What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-02-28 compared with 2022-02-24 · 298 added, 246 removed, 897 unchanged (38% of the section changed)

14 unchanged sentences

Other Information

Subsequent Event – Acquisition of Proleukin®

Pursuant to that certain Option Agreement entered into on January 23, 2023 or the Option Agreement, between Iovance and Clinigen Holdings Limited, Clinigen Healthcare Limited and Clinigen, Inc., collectively, Clinigen, we will acquire worldwide rights to Proleukin®, aldesleukin, an IL-2 product used to promote T-cell activity following TIL infusion.

Material terms of the Option Agreement include an upfront payment of £167.7 million, or approximately $200 million, a £41.7 million, or approximately $50 million, milestone payment upon first approval of lifileucel in advanced melanoma, and deferred consideration based on double-digit rates on Proleukin® global net sales payable from Iovance to Clinigen following the completion of the transaction for the applicable deferred consideration term.

Subject to the terms and conditions of the Option Agreement, Clinigen granted us a call option to purchase (i) all issued and outstanding shares of Clinigen SP Limited, the Target, (ii) the business of the Target and Clinigen comprising the manufacturing, supply, commercialization and the generation of income from Proleukin® rights and the undertaking of an active role in the development, maintenance and exploitation of those rights, and (iii) certain specified assets identified in the Option Agreement and we granted Clinigen a put option to sell them.

The Option Agreement is subject to customary termination provisions, and we would be required to pay to Clinigen a reverse termination fee, less certain transaction fees and expenses incurred by us, upon certain events as described in the Option Agreement.

We have provided Clinigen with a parent guarantee in favor of Clinigen, which guarantees that we will promptly fulfill all its obligations under the Option Agreement, subject to the conditions set forth in the Option Agreement.

The closing of the transaction is subject to required regulatory approvals and clearances and other customary closing conditions.

Certain information required by Part III is omitted from this Annual Report on Form 10-K because we will file a definitive Proxy Statement for the Annual Meeting of Stockholders pursuant to Regulation 14A of the Securities Exchange Act of 1934 (the Proxy Statement), not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and the applicable information included in the Proxy Statement is incorporated herein by reference.

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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).

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).

Third 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 29, 2022).

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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Iovance Biotherapeutics, Inc.

2018 Equity Incentive Plan, as amended (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Commission on June 9, 2020).#

2018 Equity Incentive Plan, as amended (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Quarterly Report on Form 10-Q filed with the Commission on August 4, 2022).#

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

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Iovance Biotherapeutics, Inc.

Amended and Restated 2021 Inducement Plan.#**

Amended and Restated 2021 Inducement Plan (incorporated herein by reference to Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K filed with the Commission on February 24, 2022).#**

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).#

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

2018 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on August 4, 2022).#

Patent License Agreement by and between Genesis Biopharma, 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.#+ (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 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).

and Iovance Biotherapeutics, Inc.

(incorporated herein by reference to Exhibit 10.4 of the Registrant’s Current Report on Form 10-K filed with the Commission on May 6, 2021).#+

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

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

and 300 Rouse Boulevard, LLC.**

and 300 Rouse Boulevard, LLC (incorporated herein by reference to Exhibit 10.46 to the Registrant’s Annual Report on Form 10-K filed with the Commission on February 24, 2022).

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

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63, LLC (incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Commission on February 9, 2021).

Option Agreement, dated January 23, 2023, by and among Iovance Biotherapeutics, Inc., Iovance Biotherapeutics UK Ltd, Clinigen Holdings Limited, Clinigen Healthcare Limited, and Clinigen, Inc.

(incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K/A filed with the Commission on January 27, 2023).

Subsidiaries of the Company.**

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The following financial information from the Annual Report on Form 10-K of Iovance Biotherapeutics, Inc.

for the year ended December 31, 2021, formatted in XBRL (eXtensible Business Reporting Language):

for the year ended December 31, 2022, formatted inline XBRL (eXtensible Business Reporting Language):

(1) Balance Sheets as of December 31, 2022 and 2021 (2) Statements of Income for the years ended December 31, 2022 and 2021;

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Athena Countouriotis, M.D.

February 28, 2023

IOVANCE BIOTHERAPEUTICS, INC.

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

Financial Statements

Consolidated Financial Statements

Consolidated Balance Sheets

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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.

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

(the Company) as of December 31, 2022 and 2021, 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, 2022, 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 at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

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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.

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

We are a public accounting firm registered with the 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.

We conducted our audits 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.

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

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.

Our audits 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 audits provide a reasonable basis for our opinion.

Critical Audit Matter

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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.

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 the direct cost, and contracts and change orders executed by the Company for selected 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.

1 unchanged sentence

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

Redwood City, California

San Mateo, California

February 28, 2023

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, 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.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the balance sheets of the Company as of December 31, 2022 and 2021, the related statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2022, and the related notes, and our report dated February 28, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

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/s/ Ernst & Young LLP

Redwood City, California

San Mateo, California

February 28, 2023

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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.

(the “Company”) as of December 31, 2020, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for the year 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 the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

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 audits.

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 audits in accordance with the standards of the PCAOB.

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

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.

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

Our audits 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 audits provide a reasonable basis for our opinion.

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 Matters

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Non-Current Liabilities

Operating lease liabilities – noncurrent

Operating lease liabilities – non-current

Long-term note payable

Other liabilities

Total Non-Current Liabilities

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Series B Convertible Preferred stock, $ 0.001 par value;

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

11,500,000 shares designated, 2,842,158 shares issued and outstanding as of December 31, 2022 and December 31, 2021

Common stock, $ 0.000041666 par value;

300,000,000 shares authorized, 187,812,072 and 157,004,742 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively

Accumulated other comprehensive (loss) income

Accumulated other comprehensive loss

Additional paid-in capital

1 unchanged sentence

( 1,568,338 )

( 1,172,445 )

Total Stockholders’ Equity

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Years Ended December 31,

Other comprehensive loss / (gain):

Unrealized loss / (gain) on short-term investments

Other comprehensive loss:

Unrealized loss on investments

Comprehensive Loss

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(In thousands, except share information)

Series B Convertible

Preferred Stock

Accumulated other

Preferred Sock

Preferred Stock

Comprehensive

Income (Loss)

Stockholders’

Balance - January 1, 2020

Adoption of ASU 2018-07

Stock-based compensation expense

Vesting of restricted shares issued for services

Vesting of restricted stock shares issued for services

Tax payments related to shares withheld for vested restricted stock units

Common stock issued upon exercise of stock options

Conversion of convertible preferred stock into common stock

( 2,273,726 )

Unrealized gain on investments

Cancellation of common shares from settlement of dispute

Common stock sold in public offering, net of offering costs

Unrealized loss on investments

Balance - December 31, 2020

Stock-based compensation expense

Vesting of restricted stock shares issued for service

Tax payments related to shares withheld for vested restricted stock units

Common stock issued upon purchase through 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 )

Stock-based compensation expense

Common stock issued upon purchase of employee stock purchase plan

Common stock issued upon purchase through employee stock purchase plan

Vesting of restricted shares issued for services

Tax payments related to shares retired for vested restricted stock units

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

Common stock sold in public offering, net of offering costs

Balance - December 31, 2022

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Depreciation and amortization

Gain on settlement of dispute

Accretion (amortization) of discounts and premiums on investments

Loss on disposal of assets

Accretion of discounts and premiums on investments

Loss on write-off of fixed assets

Changes in assets and liabilities:

Prepaid expenses, other assets and long-term assets

Operating lease liabilities

Operating lease liabilities, net of tenant improvement allowance received

Accounts payable

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Tax payments related to shares withheld for vested restricted stock units

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

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

Proceeds from the issuance of common stock upon exercise of options

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Net cash provided by financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, Cash Equivalents and Restricted Cash Beginning of Year

Cash, Cash Equivalents and Restricted Cash End of Year

Net increase in cash, cash equivalents and restricted cash

Cash, Cash Equivalents and Restricted Cash Beginning of Period

Cash, Cash Equivalents and Restricted Cash End of Period

Supplemental disclosure of non-cash investing and financing activities:

Net unrealized loss on short-term investments

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

Net unrealized loss on investments

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

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

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Iovance Biotherapeutics, Inc.

(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.

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, as well as non-small cell lung cancer.

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 a clinical-stage biopharmaceutical company pioneering a transformational approach to treating cancer by harnessing the human immune system’s ability to recognize and destroy diverse cancer cells using therapies personalized for each patient.

The Company’s mission is to be the global leader in innovating, developing and delivering tumor infiltrating lymphocyte (“TIL”) therapies for patients with solid tumor cancers.

The Company’s autologous TIL therapy platform uses a centralized, scalable, and proprietary 22-day manufacturing process to grow polyclonal T-cells unique to each patient and yields a cryopreserved, individualized therapy.

The Company is currently conducting clinical trials to investigate multiple TIL therapies for multiple indications, including its lead product candidate, lifileucel, for advanced, or metastatic or unresectable melanoma.

The Company initiated a rolling Biologics License Application (“BLA”) submission to the U.S.

Food and Drug Administration (“FDA”) for lifileucel in August 2022 and expects to complete the rolling BLA submission in the first quarter of 2023.

The Company is also pursuing registrational strategies for lifileucel in advanced cervical cancer and for its TIL therapy LN-145 in metastatic non-small cell lung cancer (“NSCLC”).

In addition, the Company is investigating next generation approaches to optimize TIL products, manufacturing processes and treatment regimens, including a first-in-human clinical trial of its lead genetically modified TIL therapy, IOV-4001.

The Company is also exploring a 16-day manufacturing process, tumor tissue procurement via core biopsy, additional genetically modified TIL therapies including multiple immune checkpoint gene edits and cytokine-tethered TIL therapies, as well as, a novel interleukin-2 (“IL-2”) analog, designated IOV-3001, as potential avenues to improve manufacturing timelines, sample collection and supportive treatments involved in the overall TIL therapy process and treatment regimen.

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, 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 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 twelve months from the date these consolidated financial statements are issued.

The Company has incurred a net loss of $ 395.9 million for the year ended December 31, 2022 and used $ 292.8 million of cash in its operating activities during the year ended December 31, 2022.

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.

As of December 31, 2022, the Company had $ 478.3 million in cash, cash equivalents, investments, and restricted cash ($ 231.7 million of cash and cash equivalents, $ 240.1 million in short-term investments and $ 6.4 million in restricted cash).

The Company expects to continue to incur significant expenses to support its research and development activities, on-going pre-commercial activities and completion of the construction of tenant improvements for the Iovance Cell Therapy Center (the “ i CTC”) facility during 2023 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.

Based on the funds the Company has available as of the date these consolidated 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 consolidated financial statements are issued.

Concentrations of Risk

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

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.

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

The Company's investments are classified as “available-for-sale.” The Company includes these investments in current assets or non-current assets in the Consolidated Balance Sheets based on the length of maturity from the reporting date and carries them at fair value.

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

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

No impairment losses related to credit losses were recognized for the years ended December 31, 2022, and 2021.

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government and U.S.

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.

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

Restricted Cash

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.

The Company maintains a required minimum balance in a segregated bank account in connection with its letters of credit for which amounts are restricted as to their use by the Company.

Currently, the Company’s letters of credit are primarily comprised of one for the benefit of the landlord for the i CTC used as a security deposit for the lease in the amount $ 5.45 million (See Note 10 - Leases) and one for $ 0.6 million for the benefit of the landlord for the Company’s current headquarters’ lease.

The total amount of the Company’s letters of credit is classified as Restricted Cash on the Consolidated Balance Sheets.

The letter of credit for $ 5.45 million 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):

The letter of credit with the landlord for the Company’s current headquarters’ lease 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, 2022 and December 31, 2021, restricted cash consisted of $ 6.4 million and $ 6.1 million, respectively.

This amount has been classified as a non-current asset in the Company’s Consolidated Balance Sheets.

The following table provides a reconciliation of cash and 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

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Management assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

If there is indication of impairment, management prepares an estimate of future undiscounted cash flows expected to result from the use of the asset and its eventual disposition.

If there is an indication of impairment, management prepares an estimate of future undiscounted cash flows expected to result from the use of the asset and its eventual disposition.

If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value.

For the years ended December 31, 2022, 2021, and 2020, the Company did not recognize any impairments for its property and equipment.

Loss per Share

Net Loss per Share

Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period.

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, (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.

22 unchanged sentences

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.

1 unchanged sentence

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 assets consist of commercial paper, corporate securities 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.

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

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 expenses during the reporting period.

The preparation of financial statements in conformity with 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 expenses during the reporting period.

Actual results could differ from those estimates.

7 unchanged sentences

dollar is the functional currency for all the Company's consolidated operations.

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

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.

The Company determines if an arrangement includes a lease at inception and thereafter, if modified.

Operating leases are included in its Consolidated Balance Sheets as Operating lease right-of-use assets and Operating lease liabilities as of December 31, 2022 and 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 Standards Update (“ASU”) No.

2016-02 and No.

2018-10 (together “Topic 842”).

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

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

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

The Company has elected not to apply the recognition requirements of Topic 842 for short-term leases.

For lease agreements entered into after the adoption of Topic 842 that include lease and non-lease components, such components are generally accounted for separately.

Lease expense is recognized on a straight-line basis over the expected lease term and recorded in costs and expenses in the Consolidated Statements of Operations.

The Company has elected not to apply the recognition requirements of Accounting Standards Update (“ASU”) No.

2016-02 and No.

2018-10 (together “Topic 842”) for short-term leases.

For lease agreements entered into by the Company that include lease and non-lease components, such components are generally accounted for separately.

Stock-Based Compensation

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.

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

The Company accounts for all stock-based payment awards made to employees, including the employee stock purchase plans, and non-employees 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.

Forfeitures are recognized in the period in which they occur.

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.

The non-employee awards that contain a performance condition that affects the quantity or other terms of the award are measured based on the outcome that is probable.

The fair value of the Company’s common stock option grants is estimated using a Black-Scholes option pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the common stock options, and future dividends.

The fair value of the Company's common stock option grants is estimated using a Black-Scholes option pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected term of the common stock options, and future dividends.

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 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.

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

The Company measures the compensation cost with respect to RSUs 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 is based on the closing price of the Company’s common stock on the grant date.

In addition to RSUs that have time-based vesting requirements, from time to time the Company may issue RSUs that include certain performance vesting criteria based upon the satisfaction of stated objectives (“PRSUs”).

The Company measures the compensation cost with respect to PRSUs issued to employees based upon the estimated fair value of the equity instruments at the date of grant, which is recognized as an expense over the period that achievement is determined to be probable through the stated service period associated with the award.

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Accrued Research and Development Costs

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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.

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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 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.

The Company accrues and expenses costs for clinical trial activities performed by third parties based upon the 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 services received and efforts expended pursuant to agreements established with CROs, CMOs and other outside service providers.

The Company determines its costs 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.

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 clinical trial 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 clinical trial, which can vary greatly for several reasons including, but not limited to, geographic region, medical center or physician costs, and overhead costs.

The Company accrues 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.

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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

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance, accounting, legal, investor relations, facilities, business development, marketing, commercial and human resources functions.

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance, procurement, legal, investor relations, facilities, business development, marketing, commercial and human resources functions.

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.

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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, 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,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

ASC Topic 740 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.

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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.

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

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government agency securities

Corporate securities

Commercial paper

Money market funds

Total investments

IOVANCE BIOTHERAPEUTICS, INC.

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Unrealized gains and losses are included in accumulated other comprehensive (loss) income, and as of December 31, 2022 and 2021 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.

All available-for-sale securities held as of December 31, 2022 and December 31, 2021 had contractual maturities of less than one year.

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.

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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):

As of December 31, 2022 and 2021, the fair value of the Company’s financial assets that are measured at fair value on a recurring basis, which consist of cash equivalents and short-term and long-term investments classified as available-for-sale securities, 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, 2022

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government agency securities

Corporate securities

Commercial paper

Money market funds

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Depreciation expense for the years ended December 31, 2022, 2021, and 2020 was approximately $ 9.3 million, $ 3.1 million and $ 1.1 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.

During the years ended December 31, 2022 and 2021, the Company placed $ 27.2 million and $ 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 years ended December 31, 2022 and 2021 was $ 2.7 million and $ 1.6 million, respectively.

ACCRUED EXPENSES

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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.

On February 8, 2021, the Company entered into an Open Market Sale Agreement (the “First 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”).

On November 18, 2022, the Company entered into a new Open Market Sales Agreement (the “Second Sales Agreement”), which superseded and replaced the First Sales Agreement dated February 8, 2021.

Under the terms of the Second Sales Agreement, the Company may, from time to time, in its sole discretion, issue and sell up to $ 500.0 million of shares of the Company’s Common Shares.

The issuance and sale, if any, of the Common Shares by the Company under the First Sales Agreement and Second Sales Agreement (together, the “Sales Agreements”) will be made pursuant to a prospectus supplement, dated February 8, 2021 and November 18, 2022, 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 Agreements, 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.

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 Agreements.

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

For the years ended December 31, 2022 and 2021, the Company received $ 189.5 million and $ 203.2 million in net proceeds, net of offering costs, through the sale of 29,788,993 shares and 6,474,099 shares of its common stock through the Sales Agreements at a weighted average price per share of $ 6.52 and $ 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.

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”).

As of December 31, 2022, 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 A Convertible Preferred Stock

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As of December 31, 2022, and 2021, 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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

an initial conversion price of $ 4.75 per share.

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.

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.

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, 2022.

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.

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

At December 31, 2022 and 2021, 2,842,158 shares of Series B Preferred Stock (that are convertible into 2,842,158 shares of common stock) remained outstanding.

Equity Incentive Plans

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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.

Additionally, on June 10, 2022, 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 14,000,000 to 20,700,000 shares, which became effective immediately.

As of December 31, 2022, 6,881,610 shares of common stock were available for grant under the Company’s 2018 Plan.

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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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

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As of December 31, 2022, 55,925 shares of common stock were available for grant under the Inducement Plan.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Options

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Outstanding at December 31, 2020

Expired/Cancelled

Outstanding at December 31, 2020

( 2,822,617 )

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Outstanding at December 31, 2021

Expired/Cancelled

Outstanding at December 31, 2022

Ending vested and expected to vest at December 31, 2022

Options exercisable at December 31, 2022

As of December 31, 2022, there was $ 58.9 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 1.81 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, 2022, 2021, and 2020 was $ 8.29 , $ 22.28 , and $ 17.32 per option, respectively.

The aggregate intrinsic value in the table above reflects the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the year ended December 31, 2022 and the exercise price of the options, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all option holders exercised their options on December 31, 2022.

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

The aggregate intrinsic value of stock options exercised during the year ended December 31, 2022, 2021, and 2020 were $ 0.04 million, $ 21.3 million, and $ 21.4 million, respectively.

Employee Stock Purchase Plan

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The Company reserved 500,000 shares of its common stock for issuance under the 2020 ESPP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Under the 2020 ESPP, employees of the Company can purchase shares of our common stock based on a percentage of their compensation subject to certain limits.

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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 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

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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:

The compensation expense related to the 2020 ESPP for the years ended December 31, 2022, 2021 and 2020 was $ 1.3 million, $ 1.2 million and $ 0.1 million, respectively.

Under the 2020 ESPP, for the years ended December 31, 2022, and 2021, the Company received proceeds of $ 1.7 million for the issuance of 262,701 shares, and $ 1.6 million for the issuance of 94,148 shares, respectively.

As of December 31, 2020, no shares were issued un the 2020 ESPP.

As of December 31, 2022, there was $ 0.5 million of unrecognized compensation cost associated with the 2020 ESPP, which is expected to be recognized over 5.33 months.

Restricted Stock Units and Performance Restricted Stock Units

Compensation expense related to PRSUs is based on the grant date fair value of the award and recorded from the period that achievement is determined to be probable through the stated service period associated with the award.

A summary of the RSU and PRSU activity during the years ended December 31, 2022, and 2021 is presented in the following table:

RSUs and PRSUs

Outstanding, non-vested as of December 31, 2020

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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.

Vested/Released

Canceled/Forfeited

Outstanding as of December 31, 2022

Ending vested and expected to vest at December 31, 2022

During the year ended December 31, 2022, 2.4 million restricted units were granted, of which only 100,000 were PRSUs.

No PRSUs were granted during the year ended December 31, 2021.

As of December 31, 2022, there was $ 20.6 million of unrecognized stock-based compensation expense associated with unvested RSUs and PRSUs, which the Company expects to recognize over a remaining weighted-average period of 1.72 years.

The aggregate intrinsic value of the unvested RSUs and PRSUs outstanding as of December 31, 2022 and 2021, was $ 14.5 million and $ 21.2 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock-Based Compensation

Total stock-based compensation expense related to all of the Company’s stock-based awards was recorded on the Consolidated Statements of Operations as follows (in thousands):

Total stock-based compensation expense related to the Company’s stock-based awards was recorded on the Consolidated Statements of Operations as follows (in thousands):

Years Ended December 31,

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Stock option expense

Restricted stock unit expense

Restricted stock 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.

The aggregate intrinsic value in the table above reflects the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the year ended December 31, 2021 and the exercise price of the options, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all option holders exercised their options on December 31, 2021.

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

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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, 2022, 2021, and 2020:

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73.02 % - 137.42 %

52.04% - 94.56%

Risk-free interest rate

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1.98 % - 4.78 %

0.06% - 0.13%

Expected dividend yield

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Each of the inputs discussed above is subjective and generally requires significant management judgment.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EMPLOYEE BENEFIT PLAN

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The Company's matching contribution to the defined contribution plan was $ 3.0 million, $ 2.2 million, and $ 1.2 million for the years ended December 31, 2022, 2021 and 2020, 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, 2022, 2021 or 2020.

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Lease liabilities

Capitalized R&D

Depreciation and amortization

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Permanent and other differences

Stock Based Compensation

State tax, net of federal benefit

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Effective tax rate

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.

The Company had net operating loss carryforwards (“NOLs”) for federal and state income tax purposes of approximately $ 1.0 billion and $ 158.1 million, respectively, as of December 31, 2022.

$ 142.4 million of federal NOLs will expire beginning in 2027, while $ 898.9 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”).

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

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In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will not be realized.

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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

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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.

For the years ended December 31, 2022, 2021 and 2020, the change in the valuation allowance was approximately $ 82.9 million, $ 78.1 million, and $ 60.7 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.

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The Company is not currently under examination by income tax authorities in federal, state or other foreign jurisdictions.

The Inflation Reduction Act of 2022 (the "Act"), which includes certain new tax measures, was signed into law in August 2022.

The Act contains two main tax provisions, a new corporate alternative minimum tax imposed on certain corporations meeting average annual financial statement income of more than $1 billion during a three-year tax period, and an excise tax imposed upon share repurchases by certain publicly traded corporations.

The Act is effective for tax years beginning after December 31, 2022;

the Company is evaluating the provisions of the Act but currently does not believe these provisions will have a material impact on its consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LICENSES AND AGREEMENTS

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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 CRADA was amended in 2015 and 2016 to, among other things, extend the term of the CRADA through August 2021, include new indications such as the development of TIL therapy for the treatment of patients with bladder, lung, triple-negative breast, and Human Papilloma Virus (“HPV”)-associated cancers, and 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.

In August 2021, the NCI and the Company entered into a third amendment to the CRADA.

The third amendment, among other things, extended the term of the CRADA by 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.

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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.

In addition, the Company may be required to supply certain test articles, including TIL, grown and processed under Current Good Manufacturing Practice (“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.

Patent License Agreement Related to the Development and Manufacture of TIL

The Company recorded costs associated with the CRADA of $ 2.0 million for each of the years ended December 31, 2022, 2021 and 2020, respectively, as research and development expenses.

Patent License Agreement Related to the Development and Manufacture of TIL Therapies

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

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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.

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.

Effective May 6, 2021, the Company entered into an Amended and Restated Patent License Agreement with NIH, which included the grant of additional exclusive, worldwide patent rights in the indications to interleukin-15 and interleukin-21 cytokine-tethered TIL technology, and expanded the non-exclusive, worldwide field of use to all cancers.

Effective August 1, 2022, the Company entered into a Second Amended and Restated Patent License Agreement with NIH to include additional exclusive, worldwide patent rights to TIL products expressing interleukin-12, expanded rights to TIL selection technologies previously licensed under the Exclusive Patent License Agreement below, and additional non-exclusive, worldwide patent rights to certain technologies related to enhancing TIL potency.

The Second 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 Second Amended and Restated Patent License Agreement.

The Company anticipates making payments that could range from several hundred thousand dollars to the mid-single-digit millions of dollars in conjunction with certain development milestones, the approval of a BLA or its foreign equivalent, or the first U.S.

and foreign commercial sales of any of our product candidates covered by the Second Amended

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and Restated Patent License Agreement.

The term of the Second 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

On February 10, 2015, the Company entered into an exclusive patent license agreement (the “Exclusive Patent License Agreement”) with the NIH under which the Company received an exclusive license to the NIH’s rights to patent-pending technologies related to methods for improving adoptive cell therapy through more potent and efficient production of TIL from melanoma tumors by selecting for T cell populations that express various inhibitory receptors.

Unless terminated sooner, the license shall remain in effect until the last licensed patent right expires.

Under the Exclusive Patent License Agreement, the Company agreed to pay customary royalties based on a percentage of net sales of a licensed product (which percentage is in the mid-single digits), a percentage of revenues from sublicensing arrangements, and lump sum benchmark payments upon the successful completion of clinical studies involving licensed technologies, the receipt of the first FDA approval or foreign equivalent for a licensed product or process resulting from the licensed technologies, the first commercial sale of a licensed product or process in the U.S., and the first commercial sale of a licensed product or process in any foreign country.

This license was superseded and replaced by the Second Amended and Restated Patent License Agreement.

Lee Moffitt Cancer Center

Research Collaboration and Clinical Grant Agreements with Moffitt

In December 2016, the Company entered into a new three-year Sponsored Research Agreement with H.

Lee Moffitt Cancer Center (“Moffitt”) which expired in December 2019.

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.

In June 2020, the Company entered into a Sponsored Research Agreement with the H.

Lee Moffitt Cancer Center (“Moffitt”), with a term that ends either upon completion of the research thereunder or on July 1, 2022, whichever is sooner.

In June 2022, this agreement was extended until the later of December 19, 2022, or a mutually acceptable completion of the Research Agreement, which is expected in mid-2023.

The Company recorded research and development costs of $ 0.6 million, $ 0.3 million and $ 0.2 million for each of the years ended December 31, 2022, 2021 and 2020, respectively.

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.

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.

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

In the years ended December 31, 2021, 2020 and 2019, the Company recorded research and development costs of $ 0.4 million, $ 0.6 million, and $ 0.7 million, respectively, in connection with the research collaboration and clinical grant agreements with Moffitt.

For the years ended December 31, 2022 and 2021 the Company recorded research and development costs of $ 0.1 million, and for the year ended December 31, 2020 the company recorded $ 0.4 million of research and development costs, in connection with the research collaboration and clinical grant agreements with Moffitt.

Exclusive License Agreements with Moffitt

The Company entered into a license agreement with Moffitt (the “First Moffitt License”), effective as of June 28, 2014, under which the Company received a world-wide license to Moffitt’s rights to patent-pending technologies related to methods for improving TIL for adoptive cell therapy using toll-like receptor agonists.

The Company entered into a license agreement with Moffitt (the “First Moffitt License”), effective as of June 28, 2014, under which the Company received a worldwide license to Moffitt’s rights to patent-pending technologies related to methods for improving TIL for adoptive cell therapy using toll-like receptor agonists.

Unless earlier terminated, the term of the license extends until the earlier of the expiration of the last issued patent related to the licensed technology or 20 years after the effective date of the license agreement.

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

Pursuant to the First Moffitt License, the Company paid an upfront licensing fee in the amount of $ 0.1 million, which was recorded as research and development expense.

A patent issuance fee will also be payable under the First Moffitt License, upon the issuance of the first U.S.

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An annual license maintenance fee is also payable commencing on the first anniversary of the effective date.

In addition, the Company agreed to pay an annual commercial use payment for each indication for which a first sale has occurred, which in the aggregate amounts to up to $ 0.4 million a year.

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 agreed to pay an annual commercial use payment for each indication for which a first sale has occurred, which in the aggregate amounts to up to $ 0.4 million a year.

The Company recorded $ 0.2 million for the year ended

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December 31, 2022, and $ 0.1 million for each of the years ended December 31, 2021 and 2020, respectively, 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.

Pursuant to the Amended & Restated Second Moffitt License, the Company paid an upfront licensing fee in the amount of $ 0.2 million in 2021, which was recorded as research and development expense.

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 agonists and for products relating to the use of tumor digests covered by the license.

The University of Texas M.D.

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

The Company agreed in the SAA to provide total funding not to exceed approximately $ 14.2 million for the performance of the multi-year studies under the SAA.

The Company agreed in the SAA to provide total funding not to exceed approximately $ 14.2 million for the performance of the multi-year studies under the SAA, of which approximately $ 5.3 million has been funded cumulatively through December 31, 2022 and has been recorded as research and development expense.

In return, the Company acquired all rights to inventions resulting from the studies and has been granted a non-exclusive, sub-licensable, royalty-free, and perpetual license to specified background intellectual property of MDACC reasonably necessary to exploit, including the commercialization thereof.

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The Company recorded $ 0.2 million, $ 0.5 million and $ 1.1 million associated with the SAA for the year ended December 31, 2022, 2021 and 2020 as research and development expenses, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 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.

First WuXi Manufacturing and Services Agreement

In November 2016, the Company entered into a three-year manufacturing and services agreement (the “First Wuxi 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 its subsidiary Iovance Biotherapeutics Manufacturing LLC.

Under the First WuXi MSA, the Company entered into two statements of work for two cGMP manufacturing suites to be operated by WuXi for the Company.

Both of the suites are expected to be capable of being used for the commercial manufacture of the Company’s products.

The terms of one of these statements of work was extended to December 2022.

The Company recorded costs associated with agreements with WuXi of $ 14.2 million, $ 17.5 million, and $ 20.6 million for the years ended December 31, 2022, 2021, and 2020 respectively, as research and development expenses.

Second WuXi Manufacturing and Services Agreement

In October 2022, the Company’s subsidiary Iovance Biotherapeutics Manufacturing LLC entered into an additional three-year manufacturing and services agreement (the “Second WuXi MSA”) with WuXi and its parent company WuXi Apptec, Co, Ltd pursuant to which WuXi agreed to provide commercial and clinical manufacturing services and related testing services.

Under the Second WuXi MSA, the Company entered into a statement of work for the two cGMP manufacturing suites to be operated by WuXi for the Company.

Both suites are expected to be capable of being used for the commercial and clinical manufacture of the Company’s products.

The Second WuXi MSA and its related statement of work will supersede the statements of work under the First WuXi MSA with respect to commercial and clinical manufacturing and the two manufacturing suites.

Certain other statements of work for related services will also be covered by the Second WuXi MSA.

The First WuXi MSA will continue to address development services provided by WuXi to the Company.

Prior to regulatory approval, or if the Company experiences a material adverse event, the Company may unilaterally terminate the statement of work for commercial and clinical manufacturing under the Second WuXi MSA at any time by providing written notice of at least 120 days .

Post regulatory approval, the Company may unilaterally terminate the statement of work for commercial and clinical manufacturing with written notice of 15 month in year 1 of the term, written notice of 9

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

months in year 2 of the term, and written notice of 6 months in year 3 of the term.

If WuXi fails a Pre-Licensing Inspection and does not address any related issues within 90 days of receipt of the FDA response letter, the Company may either terminate the statement of work for commercial and clinical manufacturing under the Second WuXi MSA immediately or shorten the term of this statement of work to June 30, 2024.

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.

(“Cellectis”), a clinical-stage biopharmaceutical company, to develop TIL therapies that have been genetically edited, including a PD-1 inactivated product that the Company refers to as IOV-4001.

Financial terms of the license include annual license payments and 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 with Cellectis of $ 0.4 million for each of the years ended December 31, 2022, 2021 and 2020 respectively as research and development expense.

Novartis Pharma AG

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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.

No expenses were recorded for the years ended December 31, 2022 and 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 Company leases corporate office space in California, including 49,918 square feet for its current corporate headquarters’ office space in San Carlos, California, manufacturing, research and development lab facilities and office space in Philadelphia, Pennsylvania, including 136,000 square feet of commercial manufacturing and lab space at the i CTC, and research and development lab facilities in Tampa, 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.

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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 .

The Company’s leases have remaining lease terms that range from 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.

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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.

The terms of the CMO contracts include options to terminate the lease with an advance notice of five to six months.

The terms of the CMO contracts include options to terminate the lease with advance notice of five to six months.

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.

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

December 31, 2021

December 31, 2020

Operating lease right-of-use assets

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Total operating lease liabilities

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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):

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Other information

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

Cash paid for amounts included in the measurement of lease liabilities included in cash flows from operations

Tenant improvement allowance received for amounts included in the measurement of lease liabilities included in cash flows from operations

Right-of-use assets obtained from entering new leases

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Weighted-average discount rates

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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):

As of December 31, 2022, maturities of the Company's operating lease liabilities were as follows (in thousands):

Year Ending December 31,

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Present value adjustment

Future tenant improvement reimbursement

Operating lease liabilities

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.

For its corporate headquarters’ office, the lease agreement includes a tenant improvement allowance of $ 8.2 million.

For the years ended December 31, 2022, and 2021, the Company has received reimbursement associated with this tenant improvement allowance of $ 6.4 million and $ 1.6 million, respectively.

The Company does not expect to receive additional reimbursements associated with this tenant improvement allowance.

LEGAL PROCEEDINGS

Derivative Lawsuit.

On December 11, 2020, a purported stockholder derivative complaint was filed by plaintiff Leo Shumacher against the Company, as nominal defendant, and its current directors, as defendants, in the Court of Chancery in the State of Delaware.

On December 11, 2020, a purported stockholder derivative complaint was filed by plaintiff Leo Shumacher against the Company, as nominal defendant, and then current directors, as defendants, in the Court of Chancery in the State of Delaware (the “Court”).

The complaint alleges breach of fiduciary duty and a claim for unjust enrichment in connection with alleged excessive compensation of certain non-executive directors of the Company and seeks unspecified damages on behalf of the Company.

The defendants intend to vigorously defend against the foregoing complaints.

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.

The parties have agreed to a proposed settlement, which was submitted to the Court on June 15, 2022.

After a hearing on November 17, 2022, the Court required the parties to take additional steps before it would approve the settlement.

The Company, as nominal defendant, and its current directors, as defendants, answered the complaint on Feb.

Solomon Capital, LLC.

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Lion Biotechnologies, Inc.

was filed by Solomon Capital, LLC, Solomon Capital 401(k) Trust, Solomon Sharbat and Shelhav Raff (“Solomon Plaintiffs”) against the Company in the Supreme Court of the State of New York, County of New York (index no.

was filed by Solomon Capital, LLC, Solomon Capital

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401(k) Trust, Solomon Sharbat and Shelhav Raff (“Solomon Plaintiffs”) against the Company in the Supreme Court of the State of New York, County of New York (index no.

651881/2016).

The Solomon Plaintiffs allege that, between June and November 2012, they provided to the Company $ 0.1 million and that they advanced and paid on behalf of the Company an additional $ 0.2 million.

The Solomon Plaintiffs allege that, between June and November 2012, they provided the Company $ 0.1 million and that they advanced and paid on behalf of the Company an additional $ 0.2 million.

The complaint further alleges that the Company agreed to (i) provide them with promissory notes totaling $ 0.2 million, plus interest, (ii) issue a total of 1,110 shares to the Solomon Plaintiffs (after the 1-for-100 reverse split of the Company’s common stock effected in March 2013) (the “Equity Claim”), and (iii) allow the Solomon Plaintiffs to convert the foregoing funds into its securities in the next financing of the Company on the same terms offered to other investors, which Solomon Plaintiffs allege, should have given them the right to convert their advances and payments into shares of the Company's common stock in the restructuring that took effect in May 2013.

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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.

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

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

On March 26, 2021, the 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.

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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.

On January 4, 2023, the Court granted in part the Company’s motion for sanctions against Plaintiffs for violating Rule 11 of the Federal Rules of Civil Procedure, in a decision and order that dismissed Plaintiffs’ first claim against the Company, denied Plaintiffs’ motion for leave to amend the complaint, and ordered Plaintiffs to pay the Company’s attorneys’ fees incurred in connection with the Rule 11 motion.

Following the Court’s decision and order on the Rule 11 motion, only Plaintiffs’ fifth and sixth claims, for unjust enrichment and indemnification, respectively, remain pending against the Company.

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.

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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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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.

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.

The Company concluded that it is not reasonably assured that all or a portion of the loan will be forgiven as of December 31, 2022, 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 Consolidated Balance Sheets as of December 31, 2022 and 2021.

SUBSEQUENT EVENTS

Acquisition of Proleukin ®

Pursuant to that certain Option Agreement entered into on January 23, 2023 (the “Option Agreement”) between the Company and Clinigen Holdings Limited, Clinigen Healthcare Limited and Clinigen, Inc.

(collectively, “Clinigen”), the Company will acquire worldwide rights to Proleukin® (aldesleukin) (the “Product”), an interleukin-2 product used to promote T-cell activity following TIL infusion.

Material terms of the Option Agreement include an upfront payment of £ 167.7 million, or approximately $ 200 million, a £ 41.7 million, or approximately $ 50 million, milestone payment upon first approval of lifileucel in advanced melanoma, and deferred consideration based on double-digit rates on global net sales of the Product payable from the Company to Clinigen following the completion of the transaction for the applicable deferred consideration term.

Subject to the terms and conditions of the Option Agreement, the Company will purchase (i) all issued and outstanding shares of Clinigen SP Limited (the “Target”), (ii) the business of the Target and Clinigen comprising the manufacturing, supply, commercialization and the generation of income from the Product rights and the undertaking of an active role in the development, maintenance and exploitation of those rights (the “Operations”), and (iii) certain specified assets identified in the Option Agreement.

The Option Agreement is subject to customary termination provisions, and the Company would be required to pay to Clinigen a reverse termination fee (less certain transaction fees and expenses incurred by the Company) upon certain events as described in the Option Agreement.

The closing of the transaction is subject to required regulatory approvals and clearances and other customary closing conditions.

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