What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-02-24 compared with 2021-02-25 · 467 added, 554 removed, 676 unchanged (60% of the section changed)

7 unchanged sentences

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2020 based on the framework in Internal Control—Integrated Framework

2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2021 based on the framework in Internal Control—Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO.

Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2021.

The independent registered public accounting firm, Marcum LLP, has issued an attestation report on our internal control over financial reporting.

The independent registered public accounting firm, Ernst and Young LLP, has issued an audit report on our internal control over financial reporting.

The report on the audit of internal control over financial reporting is included in this Annual Report on Form 10-K.

30 unchanged sentences

Certificate of Amendment of Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8 K filed with the Commission on June 11, 2019).

Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on May 27, 2020).

Second Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on April 26, 2021).

Specimen of Stock Certificate (incorporated herein by reference to Exhibit 4.2 to the Registrant’s Annual Report on Form 10-K filed with the Commission on March 12, 2018).

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2018 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.11 of Registrant’s Annual report on Form 10-K filed with the Commission on February 25, 2020).#

Form of Stock Unit Notice and Stock Unit Agreement under the Iovance Biotherapeutics, Inc.

2018 Equity Incentive Plan, as amended (June 2021 Retention Equity Awards) (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on August 5, 2021).#

Form of Nonqualified Stock Option Award Agreement under the Iovance Biotherapeutics, Inc.

2018 Equity Incentive Plan, as amended (June 2021 Retention Equity Awards) (incorporated herein by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 10-Q filed with the Commission on August 5, 2021).#

Iovance Biotherapeutics, Inc, 2020 Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on June 9, 2020).#

Iovance Biotherapeutics, Inc.

Amended and Restated 2021 Inducement Plan.#**

Form of Stock Option Grant Notice and Stock Option Agreement under the 2021 Inducement Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Commission on September 23, 2021).#

Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under the 2021 Inducement Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Commission on September 23, 2021).#

Patent License Agreement by and between Genesis Biopharma, Inc.

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and the National Institutes of Health (incorporated herein by reference to Exhibit 10.47 to the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on November 6, 2015).*

Amended and Restated Patent License Agreement, by and between Iovance Biotherapeutics, Inc.

and the National Institutes of Health (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10 Q filed with the Commission on August 5, 2021).*

Form of Securities Purchase Agreement, dated June 2, 2016, by and among Lion Biotechnologies, Inc.

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2 to Registrant’s Registration Statement on Form S 1 filed with the Commission on August 31, 2016).

Manufacturing Services Agreement, dated November 23, 2015, by and between WuXi AppTec, Inc.

Manufacturing Services Agreement, dated November 23, 2015, by and between WuXi Advanced Therapies, Inc.

and Lion Biotechnologies, Inc.

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(incorporated herein by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on August 1, 2019).

Executive Employment Agreement, effective as of December 14, 2020, by and between Jean-Marc Bellemin and Iovance Biotherapeutics, Inc.# **+

Executive Employment Agreement, effective as of December 14, 2020, by and between Jean-Marc Bellemin and Iovance Biotherapeutics, Inc.#+ (incorporated herein by reference to Exhibit 10.30 of the Registrant’s Annual Report on Form 10-K filed with the Commission on February 25, 2021).

Executive Employment Agreement, effective as of March 15, 2021, by and between Igor Bilinsky, Ph.D.

and Iovance Biotherapeutics, Inc.#+ (incorporated herein by reference to Exhibit 10.4 of the Registrant’s Current Report on Form 8-K filed with the Commission on May 6, 2021).

Office Lease, effective as of August 4, 2016, by and between Lion Biotechnologies, Inc.

14 unchanged sentences

and 300 Rouse Boulevard, LLC (incorporated herein by reference to Exhibit 10.3 of the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on August 6, 2020).

Third Amendment to the Lease Agreement, effective as of November 1, 2021, between Iovance Biotherapeutics, Inc.

and 300 Rouse Boulevard, LLC.**

Lease Agreement, effective as of February 8, 2021, by and between Iovance Biotherapeutics, Inc.

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Subsidiaries of the Company.**

Consent of Independent Registered Public Accounting Firm.

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.

Consent of Marcum, LLP, Independent Registered Public Accounting Firm**

Power of Attorney (included on the signature page of this Annual Report).

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February 24, 2022

/s/ Maria Fardis

Chief Executive Officer

/s/ Frederick G.

Vogt, Ph.D., J.D.

Interim Chief Executive Officer and President, and General Counsel

POWER OF ATTORNEY

Know all persons by these presents, that each person whose signature appears below constitutes and appoints Maria Fardis and Jean-Marc Bellemin, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments to this Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his or her substitute or substituted, may lawfully do or cause to be done by virtue thereof.

Know all persons by these presents, that each person whose signature appears below constitutes and appoints Frederick G.

Vogt, and Jean-Marc Bellemin, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments to this Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his or her substitute or substituted, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Maria Fardis

Chief Executive Officer (Principal

/s/ Frederick G.

Interim Chief Executive Officer and President, and

February 24, 2022

Executive Officer) and Director

Vogt, Ph.D., J.D.

General Counsel (Principal Executive Officer)

/s/ Jean-Marc Bellemin

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Jean-Marc Bellemin

(Principal Financial Officer)

/s/ Michael C.

Vice President, Finance

February 25, 2021

(Principal Accounting Officer)

(Principal Financial Officer and Accounting Officer)

/s/ Merrill A.

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February 24, 2022

Michael Weiser

Michael Weiser, M.D., Ph.D.

February 24, 2022

1 unchanged sentence

February 24, 2022

Iain Dukes, D.Phil.

/s/ Wayne Rothbaum

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February 24, 2022

Athena Countouriotis

Athena Countouriotis, M.D.

IOVANCE BIOTHERAPEUTICS, INC.

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

Report of Ernst & Young LLP, Independent Registered Public Accounting Firm (PCAOB ID:

Report of Marcum LLP, Independent Registered Public Accounting Firm (PCAOB ID:

Financial Statements

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Notes to Consolidated Financial Statements

REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Iovance Biotherapeutics, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Iovance Biotherapeutics, Inc.

(the “Company”) as of December 31, 2021, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for the year ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and the results of its operations and its cash flows for the year then ended, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 24, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

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

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

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

We conducted our audit in accordance with the standards of the PCAOB.

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

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

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

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

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

Accrued clinical development costs

Description of the Matter

During 2021, the Company incurred $38.7 million of research and development expenses and accrued $18.0 million of clinical development costs as of December 31, 2021.

As described in Note 2 to the Financial Statements, the Company determines accruals for clinical development costs based on the various clinical trial activities performed pursuant to contracts with third-party contract research organizations (“CROs”), which comprise a significant component of the Company’s research and development expenses.

Clinical development costs are accrued and expensed based on the percentage of work completed in accordance with agreements established with CROs.

The timing and amount of payments required under each individual arrangement are often different from the pattern of costs actually incurred.

The Company accrues clinical development costs under its contracts with third-party service providers based on the progress or stage of completion of trials or services completed by vendors over the life of the individual trial, number of subjects enrolled, and number of sites activated.

Auditing management’s accounting for accrued clinical development costs is especially challenging because the evaluation is dependent on a high volume of data exchanged between third-party service providers, internal clinical personnel, and the Company’s finance team.

Determining accrued amounts is based on an evaluation of the unique terms and conditions set in each respective CRO agreement.

Additionally, due to the duration of clinical trial activities and the timing of invoices received from third parties, the determination of the accrual for services incurred requires management to ensure they have complete and accurate information from vendors.

How We Addressed the Matter in Our Audit

To test accrued clinical development costs, our audit procedures included, among others, testing the accuracy and completeness of the inputs used in management’s analysis to determine costs incurred.

We also inspected terms and conditions for selected CRO contracts and change orders and compared these to the cost models management used in tracking the progress of service agreements.

We met with internal clinical personnel to understand the status of significant clinical activities.

We evaluated services provided by third parties by understanding the terms and timeline of significant projects, evaluated management’s determination of work performed, subjects enrolled, sites activated and costs incurred, and obtained external confirmation of contracts and change orders executed by the Company for a sample of CROs as well as key terms and conditions of those contracts.

Further, we inspected selected invoices received from third parties after the balance sheet date and evaluated whether services performed prior to the balance sheet date had been properly included in costs accrued.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2021.

Redwood City, California

February 24, 2022

REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Iovance Biotherapeutics, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Iovance Biotherapeutics, Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Iovance Biotherapeutics, Inc.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the balance sheet of the Company as of December 31, 2021 the related statements of operations, comprehensive loss, stockholders’ equity and cash flows for the year ended December 31, 2021, and the related notes, and our report dated February 24, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

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

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

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Redwood City, California

February 24, 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Iovance Biotherapeutics, Inc.

(the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2020, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013 and our report dated February 25, 2021, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 10 to the consolidated financial statements, the Company changed its method of accounting for leases in 2019.

We have audited the accompanying consolidated balance sheet of Iovance Biotherapeutics, Inc.

(the “Company”) as of December 31, 2020, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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As discussed in Note 10 to the consolidated financial statements, the Company’s reported right-of-use assets, current lease liabilities and long-term lease liabilities, utilize discount rates to calculate the estimated present value of future lease payments.

the Company’s leases do not provide an implicit rate, management utilized a third-party valuation specialist to assist in estimating the incremental borrowing rates used in its present value calculation, which required subjectivity.

Since the Company’s leases do not provide an implicit rate, management utilized a third-party valuation specialist to assist in estimating the incremental borrowing rates used in its present value calculation, which required subjectivity.

The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

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Our audit procedures included, amongst others:

● We obtained an understanding, evaluated the design, and tested the operating effectiveness of management’s controls with regards to the methodology, inputs, and assumptions used to determine the incremental borrowing rate, including those over management’s review of its third-party specialist valuation report.

● We obtained an understanding, evaluated the design, and tested the operating effectiveness of management’s controls with

regards to the methodology, inputs, and assumptions used to determine the incremental borrowing rate, including those over management’s review of its third-party specialist valuation report.

● We obtained an understanding of the factors considered and assumptions made by management and the valuation specialists in developing the estimate of the incremental borrowing rate, the sources of data relevant to these factors and assumptions and the procedures used to obtain the data, and the methods used to calculate the estimate.

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/s/ Marcum LLP

We have served as the Company’s auditor since 2016.

February 25, 2021

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Shareholders and Board of Directors of

Iovance Biotherapeutics, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Iovance Biotherapeutics, Inc.’s (the “Company”) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets as of December 31, 2020 and 2019, and related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows and the related notes for each of the three years in the period ended December 31, 2020 of the Company and our report dated February 25, 2021 expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

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

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

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that degree of compliance with the policies or procedures may deteriorate.

/s/ Marcum LLP

We served as the Company’s auditor from 2016 to 2021.

February 25, 2021

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Operating lease right-of-use assets

Long-term investments

Restricted cash

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Accrued expenses

Operating lease liabilities - current

Operating lease liabilities

Total Current Liabilities

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Operating lease liabilities – noncurrent

Long-term note payable

Other liabilities

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Total Liabilities

Commitments and contingencies (Note 10 and 11)

Commitments and contingencies

Stockholders’ Equity

Series A Convertible Preferred stock, $ 0.001 par value;

17,000 shares designated, 194 shares issued and outstanding as of December 31, 2020 and December 31, 2019 (aggregate liquidation value of $ 194 )

17,000 shares designated, 194 shares issued and outstanding as of December 31, 2021 and December 31, 2020

Series B Convertible Preferred stock, $ 0.001 par value;

11,500,000 shares designated, 3,581,119 shares issued and outstanding as of December 31, 2020 and December 31, 2019 (aggregate liquidation value of $ 17,010 )

11,500,000 shares designated, 2,842,158 and 3,581,119 shares issued and outstanding as of December 31, 2021 and December 31, 2020

Common stock, $ 0.000041666 par value;

300,000,000 shares authorized, 157,004,742 and 146,874,917 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively

Accumulated other comprehensive income

Accumulated other comprehensive (loss) income

Additional paid-in capital

Accumulated deficit

( 1,172,445 )

Total Stockholders’ Equity

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Costs and expenses

Research and development expenses

General and administrative expenses

Research and development

General and administrative

Total costs and expenses

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Years Ended December 31,

Other comprehensive loss:

Other comprehensive loss / (gain):

Unrealized loss / (gain) on short-term investments

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Balance - January 1, 2019

Stock-based compensation expense

Vesting of restricted shares issued for services

Tax payments related to shares withheld for vested restricted stock units

Common stock issued upon exercise of warrants

Common stock issued upon exercise of stock options

Conversion of convertible preferred stock into common stock

( 1,523,396 )

Common stock sold in public offering, net of offering costs

Unrealized loss on short- term investments

Balance - December 31, 2018

Adoption of ASU 2018-07

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( 2,273,726 )

Unrealized loss on short- term investments

Unrealized gain on investments

Cancellation of common shares from settlement of dispute

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Common stock sold in public offering, net of offering costs

Unrealized gain on short- term investments

Unrealized loss on investments

Balance - December 31, 2020

Stock-based compensation expense

Common stock issued upon purchase of employee stock purchase plan

Common stock issued upon exercise of stock options

Common stock sold in public offering, net of offering costs

Common stock issued from preferred stock conversion

Unrealized loss on investments

Balance - December 31, 2021

( 1,172,445 )

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

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Stock-based compensation expense

Noncash lease expense

Amortization of right of use asset

Depreciation and amortization

4 unchanged sentences

Prepaid expenses, other assets and long-term assets

Operating lease liabilities (Right-of-use assets)

Operating lease liabilities

Accounts payable

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Cash Flows from Investing Activities

Maturities of short-term investments

Purchase of short-term investments

Maturities of investments

Purchase of investments

Purchase of property and equipment

Net cash (used in) provided by investing activities

Net cash provided by (used in) investing activities

Cash Flows from Financing Activities

Tax payments related to shares withheld for vested restricted stock units

Proceeds from the issuance of common stock upon exercise of warrants

Proceeds from the issuance of common stock upon purchase of employee stock purchase plan

Proceeds from the issuance of common stock upon exercise of options

Proceeds from the issuance of common stock, net

Proceeds from the issuance of debt

Net cash provided by financing activities

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Supplemental disclosure of non-cash investing and financing activities:

Net unrealized (loss) gain on short-term investments

Acquisitions of property and equipment included in accounts payable and accrued expense

Net unrealized loss on short-term investments

Acquisition of property and equipment included in accounts payable and accrued expense

Conversion of convertible preferred stock to common stock

Vesting of restricted stock units

Lease liabilities arising from obtaining right-of-use asset from new leases

Lease liabilities arising from obtaining right-of-use asset from lease modifications

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

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Iovance Biotherapeutics, Inc.

(the “Company”, “we”, “us” or “our”) is a clinical-stage biopharmaceutical company focused on the development and commercialization of cell therapies as novel cancer immunotherapy products designed to harness the power of a patient’s own immune system to eradicate cancer cells.

Tumor infiltrating lymphocyte (“TIL”) therapy is an autologous cell therapy platform technology that was originally developed by the National Cancer Institute (“NCI”), which conducted initial clinical trials in diseases such as metastatic melanoma and cervical cancer.

The Company has developed a new, shorter manufacturing process for TIL therapy known as Generation 2 (“Gen 2”), which yields a cryopreserved TIL product.

This proprietary and scalable manufacturing method is being further investigated in multiple indications.

The Company’s lead product candidates include lifileucel for metastatic melanoma and metastatic cervical cancer.

Lifileucel for metastatic cervical cancer was formerly known as LN-145.

In addition to metastatic melanoma and metastatic cervical cancer, the Company is investigating the effectiveness and safety of TIL therapy and peripheral blood lymphocyte therapy for the treatment of squamous cell carcinoma of the head and neck, non-small cell lung cancer, and chronic lymphocytic leukemia through its sponsored trials, as well as in other oncology indications through collaborations.

(the “Company”) is a clinical-stage biopharmaceutical company pioneering a transformational approach to cure cancer by harnessing the human immune system’s ability to recognize and destroy diverse cancer cells in each patient.

The Company’s mission is to be the global leader in innovating, developing and delivering TIL therapy for patients with cancer.

The Company has developed a new, shorter proprietary TIL manufacturing process known as Generation 2 (“Gen 2”), which yields a cryopreserved TIL product.

This centralized, proprietary, and scalable manufacturing method is being investigated in multiple indications.

The Company’s lead product candidates include lifileucel for metastatic melanoma and metastatic cervical cancer, as well as LN-145 for metastatic non-small cell lung cancer (“NSCLC”).

In addition, the Company is investigating the effectiveness and safety of combinations of TIL therapy with immune checkpoint inhibitors (“ICI”), in metastatic melanoma, cervical cancer, NSCLC, and head and neck squamous cell carcinoma (“HNSCC”).

The Company is investigating peripheral blood lymphocyte (“PBL”) therapy for patients with relapsed or refractory chronic lymphocytic leukemia (“CLL”) and small lymphocytic lymphoma (“SLL”) through its sponsored trials.

The Company is also investigating the potential for TIL therapy in other oncology indications through academic collaborations with leading cancer research centers.

On June 1, 2017, the Company reincorporated from a Nevada corporation to a Delaware corporation.

The Company is currently engaged in the development of therapeutics to fight cancer, specifically solid tumors.

The Company currently does not have any commercial products and has not yet generated any revenues from its business.

The Company currently does not anticipate that it will generate any significant revenues from the sale or licensing of any of its product candidates during the 12 months from the date these financial statements are issued.

The Company currently does not have any commercial products and has not yet generated any revenues from its business, nor does the Company currently anticipate that it will generate any significant revenues from the sale or licensing of any of its product candidates during the 12 months from the date these financial statements are issued.

The Company has incurred a net loss of $ 342.3 million for the year ended December 31, 2021 and used $ 227.9 million of cash in its operating activities during the year ended December 31, 2021.

As of December 31, 2020, the Company had $ 635.0 million in cash, cash equivalents, short-term investments, and restricted cash ($ 67.3 million of cash and cash equivalents, $ 562.1 million in short-term investments and $ 5.5 million in restricted cash).

The Company expects to continue its research and development activities, increase pre-commercial activities and continue the construction of the tenant improvements for its new manufacturing facility, which will increase the amount of cash used during 2021 and beyond.

Specifically, the Company expects continued spending on its current and planned clinical trials, continued expansion of manufacturing activities, including construction of a manufacturing facility, higher payroll expenses as the Company increases its professional and scientific staff and continuation of pre-commercial activities.

As of December 31, 2021, the Company had $ 602.1 million in cash, cash equivalents, investments, and restricted cash ($ 78.2 million of cash and cash equivalents, $ 426.2 million in short-term investments, $ 91.6 million in long-term investments and $ 6.1 million in restricted cash).

The Company expects to continue its research and development activities, increase pre-commercial activities and complete the construction of the tenant improvements for the Iovance Cell Therapy Center (the “ i CTC”) as well as its new corporate headquarters’ office in San Carlos, California, all of which are expected to increase the amount of cash used during 2022 and beyond.

Specifically, the Company expects continued spending on its current and planned clinical trials, continued expansion of manufacturing activities, higher payroll expenses as the Company increases its professional and scientific staff and continuation of pre-commercial activities.

Based on the funds the Company has available as of the date these financial statements are issued, the Company believes that it has sufficient capital to fund its anticipated operating expenses and capital expenditures as planned for at least the next twelve months from the date these financial statements are issued.

Impact of COVID-19

In December 2019, a novel coronavirus known as SARS-CoV-2 was first detected in Wuhan, Hubei Province, People’s Republic of China, causing outbreaks of the coronavirus disease, known as COVID-19, that has now spread globally.

On January 30, 2020, the World Health Organization (“WHO”) declared COVID-19 a pandemic (the “COVID-19 Pandemic”).

The Secretary of Health and Human Services declared a public health emergency on January 31, 2020, under section 319 of the Public Health Service Act (42 U.S.C.

247d), in response to the COVID-19 Pandemic.

The full impact of the COVID-19 Pandemic is unknown and rapidly evolving.

While the potential economic impact brought by and over the duration of the COVID-19 Pandemic may be difficult to assess or predict, the COVID-19 Pandemic has resulted in significant disruption of global financial markets, which could in the future negatively affect the Company's liquidity.

In addition, a recession or market volatility resulting from the COVID-19 Pandemic could affect the Company’s business.

Given the nature and type of the Company’s short-term investments in U.S.

government securities, the Company does not believe the COVID-19 Pandemic has had or will have a material impact on the Company's current investment liquidity.

Concentrations of Risk

The Company is subject to credit risk from its portfolio of cash equivalents and short-term investments.

Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer,

The Company is subject to credit risk from its portfolio of cash, cash equivalents and investments.

Under its investment policy, the Company limits amounts invested in securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S.

The Company does not believe it is exposed to any significant concentrations of credit risk from these financial instruments.

The goals of its investment policy are safety and preservation of principal, diversification of risk, and liquidity of investments sufficient to meet cash flow requirements.

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

except for securities issued by the U.S.

The Company does not believe it is exposed to any significant concentrations of credit risk from these financial instruments.

The goals of its investment policy, in order of priority, are as follows:

safety and preservation of principal and diversification of risk and liquidity of investments sufficient to meet cash flow requirements.

SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

Cash, Cash Equivalents, and Short-term Investments

Cash, Cash Equivalents, and Investments

The Company’s cash and cash equivalents include short-term investments with original maturities of three months or less when purchased.

The Company's short-term investments are classified as “available-for-sale.” The Company includes these investments in current assets and carries them at fair value.

The Company's investments are classified as “available-for-sale.” The Company includes these investments in current assets and carries them at fair value.

Unrealized gains and losses on available-for-sale securities are included in accumulated other comprehensive loss or income.

Any impairment losses related to credit losses (if any) are included in an allowance for credit losses with an offsetting entry to net loss.

Impairment losses related to credit losses (if any) are recorded as an allowance for credit losses with an offsetting entry to net loss.

No impairment losses related to credit losses were recognized for the years ended December 31, 2021 and 2020.

The cost of debt securities is adjusted for the amortization of premiums and accretion of discounts to maturity.

Such amortization and accretion are included in net interest income in the Consolidated Statements of Operations.

Gains and losses on securities sold are recorded based on the specific identification method and are included in net interest income in the Consolidated Statements of Operations.

Such amortization and accretion are included in Interest income, net, in the Consolidated Statements of Operations.

Gains and losses on securities sold are recorded based on the specific identification method and are included in Interest income, net, in the Consolidated Statements of Operations.

The Company has not incurred any realized gains or losses from sales of securities to date.

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government agencies as well as corporate debt securities, and places restrictions on maturities and concentration by type and issuer, except for securities issued by the U.S.

Currently the Company invests excess cash only in obligations issued by the U.S.

government and U.S.

government agencies.

Restricted Cash

The Company maintains a certain minimum balance, approximately $ 5.5 million in a segregated bank account in connection with a letter of credit, one for $ 5.45 million for the benefit of the landlord for its commercial manufacturing facility used as a security deposit for the lease (See Note 10 - Leases), and a second one for $ 74,685 for the benefit of a utilities service provider.

The total amount is classified as Restricted Cash on the Consolidated Balance Sheet.

The letter of credit originally expired on May 28, 2020, however, it automatically extends for additional one-year periods, without written agreement, to May 28 in each succeeding calendar year, through at least 60 days after the lease expiration date.

Further, on the expiration of the seventh year of the lease, and each anniversary date thereafter, the letter of credit may be decreased by $ 1,000,000 , with a minimum security deposit of $ 1,450,000 maintained through the end of the lease term.

The $ 74,685 letter of credit will expire on March 9, 2021, however, it will be automatically extended, without written agreement, to the expiration date of December 1, 2022.

As of December 31, 2020 and 2019, restricted cash consisted of $ 5.5 million and this amount has been classified as a non-current asset on the Company’s Consolidated Balance Sheets.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash, reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows:

The Company maintains a required minimum balance, currently $ 6.1 million in a segregated bank account in connection with three letters of credit, one for $ 5.45 million for the benefit of the landlord for the i CTC used as a security deposit for the lease (See Note 10 - Leases), one for $ 0.1 million for the benefit of a utilities service provider, and one for $ 0.6 million for the benefit of the landlord for the Company’s new headquarters’ lease.

The total amount is classified as Restricted Cash on the Consolidated Balance Sheets.

The first letter of credit originally expired on May 28, 2020, however, it automatically extends for additional one-year periods, without written agreement, to May 28 in each succeeding calendar year, through at least 60 days after the lease expiration date.

Further, on the expiration of the seventh year of the lease, and each anniversary date thereafter, the letter of credit may be decreased by $ 1.0 million with a minimum security deposit of $ 1.5 million maintained through the end of the lease term.

The second letter of credit of $ 0.1 million expired on March 9, 2021, however, it automatically extends, without written agreement, to the expiration date of December 1, 2022.

The third letter of credit of $ 0.6 million expires on February 1, 2032, however, it will be automatically extended, without written agreement, for one-year periods to February in each succeeding calendar year.

As of December 31, 2021 and 2020, restricted cash consisted of $ 6.1 million and $ 5.5 million and these balances have been classified as a non-current asset on the Company’s Consolidated Balance Sheets.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows (in thousands):

Cash and cash equivalents

Restricted cash (included in non-current assets on the Consolidated Balance Sheets)

Restricted cash

Total cash, cash equivalents and restricted cash

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Property and Equipment, net

Property and equipment is stated at cost, net of accumulated depreciation and amortization.

Property and equipment are stated at cost, net of accumulated depreciation and amortization.

The cost of property and equipment is depreciated or amortized on the straight-line method over the following estimated useful lives.

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Computer equipment

Computer software

Office furniture and equipment

Lab equipment

Lab, process, and validation equipment

Machinery and equipment

Utility equipment

Lesser of the remaining economic life of the asset or the lease-term

Leasehold improvements

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Diluted net loss per share is computed by dividing the net loss by the sum of the weighted average number of shares of common stock outstanding and the dilutive common stock equivalent shares outstanding during the period.

The Company’s potentially dilutive common stock equivalent shares, which include incremental common shares issuable upon (i) the exercise of outstanding stock options and warrants, (ii) purchases though the 2020 Employee Stock Purchase Plan (the “2020 ESPP”), (iii) vesting of restricted stock units and restricted stock awards, and (vi) conversion of preferred stock, are only included in the calculation of diluted net loss per share when their effect is dilutive.

At December 31, 2020, 2019, and 2018, the following outstanding common stock equivalents have been excluded from the calculation of net loss per share because their impact would be anti-dilutive.

The Company’s potentially dilutive common stock equivalent shares, which include incremental common shares issuable upon (i) the exercise of outstanding stock options, (ii) purchases though the 2020 Employee Stock Purchase Plan (the “2020 ESPP”), (iii) vesting of restricted stock units, and (vi) conversion of preferred stock, are only included in the calculation of diluted net loss per share when their effect is dilutive.

As of December 31, 2021, 2020, and 2019, the following outstanding common stock equivalents have been excluded from the calculation of net loss per share because their impact would be anti-dilutive.

As of December 31,

Stock options

Employee Stock Purchase Plan

Restricted stock units

Series A Convertible Preferred Stock*

Series B Convertible Preferred Stock*

Restricted stock units

*on an as-converted basis

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Fair Value Measurements

Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, fair value is defined as the price at which an asset could be exchanged, or a liability transferred in a transaction between knowledgeable, willing parties in the principal or most advantageous market for the asset or liability.

Under Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures , fair value is defined as the price at which an asset could be exchanged, or a liability transferred in a transaction between knowledgeable, willing parties in the principal or most advantageous market for the asset or liability.

Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters.

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- Level 2—These are investments where values are based on quoted market prices in markets that are not active or model derived valuations in which all significant inputs are observable in active markets

The Company does not have fair valued assets classified under Level 2 as of December 31, 2020 and 2019.

- Level 3—These are financial instruments where values are derived from techniques in which one or more significant inputs are unobservable.

The Company does not have fair valued assets classified under Level 3 as of December 31, 2020 and 2019.

The Company’s financial instruments consist of cash and cash equivalents and short-term investments, all of which are reported at their respective fair value on its Consolidated Balance Sheets.

As of December 31, 2020 and 2019, financial assets measured at fair value on a recurring basis are categorized in the table below based upon the lowest level of significant input to the valuations (in thousands):

Assets at Fair Value as of December 31, 2020

treasury securities

government agency securities

Assets at Fair Value as of December 31, 2019

US treasury securities

US government agency securities

The Company’s financial instruments consist of cash, cash equivalents, short and long-term investments, and long-term notes payable, all of which are reported at their respective fair value or approximate fair value on its Consolidated Balance Sheets.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The Company’s financial instruments consist of Level 1 and Level 2 assets.

Where quoted prices are available in an active market, securities are classified as Level 1.

When quoted market prices are not available for a specific security, the Company estimates the fair value by using quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets.

Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs obtained from various third-party data providers, including but not limited to, benchmark yields, interest rate curves, reported trades, broker/dealer quotes, and market reference data.

Level 2 assets consist of commercial paper and government agency securities.

Level 2 inputs for the valuations are limited to quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for the asset.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

Actual results could differ from those estimates.

Significant estimates include the assumptions made in valuing stock instruments issued for services and used in measuring operating right-of-use assets and operating lease liabilities, accounting for potential liabilities, capitalization of internal-use software development costs, and the valuation allowance associated with the Company’s deferred tax assets.

Significant items subject to such estimates and assumptions include assumptions made in the fair value of equity awards and related stock-based compensation, assumptions used in measuring operating right-of-use assets and operating lease liabilities, accounting for potential liabilities, including estimates inherent in accruals related to clinical trials, and the realizability of the Company’s deferred tax assets.

IOVANCE BIOTHERAPEUTICS, INC.

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The accompanying consolidated financial statements include the accounts of Iovance Biotherapeutics, Inc.

and its wholly-owned subsidiaries, Iovance Biotherapeutics Manufacturing LLC and Iovance Biotherapeutics GmbH.

and its wholly-owned subsidiaries, Iovance Biotherapeutics Manufacturing LLC, Iovance Biotherapeutics GmbH, and Iovance Biotherapeutics B.V.

All intercompany accounts and transactions have been eliminated.

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The Company determines if an arrangement includes a lease at inception.

Operating leases are included in its Consolidated Balance Sheet as Operating lease right-of-use assets and Operating lease liabilities as of December 31, 2020.

Operating leases are included in its Consolidated Balance Sheets as Operating lease right-of-use assets and Operating lease liabilities as of December 31, 2021.

Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

In determining the net present value of lease payments, the Company uses an estimated incremental borrowing rate that is applicable to the Company based on the information available at the later of the lease commencement date or the date of adoption of Accounting Standard Update (ASU) No.

2016-02 and ASU No.

2018-10, Leases (together “Topic 842”).

2016-02 and No.

2018-10 (together “Topic 842”).

The operating lease right-of-use assets also include any lease payments made less lease incentives.

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Stock-Based Compensation

The Company periodically grants stock options to employees in non-capital raising transactions as compensation for services rendered.

The Company also offers employee stock purchase plans to employees.

The Company accounts for all stock-based payment awards made to employee, including the employee stock purchase plans, based on the authoritative guidance provided by the FASB where the value of the award is measured on the date of grant and recognized over the vesting period.

Upon the adoption of ASU No.

The Company periodically grants stock options to employees as compensation for services rendered.

The Company accounts for all stock-based payment awards made to employees, including the employee stock purchase plans, in accordance with the authoritative guidance provided by the Financial Accounting Standards Board (“FASB”) where the value of the award is measured on the date of grant and recognized over the vesting period.

In accordance with ASU No.

2018-07, Compensation-Stock Compensation (“Topic 718”), the Company accounts for stock option grants to non-employees in a similar manner as stock option grants to employees except for the term used in the grant date fair value, therefore no longer requiring a re-measurement at the then-current fair values at each reporting date until the shares underlying the options have vested.

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The stock-based compensation expense is recorded based upon the value derived from the Black-Scholes option pricing model.

The assumptions used in the Black-Scholes option pricing model could materially affect compensation expense recorded in future periods.

The Company has in the past issued restricted stock units (“RSU”) and restricted stock awards (“RSA”) as part of its share-based compensation programs.

The assumptions used in the Black-Scholes option pricing model could affect compensation expense recorded in future periods.

The Company issues restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) from time to time as part of its equity incentive plans.

The Company measures the compensation cost with respect to RSUs and RSAs issued to employees based upon the estimated fair value of the equity instruments at the date of the grant, which is recognized as an expense over the period during which an employee is required to provide services in exchange for the awards.

The fair value of RSUs and RSAs is based on the closing price of the Company’s common stock on the grant date.

Accrued Research and Development Costs

Research and development costs are expensed as incurred.

Clinical development costs compose a significant component of research and development costs.

The Company has a history of contracting with third parties, including contract research organizations (“CROs”), independent clinical investigators, and contract manufacturing organizations (“CMOs”) that perform various clinical trial activities on the Company’s behalf in connection with the ongoing development of the Company’s product candidates.

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cloud Computing Arrangements

The Company defers implementation costs incurred in cloud computing arrangements in accordance with ASC 2018-15 and amortizes it over the noncancelable term of the cloud computing arrangements plus any optional renewal periods (1) that are reasonably certain to be exercised by the Company or (2) for which exercises of the renewal option is controlled by the cloud service provider.

Costs incurred during the application development stage that are directly attributable to developing or obtaining software for internal use are defined as implementation costs and capitalized.

Costs incurred during operation and post-implementation stages are charged to expense.

Research and Development Expenses

Research and development expenses include personnel and facility-related expenses, outside contracted services including clinical trial costs, manufacturing and process development costs, research costs and other consulting services.

Research and development costs are expensed as incurred.

Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are delivered, or the related services are performed, subject to an assessment of recoverability.

Clinical development costs are a significant component of research and development expenses.

The Company has a history of contracting with third parties that perform various clinical trial activities on its behalf in connection with the ongoing development of its product candidates.

The financial terms of these contracts are subject to negotiations and may vary from contract to contract and may result in uneven payment flow.

The Company accrues and expenses costs for clinical trial activities performed by third parties based upon estimates of the percentage of work completed over the life of the individual trial in accordance with agreements established with contract research organizations and clinical trial sites.

The Company determines its estimates through discussions with internal clinical personnel and outside service providers as to the progress or stage of completion of trials or services and the agreed upon fee to be paid for such services.

The Company accrues and expenses costs for clinical trial activities performed by third parties based upon estimates of work completed to date for each clinical trial in accordance with agreements established with CROs, hospitals, and clinical investigators.

Accruals for CROs and CMOs are recorded based on estimates of services received and efforts expended pursuant to agreements established with CROs, CMOs and other outside service providers.

The Company determines its estimates through discussions with internal clinical stakeholders and outside service providers as to the progress or stage of completion of clinical trials or services and the contracted fee to be paid for such services.

Included in the Company’s clinical development costs are investigator costs, which are costs associated with treatments administered at clinical sites as required under each clinical study protocol.

The Company’s estimates for clinical investigator costs and timing of expense recognition will depend on a number of factors that include, but are not limited to, (i) the overall number of patients that enroll in the trial at each individual site, (ii) the length of study enrollment period, (iii) discontinuation and completion rates of patients, (iv) duration of patient safety follow-ups, (v) the number of sites included in the clinical trial, and (vi) the contracted fee of each participating site for patient treatment while on study, which can vary greatly for several reasons including, but not limited to, geographic region, medical center or physician costs, and overhead costs.

In addition, the Company’s estimates for per patient trial costs will vary based on a number of factors that include, but are not limited to, the extent of additional treatments that may be administered by investigators as a result of patient health status, recoverability of patient costs through insurance carriers of patients, and unanticipated cost of injuries incurred as a result of the study treatment.

The Company accrues for estimated expenses resulting from obligations under investigator site agreements as the timing of payments does not always timely align with the periods over which the treatments are administered by the clinical investigators.

These estimates are typically based on contracted amounts, patient visit data, discussions with internal clinical stakeholders and outside service providers, and historical look-back analysis of actual payments made to date.

The Company makes judgements and estimates in determining the accrual balance in each reporting period.

In the event advance payments are made to a CRO, CMO or other outside service provider, the payments are recorded within prepaid expenses and other current assets in the Consolidated Balance Sheets and subsequently recognized as research and development expense in the Consolidated Statements of Operations when the associated services have been performed.

As actual costs become known, the Company adjusts its estimates, liabilities and assets.

Inputs used in the determination of estimates discussed above may vary from actual, which will result in adjustments to research and development expense in future periods.

Changes in these estimates that result in material changes to the Company’s accruals could materially affect its results of operations.

The Company’s historical estimates have not been materially different from actual amounts recorded.

General and Administrative Expenses

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Other significant costs include facility costs not otherwise included in research and development expenses, sublicense royalty expenses, legal fees relating to corporate matters, insurance, public company expenses relating to maintaining compliance with Nasdaq listing rules and Securities and Exchange Commission (“SEC”) requirements, investor relations costs, and fees for accounting and consulting services.

General and administrative costs are expensed as incurred, and the Company accrues for services provided by third parties related to the above expenses by monitoring the status of services provided and receiving estimates from its service providers and adjusting its accruals as actual costs become known.

General and administrative costs are expensed as incurred.

The Company accounts for income taxes using the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences.

Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some or all of the deferred tax assets will not be realized.

Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

ASC Topic 740-10-40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

The Company will classify as income tax expense any interest and penalties.

The Company has no material uncertain tax positions for any of the reporting periods presented.

ASC Topic 740, Income Taxes , clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

ASC Topic 740 provides guidance on de-recognition, classification,

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted and signed into law, and GAAP requires recognition of the tax effects of new legislation during the reporting period that includes the enactment date.

The CARES Act, among other things, includes changes to the tax provisions that benefits business entities and makes certain technical corrections to the 2017 Tax Cuts and Jobs Act.

The tax relief measures for business entities include a five-year net operating loss (“NOL”) carrybacks, suspension of annual deduction limitation of 80% taxable income from net operating losses generated in a tax year beginning after December 31, 2017, changes in the deductibility of interest, acceleration of alternative minimum tax credit refunds, payroll tax relief, and technical correction to allow accelerated deductions for qualified improvement property.

The CARES Act also provides other non-tax benefits to assist those impacted by the pandemic.

The Company evaluated the impact of the CARES Act and determined the impact is immaterial.

interest and penalties, accounting in interim periods, disclosure, and transition.

The Company will classify as income tax expense any interest and penalties.

The Company has no material uncertain tax positions for any of the reporting periods presented.

Concentrations

The Company is subject to credit risk from its portfolio of cash equivalents and short-term investments.

The Company is subject to credit risk from its portfolio of cash, cash equivalents and investments.

Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S.

The Company does not believe it is exposed to any significant concentrations of credit risk from these financial instruments.

The goals of its investment policy, in order of priority, are as follows:

safety and preservation of principal and diversification of risk;

liquidity of investments sufficient to meet cash flow requirements.

The Company maintains cash, cash equivalents and short-term investment balances at three financial institutions.

The Company maintains cash, cash equivalents and investment balances at four financial institutions.

Management believes that the financial institutions which hold its cash are financially sound and, accordingly, minimal credit risk exists.

As of December 31, 2021, and 2020, respectively, the Company’s cash balances were in excess of insured limits maintained at the financial institutions.

Recent Accounting Standards

Financial Instruments

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, and also issued subsequent amendments to the initial guidance, ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, and ASU 2020-03 (collectively, Topic 326), to introduce a new impairment model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses (“CECL”).

Under Topic 326, an entity is required to estimate CECL on available-for-sale (“AFS”) debt securities only when the fair value is below the amortized cost of the asset and is no longer based on an impairment being “other-than-temporary”.

Topic 326 also requires the impairment calculation on an individual security level and requires an entity use present value of cash flows when estimating the CECL.

The credit-related losses are required to be recognized through earnings and non-credit related losses are reported in other comprehensive income.

In April 2019, the FASB further clarified the scope of Topic 326 and addressed issues related to accrued interest receivable balances, recoveries, variable interest rates and prepayment.

Topic 326 will be effective for public entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.

The new guidance requires modified retrospective application to all outstanding instruments, with a cumulative effect adjustment recorded to opening retained earnings as of the beginning of the first period in which the guidance becomes effective.

The Company adopted this guidance on January 1, 2020, however, the adoption of this new guidance did not have any material impact on its consolidated financial statements.

Cloud Computing Arrangements

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15).

The guidance requires a customer in a cloud computing arrangement that is a service contract to follow the internal use software guidance to determine which implementation costs to defer and recognize as an asset.

It therefore requires a customer to defer potentially significant implementation costs incurred in a cloud computing arrangement that were often expensed as incurred under the legacy GAAP and recognize them as expense over the term of the hosting arrangement.

ASU 2018-15 is effective for fiscal years beginning subsequent to December 15, 2019.

The Company adopted this guidance on January 1, 2020.

The Company recorded $ 1.4 million as prepaid expenses and long-term assets on the Consolidated Balance Sheet as of December 31, 2020.

The Company recorded $ 0.2 million of amortization expense for the year ended December 31, 2020.

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Segment Reporting

The Company operates in one segment, focused on developing and commercializing therapies using autologous TIL for the treatment of metastatic melanoma and other solid tumor cancers

Subsequent Events

Management of the Company evaluates events that have occurred after the balance sheet date through the date the financial statements are issued.

See Note 14 - Subsequent Events.

CASH AND CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS

Cash equivalents, and short-term investments consist of the following (in thousands):

Cash equivalents - Money market funds

Cash equivalents total

Cash equivalents in the tables above exclude cash demand deposits of $ 17.6 million and $ 3.9 million as of December 31, 2020 and 2019, respectively (in thousands).

Short-term investments

Recently Issued and Adopted Accounting Standards

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes , which simplifies accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 related to the approach for allocating income tax expense or benefit for the year to continuing operations, discontinued operations, other comprehensive income, and other charges or credits recorded directly to stockholders’ equity;

the methodology for calculating income tax expense or benefit in an interim period;

and recognition of deferred tax liabilities outside basis difference.

This ASU became effective for the Company on January 1, 2021, however, the adoption of this new standard did not have a material impact on its condensed consolidated financial statements and related disclosures.

CASH EQUIVALENTS AND INVESTMENTS

The amortized cost and fair value of cash equivalents and investments as of December 31, 2021 and December 31, 2020 were as follows (in thousands):

As of December 31, 2021

treasury securities

government agency securities

Short-term investments total

The cost and fair value of cash equivalents and short-term investments at December 31, 2020 and 2019 were as follows (in thousands):

Corporate securities

Commercial paper

Money market funds

Total investments

As of December 31, 2020

(Amortization)

treasury securities

government agency securities

As of December 31, 2019

Money market funds

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The fair value of cash equivalents and investments as of December 31, 2021 and December 31, 2020 are classified as follows in the Company’s Consolidated Balance Sheets (in thousands):

Classified as:

Cash equivalents

Short-term investments

Long-term investments

Total investments

Cash equivalents in the tables above exclude cash demand deposits of $ 17.0 million and $ 17.6 million as of December 31, 2021 and 2020, respectively.

Unrealized gains and losses are included in accumulated other comprehensive (loss) income, and as of December 31, 2021 and 2020 no unrealized losses on available-for-sale securities have resulted from credit risk.

All available-for-sale securities held as of December 31, 2021 and December 31, 2020 had contractual maturities of less than two years.

No significant available-for-sale securities held as of the periods presented have been in a continuous unrealized loss position for more than 12 months.

The Company determined that it has the ability and intent to hold all marketable securities that have been in a continuous loss position until maturity or recovery.

To date, the Company has not recorded any impairment charges on its marketable securities.

Recurring Fair Value Measurements

The following table summarizes the Company’s available-for-sale investments by contractual maturity (in thousands):

December 31, 2021

Amortized Cost

Within one year

One year to two years

Total investments

As of December 31, 2021 and 2020, the fair value of the Company’s financial assets, which consist of cash equivalents and short-term and long-term investments classified as available-for-sale securities, were measured on a recurring basis were categorized in the table below based upon the lowest level of significant input to the valuations (in thousands):

Assets at Fair Value as of December 31, 2021

treasury securities

government agency securities

Unrealized gains and losses are included in accumulated other comprehensive loss.

All short-term investments held by the Company as of December 31, 2020 and 2019 have a maturity of less than one year.

Corporate securities

Commercial paper

Money market funds

Assets at Fair Value as of December 31, 2020

treasury securities

government agency securities

Money market funds

Level 2 assets consist of commercial paper and government agency securities.

Level 2 inputs for the valuations are limited to quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for the asset.

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following (in thousands):

Lab equipment

Leasehold improvements

Computer equipment

Lab, process, and validation equipment

Utility equipment

Office furniture and equipment

Computer software

Computer equipment

Machinery and equipment

Construction in progress

3 unchanged sentences

Depreciation expense for the years ended December 31, 2021, 2020, and 2019 was approximately $ 3.1 million, $ 1.1 million and $ 1.2 million, respectively.

During the year ended December 31, 2021, the Company placed $ 62.4 million of assets related to the i CTC in service and initiated depreciation of these assets.

The depreciation expense related to these assets for the year ended December 31, 2021 was $ 1.6 million.

ACCRUED EXPENSES

Accrued expenses consist of the following (in thousands):

Clinical related

Accrued payroll and employee related expenses

Commercial manufacturing facility related

Clinical related

Manufacturing related

Facilities related

Legal and related services

Accrued other

Other accrued expenses

Total accrued expenses

STOCKHOLDERS’ EQUITY

Authorized Shares of Common Stock

On June 10, 2019, the certificate of incorporation of the Company was amended to increase the number of authorized shares of the Company's common stock, par value $ 0.000041666 , from 150,000,000 shares to 300,000,000 shares (the "Certificate of Amendment").

The Certificate of Amendment was approved by the Company's stockholders at the Company's 2019 Annual Meeting of Stockholders held on June 10, 2019.

The Company’s certificate of incorporation, as amended, authorizes the issuance of up to 300,000,000 shares of the Company’s common stock, par value $ 0.000041666 .

As of December 31, 2021, 157,004,742 shares of the Company’s common stock were issued and outstanding .

Public Offerings

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The gross proceeds from the offering, before deducting the underwriting discounts and commissions and other offering expenses payable by the Company, were $ 603.7 million, with net proceeds to the Company of $ 567.0 million.

In October 2018, the Company completed an underwritten public offering of 25,300,000 shares of the Company’s common stock at a public offering price of $ 9.97 per share, before underwriting discounts, which included 3,300,000 shares issued upon the exercise in full by the underwriter of its option to purchase additional shares at the public offering price less the underwriting discount.

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The gross proceeds from the offering, before deducting the underwriting discounts and commissions and other estimated offering expenses payable by the Company, were $ 252.2 million, with net proceeds to the Company of $ 236.7 million.

In January 2018, the Company closed an underwritten public offering of 15,000,000 shares of the Company’s common stock at a public offering price of $ 11.50 per share, before underwriting discounts, which included 1,956,521 shares issued upon the exercise in full by the underwriter of its option to purchase additional shares at the public offering price less the underwriting discount.

The gross proceeds from the offering, before deducting the underwriting discounts and commissions and other offering expenses payable by the Company, were $ 172.5 million, with net proceeds to the Company of $ 162.0 million.

At the Market Offering Program

On February 8, 2021, the Company entered into an Open Market Sale Agreement (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) with respect to an “at the market” offering program, under which the Company may, from time to time, in its sole discretion, issue and sell through Jefferies, acting as sales agent, up to $ 350.0 million of shares of the Company’s common stock (the “Common Shares”).

The issuance and sale, if any, of the Common Shares by the Company under the Sales Agreement will be made pursuant to a prospectus supplement, dated February 8, 2021, to the Company’s Registration Statement on Form S-3ASR, which became effective immediately upon filing with the Securities and Exchange Commission on May 27, 2020.

Pursuant to the Sales Agreement, Jefferies may sell the Common Shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act of 1933, as amended.

Jefferies will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the Common Shares from time to time, based upon instructions from the Company (including any price or size limits or other customary parameters or conditions the Company may impose).The Company will pay Jefferies a commission of up to 3.0 % of the gross sales proceeds of any Common Shares sold through Jefferies under the Sales Agreement.

The Company is not obligated to make any sales of Common Shares under the Sales Agreement.

The offering of Common Shares pursuant to the Sales Agreement will terminate upon the earlier to occur of (i) the issuance and sale, through Jefferies, of all Common Shares subject to the Sales Agreement and (ii) termination of the Sales Agreement in accordance with its terms.

For the year ended December 31, 2021, the Company received $ 203.2 million in net proceeds, net of offering costs, through the sale of 6,474,099 shares of its common stock through the Sales Agreement at a weighted average price per share of $ 32.12 , respectively.

Preferred Stock

The Company’s certificate of incorporation authorizes the issuance of up to 50,000,000 shares of “blank check” preferred stock.

At December 31, 2020, 17,000 shares were designated as Series A Convertible Preferred Stock and 11,500,000 shares were designated as Series B Convertible Preferred Stock (“Series B Convertible Preferred Stock”).

As of December 31, 2021, 17,000 shares were designated as Series A Convertible Preferred Stock and 11,500,000 shares were designated as Series B Convertible Preferred Stock (“Series B Convertible Preferred Stock”).

Series A Convertible Preferred Stock

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The Company may not declare, pay or set aside any dividends on shares of capital stock of the Company (other than dividends on shares of common stock payable in shares of common stock) unless the holders of the Series A Convertible Preferred Stock shall first receive an equal dividend on each outstanding share of Series A Convertible Preferred Stock.

No Shares of Series A Convertible Preferred Stock were converted during the year ended December 31, 2020 and 2019.

At December 31, 2020 and 2019, 194 shares of Series A Convertible Preferred Stock (that are convertible into 97,000 shares of common stock) remained outstanding.

No shares of Series A Convertible Preferred Stock were converted to common stock during the year ended December 31, 2021 and 2020.

As of December 31, 2021 and 2020, 194 shares of Series A Convertible Preferred Stock (that are convertible into 97,000 shares of common stock) remained outstanding.

Series B Convertible Preferred Stock

A total of 11,500,000 shares of Series B Convertible Preferred Stock are authorized for issuance under the Company’s Series B Certificate of Designation of Rights, Preferences and Privileges of Series B Convertible Preferred Stock.

The shares of Series B Convertible Preferred Stock have a stated value of $ 4.75 per share and are convertible into shares of the Company’s common stock at an initial conversion price of $ 4.75 per share.

The shares of Series B Convertible Preferred Stock have a stated value of $ 4.75 per share and are convertible into shares of the Company’s common stock at

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

an initial conversion price of $ 4.75 per share.

Each share of Series B Preferred Stock is initially convertible into 1 share of common stock.

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So long as any Series B Convertible Preferred Stock remains outstanding, the Company may not redeem, purchase or otherwise acquire any material amount of the Series A Convertible Preferred Stock or any securities junior to the Series B Convertible Preferred Stock.

No Shares of Series B Convertible Preferred Stock were converted during the year ended December 31, 2020.

A total of 2,273,726 shares of Series B Convertible Preferred Stock were converted into 2,273,726 shares of common stock during the year ended December 31, 2019.

At December 31, 2020 and 2019, 3,581,119 shares of Series B Preferred Stock (that are convertible into 3,581,119 shares of common stock) remained outstanding, respectively.

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cancellation of Common Shares

On September 30, 2013, the Company and a third party entered into an agreement under which the Company issued 50,000 shares of unregistered stock in the Company to the third party.

On January 16, 2019, the two parties entered into a confidential settlement agreement in connection with a dispute related to their prior relationship and activities.

As part of the settlement, the third party returned 32,500 shares of common stock to the Company for cancellation and retained the remaining 17,500 shares.

The Company included a gain of $ 335,000 on cancellation of 32,500 shares in Other income in its Consolidated Statement of Operations.

There were no remaining outstanding warrants as of December 31, 2020 and 2019.

Restricted Stock Units

On June 1, 2016, the Company entered into an RSU agreement with the Company’s Chief Executive Officer, Maria Fardis, Ph.D., pursuant to which the Company granted Dr.

Fardis 550,000 non-transferrable RSU at fair market value of $ 5.87 per share as an inducement of employment pursuant to the exception to The Nasdaq Global Market rules that generally require stockholder approval of equity incentive plans.

The 550,000 RSU vest in installments as follows:

(i) 137,500 RSU vested upon the first anniversary of the effective date of Dr.

Fardis’ employment agreement;

(ii) 275,000 RSU vest upon the satisfaction of certain clinical trial milestones;

and (iii) 137,500 RSU vest in equal monthly installments over the 36-month period following the first anniversary of the effective date of Dr.

Fardis’ employment, such that the RSUs were fully vested as of June 1, 2020.

At December 31, 2020, the Company had no RSUs outstanding.

Stock-based compensation expense for restricted stock units are measured based on the closing fair market value of the Company's common stock on the date of grant.

The stock-based compensation expenses relating to restricted stock units were $ 0.1 million, $ 0.3 million, and $ 0.3 million for the years ended December 31, 2020, 2019, and 2018, respectively, recorded as part of general and administrative expenses.

During the year ended December 31, 2021, 738,961 shares of Series B Convertible Preferred Stock were converted to common stock.

No shares of Series B Convertible Preferred Stock were converted to common stock during the year ended December 31, 2020.

At December 31, 2021 and 2020, 2,842,158 and 3,581,119 shares of Series B Preferred Stock (that are convertible into 2,842,158 and 3,581,119 shares of common stock) remained outstanding, respectively.

Equity Incentive Plans

On October 14, 2011, the Company’s Board of Directors (the “Board”) adopted the 2011 Equity Incentive Plan (the “2011 Plan”).

Employees, directors, consultants and advisors of the Company are eligible to participate in the 2011 Plan.

The 2011 Plan initially had 180,000 shares of common stock reserved for issuance in the form of incentive stock options, non-qualified options, common stock, and grant appreciation rights.

The 2011 Plan was not approved by the Company’s stockholders within the required one-year period following its adoption and, accordingly, no incentive stock options can be granted under that plan.

In August 2013, the Board and a majority of the Company’s stockholders approved an amendment to increase the number of shares available under the 2011 Plan from 180,000 shares to 1,700,000 shares, and an amendment to increase the number options or other awards that can be granted to any one person during a twelve (12) month period from 50,000 shares to 300,000 shares.

The foregoing amendment to the 2011 Plan became effective in September 2013.

On August 20, 2014, the Board amended the 2011 Plan to increase the number of shares available for issuance upon the exercise of stock options under the 2011 Plan from 1,700,000 to 1,900,000 shares, effective immediately.

At December 31, 2020, 11,240 shares were available for future grant under the 2011 Plan.

The Company has multiple equity incentive plans under which it grants awards.

As of December 31, 2021, there are 60,785 shares available to grant under the 2014 Equity Incentive Plan (the “2014 Plan”).

On April 22, 2018, the Company’s board of directors (the “Board”) adopted the Iovance Biotherapeutics, Inc.

2018 Equity Incentive Plan (the “2018 Plan”), which was approved by the Company’s stockholders in June 2018.

The 2018 Plan as approved initially authorized the issuance up to an aggregate of 6,000,000 shares of common stock in the form of incentive (qualified) stock options, non-qualified options, common stock, stock appreciation rights, restricted stock awards, restricted stock units, other stock-based awards, other cash-based awards or any combination of the foregoing.

On June 8, 2020, the Company's stockholders approved an amendment to the 2018 Plan to increase the number of shares available for issuance upon the exercise of stock options under the 2018 Plan from 6,000,000 to 14,000,000 shares, which became effective immediately.

As of December 31, 2021, 3,866,948 shares of common stock were available for grant under the Company’s 2018 Plan.

On September 22, 2021, the Board adopted the Iovance Biotherapeutics, Inc.

2014 Equity Incentive Plan (the “2014 Plan”).

The 2014 Plan was approved by the Company’s stockholders at the Company’s 2014 Annual Meeting of Stockholders held in November 2014.

The 2014 Plan, as approved by the stockholders, authorized the issuance up to an aggregate of 2,350,000 shares of the Company’s common stock.

On April 10, 2015, the Board amended the 2014 Plan to increase the total number of shares that can be issued under the 2014 Plan to 4,000,000 shares of the Company’s common stock.

The increase in shares available for issuance under the 2014 Plan was approved by the Company’s stockholders at the Company’s 2015 Annual Meeting of Stockholders in June 2015.

On August 16, 2016, the Company’s stockholders approved an increase in the total number of shares that can be issued under the 2014 Plan to 9,000,000 shares of the Company’s common stock.

At December 31, 2020, 61,575 shares were available for grant under the Company’s 2014 Plan.

On April 22, 2018, the Board adopted the Iovance Biotherapeutics, Inc.

2018 Equity Incentive Plan (the “2018 Plan”).

The 2018 Plan was approved by the Company’s stockholders at the annual meeting of stockholders held in June 2018.

The 2018 Plan as

2021 Inducement Plan (the “2021 Inducement Plan”).

The 2021 Inducement Plan provides for the grant of non-qualified options, common stock, stock appreciation rights, restricted stock awards, restricted stock units, other stock-based awards, other cash-based awards, or any combination of the foregoing.

The 2021 Inducement Plan was recommended for approval by the Compensation Committee of the Board (the “Compensation Committee”), and subsequently approved and adopted by the Board without stockholder approval pursuant to Rule 5635(c)(4) of the rules and regulations of The Nasdaq Stock Market, LLC (the “Nasdaq Listing Rules”).

The Board initially reserved 1,000,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the 2021 Inducement Plan, and the 2021 Inducement Plan will be administered by the Compensation Committee.

On January 12, 2022, the Compensation Committee approved an amendment to the 2021 Inducement Plan solely to increase the number of shares reserved for issuance under the 2021 Inducement Plan from 1,000,000 shares of the Company’s common stock to 1,750,000 shares of the Company’s common stock without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules.

In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, equity awards under the 2021 Inducement Plan may only be made to an employee if such employee is granted such equity awards in connection with his or her commencement of employment with the Company or a subsidiary and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary.

In addition, awards under the 2021 Inducement Plan may only be made to employees who have not previously been an employee or member of the Board (or any parent or subsidiary of the Company) or following a bona fide period of non-employment of the employee by the Company (or a parent or subsidiary of the Company).

As of December 31, 2021, 723,525 shares of common stock were available for grant under the Inducement Plan.

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

approved by the stockholders authorized the issuance up to an aggregate of 6,000,000 shares of common stock reserved for issuance in the form of incentive (qualified) stock options, non-qualified options, common stock, stock appreciation rights, restricted stock awards, restricted stock units, other stock-based awards, other cash-based awards or any combination of the foregoing.

At December 31, 2020, 7,455,537 shares of common stock were available for grant under the Company’s 2018 Plan.

Stock Options

A summary of the status of stock options at December 31, 2020, and the changes during the three years then ended, is presented in the following table:

A summary of the status of stock options as of December 31, 2021, and the changes during the three years then ended, is presented in the following table:

(in thousands)

Outstanding at January 1, 2019

( 1,336,514 )

Expired/Cancelled

2 unchanged sentences

Outstanding at December 31, 2020

( 2,822,617 )

Expired/Cancelled

( 2,800,880 )

Outstanding at December 31, 2021

Ending vested and expected to vest at December 31, 2021

Options exercisable at December 31, 2021

A summary of outstanding and exercisable stock options as of December 31, 2020 is as follows:

Options Outstanding

Options Exercisable

Range of Exercise

Exercise Price

$ 5.05 -$ 7.3

$ 7.4 -$ 8.17

$ 8.3 -$ 11.05

$ 11.15 -$ 11.26

$ 11.44 -$ 16.8

$ 16.94 -$ 22.9

$ 23 -$ 23.87

$ 23.88 -$ 23.88

$ 23.93 -$ 25.78

$ 27.5 -$ 117

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Employee Stock Purchase Plan

4 unchanged sentences

The 2020 ESPP purchases are settled with common stock from the 2020 ESPP’s previously authorized and available pool of shares.

The compensation expense related to the 2020 ESPP for the year ended December 31, 2020 was $ 0.06 million.

As of December 31, 2020, no shares were issued under the 2020 ESPP and there was $ 0.5 million of unrecognized compensation cost associated with the 2020 ESPP, which will be recognized over 6 months .

The compensation expense related to the 2020 ESPP for the years ended December 31, 2021 and 2020 were $ 1.2 million and $61,000, respectively.

During the year ended December 31, 2021, the Company received proceeds of $ 1.6 million for the issuance of 94,148 shares under the 2020 ESPP and there was $ 0.4 million of unrecognized compensation cost associated with the 2020 ESPP, which will be recognized over 5.33 months.

As of December 31, 2020, no shares were issued under the 2020 ESPP and there was $ 0.5 million of unrecognized compensation cost associated with the 2020 ESPP, to be recognized over 6 months .

Restricted Stock Units

On June 1, 2016, the Company entered into an RSU agreement with the Company’s former Chief Executive Officer, pursuant to which the Company granted the former Chief Executive Officer 550,000 RSUs as an inducement of employment pursuant to the exception to The Nasdaq Global Market rules that generally require stockholder approval of equity incentive plans.

These RSUs, which included certain performance vesting criteria based upon the satisfaction of certain clinical trial milestones were fully vested as of June 1, 2020.

No RSUs related to this grant were outstanding at either December 31, 2021 or 2020.

In June 2021, under the terms of the 2018 Plan, the Company granted 1,253,540 RSUs to its executives and employees.

The awards are time-based, and each award has one of two vesting conditions.

For certain RSU awards, 100% of the RSUs will vest on the

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

first anniversary of the grant date, and for others, 50% of the RSUs will vest on the first anniversary of the grant date with the remaining 50% vesting on December 31, 2022, assuming all time-based conditions are achieved.

A summary of the RSU activity during the years ended December 31, 2021 and 2020 is presented in the following table:

Outstanding, non-vested as of December 31, 2020

Canceled/Forfeited

Outstanding, non-vested as of December 31, 2021

As of December 31, 2021, there was $ 14.2 million of unrecognized stock-based compensation expense associated with unvested RSUs, which the Company expects to recognize over a remaining weighted-average period of 0.62 years.

The aggregate intrinsic value of the unvested RSUs outstanding as of December 31, 2021 was $ 21.2 million.

Stock-Based Compensation

3 unchanged sentences

General and administrative

Total stock-based compensation expenses

Total stock-based compensation broken down based on each individual instrument was as follows (in thousands):

Total stock-based compensation expense

Total stock-based compensation expense by type of award was as follows (in thousands):

Years Ended December 31,

Stock option expenses

Restricted stock unit expenses

2020 ESPP expenses

Total stock-based compensation expenses

As of December 31, 2020, there was $ 75.9 million of total unrecognized compensation expenses related to non-vested employee options to be recognized over a weighted average period of 1.90 years.

Stock option expense

Restricted stock unit expense

Total stock-based compensation expense

As of December 31, 2021, there was $ 93.6 million of total unrecognized compensation expense related to unvested employee stock options, which the Company expects to recognize over a remaining weighted average period of 1.84 years.

The weighted average grant date fair value for employee options granted under the Company's stock option plans during the years ended December 31, 2021, 2020, and 2019 was $ 22.28 , $ 17.32 , and $ 9.48 per option respectively.

1 unchanged sentence

The intrinsic value of the Company’s stock options changes based on the closing price of the Company’s common stock.

The total pre-tax intrinsic value of stock options exercised during the year ended December 31, 2020, 2019, and 2018 were $ 21.4 million, $ 5.3 million, and $ 2.3 million, respectively.

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The aggregate intrinsic value of stock options exercised during the year ended December 31, 2021, 2020, and 2019 were $ 21.3 million, $ 21.4 million, and $ 5.3 million, respectively.

The following table summarizes the assumptions relating to options granted pursuant to the Company’s equity incentive plans for the years ended December 31, 2021, 2020, and 2019:

Years Ended December 31,

Expected term (years)

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71.62 % - 70.63 %

52.04 % - 94.56 %

Risk-free interest rate

2 unchanged sentences

2.59 % - 1.62 %

0.06 % - 0.13 %

Expected dividend yield

Expected Dividend Yield —The Company has never paid dividends and does not expect to pay dividends in the foreseeable future.

Risk-Free Interest Rate —The risk-free interest rate was based on the market yield currently available on United States Treasury securities with maturities approximately equal to the option’s expected term.

Expected Term —The expected term of the stock option grants was calculated based on historical exercises, cancellations, and forfeitures of stock options and outstanding option shares

- Expected Term (Years) —The expected term of the stock option grants was calculated based on historical exercises, cancellations, and forfeitures of stock options and outstanding option shares

- Expected Volatility —The expected volatility is based on the historical volatility for the Company's stock over a period equal to the expected terms of the options.

- Risk-Free Interest Rate —The risk-free interest rate was based on the market yield currently available on United States Treasury securities with maturities approximately equal to the option’s expected term.

- Expected Dividend Yield —The Company has never paid dividends and does not expect to pay dividends in the foreseeable future.

- Forfeiture Rate —The Company recognizes forfeitures as they occur.

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employees under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “IRC”).

The Company's matching contribution to the plan was $ 1.2 million, $ 0.9 million, and $ 0.5 million for the years ended December 31, 2020, 2019, and 2018, respectively.

Net deferred tax assets (liabilities) are summarized as follows (in thousands):

The Company's matching contribution to the defined contribution plan was $ 2.2 million, $ 1.2 million, and $ 0.9 million for the years ended December 31, 2021, 2020, and 2019, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company did not record a provision or benefit for income taxes for the years ended December 31, 2021, 2020 or 2019.

The significant components of the Company’s net deferred tax assets and liabilities are summarized as follows (in thousands):

As of December 31,

Deferred income tax asset:

Net operating loss carry forward

Deferred income tax assets:

Net operating loss carryforwards

Stock-based compensation

Tax credit carry forwards

Tax credit carryforwards

Lease liabilities

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Net deferred tax assets (liabilities)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Reconciliation of the effective income tax rate to the U.S.

The reconciliation of the effective income tax rate to the U.S.

statutory rate is as follows:

1 unchanged sentence

Federal statutory tax rate

Orphan Drug & Research credits

Orphan drug and research credits

Permanent and other differences

Tax rate change

State tax, net of federal benefit

1 unchanged sentence

Effective tax rate

The components of income tax expense (benefit) are as follows (in thousands):

Years Ended December 31,

State and Local

Change in Valuation Allowance

Total income tax expense (benefit)

The Company had net operating loss carryovers (“NOLs”) for federal and state income tax purposes of approximately $ 662.4 million and $ 128.9 million, respectively, as of December 31, 2020.

$ 142.4 million of federal NOLs will expire beginning in 2027, while $ 520.0 million generated after Tax Reform will have an indefinite life.

The Company had net operating loss carryforwards (“NOLs”) for federal and state income tax purposes of approximately $ 945.3 million and $ 149.6 million, respectively, as of December 31, 2021.

$ 142.4 million of federal NOLs will expire beginning in 2027, while $ 803.0 million generated after the recently enacted tax reform will have an indefinite life under the Tax Cuts and Jobs Act of 2017 (the “Tax Act”).

The state NOLs will expire if unused in years 2030 through 2041.

The Company’s utilization of NOLs is subject to an annual limitation due to ownership changes that have occurred previously or that could occur in the future as provided in Section 382 of the Code (“Section 382”), as well as similar state provisions.

The Company’s utilization of NOLs is subject to an annual limitation due to ownership changes that have occurred previously or that could occur in the future as provided in Section 382 of the Internal Revenue Code (“Section 382”), as well as similar state provisions.

Section 382 limits the utilization of NOLs when there is a greater than 50% change of ownership as determined under the regulations.

Since its formation, the Company has raised capital through the issuance of capital stock and various convertible instruments which, combined with the purchasing shareholders’ subsequent disposition of these shares, has resulted in an ownership change as defined by Section 382, and could result in an ownership change in the future upon subsequent disposition.

Since its formation, the Company has raised capital through the issuance of capital stock and various convertible instruments which, combined with the purchasing shareholders’ subsequent disposition of these shares, has resulted in multiple ownership changes as defined by Section 382, and could result in ownership change in the future upon subsequent disposition.

The Company’s utilization of NOLs may also be adversely affected by future changes in federal and state tax laws and regulations.

3 unchanged sentences

After consideration of all the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance.

For the years ended December 31, 2020, 2019, and 2018, the change in the valuation allowance was approximately $ 60.7 million, $ 50.6 million, and $ 30.3 million respectively.

For the years ended

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021 and 2020, the change in the valuation allowance was approximately $ 78.1 million, $ 60.7 million, and $ 50.6 million, respectively.

The Company evaluated the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements.

1 unchanged sentence

For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

reduced) for unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740.

If applicable, interest costs related to the unrecognized tax benefits are required to be calculated and would be classified as income tax expenses in the Consolidated Statement of Operations.

Penalties would be recognized as a component of “General and Administrative Expenses” in the Consolidated Statement of Operations.

Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits.” A liability is recognized (or amount of net operating loss carry forward or amount of tax refundable is reduced) for unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740.

If applicable, interest costs related to the unrecognized tax benefits are required to be calculated and would be classified as income tax expenses in the Consolidated Statements of Operations.

Penalties would be recognized as a component of “General and Administrative Expenses” in the Consolidated Statements of Operations.

A reconciliation of the beginning and ending balances of the unrecognized tax benefits during the years ended December 31, 2021, 2020, and 2019 is as follows (in thousands):

4 unchanged sentences

Unrecognized benefit - end of period

No interest or penalties on unpaid tax were recorded during the years ended December 31, 2020, 2019, and 2018, respectively.

No interest or penalties on unpaid tax were recorded during the years ended December 31, 2021, 2020, or 2019.

The Company does not anticipate any significant changes within 12 months of this reporting date of its uncertain tax positions.

5 unchanged sentences

LICENSES AND AGREEMENTS

National Institutes of Health (NIH) and the National Cancer Institute (NCI)

Cooperative Research and Development Agreement (CRADA)

In August 2011, the Company signed a five-year CRADA with the NCI to work with Dr.

Steven Rosenberg on developing adoptive cell immunotherapies that are designed to destroy metastatic melanoma cells using a patient’s tumor infiltrating lymphocytes.

In January 2015, the Company executed an amendment to the CRADA to include four new indications.

As amended, in addition to metastatic melanoma, the CRADA included the development of TIL therapy for the treatment of patients with bladder, lung, triple-negative breast, and Human Papilloma Virus (“HPV”)-associated cancers.

In August 2016, the NCI and the Company entered a second amendment to the CRADA.

The principal changes effected by the second amendment included (i) extending the term of the CRADA by another five years to August 2021, and (ii) modifying the focus on the development of unmodified TIL as a stand-alone therapy or in combination with U.S.

Food and Drug Administration (“FDA”) - licensed products and commercially available reagents routinely used for adoptive cell therapy.

The parties will continue the development of improved methods for the generation and selection of TIL with anti-tumor reactivity in metastatic melanoma, bladder, lung, breast, and HPV-associated cancers.

National Institutes of Health (the “NIH”) and the National Cancer Institute (the “NCI”)

Cooperative Research and Development Agreement (the “CRADA”)

In August 2011, the Company signed a five-year CRADA with the NCI to work on the development of adoptive cell immunotherapies that are designed to destroy metastatic melanoma cells.

The CRADA was amended in January 2015, to include four new indications, including the development of TIL therapy for the treatment of patients with bladder, lung, triple-negative breast, and Human Papilloma Virus (“HPV”)-associated cancers.

The CRADA was further amended in August 2016 to, among other things, (i) extend the term of the CRADA by another five years to August 2021, and (ii) modify the focus on the development of unmodified TIL as a stand-alone therapy or in combination.

The parties have continued the development of improved methods for the generation and selection of TIL with anti-tumor reactivity in metastatic melanoma, bladder, lung, breast, and HPV-associated cancers.

The CRADA was further amended in August 2021 to, among other things, extend the term of the CRADA by another three years to August 2024.

The research plan in this amendment includes the evaluation in clinical trials of strategies for development of more potent TILs, such as selection of CD39/69 double negative cells and the use of certain inhibitors or other reagents in TIL expansion cultures.

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the terms of the CRADA, as amended, the Company is required to make quarterly payments of $ 0.5 million to the NCI for support of research activities.

To the extent the Company licenses patent rights relating to a TIL-based product candidate, the Company will be responsible for all patent-related expenses and fees, past and future, relating to the TIL-based product candidate.

In addition, the Company may be required to supply certain test articles, including TIL, grown and processed under cGMP conditions, suitable for use in clinical trials, where the Company holds the investigational new drug application for such clinical trial.

The extended CRADA has a five-year term expiring in August 2021.

In addition, the Company may be required to supply certain test articles, including TIL, grown and processed under cGMP conditions, suitable for use in clinical trials.

The extended CRADA has a three-year term expiring in August 2024.

The Company or the NCI may unilaterally terminate the CRADA for any reason or for no reason at any time by providing written notice at least 60 days before the desired termination date.

The Company recorded costs associated with the CRADA of $ 2.0 million, $ 2.0 million, and $ 2.2 million for the years ended December 31, 2021, 2020 and 2019, respectively, as research and development expenses.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Patent License Agreement Related to the Development and Manufacture of TIL

Effective October 5, 2011, the Company entered into an Exclusive Patent License Agreement (the “Patent License Agreement”) with the NIH, an agency of the U.S.

Public Health Service within the Department of Health and Human Services (NIH), which was subsequently amended on February 9, 2015 and October 2, 2015.

The Company entered into an Exclusive Patent License Agreement (the “Patent License Agreement”) with the NIH, an agency of the U.S.

Public Health Service within the Department of Health and Human Services, in 2011, as amended in 2015.

Pursuant to the Patent License Agreement, as amended, the NIH granted the Company licenses, including exclusive, co-exclusive, and non-exclusive licenses, to certain technologies relating to autologous tumor infiltrating lymphocyte adoptive cell therapy products for the treatment of metastatic melanoma, lung, breast, bladder and HPV-positive cancers.

The Patent License Agreement requires the Company to pay royalties based on a percentage of net sales (which percentage is in the mid-single digits), a percentage of revenues from sublicensing arrangements, and lump sum benchmark royalty payments on the achievement of certain clinical and regulatory milestones for each of the various indications and other direct costs incurred by the NIH pursuant to the agreement.

The Company anticipates making a milestone payment in conjunction with the submission of a Biologics License Application for any of its product candidates covered by the Patent License Agreement.

Effective May 6, 2021, the Company entered into an Amended and Restated Patent License Agreement with NIH (the “Amended and Restated Patent License Agreement”), which includes the grant of additional exclusive, worldwide patent rights in the Indications to cytokine-tethered TIL technology, and expands the non-exclusive, worldwide field of use to all cancers.

The Amended and Restated Patent License Agreement requires the Company to pay royalties based on a percentage of net sales in jurisdictions where patent rights exist, which percentage can fall into a tier that may be less than one percent to mid-single digits depending upon certain events, including the exclusivity of the rights, and the Company expects lower overall royalty payments as a result.

The Company also agreed to potential milestone payments on the achievement of certain clinical, regulatory, and commercial sales milestones for each of the Indications and other direct costs incurred by the NIH pursuant to the Amended and Restated Patent License Agreement.

The Company anticipates making milestone payments, including a payment in the low-single-digit millions of dollars in conjunction with the approval of a Biologics License Application for any of its product candidates covered by the Amended and Restated Patent License Agreement.

The term of the Amended and Restated Patent License Agreement continues until the expiry of the last-to-expire patent rights licensed thereunder, and the agreement contains standard termination provisions.

Exclusive Patent License Agreement Related to TIL Selection

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In June 2020, the Company entered into a new Sponsored Research Agreement with Moffitt, with a term that ends either upon completion of the research thereunder or on July 1, 2022, whichever is sooner, and under which immaterial payments will be made to Moffitt in connection with the research services thereunder.

At the same time, the Company entered into a clinical grant agreement with Moffitt to support an ongoing clinical trial at Moffitt that combines TIL therapy with nivolumab for the treatment of patients with metastatic melanoma.

In June 2017, the Company entered into a second clinical grant agreement with Moffitt to support a new clinical trial at Moffitt that combines TIL therapy with nivolumab for the treatment of patients with non-small cell lung cancer, under which the Company obtained a non-exclusive, royalty-free license to any new Moffitt inventions made in the performance of the agreement.

In December 2016, the Company entered into a clinical grant agreement with Moffitt to support an ongoing clinical trial at Moffitt that combines TIL therapy with nivolumab for the treatment of patients with metastatic melanoma.

In June 2017, the Company entered into a second clinical grant agreement with Moffitt to support a new clinical trial at Moffitt that combines TIL therapy with nivolumab for the treatment of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

patients with non-small cell lung cancer, under which the Company obtained a non-exclusive, royalty-free license to any new Moffitt inventions made in the performance of the agreement.

Under both clinical grant agreements with Moffit, the Company has non-exclusive rights to clinical data arising from the respective clinical trials.

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patent covering the subject technology.

In addition, the Company agreed to pay milestone license fees upon completion of specified milestones, customary

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

royalties based on a specified percentage of net sales (which percentage is in the low single digits) and sublicensing payments, as applicable, and annual minimum royalties beginning with the first sale of products based on the licensed technologies, which minimum royalties will be credited against the percentage royalty payments otherwise payable in that year.

In addition, the Company agreed to pay milestone license fees upon completion of specified milestones, customary royalties based on a specified percentage of net sales (which percentage is in the low single digits) and sublicensing payments, as applicable, and annual minimum royalties beginning with the first sale of products based on the licensed technologies, which minimum royalties will be credited against the percentage royalty payments otherwise payable in that year.

The Company will also be responsible for all costs associated with the preparation, filing, maintenance and prosecution of the patent applications and patents covered by the First Moffitt License related to the treatment of any cancers in the U.S., Europe and Japan and in other countries designated by the Company in agreement with Moffitt.

No expenses were recorded for the First Moffitt License for the year ended December 31, 2021, 2020, and 2019.

The Company entered into a license agreement with Moffitt effective as of May 7, 2018 (the “Second Moffitt License”), under which the Company received a license to Moffitt’s rights to patent-pending technologies related to the use of 4-1BB agonists in conjunction with TIL manufacturing processes and therapies.

The Company entered into a second license agreement with Moffitt effective as of May 7, 2018 (the “Second Moffitt License”), under which the Company received a license to Moffitt’s rights to patent-pending technologies related to the use of 4-1BB agonists in conjunction with TIL manufacturing processes and therapies.

Pursuant to the Second Moffitt License, the Company paid an upfront licensing fee in the amount of $ 0.1 million in 2018.

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The Company recorded $ 0.1 million for the years ended December 31, 2021, 2020 and 2019 as research and development expenses in connection with this agreement.

The Company subsequently exercised an option to exclusively license Moffitt’s rights to patent pending technologies related to the use of tumor digests in conjunction with TIL manufacturing processes and therapies, and entered into an amended and restated Second Moffitt License in October 2021 (the “Amended & Restated Second Moffit License”), to include these rights.

Pursuant to the Amended & Restated Second Moffitt License, the Company paid an upfront licensing fee in the amount of $ 0.2 million in 2021.

In addition, the Company agreed to pay an annual commercial use payment for each indication for which a first sale has occurred for products relating to the use of 4-1BB antagonists and for products relating to the use of tumor digests covered by the license.

The University of Texas M.D.

Anderson Cancer Center

Strategic Alliance Agreement

On April 17, 2017, the Company entered into a Strategic Alliance Agreement (the “SAA”) with M.D.

On April 17, 2017, the Company entered into a Strategic Alliance Agreement (the “SAA”) with The University of Texas M.D.

Anderson Cancer Center (“MDACC”) under which the Company and MDACC agreed to conduct clinical and preclinical research studies.

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The SAA’s term shall continue in effect until the later of the fourth anniversary of the SAA or the completion or termination of the research and receipt by the Company of all deliverables due from MDACC thereunder.

In May 2017, the Company made a prepayment of $ 1.4 million followed by subsequent payment of $ 2.5 million under this agreement.

The Company recorded $ 0.5 million, $ 1.1 million and $ 3.4 million associated with the SAA for the year ended December 31, 2021, 2020, and 2019 as research and development expenses, respectively.

In November 2016, the Company entered into a three-year manufacturing and services agreement (“MSA”) with WuXi AppTec, Inc.

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WuXi Advanced Therapies, Inc.

In November 2016, the Company entered into a three-year manufacturing and services agreement (“MSA”) with WuXi Advanced Therapies, Inc.

(“WuXi”) pursuant to which WuXi agreed to provide manufacturing and other services, which has since been amended and assigned to our subsidiary Iovance Biotherapeutics Manufacturing LLC.

Under the agreement, the Company entered into two statements of work for two cGMP manufacturing suites to be established and operated by WuXi for the Company, both of the suites are expected to be capable of being used for the commercial manufacture of its products.

The statements of work for the first suite were amended in 2019 and September 2020, and the second suite was amended in 2019.

The statements of work for facility include a fixed component to reserve a dedicated suite and a trained work force, and a variable component, mainly materials and testing used during the manufacturing processes.

Both statements of work provide for adjustments to the targeted production capacity levels and the corresponding fixed quarterly fees upon written notice from the Company of 30 days and 90 days for the first and second dedicated suites, respectively.

The terms of the related statements of work for the first and second dedicated manufacturing suites currently extend to August 2022 and June 2021, respectively.

The terms of the related statements of work currently extend to February 2022 for the first statement of work and were extended to December 2022 for the second statement of work.

The Company recorded costs associated with agreements with WuXi of $ 17.5 million, $ 20.6 million, and $ 28.4 million for the years ended December 31, 2021, 2020, and 2019 respectively, as research and development expenses.

On January 12, 2020, the Company entered into a research collaboration and exclusive worldwide license agreement whereby the Company will license gene-editing technology from Cellectis S.A.

("Cellectis"), a clinical-stage biopharmaceutical company, in order to develop TIL therapies that have been genetically edited.

Financial terms of the license include development, regulatory and sales milestone payments from the Company to Cellectis, as well as royalty payments based on net sales of TALEN-modified TIL

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company recorded costs associated with the license agreement from Cellectis of $ 0.4 million the year ended December 31, 2020, respectively.

Cellectis S.A .

On December 31, 2019, the Company entered into a research collaboration and exclusive worldwide license agreement whereby the Company will license gene-editing technology from Cellectis S.A.

(“Cellectis”), a clinical-stage biopharmaceutical company, to develop TIL therapies that have been genetically edited.

Financial terms of the license include development, regulatory and sales milestone payments from the Company to Cellectis, as well as royalty payments based on net sales of TALEN®-modified TIL products.

The Company recorded costs associated with the license agreement from Cellectis of $ 0.4 million the years ended December 31, 2021, and 2020 respectively.

Novartis Pharma AG

On January 9, 2020, the Company obtained a license from Novartis Pharma AG (“Novartis”) to develop and commercialize an antibody cytokine engrafted protein, which the Company refers to as IOV-3001.

Under the agreement, the Company has paid an upfront payment to Novartis and may pay future milestones related to initiation of patient dosing in various phases of clinical development for IOV-3001 and approval of the product in the U.S., EU and Japan.

Under the agreement, the Company paid an upfront payment to Novartis and may pay future milestones related to initiation of patient dosing in various phases of clinical development for IOV-3001 and approval of the product in the U.S., EU and Japan.

Novartis is also entitled to low-to-mid single digit percentage royalties from commercial sales of the product.

The Company recorded costs associated with the license agreement from Novartis of $ 10.0 million as research and development expenses for the year ended December 31, 2020.

Facilities Leases

The Company has evaluated the following existing facility leases and determined that, effective upon the adoption of Topic 842, they were all operating leases.

Operating lease right-of-use assets and liabilities were recognized as of January 1, 2019 based on the present value of the remaining lease payments over the lease term.

As the Company's leases do not provide an implicit rate, the Company utilized a third party in determining an incremental borrowing rate based on the information available as of the adoption date of Topic 842 to obtain the present value of lease payments.

The Company's lease terms may include options to extend or terminate the lease which are included in the lease term when it is reasonably certain that it will exercise any such options.

Lease expense is recognized on a straight-line basis over the expected lease term.

The Company elected not to apply the recognition requirements of Topic 842 for short-term leases that have a lease term of 12 months or less.

In December 2014, the Company commenced a five-year non-cancellable operating lease with the University of South Florida Research Foundation for a 5,115 square foot facility located in Tampa, Florida.

The facility is part of the University of South Florida research park and is used as the Company’s research and development facilities.

The Company had the option to extend the lease term of this facility for an additional five-year period on the same terms and conditions, except that the base rent for the renewal term will be increased in accordance with the applicable consumer price index.

In April 2015, the Company amended the original lease agreement to increase the rentable space to 6,043 square feet.

In September 2016, the Company further increased the rentable space to 8,673 square feet.

The per square foot cost and term of the lease were unchanged, and rent payments are approximately $ 20,000 per month.

In December 2019, the Company entered into an agreement to extend the lease term to December 18, 2024 for approximately $ 20,500 a month.

In June 2020, the Company amended the lease agreement to further increase the rentable space to 13,139 square feet and extend the lease term to June 5, 2025 for approximately $ 34,500 a month.

San Carlos Lease

On August 4, 2016, the Company entered into an agreement to lease 8,733 square feet in San Carlos, California.

The term of the lease is 54 months subsequent to the commencement date and will expire in April 2021.

Monthly lease payments are approximately $ 38,000 .

On April 28, 2017, the Company entered into a sublease agreement with Teradata US, Inc., pursuant to which the Company agreed to sublease certain office space located adjacent to the Company's headquarters for approximately $ 26,000 per month.

The space consists of approximately 11,449 rentable square feet in the building located in San Carlos, California.

The sublease for this space expired on October 31, 2018.

Monthly lease payments were approximately $ 26,000 .

On October 19, 2018, the Company entered into an agreement to lease 12,322 square feet of office space located adjacent to the Company's headquarters in San Carlos, California.

This lease replaces the sublease of 11,449 square feet of office space in the same

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

facility that expired on October 31, 2018.

The term of the lease is 30 months subsequent to the commencement date, November 1, 2018, and will expire in April 2021.

Monthly lease payments are approximately $ 59,000 , subject to an annual increase of 3 %.

On June 19, 2019, the Company entered into a first amendment (the “Amended Lease”) to its previously disclosed lease agreement with Hudson Skyway Landing, LLC (the “Lease”) for additional space at its corporate headquarters in San Carlos, California.

Under the Amended Lease, the Company will lease an additional 8,110 square feet (the “Expansion Space”), for a total of approximately 20,432 square feet of space on the first floor of the building located at 999 Skyway Road, San Carlos, California, commonly known as Skyway Landing II.

The term of the Amended Lease remains the same as that of the Lease and expires on April 30, 2021, unless earlier terminated in accordance with the Amended Lease.

The Company's monthly base rent for the Expansion Space under the Amended Lease will be approximately $ 39,000 for the first year, and $ 40,000 for the second year.

New York Lease

The Company leased office space in New York for a monthly rental of approximately $ 18,000 a month from January 2017 through July 2017.

On June 5, 2017, the Company entered into an agreement whereby the Company will lease office space from August 1, 2017 to July 31, 2018, for approximately $ 9,000 a month.

On April 20, 2018, the Company entered into an agreement to extend the lease term to January 31, 2019 for approximately $ 7,000 a month.

On November 2, 2018, the Company entered into an agreement to extend the lease term to July 31, 2019 for approximately $ 4,000 a month.

On May 1, 2019, the Company entered into an agreement to extend the lease term to January 31, 2020 for approximately $ 4,000 a month.

On October 24, 2019, the Company entered into an agreement to extend the lease term to April 30, 2020 for approximately $ 4,000 a month.

On January 23, 2020, the Company entered into an agreement to extend the lease term to July 31, 2020 for approximately $ 4,000 a month.

On May 24, 2020, the Company entered into an agreement to extend the lease term to October 31, 2020 for approximately $ 4,000 a month.

On September 1, 2020, the Company entered into an agreement to extend the lease term to January 31, 2021, for approximately $ 4,000 a month.

On January 31, 2021, the lease terminated, and we closed our New York office.

Philadelphia Office Lease

On May 2, 2019, the Company entered into an agreement to lease approximately 1,500 square feet of office space in Philadelphia, Pennsylvania until July 1, 2019 for a rate of $ 2,000 a month, and then approximately 4,500 square feet of office space for the remainder of a three-year term at an initial rate of $ 11,063 per month, subject to annual increases of 2.5 %.

On August 1, 2020, the Company entered into an agreement to lease approximately 2,965 square feet of a training facility space in Philadelphia, Pennsylvania for a twelve-month term at a rate of approximately $ 6,500 per month.

Commercial Manufacturing Facility Agreement

On May 28, 2019, the Company entered into a lease agreement with 300 Rouse Boulevard, LLC (the “Commercial Manufacturing Facility Lease”) for a build-to-suit commercial manufacturing facility, laboratories, and offices located in Philadelphia, Pennsylvania.

Under the Commercial Manufacturing Facility Lease, the Company leases approximately 136,000 rentable square feet of space in a building located at 300 Rouse Boulevard, Philadelphia, Pennsylvania (the “Premises”).

The construction of the commercial manufacturing facility began in July 2019 and has been substantially completed.

The Company determined the commencement date of the Commercial Manufacturing Lease to be October 7, 2020 in accordance with Topic 842 when its landlord made the Premise available for the Company’s use and the Company obtained control over the use of the Premises.

The Commercial Manufacturing Facility Lease includes an option to extend the term of the lease, exercisable under certain conditions as described in the Commercial Manufacturing Facility Lease, such that the overall term, when added to the initial term, shall be 359 months , by giving the landlord prior written notice thereof at least 18 months in advance of the expiration date.

In determining the lease term, the Company did not include the periods covered by the option to extend the lease as it determined that it is not reasonably certain that the Company will exercise such option.

Upon the commencement date, the Company recognized operating lease liabilities and right-of-use assets of $ 41.3 million and $ 45.7 million, respectively.

The Company’s monthly base rent under the Lease will be approximately $ 320,000 , subject to an annual increase of 2 % for the first ten years, and an annual increase of the greater of 2 % or 75 % of the average ten-year consumer price index.

The Company is also responsible for paying operating expenses, which are expected to be approximately $ 72,000 per month in 2021.

Operating Leases

The Company leases corporate office space in California, including 49,918 square feet for its new corporate headquarters’ office space in San Carlos, California, manufacturing, research and development lab facilities and office space in Pennsylvania, including 136,000 square feet of commercial manufacturing and lab space in Philadelphia, Pennsylvania, and research and development lab facilities in Florida.

The determination if an arrangement is a lease occurs at inception, and for leases with terms greater than 12 months , the Company records a related right-of-use asset and lease liability at the present value of lease payments over the term.

Many leases include fixed rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate.

The Company’s leases do not provide an implicit rate, and thus the Company estimated the incremental borrowing rate in calculating the present value of the lease payments.

The Company’s leases have remaining lease terms of less than one year to approximately 20 years .

Some of our leases include one or more options to renew with renewal terms that can extend the lease for additional years, or options to terminate the leases, both at the Company’s discretion.

The Company’s leases may include options to extend or terminate the lease, which is considered in the lease term when it is reasonably certain that the Company will exercise any such options.

Lease expense for minimum lease payments is recognized on a straight-line basis based on the fixed components of a lease arrangement.

Variable lease cost is determined based on performance or usage in accordance with the contractual agreements, and not based on an index or rate.

Such costs that are not fixed in nature are recognized as incurred.

The Company also leases certain furniture and equipment that has a lease term of 12 months or less.

Since the lease agreement do not include an option to purchase the underlying asset, the Company elected not to apply the recognition requirements of Topic 842 for short-term leases, however, the lease costs that pertain to the short-term leases are disclosed in the components of lease costs table below.

IOVANCE BIOTHERAPEUTICS, INC.

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During the term of each CMO agreement, the Company has access to and control of the use of a dedicated suite in each of the CMOs’ facilities for manufacturing activities.

In conjunction with the adoption of Topic 842 on January 1, 2019, the Company reevaluated all of its material contracts it has, to determine whether they contain a lease under Topic 840.

An arrangement is considered a lease or contains a lease if an underlying asset is explicitly or implicitly identified and use of the asset is controlled by the customer.

Based on this evaluation, the Company concluded that all of its contracts with CMOs contained embedded operating leases because the suites used for its production are implicitly identified, is only used by the Company exclusively during the contractual term of the arrangements, and the CMOs have no substantive contractual rights to substitute the facilities used by the Company.

The contracts with CMOs generally contain embedded operating leases based on the fact that the suites are used for the Company’s production are implicitly identified, are used exclusively by the Company during the contractual term of the arrangements, and the CMOs have no substantive contractual rights to substitute the facilities used by the Company.

Further, the Company controls the use of the facilities by obtaining all of the economic benefits from the use of the facilities and direct the use of the facilities throughout the period of use.

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The termination clauses and extension clauses are included in the calculation of the lease term for each of the CMOs when it is reasonably certain that it will not exercise such options.

The guidance requires the Company to first identify a lease deliverable and non-lease deliverable included in the arrangements, and then allocate the fixed contractual consideration to the lease deliverable(s) and the non-lease deliverable(s) on a relative standalone selling price basis to determine the amount of operating lease right-of-use assets and liabilities.

For contracts with multiple deliverables, Topic 842 requires the Company to first identify a lease deliverable and non-lease deliverable included in the arrangements, and then allocate the fixed contractual consideration to the lease deliverable(s) and the non-lease deliverable(s) on a relative standalone selling price basis to determine the amount of operating lease right-of-use assets and liabilities.

The Company identified the use of a dedicated suite as a single lease deliverable, and related labor services as a single non-lease deliverable in each of the CMO arrangements.

Judgment is required to determine the relative standalone selling price of each deliverable as the observable standalone selling prices are not readily available.

Therefore, management used estimates and assumptions in determining relative standalone selling price of lease of a suite and labor service using information that includes market and other observable inputs to the extent possible.

The Company leases certain furniture and equipment that has a lease term of 12 months or less.

Since the commencement date does not include an option to purchase the underlying asset, the Company elected not to apply the recognition requirements of Topic 842 for short-term leases, however, the lease costs that pertain to the short-term leases are disclosed in the components of lease costs table below.

The balance sheet classification of the Company’s right-of-use asset and lease liabilities was as follows:

Therefore, management uses estimates and assumptions in determining relative standalone selling price of lease of a suite and labor service using information that includes market and other observable inputs to the extent possible.

The balance sheet classification of the Company’s right-of-use asset and lease liabilities was as follows (in thousands):

December 31, 2021

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Total operating lease liabilities

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes components of lease expenses, which were included in Total expenses in the Company’s Consolidated Statement of Operations, and other information related to our operating leases as follows (in thousands except weighted-average remaining lease terms and discount rates):

The following table summarizes components of lease expenses, which were included in Total expenses in the Company’s Consolidated Statements of Operations, and other information related to our operating leases as follows (in thousands, except weighted-average remaining lease terms and discount rates):

December 31, 2021

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Cash paid for amounts included in the measurement of lease liabilities included in Operating cashflows

Increase in right-of-use assets from the adoption of Topic 842

Right-of-use assets obtained from entering new leases

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Weighted-average discount rates

Variable lease cost is determined based on performance or usage in accordance with the contractual agreements, and not based on an index or rate.

As of December 31, 2020, the maturities of the Company's operating lease liabilities were as follows (in thousands):

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2021, future payments associated with the Company's operating lease liabilities were as follows (in thousands):

Year Ending December 31,

Total lease payments

Present value adjustment

Future tenant improvement reimbursement

Operating lease liabilities

Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term.

In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the date of adoption of Topic 842 or the date of lease modifications.

As of December 31, 2020, the weighted average remaining lease term is 16.76 years and the weighted average discount rate used to determine the operating lease liabilities was 8.3 %.

For its new corporate headquarters’ office, the Company was provided a tenant improvement allowance of $ 8.2 million.

As of December 31, 2021, the Company has received reimbursement associated with this tenant improvement allowance of $ 1.6 million.

LEGAL PROCEEDINGS

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Based on the early stage of the litigation, it is not possible to estimate the amount or range of possible loss that might result from these matters.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Solomon Capital, LLC.

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The Company has asserted counterclaims for fraudulent inducement, fraudulent misrepresentation, fraudulent concealment, breach of fiduciary duty, and breach of contract, alleging principally that the counterclaim defendants misrepresented their qualifications and failed to disclose that Solomon Sharbat was the subject of an investigation by the Financial Industry Regulatory Authority (“FINRA”) that resulted in the loss of his FINRA license.

In its counterclaims, the Company is seeking damages in an amount exceeding $ 0.5 million and an order rescinding any and all agreements that the plaintiffs contend entitled them to obtain shares of Company stock.

In its counterclaims, the Company is seeking damages in an amount exceeding $ 0.5 million and an order rescinding any and all agreements that the Solomon Plaintiffs contend entitled them to obtain shares of Company stock.

On May 12, 2020, the court granted the Company’s motion for summary judgment limiting the Solomon Plaintiffs’ damages for the Equity Claim to $ 47,420 .

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On July 2, 2020, the court granted the Company’s motion to dismiss the First Solomon Suit for want of prosecution.

On July 31, 2020, the Solomon Plaintiffs, through new counsel, filed a motion for reconsideration of the dismissal of the First Solomon Suit for want of prosecution.

On August 11, 2020, the Company filed an opposition brief against the Solomon Plaintiffs’ motion for reconsideration.

On August 17, 2020, the Solomon Plaintiffs filed a reply brief in support of their motion for reconsideration.

On September 2, 2020, the Solomon Plaintiffs filed a notice of appeal of the dismissal for want of prosecution.

On January 4, 2021, the court granted the Solomon Plaintiffs motion for reconsideration, and reinstituted the case.

On January 15, 2021, the Company filed a notice of appeal of the court’s grant of the Solomon Plaintiffs motion for reconsideration.

On May 11, 2021, the Appellate Division upheld the court’s grant of the Solomon Plaintiffs’ motion for reconsideration of the dismissal of the First Solomon Suit for want of prosecution.

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On September 27, 2019, the Solomon Plaintiffs filed a new lawsuit (through new legal counsel) (“the Second Solomon Suit”) titled Solomon Capital, LLC, Solomon Capital 401(K) Trust, Solomon Sharbat and Shelhav Raff v.

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1:20-cv-1391.

The Company has not yet responded to the complaint in the Second Solomon Suit.

On May 22, 2020, the Company moved to dismiss the Second Solomon Suit for lack of personal jurisdiction.

On July 17, 2020, the Solomon Plaintiffs filed an opposition brief against the Company’s motion to dismiss for lack of personal jurisdiction.

On August 7, 2020, the Company filed a reply brief in support of the Company’s motion to dismiss for lack of personal jurisdiction.

On March 26, 2021, Court denied the Company’s motion to dismiss for lack of personal jurisdiction.

The Company filed a response to the complaint in the Second Solomon Suit on April 30, 2021.

On May 26, 2021, the Company and Singh filed motions for judgment on the pleadings with respect to the second and third claims asserted against the Company and all claims asserted against Singh, respectively, in the Second Solomon Suit.

On January 5, 2022, the Court granted the Company’s motions for judgement on the pleadings, dismissing the second and third claims against the Company and dismissing all claims against Singh.

The Company intends to vigorously defend these complaints and pursue its counterclaims, as applicable.

At the current stage of the litigation, in both the First Solomon Suit and the Second Solomon Suit, it is not possible to estimate the amount or range of possible loss that might result from an adverse judgment or a settlement of these matters.

Litigation Involving Dr.

Steven Fischkoff .

On June 13, 2017, in an action titled Steven Fischkoff v.

Lion Biotechnologies, Inc.

and Maria Fardis , Dr.

Steven Fischkoff, the Company’s former Vice President and Chief Medical Officer, filed a lawsuit against the Company in the Supreme Court of the State of New York, County of New York.

Fischkoff was dismissed by the Company on March 28, 2017.

Fischkoff was terminated “for cause” as that term is defined in his employment agreement.

In his complaint, Dr.

Fischkoff alleges breaches of his employment agreement and violation of New York Labor Law for failure to pay monies purportedly

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

owed to him, and seeks to recover amounts including severance pay and retention bonus (totaling $ 300,000 ), a prorated incentive bonus, and amounts relating to unvested options to 150,000 shares of the Company's common stock, together with prejudgment interest, costs, expenses and attorneys’ fees.

On July 5, 2017, the Company filed a removal petition and removed the lawsuit to the U.S.

District Court for the Southern District of New York, where the case has been assigned case no.

1:17-cv-05041.

On July 14, 2017, the Company filed a partial answer and counterclaims against Dr.

Fischkoff, denying his allegations, and alleging breach of contract and related claims, breach of fiduciary duty, and state and federal trade secret misappropriation and related claims, and sought a temporary restraining order and preliminary injunction against Dr.

On July 18, 2017, the court issued a temporary restraining order against Dr.

Fischkoff requiring him to return the Company's materials, prohibiting him from disclosing or using the Company’s materials, and granting expedited discovery.

On June 25, 2018, pursuant to a stipulation between the parties, the court entered a permanent injunction prohibiting Dr.

Fischkoff from disclosing, possessing, or using any of the Company’s proprietary materials or trade secrets.

On July 5, 2018, the court entered an order dismissing two of Dr.

Fischkoff’s claims against the Company and Dr.

On October 18, 2018, Dr.

Fischkoff amended his complaint to assert a new claim for defamation arising from SEC filings in which the Company provided the information about this litigation.

On September 23, 2020, the parties reached a confidential settlement in this matter, and on October 13, 2020, the court approved a stipulation of dismissal with prejudice filed by the parties.

Other Matters.

In connection with the Company’s reincorporation from Nevada to Delaware in 2017, the Company (as a Delaware corporation) untimely filed a post-effective amendment to adopt a Form S-8 registration statement that the Company filed (as a Nevada corporation) to register the shares underlying the Company’s 2011 Equity Incentive Plan.

Before the Company filed the required post-effective amendment, options to purchase 200,000 shares were exercised under the 2011 Equity Incentive Plan.

The effect of the delayed post-effective amendment filing on the 200,000 option shares is uncertain, but the issuance and sale of the shares may not have been in compliance with the Form S-8 registration statement.

The existence of any liability to the Company, and the amount of any such liability to the Company, as a result of the issuance of the 200,000 shares is uncertain.

Accordingly, no accrual for a potential claim has been made by the Company in its consolidated financial statements.

The Company may be involved, from time to time, in legal proceedings and claims arising in the ordinary course of its business.

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While there can be no assurances as to the ultimate outcome of any legal proceeding or other loss contingency involving the Company, management does not believe any pending matter will be resolved in a manner that would have a material adverse effect on its financial position, results of operations or cash flows.

QUARTERLY UNAUDITED RESULTS

The results of operations by quarter for the years ended December 31, 2020 and 2019 are as follows:

(in thousands, except per share information)

Net loss per share, basic and diluted

Weighted average share used in computing net loss per share, basic and diluted

RELATED PARTY TRANSACTIONS

On September 14, 2017, the Company entered into a three-year consulting agreement with Iain Dukes, D.

Phil, the Chairman of the Board.

As compensation for his consulting services, the Company granted Dr.

Dukes a stock option to purchase up to 150,000 shares of the Company’s common stock, at an exercise price of $ 7.30 per share.

Under the consulting agreement, Dr.

Dukes agreed to provide the Company with services regarding business development opportunities, licensing transactions and technology acquisitions by the Company, and any such strategic initiatives appropriate for the Company that Dr.

Dukes may identify.

The granted stock options vest in 12 quarterly installments (with 1/12th of the option shares having vested on the date of grant).

The vesting of the granted stock options will accelerate, and the entire award will become fully vested upon the closing of a significant licensing transaction, a material product acquisition, a material strategic transaction, or upon a change of control transaction.

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company recognized $ 0.2 million, $ 0.4 million and $ 0.7 million in stock-based compensation expense related to this consulting agreement during the years ended December 31, 2020, 2019 and 2018, respectively.

SUBSEQUENT EVENTS

New Headquarters Lease

On February 3, 2021, the Company entered into a lease agreement with ARE-San Francisco No.

63, LLC (the “New Headquarters Lease”) for laboratories and offices to be constructed in Suite 400 of an existing building located at 825 Industrial Road, San Carlos, California (the “Building”), commonly known as The District.

Under the New Headquarters Lease, the Company will lease approximately 49,918 rentable square feet of space in the Building (the “Premises”).

The New Headquarters Lease is for a term of 120 months, commencing upon the first day of the first full month (the “Rent Commencement Date”) after the earlier to occur of (i) the date that is 12 months and one day after the execution date (the “Commencement Date”), which is January 30, 2022, or (ii) the date that the Tenant Improvements are substantially completed;

provided, however, that the Rent Commencement Date shall be delayed 1 day for each day after the Commencement Date that (a) to the extent that, after the Commencement Date, any governmental authority having jurisdiction, as a result of the COVID-19 outbreak in the U.S., declares or implements any order or mandate that restricts construction activities in San Mateo County, California (any such order or mandate, a “Government Mandate”), to the extent that such Government Mandate precludes the construction of tenant improvements, or (b) a landlord delay occurs.

Construction of the Company’s offices is expected to extend through 2021.

The New Headquarters Lease includes an option to extend the term of the lease for 60 months , exercisable under certain conditions and at a market rate as described in the New Headquarters Lease.

Commencing 210 days after the Rent Commencement Date as the result of a rent abatement, the Company’s monthly base rent under the New Headquarters Lease will be $ 279,540.80 , subject to an annual increase of 3 % .

Beginning in 2022, the Company will also be responsible for paying operating expenses.

Extension of Existing Headquarters Leases

On February 3, 2021, the Company entered into two amendments (the “Suite 150 Second Amendment” and the “Suite 100 and Suite 125 First Amendment”) to its previously disclosed lease agreements with Hudson Skyway Landing, LLC, for space located on the first floor of the building located at 999 Skyway Road, San Carlos, California, commonly known as Skyway Landing II.

Under the Suite 100 and Suite 125 Second Amendment, the Company will extend its previously disclosed amended lease of approximately 20,432 rentable square feet of space, which would have expired on April 30, 2021, to December 31, 2021.

The Company’s monthly base rent under the Suite 100 and Suite 125 Second Amendment will be $ 103,181.60 .

The Company is also responsible for paying its portion of operating expenses and real estate taxes.

The Company has an option to extend the expiration of the Suite 100 and Suite 125 Second Amendment for one month or six months , at its discretion, by providing notice as specified in the Suite 100 and Suite 125 Second Amendment.

Under the Suite 150 First Amendment, the Company will extend its previously disclosed lease of approximately 8,733 rentable square feet of space, which also would have expired on April 30, 2021, to December 31, 2021.

The Company’s monthly base rent under the Suite 150 First Amendment will be $ 44,101.65 .

The Company is also responsible for paying its portion of operating expenses and real estate taxes.

The Company has an option to extend the expiration of the Suite 150 First Amendment for one month or six months , at its discretion, by providing notice as specified in the Suite 150 First Amendment.

Economic Stimulus Program Loan

On January 26, 2021, the Company entered into a Loan Note dated January 26, 2021 (the “Loan Note”) and accompanying Economic Stimulus Program Loan Agreement with PIDC – Local Development Corporation, a Pennsylvania nonprofit corporation (the “Lender”), pursuant to which the Lender agreed to make a loan (the “Job Creation Loan”) to the Company in a principal amount of $ 1.0 million.

The Job Creation Loan will be for a term of five years starting on the date of the issuance of a final certificate of occupancy for the Company’s leased premises in Philadelphia, Pennsylvania.

The Job Creation Loan is unsecured, bears no interest, and will be forgiven by the Lender in the amount of $ 2,000 per full-time or “full time equivalent” (defined as two or more part time employees whose working hours total at least 35 hours a week) employee with an average salary of at least $ 80,000 (“FT Employees”), up to a maximum amount equal to the amount of the Job Creation Loan, as calculated based on the average number of

IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FT Employees employed at the Company’s premises during the period of the 5-year term beginning on the date that is six months prior to the maturity date and ending on the maturity date.

LONG-TERM NOTE PAYABLE

On January 26, 2021, the Company entered into a Loan Note and accompanying Economic Stimulus Program Loan Agreement with PIDC – Local Development Corporation, a Pennsylvania nonprofit corporation (the “Lender”), pursuant to which the Lender agreed to make a loan (the “Job Creation Loan”) to the Company in a principal amount of $ 1.0 million.

The Job Creation Loan will be for a term of five years starting on February 18, 2021, the date of the issuance of a final certificate of occupancy for the Company’s leased premises in Philadelphia, Pennsylvania.

If the Job Creation Loan is not forgiven in full by the maturity date, the remaining balance of the loan not forgiven will become payable on the maturity date.

1 unchanged sentence

Upon the occurrence of an event of default, the Lender will have the right to exercise remedies against the Company, including the right to require immediate payment of all amounts due under the Loan Note.

Entry Into a Material Definitive Agreement

The issuance and sale, if any, of the Common Shares by the Company under the Sales Agreement will be made pursuant to a prospectus supplement, dated February 8, 2021, to the Company’s registration statement on Form S-3ASR, originally filed with the Securities and Exchange Commission on May 27, 2020, which became effective immediately upon filing.

The Company will pay Jefferies a commission of up to 3.0 % of the gross sales proceeds of any Common Shares sold through Jefferies under the Sales Agreement.

The Company is not obligated to make any sales of Common Shares under the Sales Agreement.

The Company concluded that it is not reasonably assured that all or a portion of the loan will be forgiven as of December 31, 2021, and therefore accounted for the Job Creation Loan as debt in accordance with ASC Topic 470, Debt , as opposed to an in-substance government grant, and classified as a long-term debt in its Condensed Consolidated Balance Sheets as of December 31, 2021.

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

What changed 10-K

Item 9A. Controls and Procedures