ImmunityBio, Inc. 10-Q

ibrx-20250331 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-37507 _____________________________________ IMMUNITYBIO, INC. (Exact name of registrant as specified in its charter) _____________________________________ Delaware 43-1979754 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 3530 John Hopkins Court San Diego , California 92121 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: ( 844 ) 696-5235 _____________________________________ Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.0001 per share IBRX The Nasdaq Global Select Market Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨ Emerging growth company ¨ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ The number of shares of the Registrant’s common stock outstanding as of May 8, 2025 was 882,620,409 (excluding 163,800 shares held by a majority owned subsidiary of ours which are treated as treasury shares for accounting purposes). TABLE OF CONTENTS Page PART I—FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets – As of March 3 1 , 202 5 and December 31, 202 4 1 Condensed Consolidated Statements of Operations – For the three months ended March 31, 2025 and 202 4 3 Condensed Consolidated Statements of Comprehensive Loss – For the three months ended March 31, 2025 and 202 4 4 Condensed Consolidated Statements of Stockholders’ Deficit – For the three months ended March 31, 2025 and 202 4 5 Condensed Consolidated Statements of Cash Flows – For the three months ended March 31 , 202 5 and 202 4 7 Notes to Unaudited Condensed Consolidated Financial Statements 10 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 56 Item 3. Quantitative and Qualitative Disclosures about Market Risk 78 Item 4. Controls and Procedures 78 PART II—OTHER INFORMATION Item 1. Legal Proceedings 79 Item 1A. Risk Factors 82 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 155 Item 3. Defaults Upon Senior Securities 155 Item 4. Mine Safety Disclosures 155 Item 5. Other Information 155 Item 6. Exhibits 156 Signatures 157 i Defined Terms Unless expressly indicated or the context required otherwise, the terms “ImmunityBio,” “the company,” “we,” “us,” and “our” in this Quarterly Report refer to ImmunityBio, Inc., a Delaware corporation, and, where appropriate, its subsidiaries. We have also used several other terms in this Quarterly Report, the unaudited condensed consolidated financial statements and accompanying notes included herein, most of which are defined below: Term Definition 2015 Plan ImmunityBio, Inc. 2015 Equity Incentive Plan 3M IPC 3M Innovative Properties Company 3PL Agent logistics agent AAHI Access to Advanced Health Institute ACA Affordable Care Act Altor Altor BioScience, LLC America Invents Act Leahy-Smith America Invents Act Amyris Amyris, Inc. ANKTIVA ® Proprietary name for N-803 (formerly ALT-803), our novel IL-15 receptor superagonist complex (nogapendekin alfa inbakicept-pmln) currently approved for use in the United States with BCG for the treatment of adult patients with BCG-unresponsive non-muscle invasive bladder cancer with carcinoma in situ with or without papillary tumors, and currently in clinical development for other indications. Annual Report Annual Report on Form 10-K for the year ended December 31, 2024 Approved product ANKTIVA ASC Accounting Standards Codification ASU Accounting Standards Update Athenex Athenex, Inc. ATM “at-the-market” sales agreement ATRA American Taxpayer Relief Act of 2012 BCG Bacillus Calmette-Guérin (TICE ® BCG approved for use in the U.S.) Beike Shenzhen Beike Biotechnology Co. Ltd. BLA Biologics License Application BPCIA Biologics Price Competition and Innovation Act of 2009 Brink Brink Biologics, Inc. Cambridge Cambridge Equities, LP CBER Center for Biologics Evaluation and Research of the FDA CCPA California Consumer Privacy Act of 2018 CDER Center for Drug Evaluation and Research of the FDA CEO chief executive officer CFO chief financial officer cGMP current Good Manufacturing Practice China when used in connection with the RIPA, People’s Republic of China, Hong Kong and any territories controlled by the People’s Republic of China CIS carcinoma in situ Clinic Immuno-Oncology Clinic, Inc. Closing Date when used in connection with the RIPA, December 29, 2023 ii Term Definition CMC Chemistry, Manufacturing and Controls CMO contract manufacturing organization CMS Centers for Medicare & Medicaid Services Code Internal Revenue Code of 1986, as amended CODM chief operating decision maker CPI checkpoint inhibitor CPRA California Privacy Rights Act CRL complete response letter CRO contract research organization CVR contingent value right DGCL Delaware General Corporation Law Duley Road Duley Road, LLC Dunkirk Facility a leasehold interest in a cGMP ISO Class 5 pharmaceutical manufacturing space in western New York EAP Expanded Access Program EMA European Medicines Agency EU European Union Exchange Act Securities Exchange Act of 1934, as amended Exyte Exyte U.S., Inc. FASB Financial Accounting Standards Board FCA False Claims Act FCPA U.S. Foreign Corrupt Practices Act FDA U.S. Food and Drug Administration (or the Agency) FIFO First In First Out inventory method FSMC Fort Schuyler Management Corporation, a not-for-profit corporation affiliated with the State of New York FTO freedom-to-operate FVO fair value option GBM glioblastoma multiforme GCP Good Clinical Practice GDPR General Data Protection Regulation GlobeImmune GlobeImmune, Inc. GLP Good Laboratory Practice GMP Good Manufacturing Practice hAd5 human adenovirus serotype 5 Hatch-Waxman Act Drug Price Competition and Patent Term Restoration Act of 1984 HCPCS Healthcare Common Procedure Coding System, a set of standardized codes used in the U.S. to describe specific medical procedures, services, equipment, medications, and supplies. HCW HCW Biologics, Inc. HIPAA Health Insurance Portability and Accountability Act of 1996 HITECH Health Information Technology for Economic and Clinical Health Act HIV human immunodeficiency virus IgDraSol IgDraSol, Inc., a subsidiary of the company IL-15 novel interleukin 15 iii Term Definition IND investigational new drug Infinity Infinity SA LLC, as purchaser agent for affiliates of Oberland IPR&D in-process research and development IRS Internal Revenue Service J-code a part of the HCPCS used to designate non-oral medications and other medical devices LMIC low- and middle-income countries M-ceNK memory-like cytokine-enhanced NK MAA Marketing Authorization Application mAbs monoclonal antibodies MHC major histocompatability complex MHRA Medicines and Healthcare products Regulatory Agency NantBio NantBio, Inc. Nant Capital Nant Capital, LLC NantCell NantCell, Inc., a subsidiary of the company NANTibody Immunotherapy NANTibody, LLC, a subsidiary of the company NantKwest NantKwest, Inc. NantMobile NantMobile, LLC NantWorks NantWorks, LLC, a related-party NCSC NantCancerStemCell, LLC NDA New Drug Application NEO named executive officer NK natural killer NMIBC non-muscle invasive bladder cancer NOL net operating loss NSCLC non-small cell lung cancer Oberland Oberland Capital Management LLC and its affiliates (including Purchasers as defined in the RIPA) OCE Oncology Center of Excellence of the FDA OFAC U.S. Treasury Department’s Office of Foreign Assets Control PD-L1 programmed death receptor ligand PHI Protected Health Information PMA premarket approval QMSR Quality Management System Regulation QSR Quality System Regulation Quarterly Report Quarterly Report on Form 10-Q for the three months ended March 31, 2025 QUILT QUantum Integrative Lifelong Trial rBCG recombinant BCG RDO registered direct offering REMS Risk Evaluation and Mitigation Strategy iv Term Definition Revenue Interest Payments with respect to each calendar quarter during the revenue interest period, the amount payable by the company to Oberland equal to the net sales in the covered territory for such calendar quarter multiplied by the applicable percentage, subject to the terms and conditions set forth in the RIPA; provided that, with respect to any calendar quarter, that the total revenue interest payments will not exceed the cap amount applicable at such time Revenue Interests all of the company’s right, title and interest in and to that portion of the accounts and payment intangibles arising out of sales and licenses of the included products and the product assets equal to the Revenue Interest Payments for each calendar quarter (or portion thereof) during the revenue interest period RIPA Revenue Interest Purchase Agreement Riptide Riptide Bioscience, Inc. RMAT regenerative medicine advanced therapy RSU restricted stock unit RTF refusal to file SAFE Simple Agreement for Future Equity Sarbanes-Oxley Sarbanes-Oxley Act of 2002 SARS-CoV-2 novel strain of the coronavirus (COVID-19) sBLA supplemental Biologics License Application SEC U.S. Securities and Exchange Commission Section 404 Section 404 of the Sarbanes-Oxley Act of 2002 Securities Act Securities Act of 1933, as amended Serum Institute Serum Institute of India Sorrento Sorrento Therapeutics, Inc. SPOA Stock Purchase and Option Agreement TCJA Tax Cuts and Jobs Act of 2017 Term SOFR Term Secured Overnight Financing Rate Test Date when used in connection with the RIPA, December 31, 2029 TF Platform tissue factor-based fusion discovery platform TGF-β transforming growth factor beta t-haNK targeted high-affinity NK TLR toll-like receptor TriAd Triple Antigen (CEA, MUC1, Brachyury) UK United Kingdom UK GDPR UK Data Protection Act of 2018 U.S. GAAP accounting principles generally accepted in the United States of America USPTO U.S. Patent and Trademark Office VBC Holdings VBC Holdings, LLC, a subsidiary of the company VIE variable interest entity VivaBioCell VivaBioCell, S.p.A., a wholly-owned subsidiary of VBC Holdings v Table of Contents PART I—FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. ImmunityBio, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited; in thousands, except share and per share amounts) March 31, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 60,660 $ 143,428 Marketable securities 931 6,381 Accounts receivable, net 17,029 2,360 Inventories 8,444 8,272 Due from related parties 424 293 Prepaid expenses and other current assets 19,646 20,872 Prepaid expenses – related parties 2,029 2,980 Total current assets 109,163 184,586 Property, plant and equipment, net 135,270 137,094 Goodwill and intangible assets, net 15,443 15,933 Convertible note receivable 7,192 7,130 Operating lease right-of-use assets, net 16,482 17,407 Operating lease right-of-use assets, net – related parties 15,298 15,956 Other assets 4,533 4,449 Other assets – related parties 378 378 Total assets $ 303,759 $ 382,933 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 13,501 $ 6,725 Accrued expenses and other liabilities 27,889 40,580 Operating lease liabilities 3,876 4,005 Operating lease liabilities – related parties 3,584 3,461 Due to related parties 355 173 Total current liabilities 49,205 54,944 Related-party convertible note payable, at fair value ( Note 9 and Note 1 4 ) 485,717 461,877 Revenue interest liability ( Note 13 ) 296,287 284,404 Operating lease liabilities, less current portion 17,077 17,864 Operating lease liabilities, less current portion – related parties 16,020 16,959 Derivative liabilities ( Note 13 ) 20,542 26,120 Warrant liabilities 9,023 8,575 Other liabilities 370 319 Total liabilities 894,241 871,062 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 Table of Contents ImmunityBio, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Continued) (Unaudited; in thousands, except share and per share amounts) March 31, 2025 December 31, 2024 Commitments and contingencies ( Note 11 ) Stockholders’ deficit: Common stock, $ 0.0001 par value; 1,350,000,000 shares authorized as of March 31, 2025 and December 31, 2024; 853,556,193 and 852,904,340 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively; excluding treasury stock, 163,800 shares outstanding as of March 31, 2025 and December 31, 2024 $ 85 $ 85 Additional paid-in capital 2,893,422 2,884,867 Accumulated deficit ( 3,504,894 ) ( 3,375,248 ) Accumulated other comprehensive income 19,956 1,198 Total ImmunityBio stockholders’ deficit ( 591,431 ) ( 489,098 ) Noncontrolling interests 949 969 Total stockholders’ deficit ( 590,482 ) ( 488,129 ) Total liabilities and stockholders’ deficit $ 303,759 $ 382,933 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 Table of Contents ImmunityBio, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited; in thousands, except per share amounts) Three Months Ended March 31, 2025 2024 Revenue Product revenue, net $ 16,509 $ — Other revenues 8 40 Total revenue 16,517 40 Operating costs and expenses Cost of sales 58 — Research and development 45,976 51,322 Research and development – related parties 2,258 2,029 Selling, general and administrative 31,977 41,454 Selling, general and administrative – related parties 677 431 Total operating costs and expenses 80,946 95,236 Loss from operations ( 64,429 ) ( 95,196 ) Other income (expense), net Interest and investment income, net 887 3,099 Change in fair value of related-party convertible note ( 42,582 ) — Interest expense – related party ( 15,313 ) ( 29,458 ) Interest expense related to revenue interest liability ( 13,534 ) ( 8,004 ) Change in fair value of derivative liabilities 5,578 ( 2,724 ) Change in fair value of warrant liabilities ( 448 ) ( 1,802 ) Interest expense ( 18 ) ( 25 ) Other expense, net ( 41 ) ( 20 ) Total other expense, net ( 65,471 ) ( 38,934 ) Loss before income taxes and noncontrolling interests ( 129,900 ) ( 134,130 ) Income tax benefit 234 — Net loss ( 129,666 ) ( 134,130 ) Net loss attributable to noncontrolling interests, net of tax ( 20 ) ( 21 ) Net loss attributable to ImmunityBio common stockholders $ ( 129,646 ) $ ( 134,109 ) Net loss per ImmunityBio common share – basic $ ( 0.15 ) $ ( 0.20 ) Net loss per ImmunityBio common share – diluted $ ( 0.15 ) $ ( 0.20 ) Weighted-average number of common shares used in computing net loss per share – basic 853,162 672,831 Weighted-average number of common shares used in computing net loss per share – diluted 853,162 672,831 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents ImmunityBio, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Loss (Unaudited; in thousands) Three Months Ended March 31, 2025 2024 Net loss $ ( 129,666 ) $ ( 134,130 ) Other comprehensive income (loss), net of income taxes: Change in fair value of related-party convertible note related to instrument-specific credit risk 18,742 — Net unrealized losses on available-for-sale securities ( 264 ) ( 17 ) Reclassification of net realized losses on available-for-sale securities included in net loss 253 49 Foreign currency translation adjustments 27 ( 49 ) Total other comprehensive income (loss) 18,758 ( 17 ) Comprehensive loss ( 110,908 ) ( 134,147 ) Less: Comprehensive loss attributable to noncontrolling interests 20 21 Comprehensive loss attributable to ImmunityBio common stockholders $ ( 110,888 ) $ ( 134,126 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents ImmunityBio, Inc. and Subsidiaries Condensed Consolidated Statements of Stockholders’ Deficit (Unaudited; in thousands, except share amounts) Three Months Ended March 31, 2025 Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income Total ImmunityBio Stockholders’ Deficit Noncontrolling Interests Total Stockholders’ Deficit Shares Amount Balance as of December 31, 2024 852,904,340 $ 85 $ 2,884,867 $ ( 3,375,248 ) $ 1,198 $ ( 489,098 ) $ 969 $ ( 488,129 ) Stock-based compensation expense — — 9,537 — — 9,537 — 9,537 Exercise of stock options 110,020 — 220 — — 220 — 220 Vesting of restricted stock units (RSUs) 901,713 — — — — — — — Net share settlement for RSUs vesting ( 359,880 ) — ( 1,202 ) — — ( 1,202 ) — ( 1,202 ) Other comprehensive income, net of tax — — — — 18,758 18,758 — 18,758 Net loss — — — ( 129,646 ) — ( 129,646 ) ( 20 ) ( 129,666 ) Balance as of March 31, 2025 853,556,193 $ 85 $ 2,893,422 $ ( 3,504,894 ) $ 19,956 $ ( 591,431 ) $ 949 $ ( 590,482 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents ImmunityBio, Inc. and Subsidiaries Condensed Consolidated Statements of Stockholders’ Deficit (Continued) (Unaudited; in thousands, except share amounts) Three Months Ended March 31, 2024 Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total ImmunityBio Stockholders’ Deficit Noncontrolling Interests Total Stockholders’ Deficit Shares Amount Balance as of December 31, 2023 670,867,344 $ 67 $ 2,374,620 $ ( 2,961,684 ) $ 10 $ ( 586,987 ) $ 1,050 $ ( 585,937 ) Stock-based compensation expense — — 8,266 — — 8,266 — 8,266 Exercise of stock options — — — — — — — — Vesting of RSUs 2,969,156 — — — — — — — Net share settlement for RSUs vesting ( 1,117,737 ) — ( 3,867 ) — — ( 3,867 ) — ( 3,867 ) Exercise of warrants 4,284,648 1 24,701 — — 24,702 — 24,702 Other comprehensive loss, net of tax — — — — ( 17 ) ( 17 ) — ( 17 ) Net loss — — — ( 134,109 ) — ( 134,109 ) ( 21 ) ( 134,130 ) Balance as of March 31, 2024 677,003,411 $ 68 $ 2,403,720 $ ( 3,095,793 ) $ ( 7 ) $ ( 692,012 ) $ 1,029 $ ( 690,983 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Table of Contents ImmunityBio, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited; in thousands) Three Months Ended March 31, 2025 2024 Operating activities: Net loss $ ( 129,666 ) $ ( 134,130 ) Adjustments to reconcile net loss to net cash used in operating activities: Change in fair value of related-party convertible note 42,582 — Non-cash interest expense related to revenue interest liability 13,266 8,004 Stock-based compensation expense 9,537 8,266 Change in fair value of derivative liabilities ( 5,578 ) 2,724 Depreciation and amortization 3,829 4,555 Non-cash lease expense related to operating lease right-of-use assets 925 760 Non-cash lease expense related to operating lease right-of-use assets – related parties 658 586 Change in fair value of warrant liabilities 448 1,802 Non-cash interest items, net ( 62 ) ( 63 ) Accretion of discounts on marketable debt securities ( 52 ) ( 491 ) Unrealized losses (gains) on equity securities 1 ( 725 ) Amortization of related-party notes discounts — 5,549 Other 242 74 Changes in operating assets and liabilities: Accounts receivable ( 14,669 ) — Inventories ( 172 ) — Prepaid expenses and other current assets 114 1,737 Prepaid expenses – related parties 951 ( 103 ) Other assets ( 84 ) 132 Accounts payable 6,439 4,314 Accrued expenses and other liabilities ( 12,933 ) ( 8,917 ) Due to and due from related parties, net 51 ( 158 ) Operating lease liabilities ( 916 ) ( 193 ) Operating lease liabilities – related parties ( 816 ) ( 705 ) Net cash used in operating activities ( 85,905 ) ( 106,982 ) Investing activities: Proceeds from maturities of marketable debt securities, available-for-sale 5,350 13,021 Purchases of property, plant and equipment ( 1,121 ) ( 1,261 ) Purchases of marketable debt securities, available-for-sale ( 100 ) ( 48,363 ) Proceeds from sales of marketable debt securities — 981 Net cash provided by (used in) investing activities 4,129 ( 35,622 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 7 Table of Contents ImmunityBio, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Continued) (Unaudited; in thousands) Three Months Ended March 31, 2025 2024 Financing activities: Net share settlement for RSUs vesting $ ( 1,202 ) $ ( 3,867 ) Proceeds from exercises of stock options 220 — Proceeds from exercises of warrants — 14,116 Principal payments of finance leases — ( 21 ) Payment of revenue interest liability — ( 3 ) Net cash (used in) provided by financing activities ( 982 ) 10,225 Effect of exchange rate changes on cash and cash equivalents, and restricted cash ( 10 ) ( 39 ) Net change in cash and cash equivalents, and restricted cash ( 82,768 ) ( 132,418 ) Cash and cash equivalents, and restricted cash, beginning of period 143,912 265,787 Cash and cash equivalents, and restricted cash, end of period $ 61,144 $ 133,369 The accompanying notes are an integral part of these condensed consolidated financial statements. 8 Table of Contents ImmunityBio, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Continued) (Unaudited; in thousands) Three Months Ended March 31, 2025 2024 Reconciliation of cash and cash equivalents, and restricted cash, end of period: Cash and cash equivalents $ 60,660 $ 133,035 Restricted cash 484 334 Cash and cash equivalents, and restricted cash, end of period $ 61,144 $ 133,369 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 15,593 $ 23,912 Income taxes — 8 Supplemental disclosure of non-cash activities: Property and equipment purchases included in accounts payable, accrued expenses and due to related parties $ 1,107 $ 1,379 Unrealized (losses) gains on marketable debt securities, net ( 11 ) 32 The accompanying notes are an integral part of these condensed consolidated financial statements. 9 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements 1. Description of Business In these notes to unaudited condensed consolidated financial statements, the terms “ImmunityBio,” “the company,” “we,” “us,” and “our” refer to ImmunityBio, Inc. and its subsidiaries. Our Business ImmunityBio is a vertically-integrated biotechnology company developing next-generation therapies and vaccines that bolster the natural immune system to defeat cancers and infectious diseases. The company’s range of immunotherapy and cell therapy platforms, alone and together, act to drive an immune response with the goal of creating durable and safe protection against disease. Designated an FDA Breakthrough Therapy, ANKTIVA is the first FDA-approved immunotherapy for non-muscle invasive bladder cancer CIS that activates natural killer cells, T cells, and memory T cells for a long duration response. The company is 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 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. ANKTIVA was approved by the FDA in 2024 for use in the United States with BCG for the treatment of adult patients with BCG-unresponsive non-muscle invasive bladder cancer with CIS with or without papillary tumors. We began commercial distribution of our approved product in May 2024. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC. The unaudited condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations. Certain items in the prior year’s consolidated financial statements have been reclassified to conform to the current presentation. These reclassifications had no effect on the reported results of operations . The unaudited condensed consolidated financial statements do not include all information and notes required by U.S. GAAP for annual reports and therefore should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report filed with the SEC on March 3, 2025. These interim financials are not necessarily indicative of results expected for the full fiscal year. 10 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) Principles of Consolidation The accompanying unaudited condensed 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 condensed consolidated statement of operations equal to the percentage of the ownership interest retained in such entities by the respective noncontrolling parties. 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 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. If we determine that we are the primary beneficiary of the VIE, we will consolidate the VIE. This analysis is performed at the initial investment in the entity or upon any reconsideration event. For entities we hold as an equity investment that are not consolidated under the VIE model, we consider whether our investment constitutes a controlling financial interest in the entity and therefore should be considered for consolidation under the voting interest model. Liquidity As of March 31, 2025, the company had an accumulated deficit of $ 3.5 billion. We also had negative cash flows from operations of $ 85.9 million during the three months ended March 31, 2025. 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 condensed 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 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 condensed 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 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. 11 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. 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 condensed 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 and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. 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 consideration. 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 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. 12 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) Variable consideration is 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. 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. 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. 13 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 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 condensed 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 March 31, 2025, 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. Inventories 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 We record accruals for loss contingencies to the extent that we conclude it is probable that a liability has been incurred, and the amount of the related loss can be reasonably estimated. We accrue for the best estimate of a loss within a range; however, if no estimate in the range is better than any other, then we accrue the minimum amount in the range. If we determine that a material loss is reasonably possible, we disclose the possible loss or range of loss, or that the amount of loss cannot be estimated at this time. We evaluate, on a quarterly basis, developments in legal proceedings and other matters that could cause a change in the potential amount of the liability recorded or the range of potential losses disclosed. Moreover, we record gain contingencies only when they are realizable, and the amount is known. Additionally, we record our rights to insurance recoveries, limited to the extent of incurred or probable losses, as a receivable when such recoveries have been agreed to with our third-party insurers and when receipt is deemed probable. 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. During the three months ended March 31, 2025, approximately 99 % of our total gross revenue was from our top four customers. The largest two customers accounted for 31 % of our total revenue each, while the third and fourth largest accounted for 21 % and 16 %, respectively. As of March 31, 2025, 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. 14 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 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 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. Our investment portfolio is maintained in accordance with our investment policy. While we maintain cash deposits in FDIC insured financial institutions in excess of federally insured limits, we do not believe that we are exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. We have not experienced any losses on such accounts. 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. Product candidates developed by us will require approvals or clearances from the FDA or international regulatory agencies prior to commercial sales. There can be no assurance that any of our product candidates will receive any of the required approvals or clearances. 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. Cash, Cash Equivalents, and Restricted Cash Cash equivalents include highly liquid investments with an original maturity of three months or less from the date of purchase. Restricted cash includes a certificate of deposit held as a substitute letter of credit for certain of our leased properties. This certificate of deposit is included in other assets, on the condensed consolidated balance sheet as landlords are the beneficiaries of the account and we are not able to access the funds during the terms of the leases. A reconciliation of cash and cash equivalents, and restricted cash is included on the condensed consolidated statements of cash flows as of March 31, 2025 and 2024. Marketable Securities and Other Investments Marketable Debt Securities We have typically invested our cash in a variety of financial instruments, including investment-grade short- to intermediate-term corporate debt securities, government-sponsored securities and European bonds; however, after our entry into the RIPA, we can no longer invest our excess funds in corporate or European bonds. Certain of our investments are subject to credit, liquidity, market, and interest-rate risks. The general condition of the financial markets and the economy may increase those risks and may affect the value and liquidity of investments and restrict our ability to access the capital markets. Marketable debt securities with remaining maturities of 12 months or less are classified as short-term and marketable securities with remaining maturities greater than 12 months are classified as long-term. All marketable debt securities are reported at fair value and any unrealized gains and losses are reported as a component of accumulated other comprehensive income, on the condensed consolidated statement of stockholders’ deficit, with the exception of unrealized losses believed to be other-than-temporary, which are recorded in interest and investment income (loss), net , on the condensed consolidated statement of operations. Realized gains and losses from sales of securities and the amounts, net of tax, reclassified out of accumulated other comprehensive income , if any, are determined on a specific identification basis. 15 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 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 condensed 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 condensed consolidated statement of operations. Evaluating Investments for Other-than-Temporary Impairments We periodically evaluate whether declines in fair values of our investments below their book value are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss, as well as our ability and intent to hold the investment until a forecasted recovery occurs. Additionally, we assess whether we have plans to sell the security or whether it is more likely than not we will be required to sell any investment before recovery of its amortized cost basis. Factors considered include quoted market prices, recent financial results and operating trends, implied values from any recent transactions or offers of investee securities, credit quality of debt instrument issuers, other publicly available information that may affect the value of our investments, duration and severity of the decline in value, and our strategy and intentions for holding the investment. Our other-than-temporary impairments are further discussed in Note 8 “Financial Instruments.” Equity Method of Accounting In circumstances where we have the ability to exercise significant influence over the operating and financial policies of a company in which we have an investment, we utilize the equity method of accounting for recording investment activity. 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 investee 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 investee in loss on equity method investment , on the condensed consolidated statement of operations. Property, Plant and Equipment, Net Property, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditures that are directly attributable to the acquisition of the items. All repairs and maintenance are charged to operating expenses during the financial period in which they are incurred. Depreciation of property, plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets, as follows: Buildings 39 years Software 3 years Laboratory equipment 5 to 7 years Furniture & fixtures 5 years IT equipment 3 years 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 condensed consolidated financial statements and the net amount, less any proceeds, is included in other income (expense), net , on the condensed consolidated statement of operations. 16 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 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. Recoverability is measured by a comparison of the carrying amount to the future net cash flows that the assets are expected to generate. 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. 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. 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. 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. 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. Contingent consideration incurred in connection with a business combination is recorded at fair value on the acquisition date and re-measured at its revised fair value each subsequent reporting period until the related contingencies are resolved. The resulting changes in fair value are recorded as research and development expense , on the condensed consolidated statements of operations and comprehensive loss. Changes in fair value reflect changes to our assumptions regarding probabilities of successful achievement of related milestones, the timing in which the milestones are expected to be achieved, and the discount rate used to estimate the fair value of the obligation. Common Control Transactions Transactions between us and entities where Dr. Soon-Shiong and his affiliates are the controlling stockholders are accounted for as common control transactions whereby the net assets acquired or transferred are accounted at their carrying value. Any difference between the carrying value and consideration recognized is treated as a capital transaction. Cash consideration up to the carrying value of the net assets acquired or transferred is presented as an investing activity on the condensed consolidated statement of cash flows. Cash consideration in excess of the carrying value of the net assets acquired or transferred is presented as a financing activity on the condensed consolidated statement of cash flows. 17 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) Intangible Assets, Net Intangible assets acquired in a business combination are initially recognized at their fair value on the acquisition date. 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. The amortization of these intangible assets is included in selling, general and administrative expense, on the condensed consolidated statement of operations. Indefinite-lived intangible assets are tested for impairment at least annually or more frequently if indicators of potential impairment exist. Patents Patent costs, including related legal costs, are expensed as incurred and recorded in selling, general and administrative expense, on the condensed 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 condensed 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 Fair value is defined as an exit price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We use a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires us to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows: • Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets at the measurement date. Since valuations are based on quoted prices that are readily and regularly available in an active market, the valuation of these products does not entail a significant degree of judgment. Our Level 1 assets consist of bank deposits, money market funds, and marketable equity securities. • 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. Our Level 2 assets consist of corporate debt securities including commercial paper, government-sponsored securities, and corporate bonds, as well as foreign municipal securities. • Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. 18 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) We utilize a third-party pricing service to assist in obtaining fair value pricing for our investments in marketable debt securities. Inputs are documented in accordance with the fair value disclosure hierarchy. The fair values of financial instruments other than marketable securities and cash and cash equivalents are determined through a combination of management estimates and third-party valuations. During the three months ended March 31, 2025 and 2024, no transfers were made into or out of the Level 1, 2 or 3 categories. We will continue to review the fair value inputs on a quarterly basis. Collaboration Arrangements 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 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. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. 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 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. The amounts owed to a collaboration partner are classified as research and development expense. Our collaboration arrangements require us to acquire certain equipment for exclusive use in the joint operating activities. These equipment purchases do not have an alternative use and are therefore expensed as incurred within research and development expense. Our collaboration arrangements are further discussed in Note 10 “Collaboration and License Agreements and Acquisition.” Preclinical and Clinical Trial Accruals As part of the process of preparing the condensed consolidated financial statements, we are required to estimate expenses resulting from obligations under contracts with vendors, clinical research organizations and consultants. The financial terms of these contracts vary and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. We estimate clinical trial and research agreement-related expenses based on the services performed, pursuant to contracts with research institutions and clinical research organizations and other vendors that conduct clinical trials and research on our behalf. In accruing clinical and research-related fees, we estimate the time period over which services will be performed and activity expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we will adjust the accrual accordingly. Payments made under these arrangements in advance of the receipt of the related services are recorded as prepaid expenses until the services are rendered. Transactions with Related Parties As outlined in Note 14 “Related-Party Debt” and Note 15 “Related-Party Agreements,” we have various agreements with related parties. These arrangements can be billed and settled in cash monthly, billed quarterly and settled in cash the following month, or estimated in advance and collected or paid upfront based on expected utilization. Monthly accruals are made for all quarterly billing arrangements. 19 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) Lease Obligations For all leases other than short-term leases, at the lease commencement date, a right-of-use asset and a lease liability are recognized. The right-of-use asset represents the right to use the leased asset for the lease term. At the commencement date, lease right-of-use assets and lease liabilities are determined based on the present value of lease payments to be made over the lease term. Leases are classified as either finance leases or operating leases. As the rate implicit in lease contracts are not readily determinable, we utilize its incremental borrowing rate as a discount rate for purposes of determining the present value of lease payments, which is based on the estimated interest rate at which we could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. Operating lease right-of-use assets also include any rent paid prior to the commencement date, less any lease incentives received, and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We determine the lease term by assuming the exercise of renewal options that are reasonably assured. The exercise of lease renewal options is at our sole discretion. 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. Lease expense also includes amounts relating to variable lease payments. Variable lease payments include amounts relating to common area maintenance and real estate taxes. We do not recognize right-of-use assets and lease liabilities for qualifying short-term leases with an initial lease term of 12 months or less at lease inception. Such leases are expensed on a straight-line basis over the lease term. The lease term includes the non-cancellable period of the lease and any additional periods covered by either options to renew or not to terminate when the company is reasonably certain to exercise. The depreciable life of operating right-of-use-assets and leasehold improvements is limited by the expected lease term. Warrants The company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC Topic 480, Distinguishing Liabilities from Equity (ASC 480), and ASC Topic 815, Derivatives and Hedging (ASC 815). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the company’s own stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period end date while the warrants are outstanding. For warrants that meet all criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital, on the condensed consolidated statement of stockholders’ deficit at the time of issuance. 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 recorded as a non-cash gain or loss in other income (expense), net , on the condensed consolidated statement of operations. The fair value of the warrants was estimated using the Black-Scholes option pricing model. Fair Value Option Election 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. 20 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 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 condensed 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 condensed 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 condensed 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. During the three months ended March 31, 2025, the company recorded $ 18.7 million in change in fair value related to instrument-specific credit risk, on the condensed consolidated statement of comprehensive loss. See Note 14 “Related-Party Debt” for more information. Income Taxes We recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record valuation allowances to reduce deferred tax assets to the amount we believe is more likely than not to be realized. We recognize uncertain tax positions when the position will more likely than not be upheld on examination by the taxing authorities based solely upon the technical merits of the positions. We recognize interest and penalties, if any, related to unrecognized income tax uncertainties in income tax benefit (expense), on the condensed consolidated statement of operations. We did not have any accrued interest or penalties associated with uncertain tax positions as of March 31, 2025 and 2024. Stock Repurchases In 2015, the Board of Directors approved the 2015 Share Repurchase Program. As it is our intent for the repurchased shares to be retired, we have elected to account for the shares repurchased using the constructive retirement method. For shares repurchased in excess of par, we record the purchase price in excess of par value in accumulated deficit , on the condensed consolidated balance sheet. Revenue Interest Liability On December 29, 2023, we entered into the RIPA with Infinity and Oberland. 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. 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. 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 condensed consolidated balance sheet. The company imputes interest expense associated with this liability using the effective interest rate method. The effective interest rate is calculated based on the rate that would enable the debt to be repaid in full over the anticipated life of the arrangement. Interest expense is recognized over the estimated term on the condensed consolidated statement of operations. The interest rate on this liability may vary during the term of the agreement depending on a number of factors, including the level of actual and forecasted net sales. The company evaluates the interest rate quarterly based on actual and forecasted net sales utilizing the prospective method. A significant increase or decrease in actual or forecasted net sales will materially impact the revenue interest liability, interest expense, and the time period for repayment. 21 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) Derivative Liabilities Embedded derivatives that are required to be bifurcated from the underlying debt instrument that do not meet the derivative scope exception and equity classification criteria are accounted for and valued as separate financial instruments. During the year ended December 31, 2024, the terms of an embedded derivative related to a contingent exercisable prepayment feature of a related-party convertible note (the $ 505.0 million December 2023 Promissory Note) required bifurcation. This embedded derivative was initially measured at fair value and was remeasured to fair value at each reporting date until the derivative would be 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 was no longer required. The embedded derivative is now included within the fair value of the second amended and restated promissory note recorded in related-party convertible note payable at fair value , on the condensed 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 income (expense), net , on the condensed consolidated statement of operations. Research and Development Costs Major components of research and development costs include cash compensation and other personnel-related expenses, stock-based compensation, depreciation and amortization expense on research and development property and equipment and intangible assets, costs of preclinical studies, clinical trials costs, including CROs and related clinical manufacturing, including third-party CMOs, costs of drug development, costs of materials and supplies, facilities cost, overhead costs, regulatory and compliance costs, and fees paid to consultants and other entities that conduct certain research and development activities on our behalf. Costs incurred in research and development are expensed as incurred. The company classifies its research and development expense as either external or internal. The company’s external research and development expense supports its various preclinical and clinical programs. The company’s internal research and development expense includes payroll and benefits expense, facilities and equipment expense, and other indirect research and development expense incurred in support of its research and development activities. The company’s external and internal resources are not directly tied to any one research or drug discovery program and are typically deployed across multiple programs and are not allocated to specific product candidates or development programs. Included in research and development costs are clinical trial and research expenses based on the services performed pursuant to contracts with research institutions and clinical research organizations and other vendors that conduct clinical trials and research on our behalf. We record accruals for estimated costs under these contracts. When evaluating the adequacy of the accrued liabilities, we analyze the progress of the preclinical studies or clinical trials, including the phase or completion of events, invoices received, contracted costs and purchase orders. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period based on the facts and circumstances known at that time. Although we do not expect the estimates to be materially different from the amounts actually incurred, if the estimates of the status and timing of services performed differ from the actual status and timing of services performed, we may report amounts that are too high or too low in any particular period. Actual results could differ from our estimates. We adjust the accruals in the period when actual costs become known. Stock-Based Compensation We account for stock-based compensation under the provisions of ASC 718. We estimate fair value of each stock option award on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the use of subjective assumptions, including, but not limited to, expected stock price volatility over the term of the awards and the expected term of the stock options. We measure the fair value of an equity-classified award at the grant date and recognize the 22 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) stock-based compensation expense over the period of vesting on the straight-line basis for our outstanding share awards that do not contain a performance condition. For awards subject to performance-based vesting conditions, we assess the probability of the individual milestones under the award being achieved and stock-based compensation expense is recognized over the service period using the graded vesting method once management believes the performance criteria is probable of being met. For awards with service or performance conditions, we recognize the effect of forfeitures in compensation cost in the period that the award was forfeited. See Note 18 “Stock-Based Compensation” for more information. Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. 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, 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 Noncontrolling interests are recorded for the entities that we consolidate but are not wholly-owned by the company. Noncontrolling interests are classified as a separate component of equity on the condensed consolidated balance sheet and condensed consolidated statement of stockholders’ deficit. Additionally, net loss attributable to noncontrolling interests is reflected separately from condensed consolidated net loss on the condensed consolidated statement of operations and the condensed consolidated statement of stockholders’ deficit. 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 condensed consolidated financial statements result from the company’s share of GlobeImmune, of which we controlled 69.1 % as of March 31, 2025 and December 31, 2024, respectively. Noncontrolling interest stockholders are common stockholders. GlobeImmune was determined to be a VIE as it does not have sufficient equity investment at risk to finance its operations without additional subordinated financial support and we are deemed the primary beneficiary of GlobeImmune and, accordingly, consolidate GlobeImmune into the company’s condensed consolidated financial statements under the VIE model. The company also supports GlobeImmune through a promissory note agreement, in which the company provides advances to GlobeImmune from time to time up to $ 6.0 million with a per annum interest rate of five percent ( 5 %). As of March 31, 2025 and 2024, there were no outstanding advances due from GlobeImmune under the promissory note agreement. During the three months ended March 31, 2025 and 2024, GlobeImmune recognized no revenue and recognized operating expenses of $ 0.1 million during the three months ended March 31, 2025 and 2024, respectively. As of both March 31, 2025 and December 31, 2024, the condensed 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 ImmunityBio, Inc., as the primary beneficiary. Foreign Currencies We have operations and hold assets in Italy and South Korea. The functional currency of the subsidiary in Italy is the Euro, based on the nature of the transactions occurring within this entity, and accordingly, assets and liabilities of this subsidiary are translated into U.S. dollars at exchange rates prevailing as of the balance sheet dates, while the operating results are translated into U.S. dollars using the average exchange rates for the period correlating with those operating results. Adjustments resulting from translating the financial statements of the foreign subsidiary into U.S. dollars are recorded as a component of other comprehensive (loss) income , on the condensed consolidated statement of comprehensive loss. Transaction gains and losses are recorded in other income (expense), net, on the condensed consolidated statement of operations. 23 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) Basic and Diluted Net Loss per Share of Common Stock Basic net loss per share is calculated by dividing the net loss attributable to ImmunityBio common stockholders by the weighted-average number of common shares outstanding for the period. 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. The following table reflects the calculation of basic and diluted loss per common share (in thousands, except per share amounts): Three Months Ended March 31, 2025 2024 Net loss per ImmunityBio common share – basic Numerator: Net loss attributable to ImmunityBio common stockholders $ ( 129,646 ) $ ( 134,109 ) Denominator: Weighted-average number of common shares outstanding – basic 853,162 672,831 Net loss per ImmunityBio common share – basic $ ( 0.15 ) $ ( 0.20 ) Net loss per ImmunityBio common share – diluted Numerator: Net loss attributable to ImmunityBio common stockholders $ ( 129,646 ) $ ( 134,109 ) Numerator for net loss per ImmunityBio common share – diluted $ ( 129,646 ) $ ( 134,109 ) Denominator: Weighted-average number of common shares outstanding – basic 853,162 672,831 Denominator for net loss per ImmunityBio common share – diluted 853,162 672,831 Net loss per ImmunityBio common share – diluted $ ( 0.15 ) $ ( 0.20 ) 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): Three Months Ended March 31, 2025 2024 Related-party convertible notes 93,053 162,472 Outstanding third-party warrants 6,399 33,448 Outstanding stock options 25,458 15,439 Outstanding RSUs 9,231 6,628 Outstanding related-party warrants 1,638 1,638 Total 135,779 219,625 24 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 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 13 “Revenue Interest Purchase Agreement” for more information. Recent Accounting Pronouncements Application of New or Revised Accounting Standards – Adopted In August 2023, the FASB issued ASU 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement , which requires a joint venture to initially measure all contributions received upon its formation at fair value. This ASU is applicable to joint venture entities with a formation date on or after January 1, 2025 on a prospective basis. We adopted this ASU on January 1, 2025 on a prospective basis with no impact on our condensed consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires disclosure of incremental segment information on an annual and interim basis. 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 adopted this ASU on December 31, 2024 on a retrospective basis. See Note 20 “Segment Information” for more information. 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 benefit (or expense). We plan to adopt the standard when it becomes effective for us beginning in our fiscal year 2025 annual financial statements, and we expect the adoption of the standard will impact certain areas of our income tax 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 three months ended March 31, 2025 did not, or are not expected to, have a material effect on our condensed consolidated financial statements. 25 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 3. Revenues 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): Three Months Ended March 31, 2025 2024 Product revenue, net $ 16,509 $ — Other revenues 8 40 Total revenue $ 16,517 $ 40 Product Revenue, Net During the three months ended March 31, 2025, 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 three months ended March 31, 2025, approximately $ 3.2 million of gross-to-net adjustments have been recorded as a reduction of revenue on the condensed consolidated statement of operations . As of March 31, 2025, approximately $ 0.4 million of allowances for prompt payment discounts, product returns and chargebacks were included in accounts receivable, net, and approximately $ 2.1 million related to accrued rebates, co-payment assistance and other fees were included in accrued expenses and other current liabilities, on the condensed consolidated balance sheet. 4. Inventories Inventories consist of the following (in thousands): March 31, 2025 December 31, 2024 Raw materials $ — $ — Work-in-progress 7,507 7,505 Finished goods 937 767 Inventories $ 8,444 $ 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 condensed consolidated statement of operations when consumed. 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 three years from the date of manufacture. 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 March 31, 2025, we determined that a reserve related to ANKTIVA inventory for excess quantities and obsolescence was not required. During the three months ended March 31, 2025, the company has not recorded any inventory write downs. 26 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 5. Property, Plant and Equipment, Net Property, plant and equipment, net, consist of the following (in thousands): March 31, 2025 December 31, 2024 Leasehold improvements $ 73,279 $ 73,126 Equipment 74,915 73,578 Construction in progress 86,433 86,417 Furniture & fixtures 1,881 1,865 Software 1,697 1,697 Gross property, plant and equipment 238,205 236,683 Less: Accumulated depreciation and amortization 102,935 99,589 Property, plant and equipment, net $ 135,270 $ 137,094 During the three months ended March 31, 2025 and 2024, depreciation expense related to property, plant and equipment totaled $ 3.3 million and $ 4.0 million, respectively. 6. 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): March 31, 2025 Weighted- Average Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived: Favorable leasehold rights 6.9 $ 20,398 $ ( 6,375 ) $ 14,023 Indefinite-lived: Goodwill 910 — 910 IPR&D 510 — 510 Total indefinite-lived assets 1,420 — 1,420 Goodwill and intangible assets, net $ 21,818 $ ( 6,375 ) $ 15,443 December 31, 2024 Weighted- Average Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived: Favorable leasehold rights 7.1 $ 20,398 $ ( 5,864 ) $ 14,534 Indefinite-lived: Goodwill 910 — 910 IPR&D 489 — 489 Total indefinite-lived assets 1,399 — 1,399 Goodwill and intangible assets, net $ 21,797 $ ( 5,864 ) $ 15,933 27 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) Definite-Lived Intangible Assets In connection with the acquisition of the Dunkirk Facility in 2022, we acquired definite-lived intangibles consisting of favorable leasehold rights. We recorded amortization expense of our definite-lived intangible assets totaling $ 0.5 million during the three months ended March 31, 2025 and 2024, respectively, in research and development expense , on the condensed consolidated statements of operations. Indefinite-Lived Intangible Assets Goodwill 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 during the three months ended March 31, 2025. IPR&D As of March 31, 2025 and December 31, 2024, the company had indefinite-lived IPR&D intangible assets of $ 0.5 million, which were obtained from business acquisitions. No impairments of IPR&D were recorded during the three months ended March 31, 2025 and 2024. Future amortization expense associated with our definite-lived intangible assets, net is as follows (in thousands): Years ending December 31: Definite-lived Intangible Assets 2025 (excluding the three months ended March 31, 2025) $ 1,530 2026 2,040 2027 2,040 2028 2,040 2029 2,040 2030 2,040 Thereafter 2,293 Total $ 14,023 28 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 7. Financial Statement Details Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets (including related-party amounts) consist of the following (in thousands): March 31, 2025 December 31, 2024 Prepaid research and development costs $ 5,699 $ 5,815 Prepaid services 5,386 7,762 Prepaid software license fees 2,684 2,687 Prepaid insurance 2,162 2,057 Prepaid equipment maintenance 1,544 1,448 Prepaid rent 1,532 1,532 Insurance premium financing asset 315 1,248 Other 2,353 1,303 Prepaid expenses and other current assets (including amounts with related parties) $ 21,675 $ 23,852 Convertible Note Receivable In 2016, we executed a convertible promissory note pursuant to which we advanced Riptide a principal amount of $ 5.0 million. The note bears interest at a per annum rate of five percent ( 5 %). Concurrent with the transaction, we entered into an exclusive license agreement with Riptide to obtain worldwide exclusive rights, with the right to sublicense, certain know-how related to RP-182, RP-233 and RP-183. We are required to pay a single-digit royalty on net sales of the licensed products on a country-by-country basis. Pursuant to the license agreement, we are also required to make cash milestone payments upon successful completion of certain clinical, regulatory and commercial milestones up to an aggregate amount of $ 47.0 million for the first three indications of the licensed product with a maximum payment amount of $ 100.0 million. In 2019, we entered into a first amendment to the convertible promissory note with Riptide. Under the agreement, we extended the maturity of the promissory note to the earlier of (a) the later of (i) the completion of non-clinical IND enabling studies by the company, or (ii) December 31, 2020; and (b) when we accelerate the maturity of the note upon the occurrence of an event of default. No other terms and conditions of the promissory note were modified. Concurrently, we also entered into a first amendment to the exclusive license agreement with Riptide and extended the achievement dates for certain clinical trial milestones related to the licensed products. The convertible note receivable balance was $ 7.2 million and $ 7.1 million, which included accrued interest of $ 2.2 million and $ 2.1 million as of March 31, 2025 and December 31, 2024, respectively. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consist of the following (in thousands): March 31, 2025 December 31, 2024 Accrued professional and service fees $ 8,117 $ 16,849 Accrued compensation 5,857 4,679 Accrued bonus 3,670 10,346 Accrued preclinical and clinical trial costs 3,152 2,876 Accrued research and development costs 2,272 3,002 Accrued sales costs 2,170 530 Other 2,651 2,298 Accrued expenses and other liabilities $ 27,889 $ 40,580 29 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 8. Financial Instruments Investments in Marketable Debt Securities As of March 31, 2025 and December 31, 2024, 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): March 31, 2025 Weighted- Average Remaining Contractual Life (in years) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Current: U.S. Treasury securities 0.7 $ 898 $ 1 $ — $ 899 December 31, 2024 Weighted- Average Remaining Contractual Life (in years) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Current: U.S. Treasury securities 0.3 $ 6,094 $ 2 $ — $ 6,096 As of March 31, 2025 and December 31, 2024, no marketable debt securities were in an unrealized loss position. Investments in Marketable Equity Securities We hold investments in marketable equity securities with readily determinable fair value. See Note 9 “ Fair Value Measurements ” for more information. 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 March 31, 2025 and December 31, 2024, we recorded an investment in the SAFE of $ 0.7 million in other assets , on the condensed 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 three months ended March 31, 2025. 30 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) Interest and Investment Income, Net Interest and investment income, net consists of the following (in thousands): Three Months Ended March 31, 2025 2024 Investment accretion income, net $ 621 $ 2,263 Interest income 520 160 Net realized losses on investments ( 253 ) ( 49 ) Unrealized (losses) gains from equity securities ( 1 ) 725 Interest and investment income, net $ 887 $ 3,099 Interest income includes interest from marketable securities, a 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. 9. Fair Value Measurements Recurring Valuations Financial assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands): Fair Value Measurements at March 31, 2025 Total Level 1 Level 2 Level 3 Assets at Fair Value: Current: Cash and cash equivalents $ 60,660 $ 60,660 $ — $ — U.S. Treasury securities 899 899 — — Equity securities 32 32 — — Total assets measured at fair value $ 61,591 $ 61,591 $ — $ — Liabilities at Fair Value: Current: Contingent consideration $ ( 20 ) (1) $ — $ — $ ( 20 ) Noncurrent: Related-party convertible note payable at fair value ( Note 14 ) ( 485,717 ) — — ( 485,717 ) RIPA derivative liability ( Note 13 ) ( 20,240 ) — — ( 20,240 ) Warrant liabilities ( Note 16 ) ( 9,023 ) — — ( 9,023 ) Stock option purchase liability ( Note 13 ) ( 302 ) — — ( 302 ) Total liabilities measured at fair value $ ( 515,302 ) $ — $ — $ ( 515,302 ) 31 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) Fair Value Measurements at December 31, 2024 Total Level 1 Level 2 Level 3 Assets at Fair Value: Current: Cash and cash equivalents $ 143,428 $ 143,428 $ — $ — U.S. Treasury securities 6,096 6,096 — — Equity securities 285 285 — — Total assets measured at fair value $ 149,809 $ 149,809 $ — $ — Liabilities at Fair Value: Current: Contingent consideration $ ( 19 ) (1) $ — $ — $ ( 19 ) Noncurrent: Related-party convertible note payable at fair value ( Note 14 ) ( 461,877 ) — — ( 461,877 ) RIPA derivative liability ( Note 13 ) ( 25,800 ) — — ( 25,800 ) Warrant liabilities ( Note 16 ) ( 8,575 ) — — ( 8,575 ) Stock option purchase liability ( Note 13 ) ( 320 ) — — ( 320 ) Total liabilities measured at fair value $ ( 496,591 ) $ — $ — $ ( 496,591 ) _______________ (1) Contingent consideration is recorded at estimated fair value and revalued each reporting period until the related contingency is resolved. The fair value measurement is based on inputs that are unobservable and significant to the overall fair value measurement (i.e., a Level 3 measurement within the fair value hierarchy) and are reviewed periodically by management. See Note 11 “Commitments and Contingencies—Contingent Consideration Related to Business Combinations” for more information. Changes in fair value of contingent consideration were immaterial during the three months ended March 31, 2025 and 2024, and were primarily due to changes in foreign currency exchange rates. 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. There were no 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 three months ended March 31, 2025 and 2024. We measured the fair value of the promissory notes and the embedded conversion features as of December 10, 2024, 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 14 “Related-Party Debt” for more information. 32 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 10. Collaboration and License Agreements and Acquisition Collaboration Agreement Amyris 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 was to accelerate commercialization of a next-generation COVID-19 vaccine utilizing an RNA vaccine-platform. As part of the limited liability agreement, Amyris contributed $ 1.0 million in cash and rights to its license agreement with AAHI for an RNA platform for the field of COVID-19. ImmunityBio contributed $ 1.0 million in cash and priority access to its manufacturing capacity for the joint venture product. Both parties agreed to enter into a separate manufacturing and supply agreement and a sublicense agreement following the execution of the joint venture agreement. The joint venture agreement stipulates the initial terms for equal representation in the management of the newly-formed joint venture. The joint venture is managed by a board of directors consisting of four directors: two appointed by the company and two appointed by Amyris. Both parties agreed to make additional capital contributions in cash, in proportion to their respective interests, as determined by the board of directors of the joint venture. We considered the joint venture entity as a VIE and determined that we are not the primary beneficiary of the VIE. We account for our investment in the joint venture using the equity method of accounting. We are not obligated to fund the joint venture’s potential future losses. In August 2023, Amyris announced that it filed for Chapter 11 bankruptcy protection. The Amyris bankruptcy case remains ongoing, and there can be no assurance that we will receive any recovery on account of our claims against Amyris, including for Amyris’ portion of expenses incurred by the joint venture. As of March 31, 2025, the carrying amount of our equity investment in the joint venture was zero . License Agreements 3M IPC and AAHI License Agreement 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 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. We have also agreed to make payments upon the achievement of certain regulatory milestone events and tiered royalties ranging from the low to high single-digits as a percentage of net sales. 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. During the three months ended March 31, 2025 and 2024, we recorded $ 0.6 million in research and development expense , on the condensed consolidated statements of operations. 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 $ 1.4 million in research and development expense , on the condensed consolidated statement of operations during the three months ended March 31, 2024. We recorded no expense during the three months ended March 31, 2025. 33 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) With respect to the sponsored research agreement, we recorded $ 0.5 million, in research and development expense, on the condensed consolidated statement of operations during the three months ended March 31, 2024. We recorded no expense during the three months ended March 31, 2025. Acquisition Dunkirk Facility Leasehold Interest On February 14, 2022, we completed the acquisition of the Dunkirk Facility (approximately 409,000 rentable square feet) from Athenex. We believe this facility 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. The company accounted for the transaction as an asset acquisition because the Dunkirk Facility’s integrated set of assets and activities does not meet the definition of a business. Upon the closing of the Dunkirk transaction, the company became the tenant of the Dunkirk Facility under the Fort Schuyler Management Corporation Lease, dated October 1, 2021 and as amended as of the February 14, 2022 closing date (as amended, the Dunkirk Lease), with the FSMC as landlord. The Dunkirk Facility, as well as certain equipment, is owned by the FSMC and is leased to us under the Dunkirk Lease. Our annual lease payment will be $ 2.00 per year for an initial 10-year term, with one option to renew the lease under substantially the same terms and conditions for an additional 10-year term. As part of the transaction, we assumed certain of Athenex’s obligations under various third-party agreements (the Facility Agreements), subject to the terms and conditions of the purchase agreement by and between the company and Athenex dated as of January 7, 2022, and committed to spend an aggregate of $ 1.52 billion on operational expenses during the initial term, and an additional $ 1.50 billion on operational expenses if we elect to renew the lease for one additional 10-year term. We also committed to hiring 450 employees at the Dunkirk Facility within the first five years following the Commencement Date, with 300 such employees to be hired within the first 2.5 years following the Commencement Date. 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. We believe that the Dunkirk Facility has construction needs that may require approximately 12 to 18 months to complete in order for it to be used as intended, and which needs remain as a result of an ongoing dispute with the Dunkirk Facility’s general contractor and a stay in resolving the dispute related to Athenex’s ongoing bankruptcy proceedings, as described below. In addition, and related to the delayed completion of the facility, 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 March 31, 2025, 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. Further, on May 14, 2023, Athenex, together with certain of its subsidiaries, filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Court for the Southern District of Texas (the Athenex Proceedings). We do not know what, if any, impact the Athenex Proceedings will have on any portion of the potential governmental funding remaining for the Dunkirk Facility. 34 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 11. Commitments and Contingencies Contingent Consideration Related to Business Combinations VivaBioCell, S.p.A. In April 2015, NantWorks, a related party, acquired a 100 % interest in VivaBioCell through its wholly-owned subsidiary, VBC Holdings for $ 0.7 million, less working capital adjustments. In June 2015, NantWorks contributed its equity interest in VBC Holdings to the company, in exchange for cash consideration equal to its cost basis in the investment. VivaBioCell develops bioreactors and products based on cell culture and tissue engineering in Italy. 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. 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 $ 2.2 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 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 March 31, 2025, Dr. Soon-Shiong, our Founder, Executive Chairman and Global Chief Scientific and Medical Officer, and his related party hold approximately $ 139.8 million of net sales CVRs, 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. Litigation From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations. We are not currently a party to any legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. If we are served with any such complaints, we will assess at that time any contingencies for which we may need to reserve. 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. Shenzhen Beike Biotechnology Co. Ltd. Arbitration 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 ANKTIVA 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 ANKTIVA. Beike is seeking specific performance and declaratory relief for the alleged breaches. 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. We served an Answer and Counterclaims on May 19, 2023. Beike served a Reply to our counterclaims on June 21, 2023. Beike served its Statement of Claim on March 22, 2024, and the company served its Statement of Defense and Counterclaim on June 21, 2024, 35 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 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, we served our Rejoinder and Response to Defense to Counterclaim on March 14, 2025, and Beike served its Rejoinder on Counterclaim on March 28, 2025. The hearing in the arbitration is scheduled to begin on June 9, 2025. 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 On June 30, 2023, a putative securities class action complaint, captioned Salzman v. ImmunityBio, Inc. et al. , No. 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, 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. On March 17, 2025, the court granted preliminary approval of the settlement. A final approval hearing is scheduled for June 13, 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. Approximately $ 6.0 million of this amount has since been paid by the company’s insurers, which was recorded during the three months ended March 31, 2025. 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. , Case No. 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 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 36 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 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 May 30, 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 . The court entered an order extending the defendants’ deadline to respond to the complaint to May 30, 2025. 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. , Case No. 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 . The court entered an order extending the defendants’ deadline to respond to the complaint to May 30, 2025. 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. On May 2, 2025, instead of filing an opposition to defendants’ motion to dismiss, the plaintiff filed an amended complaint. This amended complaint added certain additional members of the company’s Board of Directors as defendants but did not add new claims. Defendants’ response to the amended complaint is due July 16, 2025. Commitments During the three months ended March 31, 2025, we did not enter into any significant contracts, other than those disclosed in these condensed consolidated financial statements. In addition, we are also a party to various contracts with CROs and CMOs that generally provide for termination on notice, with the exact amounts in the event of termination to be based on the timing of the termination and the terms of the agreement. There have been no material changes in unconditional purchase commitments from those disclosed in Note 9 “ Commitments and Contingencies” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8. “Financial Statements and Supplementary Data” of our Annual Report filed with the SEC on March 3, 2025. 37 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 12. Lease Arrangements We lease property in multiple facilities across the U.S. and Italy, including facilities located in El Segundo, CA and the Dunkirk Facility in upstate New York. Substantially all of our operating lease right-of-use assets and operating lease liabilities relate to facilities leases. All of our finance leases were related to equipment rental at the Dunkirk Facility. See Note 15 “ Related-Party Agreements” for more information about our related-party leases. Our leases generally have initial terms ranging from two to ten years and often include one or more options to renew. These renewal terms can extend the lease term from one to ten years and are included in the lease term when it is reasonably certain that we will exercise the option. Supplemental balance sheet information related to our leases is as follows (in thousands): Classification March 31, 2025 December 31, 2024 Assets Operating lease assets (including amounts with related parties) Operating lease right-of-use assets $ 31,780 $ 33,363 Liabilities Current: Operating lease liabilities (including amounts with related parties) Operating lease liabilities $ 7,460 $ 7,466 Noncurrent: Operating lease liabilities (including amounts with related parties) Operating lease liabilities, less current portion 33,097 34,823 Total lease liabilities (including amounts with related parties) $ 40,557 $ 42,289 Information regarding our lease terms is as follows: March 31, 2025 December 31, 2024 Weighted-average remaining lease term: Operating leases 5.2 years 4.8 years Weighted-average discount rate: Operating leases 11.0 % 9.9 % 38 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) The components of lease expense consist of the following (in thousands): Three Months Ended March 31, 2025 2024 Operating lease costs $ 2,655 $ 2,512 Short-term lease costs 1,141 1,062 Finance lease costs (including right-of-use asset amortization and interest expense) — 21 Variable lease costs 810 916 Total lease expense $ 4,606 $ 4,511 Cash paid for amounts included in the measurement of lease liabilities is as follows (in thousands): Three Months Ended March 31, 2025 2024 Cash paid for operating leases (excluding variable lease costs) $ 2,925 $ 2,384 Financing cash flow from finance leases — 21 Operating cash flow from finance leases — 1 Future minimum lease payments as of March 31, 2025, including $ 11.5 million related to options to extend lease terms that are reasonably certain of being exercised, are presented in the following table (in thousands). Common area maintenance costs and taxes are not included in these payments. Years ending December 31: Operating Leases 2025 (excluding the three months ended March 31, 2025) $ 8,659 2026 9,728 2027 8,983 2028 9,248 2029 8,598 2030 6,260 Thereafter 1,199 Total future minimum lease payments 52,675 Less: Interest 12,118 Present value of lease liabilities $ 40,557 There have been no material changes related to our existing lease agreements from those disclosed in Note 10 “ Lease Arrangements” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8. “Financial Statements and Supplementary Data” of our Annual Report filed with the SEC on March 3, 2025. 39 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 13. Revenue Interest Purchase Agreement 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. 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 (subject to certain Call/Put Option scenarios as described below). 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. The company’s obligations under the RIPA are guaranteed by certain of its subsidiaries meeting materiality thresholds set forth in the RIPA. To secure the company’s obligations under the RIPA and the subsidiary guarantors’ obligations under the guarantees, each of the company and the subsidiary guarantors has granted a security interest in substantially all its assets, subject to certain exceptions and limitations. The RIPA contains affirmative and negative covenants and events of default, including covenants and restrictions that, among other things, restrict our ability to incur additional liens, incur additional indebtedness, make loans and investments, enter into transactions with affiliates, engage in mergers and acquisitions, engage in asset sales and exclusive licensing arrangements, and declare dividends to our stockholders, in each case, subject to certain exceptions set forth in the RIPA. As of March 31, 2025, the company was in compliance with all covenants. 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. The effective interest rate is calculated based on the rate that would enable the debt to be repaid in full over the anticipated life of the arrangement. The interest rate on this liability may vary during the term of the agreement depending on a 40 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) number of factors, including the level of forecasted net sales. The company evaluates the interest rate quarterly based on its current net sales forecasts utilizing the prospective method. A significant increase or decrease in actual or forecasted net sales may materially impact the revenue interest liability, embedded derivative liabilities, other income (expense), net, and the time period for repayment. 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 three months ended March 31, 2025 and 2024, we recorded $ 13.5 million and $ 8.0 million of interest expense, respectively, related to this arrangement. The following table summarizes the revenue interest liability activity during the three months ended March 31, 2025 (in thousands): Revenue interest liability, at December 31, 2024 $ 284,404 Interest expense recognized 13,534 Accrued revenue interest payment ( 1,204 ) Revenue interest payment ( 447 ) Revenue interest liability, at March 31, 2025 $ 296,287 Embedded Derivative Liabilities RIPA Derivative Liability 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 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. 41 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 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 condensed 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 using a Monte Carlo Simulation valuation technique, with the change in fair value being recorded in change in fair value of derivative liabilities , on the condensed consolidated statement of operations. 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 March 31, 2025 and December 31, 2024, the discount rate used for valuation of the derivative liability was 11.5 % and 10.4 %, respectively. The change in fair value of the derivative liability is as follows (in thousands): Fair value, at December 31, 2024 $ 25,800 Change in fair value ( 5,560 ) Fair value, at March 31, 2025 $ 20,240 Stock Purchase and Option Agreement On December 29, 2023 and in connection with the RIPA, we entered into an SPOA with Oberland. Under this agreement, Oberland had an option to purchase up to $ 10.0 million of our common stock, at a price per share to be determined by reference to the 30-day trailing volume weighted-average price of our common stock, calculated from the date of exercise. The option is exercisable by Oberland at any time until the earliest of (i) December 29, 2028, (ii) a change of control of the company, or (iii) a sale of substantially all of the company’s assets. Among other limitations, the option may only be exercised to the extent that the common stock issuable pursuant to such exercise would not exceed 19.9 % of the common stock outstanding immediately after giving effect to such exercise. This stock purchase option was considered as a derivative 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 March 31, 2025. This option expires on December 29, 2028. This stock purchase option is classified in derivative liabilities , on the condensed 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 condensed consolidated statement of operations. 42 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) The estimated fair value of the stock option purchase liability was computed using a Monte Carlo Simulation valuation technique which calculated exercise price and discounted back to a present value at the risk-free rate with the following unobservable assumptions at the following dates: March 31, 2025 December 31, 2024 Expected volatility 121.8 % 127.0 % Risk-free rate 3.9 % 4.3 % The change in fair value of the stock option purchase liability is as follows (in thousands): Fair value, at December 31, 2024 $ 320 Change in fair value ( 18 ) Fair value, at March 31, 2025 $ 302 14. Related-Party Debt Our related-party debt is summarized below (in thousands): Balances as of March 31, 2025 Fair Value Maturity Year Interest Rate Principal Amount Amount Leveling Related-Party Convertible Note at Fair Value: $ 505 million December 2024 Promissory Note 2027 Term SOFR + 8.0 % $ 505,000 $ 485,717 Level 3 Balances as of December 31, 2024 Fair Value Maturity Year Interest Rate Principal Amount Amount Leveling Related-Party Convertible Note at Fair Value: $ 505 million December 2024 Promissory Note 2027 Term SOFR + 8.0 % $ 505,000 $ 461,877 Level 3 $ 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 43 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 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. Also, on December 10, 2024, 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 December 10, 2024, 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. 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. 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 with unobservable assumptions such as expected market yield, volatility and risk-free rate. Immediately After the Amendment on December 10, 2024 December 31, 2024 March 31, 2025 Binomial lattice model: Expected market yield 18.7 % 19.3 % 14.4 % Expected volatility 115.1 % 125.6 % 100.0 % Risk-free rate 4.1 % 4.3 % 3.9 % 44 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) The change in the fair value of this note was as follows (in thousands): Beginning fair value, at December 31, 2024 $ 461,877 Change in fair value of related-party convertible note 42,582 Change in fair value of related-party convertible note related to instrument-specific credit risk ( 18,742 ) Ending fair value, at March 31, 2025 $ 485,717 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 condensed 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 following table summarizes the estimated future contractual obligations of our related-party debt as of March 31, 2025 (in thousands): Principal Payments Interest Payments (1) Total 2025 (excluding the three months ended March 31, 2025) $ — $ 46,790 $ 46,790 2026 — 62,103 62,103 2027 505,000 62,103 567,103 Total $ 505,000 $ 170,996 $ 675,996 _______________ (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 March 31, 2025 was 12.30 %. Interest expense consists of the following (in thousands): Three Months Ended March 31, 2025 2024 Interest expense on related-party notes payable $ 15,313 $ 23,909 Amortization of related-party notes discounts — 5,549 Interest expense – related party $ 15,313 $ 29,458 In connection with the RIPA transaction, the outstanding related-party convertible note was subordinated to the RIPA payment obligations. 45 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 15. Related-Party Agreements We conduct business with several affiliates under written agreements and informal arrangements. Below is a summary of outstanding balances and a description of significant relationships (in thousands): March 31, 2025 December 31, 2024 Due from related party–NantWorks $ 291 $ 161 Due from related party–Brink 66 59 Due from related parties–Various 67 73 Total due from related parties $ 424 $ 293 Due to related party–the Clinic $ 238 $ 21 Due to related party–Duley Road 112 134 Due to related parties–Various 5 18 Total due to related parties $ 355 $ 173 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 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 three months ended March 31, 2025 and 2024, we recorded $ 0.5 million and $ 0.4 million, respectively, in selling, general and administrative expense , and $ 0.4 million and $ 0.6 million of expense reimbursements, respectively, under this arrangement in research and development expense , on the condensed 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 March 31, 2025 and December 31, 2024, we had a receivable of $ 0.3 million and $ 0.2 million, respectively, for all agreements with NantWorks, which are included in due from related parties, on the condensed consolidated balance sheets. We also recorded $ 2.0 million and $ 3.0 million of prepaid expenses for various services that we expect will be passed through to the company from NantWorks as of March 31, 2025 and December 31, 2024, respectively, which are included in prepaid expenses and other current assets , on the condensed consolidated balance sheets. Facility License Agreement In 2015, we entered into a facility license agreement with NantWorks for approximately 9,500 rentable square feet of office space in Culver City, California, which was converted to a research and development laboratory and a cGMP manufacturing facility. In 2020, we amended this agreement to extend the term of this license agreement through December 31, 2021. Commencing January 1, 2022, the license fee increased by 3 % to approximately $ 56,120 per month. 46 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 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 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. We recorded license fee expense for this facility totaling $ 0.9 million during the three months ended March 31, 2025 and 2024, in research and development expense , on the condensed consolidated statements of operations. Immuno-Oncology Clinic, Inc. We have entered into multiple agreements with t he Clinic to conduct clinical trials related to certain of our product candidates. The Clinic is a related party as it is owned by an officer of the company and NantWorks manages the administrative operations of the Clinic. In 2021, we completed a review of alternative structures that could support our more complex clinical trial requirements and made a decision to explore a potential transition of clinical trials at the Clinic to a new structure (including contracting with a new, non-affiliated professional corporation) to be determined and agreed upon by all parties. We continue discussions with potential partners around such alternative structures. Related to clinical trial and transition services provided by the Clinic, we recorded $ 0.5 million during the three months ended March 31, 2025 and 2024, in research and development expense , on the condensed consolidated statements of operations. As of March 31, 2025 and December 31, 2024 , we owed the Clinic $ 0.2 million and an immaterial amount, respectively, which are included in due to related parties, on the condensed consolidated balance sheets . NantBio, Inc. In August 2018, we entered into a supply agreement with NCSC, a 100% owned subsidiary of NantBio. Under this agreement, we agreed to supply VivaBioCell’s proprietary GMP-in-a-Box bioreactors and related consumables, made according to specifications mutually agreed to with both companies. 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 three months ended March 31, 2025 and 2024, we recognized no revenue. As of March 31, 2025 and December 31, 2024, we recorded $ 0.1 million of deferred revenue for bioreactors that were delivered but not installed in accrued expenses and other liabilities , on the condensed consolidated balance sheets. 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. 605 Doug St, LLC 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. The lease 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. We recorded lease expense for this facility of $ 0.2 million during the three months ended March 31, 2025 and 2024, in research and development expense , on the condensed consolidated statements of operations. 47 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) Duley Road, LLC 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 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. The lease has a seven-year term that commenced in September 2019. The second lease is for the second floor of the building with approximately 6,488 rentable square feet. The lease has a seven-year term that commenced in July 2019. Both floors of the building are used for research and development and office space. 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 %. During the three months ended March 31, 2025 and 2024, we recorded rent expense for these leases totaling $ 0.2 million in research and development expense , on the condensed consolidated statements of operations. As of March 31, 2025 and December 31, 2024, we recorded $ 0.1 million of lease-related payables to Duley Road in due to related parties , on the condensed consolidated balance sheets. 605 Nash, LLC In February 2021 , but effective on January 1, 2021 , we entered into a lease agreement with 605 Nash, a related party, whereby we leased approximately 6,883 rentable square feet (the Initial Premises) i n a two-story mixed-use building containing approximately 64,643 rentable square feet at 605-607 Nash Street in El Segundo, California. This facility is used primarily for pharmaceutical development and manufacturing purposes. 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. In addition, under the agreement, we are required to pay our share of estimated property taxes and operating expenses. In May 2021, but effective on April 1, 2021, we entered into an amendment to our Initial Premises lease with 605 Nash. The amendment expanded the leased square feet by approximately 57,760 rentable square feet (the Expansion Premises). The lease term of the Expansion Premises commenced in April 2021 and expires in March 2028, whereby the company has one option to extend the initial term for three years . Per the terms of the amendment, the term of the Initial Premises lease was extended for an additional three months and now expires on March 31, 2028. 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 buildout of the facility space and associated costs. We recorded rent expense for the Initial and Expansion Premises leases totaling $ 0.5 million during the three months ended March 31, 2025 and 2024, i n research and development expense, on the condensed consolidated statements of operations. The terms of the 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 was received from the landlord in 2023. 420 Nash, LLC On September 27, 2021, we entered into a lease agreement with 420 Nash, LLC, a related party, whereby we leased an approximately 19,125 rentable square foot property located at 420 Nash Street, El Segundo, California, to be used primarily for the warehousing and storage of drug manufacturing supplies, products and equipment, and ancillary office space. 48 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) Under the terms of the lease agreement, the lease term began on October 1, 2021 and expires on September 30, 2026. The base rent is approximately $ 38,250 per month with an annual increase of 3 % on October 1 of each year beginning in 2022 during the initial term. The company is responsible for the payment of real property taxes, repairs and maintenance, improvements, insurance, and operating expenses during the term of the lease. The company has options to extend the lease term for two additional consecutive periods of five years each. At the beginning of each option term, the initial monthly base rent will be adjusted to market rent (as defined in the lease agreement) with an annual increase of 3 % during the option term. 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. We recorded rent expense of $ 0.1 million for this lease during the three months ended March 31, 2025 and 2024 in research and development expense , on the condensed consolidated statements of operations. 16. Warrant Liabilities December 2022 Warrants In connection with the December 12, 2022 RDO, the company issued 9,090,909 warrants with an exercise price of $ 6.60 per share. These warrants were classified as a liability at their fair value upon issuance. The warrants became immediately exercisable on December 12, 2022 and expired in full on December 12, 2024. February 2023 Warrants In connection with the February 15, 2023 RDO, the company issued 14,072,615 warrants with an exercise price of $ 4.2636 per share. These warrants were classified as a liability at their fair value upon issuance. The warrants became immediately exercisable on February 17, 2023 and were to 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. July 2023 Warrants 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 were classified as a liability at their fair value upon issuance. These warrants became immediately exercisable on July 25, 2023 and expire on July 24, 2026. Warrant Liabilities The following table summarizes the change in carrying amount of warrant liabilities measured at fair value during the three months ended March 31, 2025 (in thousands): Total February 2023 Warrants July 2023 Warrants Fair value, at December 31, 2024 $ 8,575 $ 3,772 $ 4,803 Change in fair value 448 197 251 Fair value, at March 31, 2025 $ 9,023 $ 3,969 $ 5,054 Warrant Exercises During the three months ended March 31, 2025, there were no warrant exercises pursuant to the February and July 2023 warrant agreements. As of March 31, 2025 and December 31, 2024, a total of 6,399,171 warrants remain outstanding with an exercise price of $ 3.2946 per share. 49 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 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: February and July 2023 Warrants March 31, 2025 December 31, 2024 Exercise price per share $ 3.2946 $ 3.2946 Expected term 1.3 years 1.6 years Expected volatility 112.1 % 125.0 % Expected dividend yield — — Risk-free interest rate 3.9 % 4.2 % 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. 17. Stockholders’ Deficit Stock Repurchases During the three months ended March 31, 2025 and 2024, no shares of our common stock were repurchased under the company’s 2015 Share Repurchase Program. As of March 31, 2025, $ 18.3 million remained authorized to use for share repurchases under the program. Shelf Registration Statements During 2023, we filed a $ 750.0 million shelf registration statement with the SEC on Form S-3 for the offering and sale of equity and equity-linked securities, including common stock, preferred stock, debt securities, depositary shares, warrants to purchase common stock, preferred stock or debt securities, subscription rights, purchase contracts, and units. As of March 31, 2025, 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 In April 2021, we entered into the ATM under which we may offer and sell, from time to time at our sole discretion, shares of our common stock through our sales agent. We pay our sales agent a commission of up to 3.0 % of the gross sales proceeds of any shares of our common stock sold through them under the ATM and also have provided them with customary indemnification and contribution rights. During the three months ended March 31, 2025 and 2024, there was no activity under the ATM. As of March 31, 2025, we had $ 296.5 million available for future stock issuances under the ATM. 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. 50 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 18. Stock-Based Compensation 2015 Equity Incentive Plan As of March 31, 2025, approximately 11.4 million shares were available for future grants under the 2015 Plan. Stock-Based Compensation The following table presents stock-based compensation included on the condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2025 2024 Stock-based compensation expense: Stock options $ 5,823 $ 3,470 RSUs 3,714 4,796 $ 9,537 $ 8,266 Stock-based compensation expense in operating expenses: Research and development $ 2,312 $ 3,677 Selling, general and administrative 7,225 4,589 $ 9,537 $ 8,266 Stock Options The following table summarizes stock option activity and related information during the three months ended March 31, 2025: Number of Options Weighted- Average Exercise Price Aggregate Intrinsic Value (in thousands) Weighted- Average Remaining Contractual Life (in years) Outstanding at December 31, 2024 15,407,588 $ 8.00 $ 90 7.1 Granted 10,256,498 $ 3.39 Exercised ( 110,020 ) $ 2.00 Forfeited/expired ( 96,393 ) $ 5.42 Outstanding at March 31, 2025 25,457,673 $ 6.18 $ 87 8.1 Vested and exercisable at March 31, 2025 11,101,044 $ 9.08 $ 87 6.1 As of March 31, 2025, the unrecognized compensation cost related to outstanding stock options was $ 45.2 million, which is expected to be recognized over a remaining weighted-average period of 2.5 years. During the three months ended March 31, 2025, the total intrinsic value of stock options exercised was $ 0.1 million and cash proceeds received from stock option exercises were $ 0.2 million. During the three months ended March 31, 2024, there were no stock option exercises. 51 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) As of December 31, 2024, a total of 8,038,537 vested and exercisable shares were outstanding. The fair value of stock options issued was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Three Months Ended March 31, 2025 Expected term 6.00 years Risk-free interest rate 4.3 % Expected volatility 120.2 % Expected dividend yield — Weighted-average grant date fair value $ 2.97 The expected term was estimated using the average of the contractual term and the weighted-average vesting term of the options. 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. The expected volatility was estimated based on the historical volatility of our common stock. The expected dividend yield was based on our expectation of not paying dividends for the foreseeable future. Restricted Stock Units The following table summarizes RSU activity during the three months ended March 31, 2025: Number of Units Weighted- Average Grant Date Fair Value Nonvested balance at December 31, 2024 5,945,421 $ 11.41 Granted 4,320,121 $ 3.35 Vested ( 901,713 ) $ 5.69 Forfeited/canceled ( 132,970 ) $ 9.85 Nonvested balance at March 31, 2025 9,230,859 $ 8.22 As of March 31, 2025, there was $ 36.7 million of unrecognized stock-based compensation expense related to RSUs that is expected to be recognized over a weighted-average period of 2.2 years. During the three months ended March 31, 2025 and 2024, the total fair value of RSUs vested was $ 3.0 million and $ 10.2 million, respectively. 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 15 “ 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 three months ended March 31, 2025 and 2024, we recorded an immaterial amount of deemed dividends, in additional paid-in capital, on the condensed consolidated balance sheets, with a corresponding credit to stock-based compensation expense . 52 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) Related-Party Warrants A total of 1,638,000 warrants issued to an affiliate of Dr. Soon-Shiong with an exercise price of $ 3.24 per share were outstanding as of March 31, 2025 and December 31, 2024. 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 ANKTIVA (which has not yet been satisfied). 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. 19. Income Taxes We are subject to U.S. federal income tax, as well as income tax in California, other states and certain foreign jurisdictions. Except for state franchise taxes, the company has not been required to pay significant U.S. federal and state income taxes because of current and accumulated NOLs. The company computes its quarterly income tax provision using a forecasted annual effective tax rate and adjusts for any discrete items arising during the quarter. No tax benefit was provided for losses incurred in the U.S. and certain foreign jurisdictions because those losses are offset by a full valuation allowance. We recorded a $ 0.2 million income tax benefit during the three months ended March 31, 2025. We recorded no income tax benefit (expense) during the three months ended March 31, 2024. The effective tax rates for the three months ended March 31, 2025 and 2024 differed from the U.S. federal statutory rate of 21% primarily due to a valuation allowance on the company’s deferred tax assets. Our federal returns for tax years 2021 through 2024 remain open to examination, and our state returns remain subject to examination for tax years 2020 through 2024. NOL carryforwards and tax credits are still subject to examination in the year they are used. No income tax returns are currently under examination by taxing authorities. 20. Segment Information We operate in one operating 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. 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. The measure of segment performance is net income (loss) as reflected in the condensed 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 condensed consolidated balance sheet. 53 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) Net loss for our reportable segment is as follows (in thousands): Three Months Ended March 31, 2025 2024 Total revenue $ 16,517 $ 40 Cost of sales 58 — Gross profit 16,459 40 Operating expenses External research and development expense (including amounts with related parties) (1) 5,511 10,133 Internal research and development expense (including amounts with related parties): (2) Personnel-related costs 23,065 24,044 Equipment, depreciation, and facility costs 13,192 12,891 Other research and development costs 6,466 6,283 Total internal research and development expense 42,723 43,218 Total research and development expense (including amounts with related parties) 48,234 53,351 Selling, general and administrative (including amounts with related parties) 32,654 41,885 Total operating expenses 80,888 95,236 Loss from operations ( 64,429 ) ( 95,196 ) Other income (expense), net Interest and investment income, net 887 3,099 Change in fair value of related-party convertible note ( 42,582 ) — Interest expense (including amounts with related parties) ( 15,331 ) ( 29,483 ) Interest expense related to revenue interest liability ( 13,534 ) ( 8,004 ) Change in fair value of derivative liabilities 5,578 ( 2,724 ) Change in fair value of warrant liabilities ( 448 ) ( 1,802 ) Other expense, net ( 41 ) ( 20 ) Total other expense, net ( 65,471 ) ( 38,934 ) Loss before income taxes and noncontrolling interests ( 129,900 ) ( 134,130 ) Income tax benefit 234 — Net loss ( 129,666 ) ( 134,130 ) Net loss attributable to noncontrolling interests, net of tax ( 20 ) ( 21 ) Net loss attributable to ImmunityBio common stockholders $ ( 129,646 ) $ ( 134,109 ) _______________ (1) Our external research and development expense supports our various preclinical and clinical programs. (2) Our internal research and development expense includes payroll and benefits expenses, facilities and equipment expense, and other indirect research and development expenses incurred in support of our research and development activities. 54 Table of Contents ImmunityBio, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (Continued) 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): Three Months Ended March 31, 2025 2024 U.S. $ 16,517 $ 15 Europe — 25 Total segment revenue $ 16,517 $ 40 21. Subsequent Events Registered Direct Offering On April 7, 2025, we entered into a securities purchase agreement with an institutional investor for the purchase and sale of 29,024,768 shares of our common stock, as well as warrants that allows such investor to purchase an additional 29,024,768 shares of common stock at an exercise price of $ 3.101 per share, for a purchase price of $ 2.584 per share and accompanying warrant, generating net proceeds of approximately $ 74.8 million, after deducting estimated offering costs. The warrants became immediately exercisable on April 9, 2025 and will expire five years after the issuance date on April 9, 2030. RTF Letter from the FDA for sBLA for BCG-Unresponsive NMIBC Papillary Disease In January 2025, an in-person meeting was held with leadership of CBER, CDER and OCE of the FDA, at which we provided the long-term cystectomy avoidance response rate results in papillary disease in patients with BCG-unresponsive NMIBC as well as a disease-specific overall survival rate of 99% at 12 months and 96% at 36 months. At this meeting, the leaders were asked, in light of these results, whether we should proceed with an sBLA based on our single-arm QUILT 3.032 clinical trial despite the FDA’s prior guidance that a randomized trial would be required. The FDA leaders present unanimously confirmed that ImmunityBio should expeditiously submit an sBLA for use of ANKTIVA plus BCG in BCG-unresponsive NMIBC for the indication of papillary disease. In March 2025, we submitted this sBLA based on data from the QUILT 3.032 clinical trial, consistent with the Agency’s recent guidance from the January 2025 meeting. On May 2, 2025, we received an RTF letter from the FDA for the sBLA stating that a randomized trial is required. This position is inconsistent with the guidance received at the January 2025 meeting. We are working to reconcile the inconsistency with the FDA as expeditiously as possible. 55 Table of Contents ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Forward-Looking Statements The following discussion and analysis of our financial condition and results of operations should be read together with the description of our business and the condensed consolidated financial statements and related notes thereto Item 1. “Financial Statements” in this Quarterly Report. This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are based on our management’s beliefs and assumptions and on information currently available to our management. Actual results could differ materially from those discussed in or implied by such forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report, particularly in Part II, Item 1A. “ Risk Factors .” Except as required by law, we do not undertake any responsibility to update any of these factors or to announce publicly any revisions to any of the forward-looking statements contained in this or any document, whether as a result of new information, future events, or otherwise. Forward-looking statements include, but are not limited to: • our ability to successfully commercialize ANKTIVA or any future approved products; • our ability to obtain incremental approvals for ANKTIVA for new indications, including, without limitation, in BCG-unresponsive NMIBC papillary, from the FDA or clearances or approvals from international regulatory agencies for the treatment of patients with NMIBC or other indications; • potential future uses and applications of ANKTIVA, including as a lymphopenia rescue agent, and use in cancer vaccines and across multiple tumor types; • our ability to develop next-generation therapies and vaccines that complement, harness, and amplify the immune system to defeat cancers and infectious diseases; • our ability to obtain additional financing to fund our operations and complete the commercialization of our approved product and the development and commercialization of our other product candidates; • our ability to meet our payment obligations under the RIPA and to service the interest on our related-party promissory note and repay such note, to the extent required; • our ability to comply with the terms, conditions, covenants, restrictions, and obligations set forth in the RIPA and related transaction documents; • our expectations regarding the potential benefits of our strategy and technology; • our ability to forecast operating results and make period-to-period comparisons predictive of future performance due to fluctuations in warrant and derivative values; • our expectations regarding the operation and effectiveness of our product candidates and related benefits; • our ability to utilize multiple modes to induce cell death; • our beliefs regarding the benefits and perceived limitations of competing approaches, and the future of competing technologies and our industry; • details regarding our strategic vision and planned product candidate pipeline; • our beliefs regarding the success, cost and timing of our product candidate development activities and current and future clinical trials and studies, including study design and the enrollment of patients; • the timing of the development and commercialization of our other product candidates; • our expectations regarding our ability to utilize the Phase 1/2 aNK and haNK ® clinical trials data to support the development of our product candidates, including our taNK, t‑haNK ™ , MSC, and M-ceNK ™ product candidates; • our expectations regarding the development, application, commercialization, marketing, prospects and use generally of our product candidates, including hAd5 constructs, and PD-L1 t‑haNK and M-ceNK; 56 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) • the timing or likelihood of regulatory filings or other actions and related regulatory authority responses in the U.S. and jurisdictions outside of the U.S., including any planned meetings, IND, BLA, NDA or MAA or similar filings or pursuit of accelerated regulatory approval pathways or orphan drug status and Breakthrough Therapy, Fast Track or RMAT designations and any designation’s eventual impact on BLA submission, filing or approval timing and or approval probability; • our ability to timely address the May 2025 RTF letter received from the FDA for the sBLA for the BCG-unresponsive NMIBC papillary indication; • our ability to implement an integrated discovery ecosystem and the operation of that planned ecosystem, including being able to regularly add neoepitopes and subsequently formulate new product candidates; • the ability and willingness of strategic collaborators to share our vision and effectively work with us to achieve our goals; • the ability and willingness of various third parties to engage in research and development activities involving our product candidates, and our ability to leverage those activities; • our ability to attract additional third-party collaborators; • our expectations regarding the ease of administration associated with our product candidates; • our expectations regarding patient compatibility associated with our product candidates; • our beliefs regarding the potential markets for our product candidates and our ability to serve those markets; • our expectations regarding the timing of enrollment and submission of our clinical trials, and protocols and timing of data read-outs related to such trials; • our ability to produce a cytokine fusion protein, a DNA or recombinant protein vaccine, or a cell therapy; • our beliefs regarding the potential manufacturing and distribution benefits associated with our product candidates, and our third-party CMOs’ abilities to follow cGMP standards to scale up the production of our product candidates; • our plans regarding our manufacturing facilities and our belief that our manufacturing is capable of being conducted in‑house; • our belief in the potential of our cytokine fusion proteins, DNA or recombinant protein vaccines, or cell therapies, and the fact that our business is based upon the success individually and collectively of these platforms; • our belief regarding the magnitude or duration for additional clinical testing of our cytokine fusion proteins, DNA or recombinant protein vaccines, or cell therapies, along with other product candidate families; • even if we successfully develop and commercialize specific product candidates, our ability to develop and commercialize our other product candidates either alone or in combination with other therapeutic agents; • the ability to obtain and maintain regulatory approval of our approved product and to obtain and maintain regulatory approval of any of our other product candidates, and any related restrictions, limitations and/or warnings in the label of any approved product candidate; • the rate and degree of market acceptance of any approved products; • our ability to attract and retain key personnel; • the accuracy of our estimates regarding our future revenue, as well as our future operating expenses, capital requirements and needs for additional financing; • our ability to obtain, maintain, protect, and enforce patent protection and other proprietary rights for our approved product and our other product candidates and technologies; • the terms and conditions of licenses granted to us and our ability to license additional intellectual property relating to our product, product candidates and technology; 57 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) • our expectations regarding the results of market access initiatives and coverage under medical reimbursement policies; • shelf life of ANKTIVA drug substance and drug product and availability of product supply; • our global expansion efforts; • any government shutdown or budget disruption, which could adversely affect the U.S. and global economies, and materially and adversely affect our business and/or our future BLA submissions; • the impact on us, if any, if the CVRs held by former Altor stockholders become due and payable in accordance with their terms; and • regulatory developments in the U.S. and foreign countries. Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “continues,” “goal,” “could,” “estimates,” “scheduled,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “indicate,” “projects,” “seeks,” “should,” “will,” “would,” “strategy,” and variations of such words or similar expressions. and the negatives of those terms. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. Statements of past performance, efforts, or results of our preclinical and clinical trials, about which inferences or assumptions may be made, can also be forward-looking statements and are not indicative of future performance or results. These statements are based upon information available to us as of the date of this Quarterly Report, and although we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted a thorough inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in Part II, Item 1A. “ Risk Factors ” of this Quarterly Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Quarterly Report. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. You should read this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. ImmunityBio, ImmunityBio Care, ANKTIVA, ThAnktiva, haNK, taNK, ceNK, NK-92, Nant Cancer Vaccine, NANT 001, NANT XL, NANT 001 and Design, QUILT, Outsmart Your Disease, Smart Therapies for Difficult Diseases, NantKwest, VivaBioCell, and Infacell are trademarks or registered trademarks of ImmunityBio, Inc., its subsidiaries and affiliates. ANKTIVA has been approved by the U.S. FDA for use with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with CIS with or without papillary tumors. Other than as set forth in such specific approved label, our product candidates, including N-803, are investigational agents that are restricted by federal law to investigational use only, and safety and efficacy have not been established by any agency, including the FDA. This Quarterly Report contains references to our products and trademarks and products and trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Quarterly Report, including logos, artwork, and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies’ products or trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us, by any other companies. In this Quarterly Report, the terms “ImmunityBio,” “the company,” “we,” “us,” and “our” refer to ImmunityBio, Inc. and its subsidiaries. 58 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Our Business ImmunityBio is a vertically-integrated biotechnology company developing next-generation therapies and vaccines that bolster the natural immune system to defeat cancers and infectious diseases. The company’s range of immunotherapy and cell therapy platforms, alone and together, act to drive an immune response with the goal of creating durable and safe protection against disease. Designated an FDA Breakthrough Therapy, ANKTIVA is the first FDA-approved immunotherapy for non-muscle invasive bladder cancer CIS that activates natural killer cells, T cells, and memory T cells for a long duration response. The company is applying our science and platforms to treating cancers, including the development of potential cancer vaccines, as well as developing immunotherapies and cell therapies that we believe sharply reduce or eliminate the need for standard high-dose chemotherapy. These platforms and their associated product candidates are designed to be more effective, accessible, and easily administered than current standards of care in oncology and infectious diseases. Our Approved Product – ANKTIVA ANKTIVA is a first-in-class IL-15 receptor superagonist IgG1 fusion complex, consisting of an IL-15 mutant (IL-15N72D) fused with an IL-15 receptor alpha, which binds with high affinity to IL-15 receptors on NK, CD4+, and CD8+ T cells. This fusion complex of ANKTIVA mimics the natural biological properties of the membrane-bound IL-15 receptor alpha, delivering IL-15 by dendritic cells and drives the activation and proliferation of NK cells with the generation of memory killer T cells that have retained immune memory against these tumor clones. The proliferation of the trifecta of these immune killing cells and the activation of trained immune memory results in immunogenic cell death, inducing a state of equilibrium with durable complete responses. ANKTIVA has improved pharmacokinetic properties, longer persistence in lymphoid tissues, and enhanced anti-tumor activity compared to native, non-complexed IL-15 in-vivo. ANKTIVA was approved by the FDA in 2024 for use in the United States with BCG for the treatment of adult patients with BCG-unresponsive non-muscle invasive bladder cancer with CIS with or without papillary tumors. We began commercial distribution of our approved product in May 2024. We believe there is potential for ANKTIVA to become a therapeutic foundation across all phases of treatment, including in adjunctive therapy, to amplify, reactivate or extend the efficacy of standard of care. ANKTIVA is being clinically evaluated in multiple oncology indications. We believe that other oncology indications with registration potential for ANKTIVA include other types of NMIBC ( BCG-unresponsive papillary, for which we submitted an sBLA in March 2025 and received an RTF letter from the FDA in May 2025, BCG-naïve CIS and BCG-naïve papillary), lung, colorectal, prostate and ovarian cancers, and GBM and NHL. Data from multiple clinical trials suggest ANKTIVA has potential to enhance the activity of therapeutic mAbs, including CPIs (e.g., pembrolizumab/Keytruda), across a wide range of tumor types, including lung cancer. Further, ANKTIVA has been observed to increase lymphocyte count in healthy adults, making it a potential therapy to rescue lymphopenia. We are also exploring or pursuing several other studies of ANKTIVA in combination with our other product candidates, including in prostate cancer (ANKTIVA in combination with hAd5 PSA), colon cancer (ANKTIVA in combination with hAd5 TriAd), and NHL (ANKTIVA in combination with rituximab). We are also exploring ANKTIVA in infectious diseases, including HIV and long COVID. 59 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) 2025 Platforms and Indications Our proprietary platforms for the development of biologic products and product candidates include: Our Next-Generation Platforms i. Cytokine Fusion Proteins (a) ANKTIVA ii. DNA and Vaccine Vectors (a) hAd5 (PSA, Brachyury, CEA, MUC1, HPV [E6/E7], neoantigens, nucleocapsid) iii. Cell Therapies (a) CD19 t-haNK (b) PD-L1 t-haNK (c) M-ceNK (autologous, allogeneic) Indications (Current Prioritized Studies) i. BCG-Unresponsive NMIBC with CIS (approved) ii. BCG-Unresponsive NMIBC Papillary (sBLA submitted in March 2025 with an RTF letter received in May 2025) iii. BCG-Naïve NMIBC with CIS iv. rBCG in NMIBC v. Non-Small Cell Lung Cancer vi. Pancreatic Cancer vii. Chemotherapy Radiation Lymphopenia viii. Lynch Syndrome ix. Hematological Malignancies (Liquid Tumors) x. Colon Cancer xi. Glioblastoma Multiforme xii. Non-Hodgkin Lymphoma xiii. Ovarian Cancer xiv. Prostate Cancer xv. HIV xvi. Universal Nucleocapsid Vaccine xvii. Long COVID 60 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Our Pipeline Our proprietary platforms for the development of biologic products and product candidates include: (i) cytokine fusion proteins, (ii) vaccine vectors, and (iii) cell therapies. As of March 2025, our platforms have generated nine first-in-human therapeutic agents (including one agent approved by the FDA) that are currently or planned to be studied in clinical trials in liquid and solid tumors. The indications in the table above are among the most frequent and lethal cancer types and where there are high failure rates for existing standards of care or no available effective treatment. We are constantly monitoring and prioritizing clinical development based upon the availability of our resources and the efficacy and market developments of our competitors’ products and product candidates, among other factors. Our platforms and their associated approved 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 CPIs, by turning immunologically cold, MHC-deficient tumors into hot tumors, and/or reducing the need for standard high-dose chemotherapy in cancer by employing a coordinated approach to establish “immunological memory” that confers long-term benefit for the patient. ImmunityBio Platforms – The Development of a Universal Therapeutic Cancer Vaccine Based on the vision of activating the patient’s immune system, the company continues its efforts to demonstrate that a universal cancer vaccine that leverages the power of its platforms – backbone ANKTIVA, off-the-shelf and autologous NK-cell-based therapies, adenovirus-vectored delivered vaccines, and other technologies – provide benefit and hope not only for patients with cancer but also for those with a high risk of developing cancer. 61 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Significant Developments The following is a summary of selected significant developments affecting our business that occurred since the filing of our Annual Report dated December 31, 2024 with the SEC on March 3, 2025: • For the three months ended March 31, 2025—marking the first quarter with a permanent J-code that streamlined billing and reimbursement for prescribing providers—ImmunityBio achieved net product revenue of approximately $16.5 million, representing a 129% increase over $7.2 million in Q4 2024. • ANKTIVA unit sales volume in Q1 2025 grew 150% over Q4 2024, with monthly volume in March up 69% over February. • Nearly 200 urology practices across the United States are in the process of registering for ImmunityBio’s rBCG EAP, reflecting continued progress in ImmunityBio’s efforts to address the BCG shortage and broaden the market for ANKTIVA. • The company completed a $75 million equity financing in April 2025 to support ongoing operations. • In January 2025, an in-person meeting was held with leadership of CBER, CDER and OCE of the FDA, at which we provided the long-term cystectomy avoidance response rate results in papillary disease in patients with BCG-unresponsive NMIBC as well as a disease-specific overall survival rate of 99% at 12 months and 96% at 36 months. At this meeting, the leaders were asked, in light of these results, whether we should proceed with an sBLA based on our single-arm QUILT 3.032 clinical trial despite the FDA’s prior guidance that a randomized trial would be required. The FDA leaders present unanimously confirmed that ImmunityBio should expeditiously submit an sBLA for use of ANKTIVA plus BCG in BCG-unresponsive NMIBC for the indication of papillary disease. In March 2025, we submitted this sBLA based on data from the QUILT 3.032 clinical trial, consistent with the Agency’s recent guidance from the January 2025 meeting. On May 2, 2025, we received an RTF letter from the FDA for the sBLA stating that a randomized trial is required. This position is inconsistent with the guidance received at the January 2025 meeting. We are working to reconcile the inconsistency with the FDA as expeditiously as possible. Operating Results Until April 2024, we had no clinical products approved for commercial sale and thus had not generated any revenue from therapeutic and vaccine product candidates that are or were under development. Now that we have received FDA approval for ANKTIVA, we have begun to generate revenue although we expect it to take some time to generate significant revenue from our approved product and we can provide no assurance when, or if, this will occur. We began commercial distribution of our approved product in May 2024; however, we can provide no assurance with respect to our future revenues, market acceptance, reimbursement from third-party payors, or the profitability of our approved product or any other product candidate for which we may obtain approval. We do not expect additional revenue from our other product candidates unless and until we obtain regulatory approval of and commercialize any of our other product candidates, and we do not know when, or if, this will occur. We expect to continue to incur significant expenses as we seek to expand our business, including commercializing our approved product, seeking regulatory approvals, conducting research and development across multiple therapeutic areas, participating in clinical trial activities, continuing to acquire or in-license technologies, maintaining, protecting and expanding our intellectual property, and increasing our manufacturing capabilities. Furthermore, the timing and magnitude of our approved product sales and revenue remain uncertain and may take a significant amount of time to materialize, if ever. We have incurred net losses in each year since our inception and, as of March 31, 2025, we had an accumulated deficit of $3.5 billion. During the three months ended March 31, 2025 and 2024, net losses attributable to ImmunityBio common stockholders were $129.6 million and $134.1 million, respectively. Substantially all of our net losses resulted principally from costs incurred in connection with our ongoing clinical trials and operations, our research and development programs, and from selling, general and administrative costs associated with our operations, including stock-based compensation expense. 62 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) As of March 31, 2025, we had 671 employees. Personnel of related companies who provide corporate, general and administrative, certain research and development, and other support services under our shared services agreement with NantWorks are not included in this number. See Note 15 “Related-Party Agreements” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for more information. In anticipation of the ongoing commercialization of our approved product, we expect to continue to incur significant expenses and increasing operating expenses for the foreseeable future, which may fluctuate significantly from quarter-to-quarter and year-to-year. See “ —Future Funding Requirements ” below for a discussion of our anticipated expenditures and sources of capital we expect to access to fund these expenditures. Collaboration Agreements We anticipate that strategic collaborations will continue to be an integral part of our operations, providing opportunities to leverage our partners’ expertise and capabilities to gain access to new markets for our approved product and acquire new technologies or further expand the potential of our technologies, approved product and product candidates across relevant platforms. We believe we are well positioned to become a leader in immunotherapy due to our broad and vertically-integrated platforms and through complementary strategic partnerships. We believe that our innovative approach to orchestrate and combine therapies for optimal immune system response will become a therapeutic foundation across multiple indications. Additionally, we believe that data from multiple clinical trials indicates ANKTIVA has broad potential to enhance the activity of therapeutic mAbs, including CPIs, across a wide range of tumor types and potentially rescue lymphopenia by proliferation and activation of NK and T cells. We may also enter into supply arrangements for various investigational agents to be used in our clinical trials. See Part I, Item 1. “ Business—Collaboration and License Agreements ” of our Annual Report filed with the SEC on March 3, 2025 for a more detailed discussion regarding our collaboration and license agreements. Agreements with Related Parties Our Executive Chairman and Global Chief Scientific and Medical Officer also founded and has a controlling interest in NantWorks, which is a collection of companies in the healthcare and technology space. We have entered into arrangements with NantWorks, and certain affiliates of NantWorks. Affiliates of NantWorks are also affiliates of the company due to the common control by and/or common ownership interest of our Founder, Executive Chairman and Global Chief Scientific and Medical Officer. Related-Party Debt See Note 14 “ Related-Party Debt” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for information regarding our related-party debt. NantWorks, LLC Our Founder, Executive Chairman and Global Chief Scientific and Medical Officer also founded and has a controlling interest in NantWorks, which is a collection of companies in the healthcare and technology space. We have entered into arrangements with NantWorks, and certain affiliates of NantWorks. Affiliates of NantWorks are also affiliates of the company due to the common control by and/or common ownership interest of our Founder, Executive Chairman and Global Chief Scientific and Medical Officer. See Note 15 “Related-Party Agreements” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for more information regarding our agreements with NantWorks. 63 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Immuno-Oncology Clinic, Inc. We have entered into multiple agreements with the Clinic to conduct clinical trials related to certain of our product candidates. The Clinic is a related party as it is owned by an officer of the company and NantWorks manages the administrative operations of the Clinic. See Note 15 “ Related-Party Agreements” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for more information regarding our agreements with the Clinic. Related-Party Leases We lease property in multiple facilities across the U.S. and Italy, including facilities located in El Segundo and Culver City, CA that are leased from related parties. See Note 15 “Related-Party Agreements” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for more information about our related-party leases. Related-Party Warrants A total of 1,638,000 warrants issued to an affiliate of Dr. Soon-Shiong with an exercise price of $3.24 per share were outstanding as of March 31, 2025. See Note 18 “Stock-Based Compensation” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for more information regarding the related-party warrants. Contingent Value Rights In connection with our 2017 acquisition of Altor, we issued CVRs under which we agreed to pay the prior stockholders of Altor approximately $304.0 million of contingent consideration upon calendar-year worldwide net sales of ANKTIVA exceeding $1.0 billion prior to December 31, 2026, with amounts payable in cash or shares of our common stock or a combination thereof. As of March 31, 2025, Dr. Soon-Shiong, our Founder, Executive Chairman and Global Chief Scientific and Medical Officer, and his related party hold approximately $139.8 million of net sales CVRs. See Note 11 “Commitments and Contingencies” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for more information regarding the CVRs. Components of our Results of Operations Product Revenue, Net Prior to the approval of ANKTIVA for commercial sale, we primarily generated revenues from non-exclusive license agreements related to our cell lines, the sale of our bioreactors and related consumables, and grant programs. The company expects to continue to generate revenue from these programs. Until April 2024, we had no clinical products approved for commercial sale and thus had not generated any revenue from therapeutic and vaccine product candidates that are or were under development. Now that we have received FDA approval for ANKTIVA, we have begun to generate revenue although we expect it to take some time to generate significant revenue from our approved product and we can provide no assurance when, or if, this will occur. We began commercial distribution of our approved product in May 2024; however, we can provide no assurance with respect to our future revenues, market acceptance, reimbursement from third-party payors, or the profitability of our approved product or any other product candidate for which we may obtain approval. We do not expect additional revenue from our other product candidates unless and until we obtain regulatory approval of and commercialize any of our other product candidates, and we do not know when, or if, this will occur. 64 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Cost of Sales Cost of sales consists primarily of third-party manufacturing costs, distribution, and overhead costs related to ANKTIVA sales. Cost of sales may also include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances. All costs associated with the production of ANKTIVA prior to receiving regulatory approval were expensed in research and development expense , on the condensed consolidated statement of operations in the period incurred and therefore are not reflected in cost of sales. We expect the cost of sales for ANKTIVA to increase in relation to product revenues as we deplete these inventories. Operating Expenses We generally classify our operating expenses into research and development, and selling, general and administrative expenses. Personnel costs, including salaries, benefits, bonuses, and stock-based compensation expense comprise a significant component of our research and development, and selling, general and administrative expense categories. We allocate expenses associated with our facilities and information technology costs between these two categories, primarily based on the nature of each cost. Research and Development Research and development expense consists of expenses incurred while performing research and development activities to discover and develop our technology and product candidates. This includes conducting preclinical studies and clinical trials, manufacturing development efforts and activities related to regulatory submissions for our approved product and product candidates. We expense research and development costs as they are incurred. Our research and development expense primarily consists of: • clinical trial and regulatory-related costs; • expenses incurred under agreements with investigative sites and consultants that conduct our clinical trials; • expenses incurred under collaborative agreements; • manufacturing and testing costs and related supplies and materials; • employee-related expenses, including salaries, benefits, travel and stock-based compensation; and • facility expenses dedicated to research and development. The company classifies its research and development expense as either external or internal. The company’s external research and development expense supports its various preclinical and clinical programs. The company’s internal research and development expense includes payroll and benefits expense, facilities and equipment expense, and other indirect research and development expense incurred in support of its research and development activities. The company’s external and internal resources are not directly tied to any one research or drug discovery program and are typically deployed across multiple programs and are not allocated to specific product candidates or development programs. We expect our research and development expense to increase significantly for the foreseeable future as we continue to invest in research and development activities related to expanding our product into new indications and markets, developing our other product candidates, and conducting our ongoing and planned clinical trials . 65 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) The process of conducting clinical trials necessary to obtain regulatory approval is costly and time consuming. The successful development of product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing or costs required to complete the remaining development of our other product candidates or to expand potential approved markets and indications for ANKTIVA. This is due to the numerous risks and uncertainties associated with the development of product candidates. The costs of clinical trials may vary significantly over the life of a project owing to, but not limited to, the following: • per patient trial costs; • the number of sites included in the clinical trials; • the countries in which the clinical trials are conducted; • the length of time required to enroll eligible patients; • the number of patients that participate in the clinical trials; • the number of doses that patients receive; • the cost of comparative or combination agents used in clinical trials; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring or other studies or incremental cohorts requested by regulatory agencies; • the duration of patient follow-up; and • the safety profile and efficacy of the product candidate. We have only one approved product, ANKTIVA, for which we received approval from the FDA on April 22, 2024. We began commercial distribution of our approved product in May 2024. There can be no assurance that our other product candidates will be approved for commercial sale by the FDA in the near term, if ever. Selling, General and Administrative Selling, general and administrative expense consists primarily of salaries and personnel-related costs, including employee benefits and any stock-based compensation, for employees performing functions other than research and development. This includes personnel in executive, finance, human resources, information technology, legal, sales and administrative support functions. Other selling, general and administrative expenses include sales and marketing costs, facility-related costs not otherwise allocated to research and development expense, professional fees for auditing, tax and legal services, advertising costs, expenses associated with strategic business transactions and business development efforts, obtaining and maintaining patents, consulting costs, royalties and licensing costs, and costs of our information systems. We expect that our selling, general and administrative expense will increase for the foreseeable future as we commercialize our approved product and expand operations, build out information systems and increase our headcount to support continued research activities and the development of our clinical programs. We have incurred and expect that we will continue to incur in the future, additional costs associated with operating as a public company, including costs to comply with stock exchange listing and SEC requirements, future funding efforts, corporate governance, internal controls, investor relations, disclosure and similar requirements applicable to public companies. Additionally, if and when we believe that a regulatory approval of one of our other product candidates appears likely, we expect to incur significant increases in our selling, general and administrative expense relating to the sales and marketing of any additional approved product candidate. Other Income (Expense), Net Other income (expense), net consists primarily of interest and investment income, interest expense (including amortization of debt discounts), unrealized gains and losses from investments in equity securities and equity-method investments, changes in fair value of warrant liabilities, derivative liabilities, and convertible notes, realized gains and losses on debt and equity securities, and gains and losses on foreign currency transactions. 66 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Income Taxes We are subject to U.S. federal income tax, as well as income tax in California, other states and other certain foreign jurisdictions. From inception through March 31, 2025, we have not been required to pay significant U.S. federal and state income taxes because of current and accumulated NOLs. Discussion of Condensed Consolidated Results of Operations Comparison of the Three Months Ended March 31, 2025 and 2024 Three Months Ended March 31, $ Change % Change 2025 2024 ($ in thousands) Revenue Product revenue, net $ 16,509 $ — $ 16,509 100% Other revenues 8 40 (32) (80) % Total revenue 16,517 40 16,477 n/a Operating costs and expenses: Cost of sales 58 — 58 100% Research and development (including amounts with related parties) 48,234 53,351 (5,117) (10) % Selling, general and administrative (including amounts with related parties) 32,654 41,885 (9,231) (22) % Total operating costs and expenses 80,946 95,236 (14,290) (15) % Loss from operations (64,429) (95,196) 30,767 (32) % Other income (expense), net Interest and investment income, net 887 3,099 (2,212) (71) % Change in fair value of related-party convertible note (42,582) — (42,582) 100% Interest expense (including amounts with related party) (15,331) (29,483) 14,152 (48) % Interest expense related to revenue interest liability (13,534) (8,004) (5,530) 69 % Change in fair value of derivative liabilities 5,578 (2,724) 8,302 (305) % Change in fair value of warrant liabilities (448) (1,802) 1,354 (75) % Other expense, net (41) (20) (21) 105 % Total other expense, net (65,471) (38,934) (26,537) 68 % Loss before income taxes and noncontrolling interests (129,900) (134,130) 4,230 (3) % Income tax benefit 234 — 234 100% Net loss $ (129,666) $ (134,130) $ 4,464 (3) % Product Revenue, Net Product revenue, net increased $16.5 million during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, due to sales of ANKTIVA, which was approved in April 2024. Other Revenues Other revenues decreased during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to decreased bioreactor and related consumable product sales. 67 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Cost of Sales Cost of sales increased $0.1 million during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. We did not report cost of sales during the three months ended March 31, 2024. Cost of sales consists primarily of third-party manufacturing, distribution, and overhead costs. All costs associated with the production of ANKTIVA prior to receiving regulatory approval were expensed in research and development expense , on the condensed consolidated statement of operations in the period incurred and therefore are not reflected in cost of sales. As a result, our initial product gross margin is higher as our pre-launch inventory costs are not included in the cost of sales. We expect the cost of sales for ANKTIVA to increase in relation to product revenues as we deplete these inventories. Research and Development Expense Research and development expense decreased $5.1 million during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The following table summarizes our research and development expense during the three months ended March 31, 2025 and 2024, together with the changes in those items (in thousands): Three Months Ended March 31, 2025 2024 $ Change External research and development expense $ 5,511 $ 10,133 $ (4,622) Internal research and development expense: Personnel-related costs 23,065 24,044 (979) Equipment, depreciation, and facility costs 13,192 12,891 301 Other research and development costs 6,466 6,283 183 Total internal research and development expense 42,723 43,218 (495) Total research and development expense $ 48,234 $ 53,351 $ (5,117) Research and development expense decreased $5.1 million primarily attributable to the following: • a $4.6 million decrease in external manufacturing costs, primarily due to a reduction in CMO fees, and lower consulting costs, partially offset by higher clinical trial related costs; and • a $1.0 million decrease in personnel-related costs, primarily due to a decrease in stock based compensation expenses, partially offset by lower shared service costs charged out and higher recruiting and training expenses compared to the prior period; partially offset by • a $0.3 million increase in equipment, depreciation, and facility costs, primarily due to increased facility expenses driven by building repairs and facility maintenance, partially offset by lower depreciation and amortization expenses and equipment expenses; and • a $0.2 million increase in other research and development costs, primarily due to higher manufacturing costs and higher distribution costs driven by more production and clinical trial activities and higher license fees, partially offset by fewer sponsored research agreements. We expect our research and development expense to increase significantly for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates and conduct our ongoing and planned clinical trials . 68 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Selling, General and Administrative Expense Selling, general and administrative expense decreased $9.2 million during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. T he decrease in selling, general and administrative expense was primarily driven by a $15.4 million decrease in legal expenses mainly due to lower costs related to litigation settlements, a $3.2 million decrease in commercial consulting activities, and a $0.4 million increase in net shared service costs charged out, partially offset by a $5.0 million increase in recruiting and training expenses, salaries, benefits and commissions, and travel expenses due to growing sales and marketing activities, a $2.6 million increase in stock-based compensation due to grants of 2025 equity incentive awards, and increased headcount, a $0.8 million increase in marketing and public relations expenses, a $0.5 million increase in facility costs, a $0.4 million increase in software license fees, a $0.3 million increase in distribution costs and a $0.2 million increase in research agreement costs. Other Income (Expense), Net Total other expense, net increased $26.5 million during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase in total other expense , net was primar ily driven by an increase of $42.6 million due to the change in fair value of a related-party convertible note, an increase of $5.5 million in interest expense related to the revenue interest liability, and a $2.2 million decrease in interest and investment income, partially offset by a decrease of $14.1 million mainly due to related-party interest expense, a decrease of $8.3 million due to the change in fair value of derivative liabilities, and a decrease of $1.4 million due to the change in fair value of warrant liabilities. Financial Condition, Liquidity and Capital Resources Sources of Liquidity From inception through March 31, 2025, we have funded our operations primarily through proceeds from the issuance of related-party promissory notes, sales of common stock under our shelf registration statements and through RDOs, and a RIPA financing. Cash and Marketable Securities on Hand As of March 31, 2025, we had cash and cash equivalents, and marketable securities of $61.6 million compared to $149.8 million as of December 31, 2024. We have typically invested our cash in a variety of financial instruments and classified these investments as available-for-sale. However, after our entry into the RIPA we can no longer invest our excess funds in corporate or European bonds. Certain of our investments are subject to credit, liquidity, market, and interest-rate risks. The general condition of the financial markets and the economy may increase those risks and may affect the value and liquidity of investments and restrict our ability to access the capital markets. Shelf Registration Statements During 2023, we filed a $750.0 million shelf registration statement with the SEC on Form S-3 for the offering and sale of equity and equity-linked securities, including common stock, preferred stock, debt securities, depositary shares, warrants to purchase common stock, preferred stock or debt securities, subscription rights, purchase contracts, and units. As of March 31, 2025, 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. As of March 31, 2025, we had $296.5 million available for future stock issuances under the ATM. 69 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Revenue Interest Purchase Agreement On December 29, 2023, we entered into the RIPA with Infinity and Oberland. Pursuant to the RIPA, Oberland had the option to purchase additional Revenue Interests from us in exchange for a $100.0 million Second Payment upon satisfaction of certain conditions in the RIPA, including receipt of approval from the FDA of our BLA for ANKTIVA on or before June 30, 2024. On April 22, 2024, the FDA approved our product ANKTIVA and as a result, on May 13, 2024 Oberland purchased additional Revenue Interests from us for a gross purchase price of $100.0 million, less certain issuance costs. As consideration for the aforementioned payments, Oberland has the right to receive quarterly Revenue Interest Payments from us based on, among other things, a certain percentage of our net sales during such quarter, which are tiered payments ranging from 4.5% to 10.0% (before funding of the Second Payment, 3.0% to 7.0%) of the company’s worldwide net sales, excluding those in China. See Note 13 “ Revenue Interest Purchase Agreement” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for more information. Stock Purchase and Option Agreement On December 29, 2023 and in connection with the RIPA, we entered into an SPOA with Oberland. Under this agreement, Oberland had an option to purchase up to $10.0 million of our common stock, at a price per share to be determined by reference to the 30-day trailing volume weighted-average price of our common stock, calculated from the date of exercise. The option is exercisable by Oberland at any time until the earliest of (i) December 29, 2028, (ii) a change of control of the company, or (iii) a sale of substantially all of the company’s assets. Among other limitations, the option may only be exercised to the extent that the common stock issuable pursuant to such exercise would not exceed 19.9% of the common stock outstanding immediately after giving effect to such exercise. 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. Following such exercise, approximately $5.0 million remains available for future exercise under the SPOA as of March 31, 2025. Uses of Liquidity In addition to the cash used to fund our operating activities discussed in “ —Future Funding Requirements ” below, we will require cash to settle the following obligations: • As of March 31, 2025, the aggregate amount of our indebtedness payable was $505.0 million in the form of a convertible promissory note due December 31, 2027. This convertible promissory note is held by Nant Capital, an entity affiliated with Dr. Soon-Shiong. In connection with the RIPA, our related-party promissory note is a general unsecured obligation of the company that is subordinated in right of payment to indebtedness, obligations, and other liabilities under the RIPA, the Revenue Interests issued pursuant to such agreement, and refinancing of the foregoing. There can be no assurance that the company can refinance this promissory note or what terms will be available in the market at the time of refinancing. Furthermore, if prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, then the interest expense relating to the refinanced indebtedness would increase. These risks could materially adversely affect the company’s financial condition, cash flows and results of operations. • On December 29, 2023 , we entered into the RIPA with Infinity and Oberland. Oberland has the right to receive quarterly Revenue Interest Payments from us based on, among other things, our worldwide net sales, excluding those in China, which will be tiered payments initially ranging from 4.5% to 10.0% (before funding of the Second Payment, 3.0% to 7.0%) , subject to increase or decrease, following December 31, 2029 (the Test Date) depending on whether our aggregate payments made to Oberland as of the Test Date have met or exceeded the Cumulative Purchaser Payments. In addition, if our aggregate payments made as of the Test Date to Oberland do not equal or exceed the amount of the Cumulative Purchaser Payments as of such date, then we are obligated to make a one-time True-Up Payment to Oberland in an amount equal to 100% of the Cumulative Purchaser Payments as of 70 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) the Test Date, less the aggregate amount of our previous payments to Oberland as of the Test Date. See Note 13 “Revenue Interest Purchase Agreement” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for more information regarding the RIPA. • In connection with our 2017 acquisition of Altor, we issued CVRs under which we agreed to pay the prior stockholders of Altor approximately $304.0 million of contingent consideration upon calendar-year worldwide net sales of ANKTIVA exceeding $1.0 billion prior to December 31, 2026, with amounts payable in cash or shares of our common stock or a combination thereof. As of March 31, 2025, Dr. Soon-Shiong 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. We may need to seek additional sources of capital to satisfy the CVR obligations if they are achieved. • In connection with our acquisition of VivaBioCell, we are obligated to pay the former owners approximately $2.2 million of contingent consideration upon the achievement of a regulatory milestone relating to the GMP-in-a-Box technology. Discussion of Condensed Consolidated Cash Flows The following discussion of ImmunityBio’s cash flows is based on the condensed consolidated statements of cash flows in Item 1. “Financial Statements” and is not meant to be an all‑inclusive discussion of the changes in its cash flows for the periods presented below. The following table sets forth our primary sources and uses of cash for periods indicated (in thousands): Three Months Ended March 31, 2025 2024 Cash (used in) provided by: Operating activities $ (85,905) $ (106,982) Investing activities 4,129 (35,622) Financing activities (982) 10,225 Effect of exchange rate changes on cash and cash equivalents, and restricted cash (10) (39) Net change in cash and cash equivalents, and restricted cash $ (82,768) $ (132,418) Operating Activities During the three months ended March 31, 2025, net cash used in operating activities of $85.9 million consisted of a net loss of $129.7 million and $22.0 million of cash used in net working capital, partially offset by $65.8 million in adjustments for non-cash items. The changes in net working capital consisted primarily of an increase of $14.7 million in accounts receivable, net, a decrease of $12.9 million in accrued expenses and other liabilities, a decrease of $1.7 million in operating lease liabilities, an increase of $0.2 million in inventories, and an increase of $0.1 million in other assets, partially offset by an increase of $6.4 million in accounts payable, a decrease of $1.1 million in prepaid expenses and other current assets, and an increase of $0.1 million with related parties. Adjustments for non-cash items primarily consisted of a $42.6 million change in the fair value of a related-party convertible note, $13.3 million of non-cash interest expense related to the revenue interest liability, $9.5 million in stock-based compensation expense, $3.8 million in depreciation and amortization expense, $1.6 million in non-cash lease expense related to operating lease right‑of‑use assets, a $0.4 million change in fair value of warrant liabilities, and $0.3 million in other items, reduced by a $5.6 million change in the fair value of derivative liabilities and $0.1 million in non-cash interest and accretion of discounts on marketable debt securities. 71 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) During the three months ended March 31, 2024, net cash used in operating activities of $107.0 million consisted of a net loss of $134.1 million and $3.9 million of cash used in net working capital, partially offset by $31.0 million in adjustments for non-cash items. The changes in net working capital consisted primarily of decreases of $8.9 million in accrued expenses and other liabilities, $0.9 million in operating lease liabilities, and $0.1 million with related parties, partially offset by an increase of $4.3 million in accounts payable, a decrease of $1.6 million in prepaid and other current assets, and a decrease of $0.1 million in other assets. Adjustments for non-cash items primarily consisted of $8.3 million in stock-based compensation expense, $7.9 million in non-cash interest primarily related to the revenue interest liability and related-party promissory notes, $5.5 million in amortization of related-party note discounts, $4.6 million in depreciation and amortization expense, a $2.7 million change in fair value of derivative liabilities, a $1.8 million change in the fair value of warrant liabilities, and $1.3 million in non-cash lease expense related to operating lease right‑of‑use assets, and $0.1 million of other non-cash items, reduced by $0.7 million in unrealized gains on equity securities driven by an increase in the value of our investments, and $0.5 million of accretion of discounts, on marketable debt securities. We have historically experienced negative cash flows from operating activities, with such negative cash flows likely to continue for the foreseeable future. Investing Activities During the three months ended March 31, 2025, net cash provided by investing activities was $4.1 million, which included proceeds of $5.3 million from maturities of marketable debt securities, partially offset by cash outflows of $1.1 million for purchases of property, plant and equipment, and $0.1 million for purchases of marketable debt securities. During the three months ended March 31, 2024, net cash used in investing activities was $35.6 million, which included cash outflows of $48.4 million for purchases of marketable debt securities and $1.2 million for purchases of property, plant and equipment, partially offset by proceeds of $14.0 million from maturities and sales of marketable debt and equity securities. Our investments in property, plant and equipment are primarily related to acquisitions of equipment that will be used for the manufacturing of our approved product and product candidates and expenditures related to the build out of our manufacturing facilities. We expect to accelerate our capital spending as we scale our GMP manufacturing capabilities, which will require significant capital for the foreseeable future. Financing Activities During the three months ended March 31, 2025, net cash used in financing activities was $1.0 million, which consisted of $1.2 million related to net share settlement of vested RSUs for payment of payroll tax withholding, partially offset by $0.2 million in proceeds from the exercise of stock options. During the three months ended March 31, 2024, net cash provided by financing activities was $10.2 million, which consisted of $14.1 million of proceeds from the exercise of warrants, partially offset by $3.9 million related to net share settlement of vested RSUs for payment of payroll tax withholding. Future Funding Requirements 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. 72 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Until April 2024, we had no clinical products approved for commercial sale and thus had not generated any revenue from therapeutic and vaccine product candidates that are or were under development. Now that we have received FDA approval for ANKTIVA, we have begun to generate revenue although we expect it to take some time to generate significant revenue from our approved product and we can provide no assurance when, or if, this will occur. We began commercial distribution of our approved product in May 2024; however, we can provide no assurance with respect to our future revenues, market acceptance, reimbursement from third-party payors, or the profitability of our approved product or any other product candidate for which we may obtain approval. We do not expect additional revenue from our other product candidates unless and until we obtain regulatory approval of and commercialize any of our other product candidates, and we do not know when, or if, this will occur. In addition, we expect our operating expenses to significantly increase in connection with our ongoing development activities, particularly as we continue the research, development and clinical trials of, and seek regulatory approval for, our other product candidates. We have also incurred and expect that we will continue to incur in the future additional costs associated with operating as a public company as well as costs related to future fundraising efforts. In addition, subject to obtaining regulatory approval of our other product candidates, we expect to incur significant incremental commercialization expenses for product sales, marketing, manufacturing and distribution. We anticipate that we will need substantial additional funding in connection with our continuing operations. We expect that our operating expenses will increase substantially if and as we: • commercialize our approved product; • continue research and development, including preclinical and clinical development of our other existing product candidates; • seek regulatory approval of our approved product in incremental markets and indications and potentially seek regulatory approval for our other product candidates; • seek to discover and develop additional product candidates; • establish a commercialization infrastructure and scale up our manufacturing and distribution capabilities to commercialize any of our other product candidates for which we may obtain regulatory approval; • seek to comply with regulatory standards and laws; • maintain, leverage and expand our intellectual property portfolio; • hire clinical, manufacturing, scientific and other personnel to support our product candidates’ development and future commercialization efforts; • add operational, financial and management information systems and personnel; and • incur additional legal, accounting and other expenses in operating as a public company. As a result of continuing anticipated operating cash outflows as we commercialize our approved product and accelerate our development efforts, we believe that substantial doubt exists regarding our ability to continue as a going concern without additional funding or financial support. However, we believe our existing cash and cash equivalents, and investments in marketable securities; sales of our approved product; capital to be raised through equity offerings, including but not limited to, the offering, issuance and sale by us of our common stock under our shelf registration statement; 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 condensed consolidated financial statements based primarily upon our Founder, Executive Chairman and Global Chief Scientific and Medical Officer’s intent and ability to support our operations with additional funds, including loans from affiliated entities, as required, which we believe alleviates such doubt. In addition to funds from the future sales of our approved product, which we expect to take time to establish, we may also seek to sell additional equity, through one or more follow-on public offerings, or in separate financings, or obtain a credit facility, issue other debt in compliance with the terms of the RIPA, or 73 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) engage in strategic partnership transactions. However, we may not be able to secure such external financing in a timely manner or on favorable terms, if at all. Without additional funds, we may choose to delay or reduce our operating or investment expenditures. Further, because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we may need additional funds to meet our needs sooner than planned. We will need to obtain additional financing to fund our future operations, including completing the commercialization of our approved product and the development and commercialization of our other product candidates. Changing circumstances may cause us to increase our spending significantly faster than we currently anticipate and we may need to raise additional funds sooner than we presently anticipate. Moreover, research and development and our operating costs and fixed expenses such as rent and other contractual commitments, including those for our research collaborations, are substantial and are expected to increase in the future. Our future funding requirements will depend on many factors, including, but not limited to: • our ability and the time required to successfully commercialize our approved product; • progress, timing, number, scope and costs of researching and developing our product candidates and our ongoing, planned and potential clinical trials; • time and cost of regulatory approvals; • our ability to successfully commercialize any of our other product candidates, if approved and the costs of such commercialization activities; • revenue from product candidates that we may commercialize, if any, including the selling prices for such potential products and the availability of adequate third-party coverage and reimbursement for patients; • interest and principal payments on our related-party promissory note, and repayment of Revenue Interests and Test Date payments due under the RIPA; • cost of building, staffing and validating our own manufacturing facilities in the U.S., including having a product candidate successfully manufactured consistent with FDA and EMA regulations; • terms, timing and costs of our current and any potential future collaborations, business or product acquisitions, CVRs, milestones, royalties, licensing or other arrangements that we have established or may establish; • time and cost necessary to respond to technological, regulatory, political and market developments; and • costs of filing, prosecuting, maintaining, defending and enforcing any patent claims and other intellectual property rights. Unless and until we can generate a sufficient amount of revenues, we may finance future cash needs through public or private equity offerings, license agreements, debt financings, collaborations, strategic alliances and marketing or distribution arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms, or at all. 74 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) To the extent that we raise additional capital through the sale of equity or equity-linked securities (including warrants), convertible debt, our shelf registration statements, or other offerings, or if any of our current debt is converted into equity or if our existing warrants are exercised, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. The incurrence of additional indebtedness would result in increased fixed payment obligations and could involve certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms unfavorable to us and our revenue interest liability may come due. We have no committed source of additional capital and if we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may be required to delay or reduce the scope of or eliminate one or more of our research or development programs or our commercialization efforts. Our current license and collaboration agreements may also be terminated if we are unable to meet the payment obligations under those agreements. As a result, we may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. Contractual Obligations We have material cash requirements to pay related-party affiliates and third parties under various contractual obligations discussed below: • We are obligated to make payments to several related-party affiliates under written agreements and other informal arrangements. We are also obligated to pay interest and to repay principal under our related-party promissory notes. See Note 14 “Related-Party Debt” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for information regarding our financing obligations. • We are obligated to make payments to Oberland associated with our revenue interest liability, which do not have a fixed repayment schedule. Oberland’s right to receive payments under the RIPA shall terminate when Oberland has received maximum payments (including any True-Up Payment) equal to 195.0% of the then Cumulative Purchaser Payments unless the RIPA is terminated prior to such date. Under the terms of the agreement, prior to the Test Date, every $100.0 million of worldwide net sales, excluding those in China, of less than or equal to $600.0 million in a calendar year will result in a tiered Revenue Interest Payment of approximately $10.0 million or 10.0% (after funding of the Second Payment). Worldwide net sales, excluding those in China, for a calendar year exceeding $600.0 million will result in a tiered Revenue Interest Payment of approximately $4.5 million or 4.5% (after funding of the Second Payment) for every $100.0 million of worldwide net sales, excluding those in China, above the threshold. In the future, cumulative worldwide net sales, excluding those in China, levels up to the Test Date will determine whether or not we are required to make a True-Up Payment and implement modified payment rates. The amount of the obligation and timing of payment is likely to change . See Note 13 “Revenue Interest Purchase Agreement” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for more information regarding the RIPA. • We are obligated to make payments under our operating leases, which primarily consist of facility leases. See Note 12 “Lease Arrangements” and Note 15 “Related-Party Agreements” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appear in Item 1. “Financial Statements” of this Quarterly Report for information regarding our lease obligations. • In connection with the acquisitions of Altor and VivaBioCell, we are obligated to pay contingent consideration upon the achievement of certain milestones. See Note 11 “Commitments and Contingencies—Contingent Consideration Related to Business Combinations” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for information regarding our contingent consideration obligations. 75 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) • We have contractual obligations to make payments to related-party affiliates and third parties under unconditional purchase arrangements. See Note 9 “ Commitments and Contingencies—Unconditional Purchase Obligations” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8. “Financial Statements and Supplementary Data” of our Annual Report filed with the SEC on March 3, 2025 for information on these unconditional purchase obligations. • We have certain contractual commitments that are expected to be paid within one year, depending on the actual progress of build outs, completion of services, and the realization of milestones associated with third-party agreements. This amount totals $41.8 million and is primarily related to capital expenditures and open purchase orders as of March 31, 2025 for the acquisition of goods and services in the ordinary course of business, and near-term upfront milestone payments to third parties. • In addition, we have contractual commitments that are expected to be paid in fiscal year 2026 and beyond based on the achievement of various development, regulatory and commercial milestones for agreements with third parties. These payments may not be realized or may be modified and are contingent upon the occurrence of various future events, substantially all of which have a high degree of uncertainty of occurring. As of March 31, 2025, the maximum amount that may be payable related to these commitments is $292.9 million. • In connection with our leasehold interest in the Dunkirk Facility, we committed to spend an aggregate of $1.52 billion on operational expenses during the initial 10-year term, and an additional $1.50 billion on operational expenses if we elect to renew the lease for the additional 10-year term. These amounts are not included in the discussion above. See Note 10 “ Collaboration and License Agreements and Acquisition—Acquisition” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for more information on these obligations. Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of condensed consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Those estimates can be complex and actual results could differ materially from those estimates. Estimates are assessed each period and updated to reflect current information. See Note 2 “ Summary of Significant Accounting Policies” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8. “Financial Statements and Supplementary Data” of our Annual Report filed with the SEC on March 3, 2025 for information on our significant accounting policies. Recent Accounting Pronouncements See Note 2 “ Summary of Significant Accounting Policies” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for a discussion of recent accounting pronouncements or changes in accounting pronouncements that are of significance, or potential significance, to us. 76 Table of Contents ImmunityBio, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Subsequent Events Registered Direct Offering On April 7, 2025, we entered into a securities purchase agreement with an institutional investor for the purchase and sale of 29,024,768 shares of our common stock, as well as warrants that allows such investor to purchase an additional 29,024,768 shares of common stock at an exercise price of $3.101 per share, for a purchase price of $2.584 per share and accompanying warrant, generating net proceeds of approximately $74.8 million, after deducting estimated offering costs. The warrants became immediately exercisable on April 9, 2025 and will expire five years after the issuance date on April 9, 2030. RTF Letter from the FDA for sBLA for BCG-Unresponsive NMIBC Papillary Disease In January 2025, an in-person meeting was held with leadership of CBER, CDER and OCE of the FDA, at which we provided the long-term cystectomy avoidance response rate results in papillary disease in patients with BCG-unresponsive NMIBC as well as a disease-specific overall survival rate of 99% at 12 months and 96% at 36 months. At this meeting, the leaders were asked, in light of these results, whether we should proceed with an sBLA based on our single-arm QUILT 3.032 clinical trial despite the FDA’s prior guidance that a randomized trial would be required. The FDA leaders present unanimously confirmed that ImmunityBio should expeditiously submit an sBLA for use of ANKTIVA plus BCG in BCG-unresponsive NMIBC for the indication of papillary disease. In March 2025, we submitted this sBLA based on data from the QUILT 3.032 clinical trial, consistent with the Agency’s recent guidance from the January 2025 meeting. On May 2, 2025, we received an RTF letter from the FDA for the sBLA stating that a randomized trial is required. This position is inconsistent with the guidance received at the January 2025 meeting. We are working to reconcile the inconsistency with the FDA as expeditiously as possible. 77 Table of Contents ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Financial market risks related to interest rates, foreign currency exchange rates, market risk on the price and volatility of our common stock, and inflation are described in Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report filed with the SEC on March 3, 2025. There have been no material changes to such financial market risks as of the date of this Quarterly Report. We do not currently anticipate any other near-term changes in the nature of our financial market risk exposures or in management’s objectives and strategies with respect to managing such exposures. ITEM 4. CONTROLS AND PROCEDURES. Evaluation of Disclosure Controls and Procedures Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives of ensuring that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures, and is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. There is no assurance that our disclosure controls and procedures will operate effectively under all circumstances. Management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2025. The term “disclosure controls and procedures,” as defined in Rule 13a-15(e) of the Exchange Act means controls and other procedures of a company that are designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2025, our CEO and CFO have concluded that, as of March 31, 2025, our disclosure controls and procedures were effective at the reasonable assurance level. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the fiscal quarter ended March 31, 2025, that our certifying officers concluded materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Inherent Limitations on Effectiveness of Controls Management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. 78 Table of Contents PART II—OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations. We are not currently a party to any legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. If we are served with any such complaints, we will assess at that time any contingencies for which we may need to reserve. 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. Shenzhen Beike Biotechnology Co. Ltd. Arbitration 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 ANKTIVA 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 ANKTIVA. Beike is seeking specific performance and declaratory relief for the alleged breaches. 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. We served an Answer and Counterclaims on May 19, 2023. Beike served a Reply to our counterclaims on June 21, 2023. 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, we served our Rejoinder and Response to Defense to Counterclaim on March 14, 2025, and Beike served its Rejoinder on Counterclaim on March 28, 2025. The hearing in the arbitration is scheduled to begin on June 9, 2025. 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 On June 30, 2023, a putative securities class action complaint, captioned Salzman v. ImmunityBio, Inc. et al. , No. 3:23-cv-01216-GCP-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, 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. On March 17, 2025, the court granted preliminary approval of the settlement. A final approval hearing is scheduled for June 13, 2025. 79 Table of Contents As a result of the foregoing, the company recorded legal settlement expense of $10.5 million in selling, general and administrative expense, on the condensed 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. Approximately $6.0 million of this amount has since been paid by the company’s insurers, which was recorded during the three months ended March 31, 2025. 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. Altor BioScience, LLC, and NantCell, Inc. Matters Against Dr. Hing Wong and HCW Biologics, Inc. On December 23, 2022, Altor and NantCell filed an arbitration demand against Dr. Hing Wong, former CEO of Altor and NantCell. The demand asserts claims for breach of Dr. Wong’s contracts with the companies, breach of the covenant of good faith and fair dealing, conversion, fraudulent concealment, unjust enrichment, breach of fiduciary duty, and replevin. The same day, Dr. Wong filed an arbitration demand seeking a declaratory judgment finding that Dr. Wong is not liable to Altor or NantCell for any of their claims. The parties agreed to consolidate the arbitration filings in one proceeding, and on January 23, 2023, Dr. Wong filed an Answering Statement denying the claims. Also, on December 23, 2022 Altor and NantCell filed a complaint in the United States District Court for the Southern District of Florida against HCW, Dr. Wong’s new company. Altor’s and NantCell’s complaint asserts claims for misappropriation of trade secrets under both Florida and federal law, inducement of breach of contract, tortious interference with contractual relations, inducement of breach of fiduciary duty, conversion, unjust enrichment, replevin, request for assignment of patents and patent applications, and establishment of a constructive trust. On January 31, 2023, HCW filed motions to compel arbitration of Altor’s and NantCell’s claims, or in the alternative to stay or dismiss them. Altor and NantCell filed an opposition to the motions on February 14, 2023, and HCW filed reply papers on February 21, 2023. At a hearing on April 18, 2023, the court heard argument and requested supplemental briefing. After the hearing, the parties reached an agreement to consolidate all claims in a single arbitration proceeding. On May 1, 2023, we filed our arbitration demand asserting the same claims against HCW that were asserted in the federal court complaint. On May 15, 2023, HCW filed an Answering Statement denying the claims. The hearing in the consolidated arbitration took place from May 20, 2024 to May 30, 2024. On July 13, 2024, we entered into a Settlement with HCW and Dr. Hing Wong to resolve the claims asserted in the consolidated arbitration and related matters. Under the terms of the Settlement, in part and for no monetary consideration from ImmunityBio, HCW transferred and assigned to ImmunityBio molecules (along with other related assets, including master cell banks, clinical trial protocols, inventory and FDA documents), controlled by HCW that were generated through the use of a TF Platform related to the human TGF-β receptor and TGF-β traps, including, without limitation, HCW9218, HCW9219, HCW9209 and any derivatives thereof or therefrom, including assignment of all patents, know-how and all other intellectual property existing as of the Settlement effective date and thereafter that is necessary or reasonably useful for the exploitation of such TGF-β molecules, with the exception that future reasonably useful intellectual property is the subject of a non-exclusive license to ImmunityBio. For indications outside of oncology, ImmunityBio has agreed to grant an exclusive license back to HCW for the transferred intellectual property for TGF-β products, and a non-exclusive license for neoadjuvant ovarian cancer, subject to certain requirements. In addition, the Settlement provides to ImmunityBio a worldwide, perpetual, irrevocable, fully paid-up, royalty-free, exclusive license to exploit fusion proteins, molecules and/or antibodies created utilizing the TF Platform directed to the receptors of PDL-1, IL-7, IL-12, IL-15, IL-18, and IL-21 in the oncology field. Furthermore, the Settlement provides additional license terms including, without limitation, a non-exclusive license to ImmunityBio to exploit HCW9201, another fusion protein, and the anti-tissue factor based antibody HCW9101 and the linked resins to manufacture and purify the fusion proteins described above, as well as a right of first refusal for ImmunityBio with respect to any other fusion protein developed by HCW using the TF Platform going forward. Pursuant to the Settlement, the parties agreed to mutual, full and complete releases. On December 23 and 24, 2024, the company dismissed the consolidated arbitration claims and a related action in the Delaware Court of Chancery in light of the Settlement. 80 Table of Contents 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. , Case No. 3:24-cv-02014-GPCL-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 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 has entered an order extending the defendants’ deadline to respond to the complaint to May 30, 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 . The court entered an order extending the defendants’ deadline to respond to the complaint to May 30, 2025. 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. , Case No. 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 . The court entered an order extending the defendants’ deadline to respond to the complaint to May 30, 2025. 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. On May 2, 2025, instead of filing an opposition to defendants’ motion to dismiss, the plaintiff filed an amended complaint. This amended complaint added certain additional members of the company’s Board of Directors as defendants but did not add new claims. Defendants’ response to the amended complaint is due July 16, 2025. 81 Table of Contents ITEM 1A. RISK FACTORS. Investing in our securities involves a high degree of risk. You should carefully consider the risks described below, any of which may be relevant to decisions regarding an investment in or ownership of our stock. The occurrence of any of these risks could have a significant adverse effect on our reputation, business, financial condition, results of operations, growth, and ability to accomplish our strategic objectives. We have organized the description of these risks into groupings in an effort to enhance readability, but many of the risks interrelate or could be grouped or ordered in other ways, so no special significance should be attributed to the groupings or order below. Risk Factor Summary Risks Related to Our Financial Condition and Capital Requirements • We are a vertically-integrated commercial stage biotechnology company with a single approved product and a limited operating history as a commercial company and have many other product candidates at the clinical stage. We have a history of operating losses, and we expect to continue to incur losses and may never be profitable, which, together with our limited operating history, makes it difficult to assess our future viability. • We anticipate needing additional financing to fund our operations, complete the commercialization of our approved product, conduct clinical trials, and develop and commercialize of our other product candidates. • The RIPA imposes Revenue Interest Payment obligations, which may adversely affect our financial position and results of operations, as well as affirmative and negative covenants, which restrict our business operations. • Our debt and revenue interest liability could adversely affect our cash flows and limit our flexibility to raise additional capital. • The value of our warrants outstanding and the revenue interest liability are subject to potentially material increases and decreases based on fluctuations in the price of our common stock or projected sales and the probability of specific events, which may affect our results of operations and financial position and could adversely affect our stock price. Risks Related to the Discovery, Development and Commercialization of our Approved Product and our Other Product Candidates • We are substantially dependent on the successful commercialization of our approved product and the success and regulatory approval of our other product candidates. If we are unable to successfully commercialize our approved product or successfully complete clinical development of, obtain regulatory approval for, or commercialize, our other product candidates, or if we experience delays in doing so, our business will be materially harmed. • We have limited experience as a commercial company and the sales, marketing, and distribution of our approved product or any future approved products may be unsuccessful or less successful than anticipated. • We have developed an approved product and are developing other product candidates in combination with other therapies, which expose us to additional risks. Risks Related to Reliance on Third Parties • We have relied and will continue to rely on third parties and related parties to conduct some of our preclinical studies and clinical trials, manufacture products, and perform many essential services for any products that we commercialize. Any failure by a third party or related party to perform as expected, to comply with legal and regulatory requirements, to manufacture products in compliance with cGMP, or to conduct the clinical trials according to GCP guidelines, and in a timely manner, may delay or prevent our ability to commercialize our approved product, to seek or obtain regulatory approval for or commercialize our other product candidates or may subject us to regulatory sanctions. • If third-party manufacturers, wholesalers and distributors fail to perform as expected, or fail to devote sufficient time and resources to our approved product or other product candidates, our clinical development may be delayed, our costs may be higher than expected or our other product candidates may fail to be approved, or we may fail to successfully commercialize our approved product or any other product candidates if approved. 82 Table of Contents • We use the Clinic, a related party, in some of our clinical trials which may expose us to significant regulatory risks. If our data for this site is not sufficiently robust or if there are any data integrity issues, we may be required to repeat such studies or contract with other clinical trial sites, which could delay and/or increase the cost of our development plans. • We have formed, and may in the future form or seek, strategic alliances or enter into collaborations with third parties or additional licensing arrangements, and we may not realize the benefits of such alliances or licensing arrangements, and we may engage in disputes with such third parties, which can be costly and time consuming. Risks Related to Healthcare and Other Government Regulations • While we have one FDA-approved product, we may be unable to obtain additional U.S. or foreign regulatory approval and, as a result, may be unable to commercialize our other product candidates. We are, and will continue to be subject to ongoing extensive regulation, regulatory obligations and continued regulatory review, which may result in significant additional expense. • Obtaining and maintaining regulatory approval of our approved product or other product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval in other jurisdictions. • Even though we have a regulatory approved product, we will continue to be subject to ongoing regulatory requirements concerning it and our other product candidates which may result in significant additional expenses. Additionally, our other product candidates, if approved, could be subject to labeling and other restrictions, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our approved product or product candidates. • If we are unable to establish adequate sales, marketing and distribution capabilities, we may not be successful commercializing our approved product or other product candidates if and when they are approved. • Problems related to large-scale commercial manufacturing could cause delays in product launches, an increase in product costs, product recalls or product shortages. Risks Related to Intellectual Property • If we are unable to obtain, maintain, protect and enforce patent protection and other proprietary rights for our approved product and our other product candidates and technologies, we may not be able to compete effectively or operate profitably and our ability to prevent our competitors from commercializing similar or identical technology and we would be adversely affected. • If any of our owned or in-licensed patent applications do not issue as patents in any jurisdiction, we may not be able to compete effectively. • We or our licensors, collaborators, or any future strategic partners may become subject to third-party claims or litigation alleging infringement of patents or other proprietary rights or seeking to invalidate patents or other proprietary rights, and we may need to resort to litigation to protect or enforce our patents or other intellectual property or the patents or other intellectual property of our licensors, all of which could be expensive, time-consuming and unsuccessful, may delay or prevent the development and commercialization of our approved product and other product candidates, or may put our patents and other proprietary rights at risk. Risks Related to Our Common Stock • Dr. Soon-Shiong, our Founder, Executive Chairman, Global Chief Scientific and Medical Officer and principal stockholder, has significant interests in other companies which may conflict with our interests. • Dr. Soon-Shiong, through his voting control of the company, has the ability to control actions that require stockholder approval. • Conversion of related-party promissory notes, exercise of outstanding warrants and options to purchase our common stock, the achievement of the milestone under our outstanding CVRs, and potential additional equity issuances may dilute the ownership interest of existing stockholders or may otherwise depress the price of our common stock. • The market price of our common stock has been and may continue to be volatile, and investors may have difficulty selling their shares. 83 Table of Contents Risks Related to Our Financial Condition and Capital Requirements We are a vertically-integrated commercial stage biotechnology company with a single approved product and a limited operating history as a commercial company and have many other product candidates at the clinical stage. We have a history of operating losses, and we expect to continue to incur losses and may never be profitable, which, together with our limited operating history, makes it difficult to assess our future viability. We are a vertically-integrated commercial stage biotechnology company with a limited operating history as a commercial company upon which you can evaluate our business and prospects regarding the commercialization of our approved product and we have a broad portfolio of product candidates at various stages of development. 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. On April 22, 2024, the FDA approved ANKTIVA with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with CIS with or without papillary tumors for commercial sale, and we have commenced generating revenue, although we expect it to take some time to generate significant revenue from our approved product. We can provide no assurance when, or if, this will occur. We do not expect additional revenue from our other product candidates unless and until we obtain regulatory approval of and commercialize any of such other product candidates, and we do not know when, or if, this will occur. In addition, we have limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biotechnology industry, including in connection with obtaining marketing approvals, manufacturing a commercial-scale product or arranging for a third party to do so on our behalf, and conducting sales and marketing activities necessary for successful product commercialization. Because of the numerous risks and uncertainties associated with the commercialization of our approved product and other development efforts, we are unable to predict when we may become profitable, if at all. Since the commencement of our operations, we have incurred significant losses each year, and, as of March 31, 2025, we had an accumulated deficit of $3.5 billion. We expect to continue to incur significant expenses as we seek to expand our business, including in connection with conducting research and development across multiple therapeutic areas, participating in clinical trial activities, continuing to acquire or in-license technologies, maintaining, protecting and expanding our intellectual property, seeking regulatory approvals, increasing our manufacturing capabilities and, upon successful receipt of FDA approval, commercializing our other product candidates. Furthermore, the timing and magnitude of sales of our approved product and other revenues remain uncertain and may take a significant amount of time to materialize. We expect our expenses and net losses to increase significantly as we continue to commercialize our approved product, continue to develop and seek regulatory approvals for our other product candidates, and plan to commercialize other approved products, if any, as well as hire additional personnel, protect our intellectual property and incur additional costs associated with operating as a public company. Since ANKTIVA is approved for use with BCG (and currently TICE BCG is the only FDA-approved strain of BCG available in the U.S., except for rBCG available in limited quantities through our agreement with Serum Institute pursuant to an EAP), any shortage or supply chain issues associated with TICE BCG could impact the demand for ANKTIVA and our ability to commercialize our approved product. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on sales, the timing of our clinical studies and trials, associated manufacturing needs, commercialization activities of our approved product, and any of our other product candidates, if they are approved, and our expenditures on other research and development activities. We also face the risks associated with the shift from development to commercialization of new products based on innovative technologies. Our ability to achieve profitability, if ever, is dependent upon, among other things, obtaining regulatory approvals for additional product candidates and successfully commercializing our approved product, and other product candidates alone or with third parties. However, our operations may not become profitable even with commercial sales of our approved product or other product candidates, even if they are successfully developed, approved and thereafter commercialized. Even if we do become profitable, we may not be able to sustain or increase our profitability on a quarterly or annual basis. As a result, it may be more difficult for you to assess our future viability than it could have been if we had a longer operating history. 84 Table of Contents We anticipate needing additional financing to fund our operations, complete the commercialization of our approved product, conduct clinical trials, and develop and commercialize our other product candidates. If we are unable to obtain such financing when needed or on acceptable terms, we may be unable to successfully commercialize our approved product or develop and commercialize our other product candidates. If we are unable to obtain such financing when needed or on acceptable terms, we could be forced to delay, limit, reduce, or terminate our development programs, commercialization efforts, and/or other operations. The development of biopharmaceutical products, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive and uncertain process that takes years to complete. Our operations have consumed substantial amounts of cash since inception. A significant portion of our funding has been in the form of related-party promissory notes. As of March 31, 2025, our indebtedness was comprised of a $505.0 million convertible promissory note held by an entity affiliated with Dr. Soon-Shiong. As of March 31, 2025, we held cash and cash equivalents, and marketable securities totaling $61.6 million. We 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. Changing circumstances may cause us to increase our spending significantly faster than we currently anticipate and we may need to raise additional funds sooner than we presently anticipate. Moreover, research and development and our operating costs and fixed expenses such as rent and other contractual commitments, including those for our research collaborations, are substantial and are expected to increase in the future. Unless and until we can generate a sufficient amount of revenue, we may finance future cash needs through public or private equity offerings, license agreements, debt financings, collaborations, strategic alliances or marketing and/or distribution arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms, or at all. To the extent that we raise additional capital through the sale of equity or equity-linked securities (including warrants), convertible debt, our shelf registration statements, or other offerings, or if any of our current debt is converted into equity or if our existing warrants are exercised, your ownership interest will be diluted, and the liquidation or other preferences may adversely affect your rights as a stockholder. If we incur additional indebtedness, our fixed payment obligations will increase, and we may have to comply with certain restrictive covenants that are similar to those associated with the RIPA, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms unfavorable to us, or exercise our Call Option (as defined in the RIPA) to purchase the outstanding revenue interest liability, which will require us to generate a significant amount of cash flow to offset these outflows. We have no committed source of additional capital, and if we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may be required to delay or reduce the scope of or eliminate one or more of our research or development programs or our commercialization efforts. See “ —Our payment obligations under the RIPA may adversely affect our financial position and results of operations and our ability to raise additional capital which in turn may increase our vulnerability to adverse regulatory developments or economic or business downturns ” and Note 13 “ Revenue Interest Purchase Agreement” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Part I, Item 1. “Financial Information” of this Quarterly Report for more information. Our current license and collaboration agreements may also be terminated if we are unable to meet the payment obligations under those agreements. As a result, we may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. 85 Table of Contents Our payment obligations under the RIPA may adversely affect our financial position and results of operations and our ability to raise additional capital, which in turn may increase our vulnerability to adverse regulatory developments or economic or business downturns. On December 29, 2023, we entered into the RIPA with Infinity and Oberland. Pursuant to the RIPA, Oberland acquired certain Revenue Interests from us for a gross purchase price of $200.0 million paid on closing, less certain transaction expenses. In addition, on May 13, 2024, Oberland purchased additional Revenue Interests from us in exchange for a $100.0 million Second Payment, which we requested upon satisfaction of certain conditions specified in the RIPA, including the receipt of approval from the FDA of our BLA for ANKTIVA with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with CIS with or without papillary tumors on or before June 30, 2024. In consideration for the aforementioned payments, Oberland has the right to receive quarterly Revenue Interest Payments from us based on, among other things, our worldwide net sales, excluding those in China, which are tiered payments ranging from 4.50% to 10.00%, subject to increase or decrease following December 31, 2029 depending on whether the aggregate payments made to Oberland as of that date met or exceeded the Cumulative Purchaser Payments (as defined in the RIPA). In addition, if the aggregate payments to Oberland as of December 31, 2029 do not equal or exceed the amount of the Cumulative Purchaser Payments, then we are obligated to make a one-time payment to Oberland in an amount equal to 100% of the Cumulative Purchaser Payments, less the aggregate amount of our previous payments to Oberland as of December 31, 2029 (the True-Up Payment, as defined in the RIPA). See Note 13 “ Revenue Interest Purchase Agreement” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Part I, Item 1. “Financial Information” of this Quarterly Report for more information. The RIPA and our payment obligations to Oberland could have important negative consequences to holders of our securities. For example, a portion of our cash flow from operations will be needed to make required payments to Oberland and will not be available to fund future operations. Payment requirements under the RIPA will increase our cash outflows. Our future operating performance is subject to market conditions and business factors that are beyond our control. If our cash inflows and capital resources are insufficient to allow us to make required payments, we may have to reduce or delay capital expenditures, sell assets or seek additional capital. If we raise funds by selling additional equity, such sales will result in dilution to our stockholders. There is no assurance that if we are required to secure funding we can do so on terms acceptable to us, or at all. Failure to pay amounts owed to Oberland when due would result in a default under the RIPA and could result in foreclosure on all or substantially all of our assets, which would have a material adverse effect on our financial condition and business operations. The RIPA contains affirmative and negative operational covenants and events of default, which may prevent us from capitalizing on business opportunities and taking some corporate actions and give rise to a Put Option in favor of Oberland, which could have a material adverse effect on our financial condition and business operations. The RIPA contains affirmative and negative covenants and events of default, including covenants and restrictions that, among other things, restrict our ability to incur liens, incur additional indebtedness, make loans and investments, enter into transactions with affiliates, engage in mergers and acquisitions, engage in asset sales and exclusive licensing arrangements, and declare dividends to our stockholders, in each case, subject to certain exceptions 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 under the RIPA, an uncured material breach, default on certain third-party agreements, a breach or default under any subordination agreements with respect to indebtedness to existing stockholders, any right to repurchase or accelerate debt instruments like permitted convertible notes, existing stockholder indebtedness, or subordinated notes during certain time periods, judgments in excess of certain amounts against us, a material adverse effect, the loss of regulatory approval of our approved product, or a change of control. The triggering of the Put Option, including by our failure to comply with these covenants, would permit Oberland to declare certain amounts to be immediately due and payable. If we were to default under the terms of the RIPA, including by failure to make such accelerated payments, Oberland could exercise remedies, including initiating foreclosure proceedings against all or substantially all of our assets. Oberland’s right to repayment is senior to the rights of the holders of our common stock. Any triggering of the Put Option or other declaration by Oberland of an event of default under the RIPA could significantly harm our financial condition, business and prospects and could cause the price of our common stock to decline. 86 Table of Contents Our debt and revenue interest liability could adversely affect our cash flows and limit our flexibility to raise additional capital. We have a significant amount of debt and a revenue interest liability and may need to incur additional debt to support our growth. As of March 31, 2025, our indebtedness was comprised of a $505.0 million convertible promissory note held by an entity affiliated with Dr. Soon-Shiong and a revenue interest liability with Oberland under the RIPA in excess of $300.0 million. The total amount paid to Oberland depends on when we repay this debt. See Note 13 “ Revenue Interest Purchase Agreement” of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Part I, Item 1. “Financial Information” of this Quarterly Report for more information. Our substantial amount of debt could have important consequences and could: • require us to dedicate a substantial portion of our cash and cash equivalents to make interest and principal payments on our debt and revenue interest liability payments, reducing the availability of our cash and cash equivalents and cash flow from operations to fund future capital expenditures, working capital, execution of our strategy and other general corporate requirements; • increase our cost of borrowing and even limit our ability to access additional debt to fund future growth; • increase our vulnerability to general adverse economic and industry conditions and adverse changes in governmental regulations; • limit our flexibility in planning for, or reacting to, changes in our business and industry, which may place us at a disadvantage compared with our competitors; and • limit our ability to borrow additional funds, even when necessary to maintain adequate liquidity, which would also limit our ability to further expand our business. The occurrence of any of the foregoing factors could have a material adverse effect on our business, results of operations and financial condition. There can be no assurance that we can refinance the related-party promissory note or revenue interest liability or what terms will be available in the market at the time of refinancing. Furthermore, if prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, then the interest expense relating to the refinancing would increase. These risks could materially adversely affect our financial condition, cash flows and results of operations. The value of our warrants outstanding and the revenue interest liability are subject to potentially material increases and decreases based on fluctuations in the price of our common stock or projected sales and the probability of specific events, which may affect our results of operations and financial position and could adversely affect our stock price. In connection with our RDO during the year ended December 31, 2023, we entered into warrant agreements with certain institutional investors that allow such investors to purchase up to an aggregate total of 28,641,911 shares of our common stock at an exercise price of $3.2946 per share. As of March 31, 2025, 6,399,171 warrants were exercisable with an expiration date of July 24, 2026. We account for the warrants as derivative instruments, and changes in the fair value of the warrants are included in other income (expense), net , on the condensed consolidated statement of operations for each reporting period. As of March 31, 2025, the fair value of warrant liabilities included in the condensed consolidated balance sheet was $9.0 million. We use the Black-Scholes option pricing model to determine the fair value of the warrants. As a result, the valuation of these derivative instruments is subjective, and the Black-Scholes option pricing model requires the input of subjective assumptions, including the expected stock price volatility and probability of a fundamental transaction (a strategic merger or sale). Changes in these assumptions can materially affect the fair value estimate. We could, at any point in time, ultimately incur amounts different than the carrying value, which could have a significant impact on our results of operations and financial position. 87 Table of Contents We account for the revenue interest liability 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. The company imputes interest expense associated with this liability using the effective interest rate method. The effective interest rate is calculated based on the rate that would enable the debt to be repaid in full over the anticipated life of the arrangement. Interest expense is recognized over the estimated term on the condensed consolidated statement of operations. The interest rate on the liability and the underlying value of the bifurcated embedded derivative may vary during the term of the agreement depending on a number of factors, including the level of actual and forecasted net sales, and in the case of the derivative, specific probabilities associated with RIPA Put/Call events or Test Date payments underlying our Monte Carlo Simulation valuation technique. The company evaluates the interest rate quarterly based on actual and forecasted net sales utilizing the prospective method. A significant increase or decrease in actual or forecasted net sales will materially impact the revenue interest liability and/or the bifurcated embedded derivative, interest expense, and the time period for repayment. Fluctuations in warrant, revenue interest liability, and derivative values, and changes in the assumptions and factors used in the model may impact our operating results, making it difficult to forecast our operating results and making period-to-period comparisons less predictive of future performance. In one or more future quarters, our results of operations may fall below the expectations of securities analysts and investors. In that event, the market price of our common stock could decline. In addition, the market price of our common stock may fluctuate or decline regardless of our operating performance . The accounting method for convertible debt securities could have a material effect on our reported financial results. We entered into a second amended and restated promissory note with Nant Capital on December 10, 2024 in connection with an equity offering. Pursuant to the terms of the second amended and restated promissory note, Tranche 1 of the prior promissory note (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 (the December 2024 Promissory Note). The December 2024 Promissory Note was accounted for as part of a debt extinguishment, in accordance with FASB ASC Topic 470-50, Debt – Modifications and Extinguishments (ASC 470-50), as the terms of the December 2024 Promissory Note were substantially different than the terms of the December 2023 Promissory Note. The company elected the fair value option of accounting under FASB ASC Topic 825, F inancial Instruments (ASC 825), for the December 2024 Promissory Note. As a result of the fair value option election, the December 2024 Promissory Note and the embedded derivative were accounted for as a single instrument in accordance with FASB ASC Topic 815, Derivatives and Hedging (ASC 815). Changes in fair value of the December 2024 Promissory Note are recorded as a component of other income (expense), net, on the consolidated statement of operations. There is no current observable market for the December 2024 Promissory Note and, as such, we determined the fair value by using the binomial lattice model with significant unobservable inputs including an expected market yield, an expected volatility, and a risk-free rate. The changes in fair value of the December 2024 Promissory Note may have a substantial effect and may have a negative impact on our statement of financial position and statement of operations. It is difficult to predict the effect on our future financial results as the significant inputs are outside of our control. We invest our cash on hand in various financial instruments which are subject to risks that could adversely affect our business, results of operations, liquidity and financial condition. We have typically invested our cash in a variety of financial instruments, including investment-grade short- to intermediate-term corporate debt securities, government-sponsored securities and European bonds; however, after our entry into the RIPA, we can no longer invest our excess funds in corporate or European bonds. Certain of our investments are subject to credit, liquidity, market, and interest rate risk. Such risks, including the failure or severe financial distress of the financial institutions that hold our cash and cash equivalents, and investments, may result in a loss of liquidity, impairment to our investments, realization of substantial future losses, or a complete loss of the investments in the long-term, which may have a material adverse effect on our business, results of operations, liquidity and financial condition. To manage the risk to our investments, we maintain an investment policy that, among other things, limits the amount that we may invest in any one issue or any single issuer and requires us to only invest in high credit quality securities to preserve liquidity. 88 Table of Contents Our ability to use NOLs and research and development credits to offset future taxable income may be subject to certain limitations. In general, under Sections 382 and 383 of the Code, a corporation that undergoes an ownership change is subject to limitations on its ability to utilize its pre-change NOLs or credits, to offset future taxable income or taxes. For these purposes, an ownership change generally occurs when the aggregate stock ownership of one or more stockholders or groups of stockholders who own at least 5% of a corporation’s stock increases its ownership by more than 50 percentage points over its lowest ownership percentage within a specified testing period (“ownership shift”). We have not conducted a complete study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study. If we have experienced a change of control, as defined by Section 382, at any time since inception (including as a result of the March 2021 merger which pursuant to which NantKwest and NantCell combined their businesses ), utilization of the NOL carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382. Any limitation may result in expiration of a portion of the NOL carryforwards or research and development tax credit carryforwards before utilization. In addition, our NOLs or credits may also be impaired under state law. Accordingly, we may not be able to utilize a material portion of our NOLs or credits. Since we will need to raise substantial additional funding to finance our operations, we may experience further ownership shifts in the future, some of which may be outside of our control. Limits on our ability to use our pre-change NOLs or credits to offset U.S. federal taxable income could potentially result in increased future tax liability to us if we earn net taxable income in the future. In addition, under the legislation commonly referred to as the TCJA, as modified by the Coronavirus Aid, Relief, and Economic Security Act, the amount of NOLs generated in taxable periods beginning after December 31, 2017, that we are permitted to deduct in any taxable year beginning after December 31, 2020 is limited to 80% of our taxable income in such year, where taxable income is determined without regard to the NOL deduction itself. The TCJA allows post-2017 unused NOLs to be carried forward indefinitely. Similar rules apply under state tax laws. In addition, some states, e.g., California, may suspend the use of NOL carryovers that may result in state taxable income and liabilities. Our transfer pricing policies may be subject to challenge by the IRS or other taxing authorities. Our intercompany relationships are subject to complex transfer pricing regulations administered by taxing authorities in various jurisdictions. The relevant tax authorities may disagree with our determinations as to the value of assets sold or acquired or income and expenses attributable to specific jurisdictions. If such a disagreement were to occur, and our position were not sustained, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations. We believe that our condensed consolidated financial statements reflect adequate reserves to cover such a contingency, but there can be no assurances in that regard. Unanticipated changes in effective tax rates or adverse outcomes resulting from new tax statutes or regulations, examination of our income or other tax returns could expose us to greater than anticipated tax liabilities. The tax laws applicable to our business, including the laws of the U.S. and other jurisdictions, are subject to change, interpretation and certain jurisdictions may aggressively interpret their laws to raise additional tax revenue. It is possible that tax authorities may disagree with certain positions we have taken, are currently taking or will take, and any adverse outcome of such a review or audit could have a negative effect on our financial position and results of operations. Further, the determination of our provision for income taxes and other tax liabilities requires significant judgment by management, and there are transactions where the ultimate tax determination is uncertain. Although we believe that our estimates are reasonable, the ultimate tax outcome may differ from the amounts recorded on the condensed consolidated financial statements and may materially affect our financial results in the period or periods for which such determination is made. In addition, tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. For example, in August 2022, the U.S. enacted the IRA, which imposes a 15% minimum tax on the adjusted financial statement income of certain large corporations, as well as a 1% percent excise tax on corporate stock repurchases by publicly traded companies. Additionally, for taxable years beginning on or after January 1, 2022, the Code eliminated the right to deduct research and development expenditures currently and requires taxpayers to capitalize and amortize U.S. and foreign research and development expenditures over 5 and 15 tax years, respectively. These updates, as well as any other changes to tax laws that are enacted, could adversely affect our tax liability. 89 Table of Contents Risks Related to the Discovery, Development and Commercialization of our Approved Product and our Other Product Candidates We are substantially dependent on the successful commercialization of our approved product and the success and regulatory approval of our other product candidates. If we are unable to successfully commercialize our approved product or successfully complete clinical development of, obtain regulatory approval for, or commercialize, our other product candidates, or if we experience delays in doing so, our business will be materially harmed. Prior to the approval of ANKTIVA with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with CIS with or without papillary tumors for commercial sale, we primarily generated revenues from non-exclusive license agreements related to our cell lines, the sale of our bioreactors and related consumables, and grant programs. The company expects to continue to generate revenue from these programs. Until April 2024, we had no clinical products approved for commercial sale and thus had not generated any revenue from therapeutic and vaccine product candidates that are or were under development. In addition, now that we have received FDA approval for ANKTIVA with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with CIS with or without papillary tumors, we have begun to generate revenue although we expect it to take some time to generate significant revenue from our approved product and we can provide no assurance when, or if, this will occur. We began commercial distribution of our approved product in May 2024; however, we can provide no assurance with respect to our future revenues, both in terms of amounts and pace, market acceptance, reimbursement from third-party payors, or the profitability of our approved product or any other product candidate for which we may obtain approval. We are required to comply with certain post-marketing commitments, including completion of our QUILT 3.032 clinical trial and annual reporting for up to four years, with a final report submission to FDA by the end of 2029. Our business currently depends heavily on our ability to successfully commercialize our approved product in the U.S. and in other jurisdictions where we may obtain marketing approval. We may never be able to successfully commercialize our approved product or meet our, or analysts or other third parties’ expectations with respect to revenues. We have never marketed, sold, or distributed for commercial use any pharmaceutical product other than our approved product, with respect to which we only recently began efforts to initiate commercial sales. There is no guarantee that the infrastructure, systems, processes, policies, relationships, and materials we have built for the launch and commercialization of our approved product in the U.S. or elsewhere will be sufficient for us to achieve success at the levels we expect. We may encounter issues and challenges in commercializing our approved product and generating substantial revenues. We may also encounter challenges related to reimbursement of our approved product, including potential limitations in the scope, breadth, availability, or amount of reimbursement covering our approved product. Similarly, healthcare settings or patients may determine that the financial burdens of treatment are not acceptable and as a result physicians may be reluctant to recommend our approved product to their patients. We may face other limitations or issues related to the price of our approved product. Our results may also be negatively impacted if we have not adequately sized our field teams or our physician segmentation and our targeting strategy is inadequate or if we encounter deficiencies or inefficiencies in our infrastructure or processes. Other factors that may hinder our ability to successfully commercialize approved product, or any of our other product candidates if or when approved and generate substantial revenues, include: • the acceptance of our approved product by patients and the medical community, including industry groups and third-party payors; • the ability of our third-party manufacturer(s) to manufacture commercial supplies of our approved product at acceptable costs, to remain in good standing with regulatory agencies, and to maintain commercially viable manufacturing processes that are, to the extent required, compliant with cGMP regulations; • our ability to remain compliant with laws and regulations that apply to us and our commercial activities; • FDA-mandated package-insert requirements and successful completion of FDA post-marketing requirements; • the actual market size for our approved product, which may be different than expected; • the length of time that patients who are prescribed our drug remain on treatment; • our ability to obtain marketing approval for our approved product outside of the U.S.; 90 Table of Contents • the sufficiency of our drug supply to meet commercial and clinical demands, which could be negatively impacted if our projections regarding the potential number of patients are inaccurate, we are subject to unanticipated regulatory requirements, or our current drug supply is destroyed, or negatively impacted at our manufacturing sites, storage sites, or in transit; • the availability of reimbursement for our approved product and physicians’ understanding regarding the same; • our ability to effectively compete with other therapies that may emerge for the treatment of bladder cancer; and • our ability to maintain, enforce, and defend third party challenges to our intellectual property rights in and to our approved product or any of our other product candidates. Any of these issues could impair our ability to successfully commercialize our approved product or to generate substantial revenues or profits or to meet our expectations with respect to the amount or timing of revenues or profits. Any issues or hurdles related to our commercialization efforts may materially adversely affect our business, results of operations, financial condition, and prospects. There is no guarantee that we will be successful in our launch or commercialization efforts with respect to our approved product. We may also experience significant fluctuations in sales of our approved product from period to period and, ultimately, we may never generate sufficient revenues from our approved product to reach or maintain profitability or sustain our anticipated levels of operations. Any inability on our part to successfully commercialize our approved product in the U.S., and any other international markets where it may subsequently be approved, or any significant delay, could have a material adverse impact on our ability to execute upon our business strategy. In addition, while we have pursued additional regulatory filings in the first quarter of 2025, such as an sBLA submission for BCG-unresponsive NMIBC patients in the papillary indication as discussed below and are pursuing and anticipating certain additional regulatory submissions in 2025 following discussions with the FDA, including a BLA for second-line and third-line treatment of patients with NSCLC who are progressing on CPIs, and a potential BLA for the indication of reversal of lymphopenia in patients receiving standard of care chemotherapy and/or radiation and for the treatment of locally advanced or metastatic pancreatic cancer, among others, the regulatory review process is dynamic and highly uncertain. Even if we are able to prepare and submit these regulatory submissions on the anticipated timeline, there can be no assurance that the FDA will accept the BLAs and other regulatory submissions for filing and review, and there can be no assurance that the FDA will ultimately approve such BLAs and submissions if accepted for filing and review. For example, on May 2, 2025, we received an RTF letter from the FDA for the sBLA we submitted for use of ANKTIVA plus BCG in BCG-unresponsive NMIBC for the indication of papillary disease stating that a randomized trial is required. We believe the RTF letter to be inconsistent with guidance received from members of Agency leadership during a January 2025 meeting to submit the sBLA based on the single-arm QUILT 3.032 trial, and we are working to reconcile the inconsistency with the FDA as expeditiously as possible. There can be no assurance that we will be successful in our efforts to resolve the RTF letter with the FDA and/or that our sBLA will be accepted for filing and review in this indication in a timely manner, or at all, without the need to conduct a new randomized trial, or that we will receive approval even if it is accepted for filing and review. Further, we have invested a significant portion of our efforts and financial resources in the development of ANKTIVA, our novel antibody-cytokine fusion protein , and our other product candidates, s econd-generation hAd5 vaccine candidates, and our NK cell therapy candidates. Our other product candidates will require additional clinical and non-clinical development, regulatory approval, commercial manufacturing arrangements, enhancement of our commercial organization and service providers, significant marketing efforts, and further investment before we can generate any revenue from the sale of these other potential products. We expect to invest heavily in our other current product candidates and in any future product candidates that we may develop. Our product candidates are susceptible to the risks of failure inherent at any stage of product development, including the appearance of unexpected adverse events or failure to achieve primary endpoints in clinical trials. Furthermore, we cannot assure you that we will meet our timelines for current or future clinical trials, including post-market study requirements for our approved product, which may be delayed or not completed for a number of reasons. Additionally, our ability to generate revenues from our approved product and any other combination therapy products will depend on the availability of the other therapies used in combination therewith, including BCG, with which our approved product and other product candidates are intended to be used. In particular, there has been a shortage of TICE BCG in the U.S. According to the American Urological Association, Merck & Co., Inc. is the sole manufacturer and supplier of TICE BCG in the U.S. and many other countries around the world. Increasing demand for BCG has led to supply constraints for TICE BCG, which could materially impact the demand for our approved product and our ability to commercialize our approved product, and our efforts to introduce an alternative source of BCG in connection with our collaboration with Serum Institute may not be successful. 91 Table of Contents We have limited experience as a commercial company and the sales, marketing, and distribution of our approved product or any future approved products may be unsuccessful or less successful than anticipated. We recently began commercializing our approved product in the U.S. As a company, we have no prior experience commercializing a product. The success of our commercialization efforts for our approved product and any future approved products is difficult to predict and subject to the effective execution of our business plan, including, among other things, the continued development of our internal and external sales, marketing, and distribution capabilities and our ability to navigate the significant expenses and risks involved with the development and management of such capabilities. For example, we have hired and contracted for service providers in areas to support commercialization, including in sales management, sales representatives, marketing, access and reimbursement, sales support, and distribution. There are significant expenses and risks involved with establishing our sales, marketing, and distribution capabilities, including our ability to hire or contract, retain, and appropriately incentivize qualified individuals, provide adequate training to sales and marketing personnel, and effectively manage geographically dispersed sales and marketing teams to generate sufficient demand. Any failure or delay in the development of these capabilities could delay or negatively affect the success of our commercialization efforts and our business. For example, the commercialization of our approved product may not develop as planned or anticipated, which may require us to, among others, adjust or amend our business plan and incur significant expenses. Further, given our lack of experience commercializing products, we do not have a track record of successfully executing on the commercialization of an approved product. If we are unsuccessful in accomplishing our objectives and executing on our business plan, or if the commercialization of our approved product does not develop as quickly as planned, or any future approved products does not develop as planned, we may require significant additional capital and financial resources, we may not become profitable, and we may not be able to compete against more established companies in our industry. We have developed an approved product and are developing other product candidates in combination with other therapies, which expose us to additional risks. We have developed an approved product and are developing other product candidates in combination with one or more other therapies. We are studying ANKTIVA therapy along with other products and product candidates, such as BCG, CPIs, hAd5 TAAs, PD-L1 t-haNK, and M-ceNK. Since we have developed a product, or if we choose to develop other products for use in combination with an approved therapy, we are subject to the risk that the FDA, EMA or comparable foreign regulatory authorities in other jurisdictions could revoke approval of, or that safety, efficacy, manufacturing or supply issues could arise with the therapy used in combination with our approved product or our other product candidates. In particular, supply chain issues or shortages of other products used in combination with our approved product or any other product candidates could impact our ability to obtain FDA regulatory approval, meet clinical trial timelines, and commercialize our approved product or other product candidates. The FDA may require us to use more complex clinical trial designs in order to evaluate the contribution of each product and product candidate to any observed effects. To the extent that we do not have rights to already approved products, this may require us to work with another company to satisfy such a requirement or increase our cost of development. It is possible that the results of these trials could show that any positive results are attributable to the already approved product. Following product approval, the FDA may require that products used in conjunction with each other be cross labeled for combined use. If the therapies we use in combination with our approved product or our other product candidates are replaced as the standard of care for the indications we choose for our approved product or any of our other product candidates, the FDA or comparable foreign regulatory authorities may require us to conduct additional clinical trials. The occurrence of any of these risks could result in our own products, if approved, being removed from the market or being less successful commercially. In addition, unapproved therapies face the same risks described with respect to our product candidates currently in development and clinical trials, including the potential for serious adverse effects, delays in clinical trials and lack of FDA approval. If the FDA or comparable foreign regulatory authorities do not approve or revoke their approval of these other therapies, or if safety, efficacy, quality, manufacturing or supply issues arise with, the therapies we choose to evaluate in combination with any of our product candidates, we may be unable to obtain approval of or market such other combination therapies. 92 Table of Contents Our clinical trials may fail to adequately demonstrate the safety and efficacy of our product candidates, which would prevent or delay regulatory approval and commercialization of other product candidates. Our research and development programs of our other non-FDA-approved product candidates are at various stages of development. The clinical trials of our product candidates as well as the manufacturing and marketing of our product candidates will be subject to extensive and rigorous review and regulation by numerous government authorities in the U.S. and in other countries where we intend to test and market our product candidates. Before obtaining regulatory approvals for the commercial sale of any of our other product candidates, we must demonstrate through lengthy, complex, and expensive preclinical testing and clinical trials that our product candidates are safe, pure, and potent for use in their target indications. Each product candidate must demonstrate an adequate risk versus benefit profile in its intended patient population and for its intended use. The risk/benefit profile required for product licensure will vary depending on these factors and may include not only the ability to show tumor shrinkage, but also adequate duration of response, a delay in the progression of the disease, and/or an improvement in survival. For example, response rates from the use of our product candidates or their contribution of effect may not be sufficient to obtain regulatory approval unless we can also show an adequate duration of response. The clinical trials for our product candidates under development may not be completed on schedule, and regulatory authorities may ultimately disagree with our chosen endpoints or may find that our studies or study results do not support product approval. The FDA or foreign regulatory authorities may not interpret the results as we do or accept the therapeutic effects as valid endpoints in clinical trials necessary for market approval, or they may find that our clinical trial design or conduct does not meet the applicable approval requirement, and more trials could be required before we submit our product candidates for approval. Success in early clinical trials does not ensure that large-scale clinical trials will be successful, nor does it predict final results. Product candidates in later stages of clinical trials may fail to show the desired safety, tolerability, and efficacy traits despite having progressed through preclinical studies and initial clinical trials and after reviewing test results, we or our collaborators may abandon projects that we might previously have believed to be promising. In addition, we do not have data on possible harmful long-term effects of our product candidates and do not expect to have this data in the near future. As a result, our ability to generate clinical safety and effectiveness data sufficient to support submission of a marketing application or commercialization of our product candidates is uncertain and is subject to significant risk. The ongoing shortage of TICE BCG in the U.S. may adversely impact market uptake of our approved product, ANKTIVA, and it may also delay our ability to execute our clinical trials or seek new approvals. There is an ongoing shortage of TICE BCG in the U.S., which may adversely impact market uptake of our approved product. The TICE BCG shortage may impact the number of patients who are treated with BCG for NMIBC with CIS with or without papillary tumors, therefore limiting the pool of BCG-unresponsive patients who may be candidates for our approved product. In addition, the TICE BCG shortage may also constrain the number of patients we can treat with our approved product since our product is administered along with BCG. In addition, ANKTIVA was awarded Fast Track designation by the FDA for the treatment of BCG-naïve NMIBC with CIS. We are currently enrolling patients in our Phase 2b blinded, randomized, two-cohort, open-label, multi-center trial of intravesical BCG with ANKTIVA versus BCG alone, in BCG-naïve patients with high-grade NMIBC with CIS (Cohort A) and NMIBC papillary (Cohort B), which is impacted by the availability of TICE BCG. If we do not complete new trials timely, our ability to generate clinical safety and effectiveness data sufficient to support submission of a marketing application or commercialization of our product candidates in new indications could harm our business, operating results, prospects or financial condition. In addition, our efforts to introduce an alternative source of BCG in connection with our collaboration with Serum Institute (including a recent EAP approved by the FDA) and ultimately obtain regulatory approval for such alternative BCG supply may not be successful in mitigating the TICE BCG shortage, or at all. We may choose to expend our limited resources on programs that do not yield successful product candidates or additional indications and may fail to capitalize on other indications and product candidates that may ultimately have been more profitable or had a greater likelihood of success. We do not have sufficient resources to pursue development of all or even a substantial portion of the potential opportunities that we believe will be afforded to us by our product candidates. Because we have limited resources and access to capital to fund our operations, our management must make strategic decisions as to which product candidates and indications to pursue and how much of our resources to allocate to each. Our management must also evaluate the benefits of developing in‑licensed or jointly owned technologies, which in some circumstances we may be contractually obligated to pursue, relative to 93 Table of Contents developing other product candidates, indications or programs. Our management has broad discretion to suspend, scale down, or discontinue any or all of these development efforts, or to initiate new programs to treat other diseases. If we select and commit resources to opportunities that we are unable to successfully develop, or we forego more promising opportunities, our business, financial condition, and results of operations will be adversely affected. Our projections regarding the market opportunities for our approved product and our other product candidates may not be accurate, and the actual market for our approved product and other product candidates, may be smaller than we estimate. Since our approved product, current product candidates, and any future product candidates represent novel approaches to treating various conditions, it may be difficult to accurately estimate the potential revenues from our approved product and these other product candidates. Accordingly, we may spend significant capital trying to successfully commercialize our approved product or obtain approval for our other product candidates that have an uncertain commercial market. Our projections of addressable patient populations that may benefit from treatment with our approved product or other product candidates are based on our beliefs and estimates of the therapeutic benefit and adverse event profile of our approved product and other product candidates. These estimates, which have been derived from a variety of sources, including scientific literature, preclinical and clinical studies, surveys of clinics, patient foundations, or market research by third parties, may prove to be incorrect. Further, new studies or approvals of new therapeutics may change the estimated incidence or prevalence of these diseases. The number of patients may turn out to be lower than expected. Additionally, the potentially addressable patient population for our approved product or other product candidates may be limited or may not be amenable to treatment with our approved product or other product candidates and may also be limited by the cost of our treatments and the reimbursement of those treatment costs by third-party payors. Even if we obtain significant market share for our approved product or other product candidates, because the potential target populations may be small, we may never achieve profitability without obtaining regulatory approval for additional indications. There can be no assurance that we will complete a strategic partnership transaction on acceptable terms, or at all. We continue to explore potential global strategic partnership transactions for commercialization of ANKTIVA for certain indications. Factors that may impact our ability, or decision, to enter into such a strategic partnership, include, without limitation, the put/call features of the RIPA that may be triggered by entry into a strategic partnership depending on its scope and terms, and ultimately there can be no assurance that we will complete a transaction on acceptable terms, or at all. If we do not execute a strategic partnership transaction in the near-term, it would eliminate a potential source of near-term funding, and may impact our ability to raise additional funds to meet our business needs. In addition, there are significant risks involved with building and managing a commercial infrastructure on a stand-alone basis, which could materialize in the event we do not execute a strategic partnership transaction, or depending on the geographic scope of any executed transaction. Interim, initial, top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. From time to time, we may publicly disclose preliminary, interim, or top-line data from our preclinical studies and clinical trials, which are based on preliminary analyses of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available or as patients from our clinical trials continue other treatments for their disease, or as inclusion and exclusion criteria is discussed with regulators. We also may make assumptions, estimations, calculations, and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the interim, top-line, or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data has been received and fully evaluated. Top-line data also remains subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, top-line data should be viewed with caution until the final data are available. Adverse differences between preliminary or interim data and final data could significantly harm our business prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our common stock. 94 Table of Contents In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is typically selected from a more extensive amount of available information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure. If the interim, top-line, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition. Our clinical trials may not be initiated or completed when we expect, or at all, may take longer and cost more to complete than we project, and may have higher costs than more conventional therapeutic technologies or drug products. We may be required to conduct additional clinical trials or modify current or future clinical trials based on feedback we receive from the FDA. We cannot guarantee that any current or future clinical trials will be conducted as planned or completed on schedule, if at all, or that any of our other product candidates will receive regulatory approval. A failure of one or more clinical trials can occur at any stage of the clinical trial process, other events may cause us to stop a clinical trial temporarily or permanently, and our future clinical trials may not be successful. Because our current product candidates include, and we expect our future product candidates to include, candidates based on advanced therapy technologies, we expect that they will require extensive research and development and have substantial manufacturing costs. In addition, costs to treat patients and to treat potential side effects that may result from our product candidates can be significant. Some clinical trial sites may not bill, or obtain coverage from Medicare, Medicaid, or other third-party payors for some or all of these costs for patients enrolled in our clinical trials, and clinical trial sites outside of the U.S. may not reimburse for costs typically covered by third-party payors in the U.S. As a result, we may be required by those trial sites to pay such costs. Accordingly, our clinical trial costs are likely to be significantly higher per patient than those of more conventional therapeutic technologies or drug products. Collaborations with other entities may be subject to additional delays because of the management of the trials, contract negotiations, the need to obtain agreement from multiple parties, and the necessity of obtaining additional approvals for therapeutics used in the combination trials. These combination therapies will require additional testing and clinical trials will require additional FDA approval and will increase our future costs. Any inability to successfully complete preclinical and clinical development could result in additional costs to us, slow down our product development and approval process, or impair our ability to commence product sales and generate revenues. In addition, if we make manufacturing changes to our approved product or other product candidates, we may be required to, or we may elect to, conduct additional trials to bridge our modified approved product or other product candidates to earlier versions. These changes may require FDA approval or notification and may not have their desired effect. The FDA may also not accept data from prior versions of the product to support an application, delaying our clinical trials or programs or necessitating additional clinical trials or preclinical studies. We may find that this change has unintended consequences that necessitates additional development and manufacturing work, additional clinical and preclinical studies, or that results in an RTF letter or non-approval of a BLA and/or NDA. Clinical trial delays could shorten any period during which our product candidates have patent protection and may allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business and results of operations. In addition, we have in the past experienced clinical holds imposed upon certain of our or investigator-led clinical trials for various reasons, and we may experience further clinical trial holds in the future. If we fail to commence or complete, or experience delays in, any of our planned clinical trials, our stock price and our ability to conduct our business as currently planned could be harmed. If we are required by the FDA or any equivalent foreign regulatory authority to perform clinical trials or studies in addition to those we currently expect to conduct, or if there are any delays in completing the clinical trials of our other product candidates, our expenses could increase substantially. 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. We are required to comply with certain post-marketing commitments, including completion of our QUILT 3.032 clinical trial and annual reporting for up to four years, with a final report submission to the FDA by the end of 2029. 95 Table of Contents Even if more of our product candidates are approved and commercialized, we may not become profitable. If approved for marketing by applicable regulatory authorities, our ability to generate revenues from our other product candidates will depend on our ability to: • price our other product candidates competitively such that third-party and government reimbursement leads to broad product adoption; • prepare a broad network of clinical sites for administration of our other product candidates; • create market demand for our other product candidates through our own or our partner’s marketing and sales activities, and any other arrangements to promote these product candidates that we may otherwise establish; • receive regulatory approval for the targeted patient population(s) and claims that are necessary or desirable for successful marketing; • manufacture our other product candidates through third-party CMOs or in our own manufacturing facilities or facilities owned by entities affiliated with Dr. Soon-Shiong in sufficient quantities and at acceptable quality and manufacturing cost to meet regulatory requirements and commercial demand at launch and thereafter; • establish and maintain agreements with wholesalers, distributors, pharmacies, and group purchasing organizations on commercially reasonable terms; • obtain, maintain, protect, and enforce patent and other intellectual property protection and regulatory exclusivity for our other product candidates; • successfully commercialize any of our other product candidates that receive regulatory approval; • maintain compliance with applicable laws, regulations, and guidance specific to commercialization including interactions with health care professionals, patient advocacy groups, and communication of health care economic information to payors and formularies; • achieve market acceptance of our other product candidates by patients, the medical community, and third-party payors; • achieve appropriate reimbursement for our product candidates; • maintain a distribution and logistics network capable of product storage within our specifications and regulatory guidelines, and further capable of timely product delivery to commercial clinical sites; • effectively compete with other therapies or competitors; and • following launch, ensure that our approved product will be used as directed and that additional unexpected safety risks will not arise. We can provide no assurance with respect to the profitability or the market share that we might achieve for our product candidates, if approved. The target patient population for which we obtain approval may be narrower than we expect. Additionally, we may not be able to obtain the labeling claims necessary or desirable for the promotion of our approved product. Further, supply chain issues or shortages associated with combination products that may be used with our approved product, such as ANKTIVA plus BCG, may limit the demand for our approved product. We are also party to agreements that may require substantial payments upon the occurrence of certain milestones. As an example, 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 exceed ing $1.0 billion prior to December 31, 2026 with amounts payable in cash or shares of our common stock or a combination thereof. As of March 31, 2025, Dr. Soon-Shiong 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 96 Table of Contents 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. If this were to occur, we may need to seek additional sources of capital and any such financing activities may be restricted by the covenants included in the terms of the RIPA. As such, we may face difficulties raising additional capital and may have to accept unfavorable terms and as a result, we may not be able to achieve profitability or positive cash flow. In connection with our financing in December 2023, we entered into the RIPA with Infinity and Oberland. Oberland has the right to receive quarterly Revenue Interest Payments from us based on, among other things, our worldwide net sales, excluding those in China, which are tiered payments ranging from 4.50% to 10.00%, subject to increase or decrease, following the Test Date depending on whether our aggregate payments made to Oberland as of the Test Date have met or exceeded the Cumulative Purchaser Payments. In addition, if our aggregate payments made as of the Test Date to Oberland do not equal or exceed the amount of the Cumulative Purchaser Payments as of such date, then we are obligated to make a one-time payment True-Up Payment as described above. In addition to other considerations of the RIPA and the associated impact to our profitability and cash flow, if we were required to make a True-Up Payment, we may need to seek additional sources of capital, and we may not be able to achieve profitability or positive cash flow. If we encounter delays or difficulties enrolling and/or maintaining patients in our clinical trials, our clinical development activities, and receipt of necessary marketing approvals could be delayed or otherwise adversely affected. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the trial until its conclusion. We may experience difficulties or delays in patient enrollment and retention in our clinical trials for a variety of reasons. Because the number of qualified clinical investigators is limited, we may need to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such clinical trial sites. In addition, in the past we have engaged, and we intend to continue to engage, in clinical trial efforts outside of the U.S., which gives rise to additional potential complexity and challenges, and further reliance upon third parties in foreign jurisdictions. Moreover, because our product candidates represent a departure from more commonly used methods for cancer and/or viral disease treatment, potential patients and their doctors may be inclined to use conventional therapies, such as chemotherapy and approved immunotherapies that have established safety and efficacy profiles, rather than enroll patients in any future clinical trial. Delays or failures in planned patient enrollment or retention may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our product candidates or could render further development impossible. Our approved product and other product candidates may cause undesirable side effects, adverse events, or have other properties or safety risks that could halt their clinical development, delay or prevent their regulatory approval, result in regulatory warning letters, product recalls, regulatory and manufacturing holds, or limit their commercial potential or result in other significant negative consequences. Results of our trials could reveal a high and unacceptable severity and prevalence of side effects, adverse events or unexpected characteristics. Combination immunotherapy that includes our current product candidates may be associated with more frequent adverse events or additional adverse events. Undesirable side effects or unacceptable toxicities caused by our other product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials or order our clinical trials to be placed on clinical hold, and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities for any or all targeted indications. The FDA or comparable foreign regulatory authorities may also require additional data, clinical trials, or preclinical studies should unacceptable toxicities arise. We may need to abandon development or limit development of that product candidate to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe, or more acceptable from a risk/benefit perspective. Even if we were to receive product approval, such approval could be contingent on inclusion of unfavorable information in our product labeling, such as limitations on the indicated uses for which the products may be marketed or distributed, a label with significant safety warnings, including boxed warnings, contraindications, and precautions, a label without statements necessary or desirable for successful commercialization, or requirements for costly post marketing testing and surveillance, or other requirements, including a REMS to monitor the safety or efficacy of the products, and in turn prevent us from commercializing and generating revenues from the sale of our current or future product candidates. In addition, these serious adverse effects may not be appropriately 97 Table of Contents recognized or managed by the treating medical staff, as toxicities resulting from our other product candidates are not normally encountered in the general patient population and by medical personnel. They may have difficulty observing patients and treating toxicities, which may be more challenging due to personnel changes, shift changes, house staff coverage or related issues. This could lead to more severe or prolonged toxicities or even patient deaths, which could result in us or the FDA delaying, suspending or terminating one or more of our clinical trials and which could jeopardize regulatory approval. Any of these occurrences may materially harm our business, financial condition and prospects. The manufacture of our approved product and other product candidates is complex, and we may encounter difficulties in production, particularly with respect to process development, quality control, cGMP compliance, or scaling-up of our manufacturing capabilities. If we or our related parties, or any of our third-party manufacturers, encounter such difficulties, our ability to gain approval, or to provide adequate supply of our product candidates for clinical trials or our products for patients, if approved, could be delayed or stopped, or we may be unable to maintain a commercially viable cost structure. The manufacture of our approved product and other product candidates involves complex processes, especially for our biologics, vectors and cell therapy product candidates, which are complex, highly regulated and subject to multiple risks. As a result of the complexities, the cost to manufacture biologics, vectors, and cell therapies is generally higher than traditional small molecule chemical compounds, and the manufacturing process is less reliable and is more difficult to reproduce. The manufacture of fusion proteins, DNA and vaccine vectors, and cell therapy products require significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of cell therapy products often encounter difficulties in production, particularly in scaling up initial production. These problems include difficulties with production costs and yields, quality control, including stability of the product or other product candidates and quality assurance testing, shortages of qualified personnel, and compliance with strictly enforced federal, state, local, and foreign regulations. We may also find that the manufacture of our approved product or other product candidates is more difficult than anticipated, resulting in an inability to produce a sufficient amount of our other product candidates for our clinical trials or, if approved, commercial supply. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects, and other supply disruptions. Our approved product and other product candidates are manufactured using processes developed or modified by us, our affiliates, or by our third-party collaborators that we may not utilize for more advanced clinical trials or commercialization. Currently we manufacture our approved product and other product candidates in our own manufacturing facilities, facilities owned by entities affiliated with Dr. Soon-Shiong and/or through third-party CMOs. Our clinical trials will need to be conducted with product candidates and materials that were produced under cGMP and/or GTP regulations, which are enforced by regulatory authorities. Our approved product and other product candidates may compete with other products and product candidates for access to manufacturing facilities. Moreover, because of the complexity and novelty of our manufacturing process, there are only a limited number of manufacturers that operate under cGMP regulations and that are both capable of manufacturing our approved product and other product candidates for us and willing to do so. If our third-party CMOs cease manufacturing for us, we would experience delays in obtaining sufficient quantities of our approved product for commercial supply and other product candidates for clinical trials and, if approved, commercial supply of such future products. Further, our third-party CMOs may breach, terminate, or not renew our agreements with them. If we were to need to find alternative manufacturing facilities or transfer between existing facilities it may take us significant time to find a replacement, if we are able to find a replacement at all and it would significantly impact our ability to develop, obtain regulatory approval for or market our approved product and/or other product candidates, if approved. The commercial terms of any new arrangement could be less favorable than our existing arrangements and the expenses relating to the transfer of necessary technology and processes could be significant. We and our suppliers and third-party CMOs must maintain compliance with cGMP requirements and other applicable regulatory requirements. Any failure to comply with these regulations may require us to cease sales of our approved product or repeat clinical trials, which would delay the regulatory review process of our other product candidates. We may not be able to demonstrate sufficient comparability between products manufactured in different runs at the same or at different facilities to allow for inclusion of the clinical results from patients treated with products from these different runs, in our product registrations or to ensure a cGMP process to qualify our other product candidates. We also are required to register certain clinical trials and post the results of certain completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes. Failure to do so could result in enforcement actions and adverse publicity. 98 Table of Contents Reliance on third-party manufacturers entails exposure to risks to which we would not be subject if we manufactured the product candidate ourselves, including: • inability to negotiate manufacturing and quality agreements with third parties under commercially reasonable terms; • reduced day-to-day control over the manufacturing process for our other product candidates as a result of using third-party manufacturers for all aspects of manufacturing activities; • reduced control over the protection of our trade secrets, know-how, and other proprietary information from misappropriation or inadvertent disclosure or from being used in such a way as to expose us to potential litigation; • termination or non-renewal of manufacturing agreements with third parties in a manner or at a time that may be costly or damaging to us or result in delays in the development or commercialization of our approved product or other product candidates; and • disruptions to the operations of our third-party manufacturers or suppliers caused by conditions unrelated to our business or operations, including the bankruptcy or personnel turnover at the manufacturer or supplier. Moreover, any problems or delays we or our third-party CMOs experience in preparing for commercial scale manufacturing of a product candidate may result in a delay in the FDA approval of the product candidate or may impair our ability to manufacture commercial quantities or such quantities at an acceptable cost, which could result in the delay, prevention, or impairment of clinical development and commercialization of our product candidates and could adversely affect our business. Furthermore, if we or our third-party CMOs fail to deliver the required commercial quantities of our product candidates on a timely basis and at reasonable costs, we would likely be unable to meet demand for our products and we would lose potential revenues. We may ultimately be unable to reduce the cost of goods for our other product candidates to levels that will allow for an attractive return on investment if and when those product candidates are commercialized. In addition, the manufacturing process and facilities for our approved product and any other products that we may develop are subject to FDA and foreign regulatory authority approval processes, and we or our third-party CMOs will need to meet all applicable FDA and foreign regulatory authority requirements, including cGMP, on an ongoing basis. cGMP requirements include quality control, quality assurance and the maintenance of records and documentation. The FDA and other regulatory authorities enforce these requirements through facility inspections. Manufacturing facilities must submit to pre-approval inspections by the FDA that will be conducted after we submit our marketing applications, including BLAs and NDAs, to the FDA. Manufacturers are also subject to continuing FDA and other regulatory authority inspections following marketing approval. Further, we and our third-party CMOs must supply all necessary CMC documentation in support of a BLA or NDA on a timely basis. Our or our third-party CMOs’ manufacturing facilities may be unable to comply with our specifications, cGMP, and with other FDA, state, and foreign regulatory requirements, and there is no guarantee that we or our third-party CMOs will be able to successfully pass all aspects of a pre-approval or continued inspection by the FDA or other foreign regulatory authorities. For example, 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. The CRL we received in response to our initial BLA submission required us to resubmit the BLA to the FDA addressing the issues in the CRL, resulting in additional expense and delay. On April 22, 2024, the FDA approved ANKTIVA with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with CIS with or without papillary tumors. Poor control of production processes can lead to the introduction of adventitious agents or other contaminants, or to inadvertent changes in the properties or stability of our product or other product candidates that may not be detectable in final product testing. If microbial, viral, environmental, or other contaminants are discovered in our product or other product candidates or in the manufacturing facilities in which our product or other product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination which could delay commercial sales and clinical trials and adversely harm our business. If we or our third-party CMOs are unable to reliably produce products to specifications acceptable to the FDA or other regulatory authorities, or in accordance with the strict regulatory requirements, we may not obtain or maintain the initial or continued approvals we need to commercialize such products. There is no assurance that either we or our third-party CMOs will be able to manufacture our approved product or any subsequently approved product candidate to specifications acceptable to the FDA or other regulatory authorities, to produce our product or other product candidates in sufficient quantities to meet the requirements for the launch of such products, or to meet potential future demand. 99 Table of Contents Deviations from manufacturing requirements may further require remedial measures that may be costly and/or time-consuming for us or a third party to implement and may include the temporary or permanent suspension of a clinical trial or commercial sales or the temporary or permanent closure of a facility. Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business. As product candidates progress through preclinical and clinical trials to marketing approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize yield and manufacturing batch size, minimize costs and achieve consistent quality and results. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause our product or other product candidates to perform differently and affect our commercial sales or the results of planned clinical trials or other future clinical trials conducted with the altered materials. This could cause commercial sales to cease, delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product candidates, and jeopardize our ability to commercialize our other product candidates, if approved, and generate revenues. To the extent we use third-party CMOs, we are ultimately responsible for the manufacture of our products, once approved, and our other product candidates. A failure to comply with these requirements may result in regulatory enforcement actions against our manufacturers or us, including fines and civil and criminal penalties, which could result in imprisonment, suspension or restrictions of production, injunctions, delay or denial of product approval or supplements to approved products, clinical holds or termination of clinical trials, warning or untitled letters, regulatory authority communications warning the public about safety issues with the biologic, refusal to permit the import or export of the products, product seizure, detention, or recall, operating restrictions, suits under the federal civil FCA, corporate integrity agreements, consent decrees, or withdrawal of product approval. Any of these challenges could cause us to cease commercial sales, delay completion of clinical trials, require bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product candidate, impair commercialization efforts, increase our cost of goods, and have a material adverse effect on our business, financial condition, results of operations and growth prospects. We may not be successful in managing the build-out of our manufacturing facilities and associated costs or satisfying manufacturing-related regulatory requirements. We have entered into facility leases for our planned manufacturing operations and related activities under which we are responsible for the build-out of the facility space and associated costs. The build-out of these facilities and related equipment purchases are complex and specialized and will involve substantial capital expenditure, and it could take longer, and cost more, than currently expected. Significant delays and/or cost overruns would result in higher expenditures and could be disruptive to operations, any of which could have a negative impact on our financial condition or results of operations. For example, during the first quarter of 2022 we acquired a leasehold interest in the 409,000 square foot Dunkirk Facility as described below. While we believe that governmental funding will assist in funding a small portion of the further build-out of the Dunkirk Facility, 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. In addition, it is possible that, once built, the leased facilities may prove to be less conducive to our operations than is currently anticipated, resulting in operational inefficiencies or similar difficulties that could prove difficult or impossible to remediate and result in an adverse impact on our financial condition or results of operations. We also may not successfully realize the anticipated benefits from the capital expenditure at such facilities based on factors such as delays and uncertainties regarding development, regulatory approval, and commercialization of our product candidates, as well as the potential to lose access to the leased facilities. 100 Table of Contents Further, in the future if we transition from our current third-party CMOs to our own manufacturing facilities, or to alternative third-party CMOs, for one or more of our products or other product candidates, including our approved product, we will need to conduct additional preclinical, analytical and/or clinical testing and obtain FDA approval before such manufacturing changes are implemented. If we are unsuccessful in demonstrating the comparability of supplies before and after a manufacturing change, such manufacturing change can result in a delay or disruption in our clinical development plan or our ability to commercialize any approved product. Any production shortfall that impairs the supply of our product or other product candidates could negatively impact our ability to sell our approved product, complete clinical trials, obtain regulatory approval, and commercialize our other product candidates. A product shortfall could have a material adverse effect on our business, financial condition and results of operations and adversely affect our ability to satisfy demand for our product or other product candidates, which could materially and adversely affect our revenue and results of operations. In addition, our planned operations, including our development, testing, and future manufacturing activities, are subject to numerous environmental, health, and safety laws and regulations. These laws and regulations govern, among other things, the controlled use, handling, release, and disposal of and the maintenance of a registry for, hazardous materials and biological materials, such as chemical solvents, human cells, carcinogenic compounds, mutagenic compounds, and compounds that may have a toxic effect on reproduction, laboratory procedures and exposure to blood-borne pathogens. If we fail to comply with such laws and regulations, we could be subject to fines or other sanctions. Failure to successfully complete our build-outs and successfully operate our planned manufacturing facilities and satisfy manufacturing-related regulatory requirements could adversely affect the commercial viability of our product candidates and our business. Cell-based therapies and biologics rely on the availability of reagents, specialized equipment, and other specialty materials, which may not be available to us on acceptable terms or at all. For some of these reagents, equipment, and materials, we rely or may rely on sole source vendors or a limited number of vendors, which could impair our ability to manufacture and supply our approved product and any future products, if approved. We currently depend on a small number of suppliers for some of the materials used in, and processes required to develop, our approved product and other product candidates. For some of these reagents, equipment, and materials used in the manufacture of our approved product and other product candidates, we rely and we may in the future rely on sole source vendors or a limited number of vendors. Some of these suppliers may not have the capacity to support commercial scale or clinical trials and commercial products manufactured under cGMP by biopharmaceutical firms or may otherwise be ill-equipped to support our needs. We also do not have supply contracts with many of these suppliers and may not be able to obtain supply contracts with them on acceptable terms or at all. Accordingly, we may experience delays in receiving key materials and equipment to support clinical or commercial manufacturing. An inability to continue to source product from any of these suppliers could adversely affect our ability to satisfy demand for our approved product and other product candidates, which could adversely and materially affect our product sales and operating results or our ability to conduct clinical trials, either of which could significantly harm our business. As we seek to develop and scale our manufacturing process, we expect that we will need to obtain rights to and supplies of certain materials and equipment to be used as part of that process. We may not be able to obtain rights to such materials on commercially reasonable terms, or at all, and if we are unable to alter our process in a commercially viable manner to avoid the use of such materials or find a suitable substitute, it would have a material adverse effect on our business. Even if we are able to alter our process so as to use other materials or equipment, such a change may lead to a delay in our clinical development and/or commercialization plans. If such a change occurs for a product candidate that is already in clinical testing, the change may require us to perform both ex vivo comparability studies and to collect additional data from patients prior to undertaking more advanced clinical trials. 101 Table of Contents Because our approved product and other product candidates represent, and our other potential product candidates will represent, novel approaches to the treatment of disease, there are many uncertainties regarding the development, market acceptance, public opinion, third-party reimbursement coverage, and the commercial potential of our approved product and other product candidates, which may impact public perception of us and our approved product and other product candidates and which may adversely affect our ability to conduct our business and implement our business plans. Human immunotherapy products are a new category of therapeutics. We use relatively novel technologies involving ANKTIVA, hAd5 and yeast constructs, and cell-based therapies, and our NK cell platform utilizes a relatively novel technology involving the genetic modification of human cells and utilization of those modified cells in other individuals. Because this is a relatively new and expanding area of novel therapeutic interventions, there are many uncertainties related to development, marketing, reimbursement, and the commercial potential for our approved product and other product candidates. There can be no assurance as to the length of the trial period, the number of patients the FDA will require to be enrolled in the trials in order to establish the safety, efficacy, purity and potency of immunotherapy products, or that the data generated in these trials will be acceptable to the FDA to support marketing approval. Adverse public attitudes may adversely impact our ability to enroll patients in clinical trials. The FDA may take longer than usual to come to a decision on any BLA and/or NDA that we submit and may ultimately determine that there is not enough data, information, or experience with our product candidates to support an approval decision. The FDA may also require that we conduct additional post-marketing studies or implement risk management programs, such as REMS, until more experience with our other product candidates is obtained. Finally, after increased usage, we may find that our product or other product candidates do not have the intended effect, do not work with other combination therapies or have unanticipated side effects, potentially jeopardizing initial or continuing regulatory approval and commercial prospects. More restrictive government regulations or negative public opinion could have an adverse effect on our business or financial condition and may delay or impair the commercialization of our approved product and development and commercialization of our product candidates or demand for our product or any products we may develop. Adverse events in our c