Item 3. Legal Proceedings
ITEM 3. 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 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
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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, 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 was held from June 9, 2025 through June 13, 2025. Post-hearing submissions concluded in February 2026. 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.
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 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 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.
On May 2, 2025, the court entered an order consolidating these three shareholder derivative actions. On May 22, 2025, the parties in the consolidated derivative action notified the court that they had entered into a Stipulation and Settlement Agreement to settle the consolidated derivative action for corporate governance reforms and attorneys’ fees. On November 6, 2025, the court entered an order and final judgment approving the settlement. As a result of the final judgment, the company was required to make various corporate governance modifications that the company complied with.
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
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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 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. On July 16, 2025, the defendants filed a motion to dismiss the amended complaint. On February 4, 2026, after complete briefing and oral argument, the court granted the defendants’ motion to dismiss. The plaintiff was not provided an opportunity to amend.
Washington State Attorney General Investigation
In June 2025, the company received a request from the Attorney General of the State of Washington (the Request) seeking information and documents from the company relating to its relationship with the Access to Advanced Health Institute, a nonprofit biotech research institute located in Seattle (AAHI). ImmunityBio licensed and explored the development of AAHI’s RNA COVID vaccine and upon further investigation of the technology terminated the license. Dr. Soon-Shiong served on the board of directors of AAHI in his capacity as representative of a non-profit foundation. The company is cooperating with the Washington Attorney General’s Office with respect to the Request.
SRS/Altor Shareholder CVR Arbitration
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 the successful regulatory approval of a BLA by the FDA, or foreign equivalent, for ANKTIVA by December 31, 2022, and $304.0 million of contingent consideration upon calendar-year worldwide net sales of ANKTIVA exceeding $1.0 billion prior to December 31, 2026. As of December 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 FDA approval CVRs and $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. Because the FDA did not approve our BLA on or before December 31, 2022, the first CVR milestone was not met.
On December 27, 2022, Shareholder Representative Services, LLC (SRS), in its capacity as shareholder representative on behalf of former Altor BioScience Corp. shareholders, sent the company’s subsidiary NantCell a notice of claims relating to the regulatory milestone CVR. The notice of claims asserted that SRS was exploring, and might pursue, claims on behalf of Altor shareholders for additional merger consideration in the amount of the $2.00 per share milestone payment under the regulatory CVR milestone. The notice stated that any such claim would be based on NantCell’s alleged failure to use commercially reasonable efforts to secure FDA approval of ANKTIVA on or before December 31, 2022. In a separate October 2022 letter, SRS requested that NantCell preserve all documents and information relating to its efforts to achieve milestones set forth in the regulatory milestone CVR, and requested that the company provide certain categories of documents under the information-sharing provisions of the CVR agreement.
After the company provided many of the requested documents, on September 29, 2023, SRS filed a demand for arbitration with JAMS, seeking to compel the company to produce additional documents identified in its October 2022 letter relating to its efforts to obtain FDA approval for ANKTIVA. The arbitration demand did not include any claims beyond SRS’s claim that it had a right to obtain additional documents, and sought a ruling that the company was obligated to provide additional documents. After the arbitrator issued a preliminary ruling regarding the scope of the company’s obligation to provide information under the CVR Agreements, the company produced additional documents responsive to SRS’s requests.
On August 27, 2025, several months after SRS’s document-access claim had been resolved, SRS requested leave to amend its JAMS arbitration demand to state a claim for breach of contract. SRS’s proposed amended demand alleged that the company and NantCell had failed to exercise commercially reasonable efforts to obtain FDA approval of ANKTIVA on or before December 31, 2022. The JAMS arbitrator presiding over the document-access arbitration denied SRS’s motion for leave to amend its claims, and on September 26, 2025, the parties filed a joint stipulation asking that the JAMS document-access arbitration be closed.
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After SRS’s motion for leave to amend was denied, on September 26, 2025, SRS sent the company a further notice of claims and essentially the same arbitration demand, asserting that the company had breached its obligations to exercise commercially reasonable efforts to achieve FDA approval of ANKTIVA on or before December 31, 2022. SRS’s arbitration demand seeks relief in the form of payment, in the amount of approximately $164.2 million plus interest exceeding $50.0 million, to former Altor shareholders not affiliated with Dr. Soon-Shiong. SRS filed its most recent arbitration demand with JAMS on November 5, 2025. The company filed its response on November 19, 2025, and an arbitrator was appointed on January 16, 2026. It remains too early to evaluate the likely outcome of the case or to estimate any range of potential loss. We believe the company exercised commercially reasonable efforts in its pursuit of FDA approval of ANKTIVA, and that the claims asserted against the company lack merit.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
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PART II