ImmunityBio, Inc. [IBRX] Filings

10-Q 1 ibrx-20240630.htm 10-Q ibrx-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


þ			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-37507

_____________________________________

IMMUNITYBIO, INC.

(Exact name of registrant as specified in its charter)

_____________________________________


Delaware			43-1979754
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

3530 John Hopkins Court San Diego, California			92121
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (844) 696-5235

_____________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

IBRX

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The number of shares of the Registrant’s common stock outstanding as of August 7, 2024 was 696,533,418 (excluding 163,800 shares held by a majority owned subsidiary of ours which are treated as treasury shares for accounting purposes).

TABLE OF CONTENTS


		Page

PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets – As of June 30, 2024 and December 31, 2023	1
	Condensed Consolidated Statements of Operations – For the three and six months ended June 30, 2024 and 2023	3
	Condensed Consolidated Statements of Comprehensive Loss – For the three and six months ended June 30, 2024 and 2023	4
	Condensed Consolidated Statements of Stockholders’ Deficit – For the three and six months ended June 30, 2024 and 2023	5
	Condensed Consolidated Statements of Cash Flows – For the six months ended June 30 , 2024 and 2023	7
	Notes to Unaudited Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	49
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	73
Item 4.	Controls and Procedures	73

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	75
Item 1A.	Risk Factors	77
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	146
Item 3.	Defaults Upon Senior Securities	146
Item 4.	Mine Safety Disclosures	146
Item 5.	Other Information	146
Item 6.	Exhibits	147
Signatures		148

Defined Terms

Unless expressly indicated or the context required otherwise, the terms “ImmunityBio,” “the company,” “we,” “us,” and “our” in this Quarterly Report refer to ImmunityBio, Inc., a Delaware corporation, and, where appropriate, its subsidiaries. We have also used several other terms in this Quarterly Report, the unaudited condensed consolidated financial statements and accompanying notes included herein, most of which are defined below:


Term						Definition

2015 Plan						ImmunityBio, Inc. 2015 Equity Incentive Plan
3M IPC						3M Innovative Properties Company
3PL Agent						logistics agent
AAHI						Access to Advanced Health Institute
ACA						Affordable Care Act
Altor						Altor BioScience, LLC
America Invents Act						Leahy-Smith America Invents Act
Amyris						Amyris, Inc.
ANKTIVA®						Proprietary name for N-803 (formerly ALT-803), our novel IL-15 agonist complex (nogapendekin alfa inbakicept-pmln) currently approved for use in the United States with BCG for the treatment of adult patients with BCG-unresponsive non-muscle invasive bladder cancer with carcinoma in situ with or without papillary tumors, and currently in clinical development for other indications.
Annual Report						Annual Report on Form 10-K for the year ended December 31, 2023
Approved product						ANKTIVA
ASC						Accounting Standards Codification
ASU						Accounting Standards Update
Athenex						Athenex, Inc.
ATM						“at-the-market” sales agreement
ATRA						American Taxpayer Relief Act of 2012
BCG						Bacillus Calmette-Guérin
Beike						Shenzhen Beike Biotechnology Co. Ltd.
BLA						Biologics License Application
BPCIA						Biologics Price Competition and Innovation Act of 2009
Brink						Brink Biologics, Inc.
Cambridge						Cambridge Equities, LP
CCPA						California Consumer Privacy Act of 2018
CEO						chief executive officer
CFO						chief financial officer
cGMP						current Good Manufacturing Practice
China						when used in connection with the RIPA, People’s Republic of China, Hong Kong and any territories controlled by the People’s Republic of China

CIS						carcinoma in situ
Clinic						Immuno-Oncology Clinic, Inc.
Closing Date						when used in connection with the RIPA, December 29, 2023
CMC						Chemistry, Manufacturing and Controls
CMO						contract manufacturing organization
CMS						Centers for Medicare & Medicaid Services
Code						Internal Revenue Code of 1986, as amended


Term						Definition

CPRA						California Privacy Rights Act

CRL						complete response letter
CRO						contract research organization
CVR						contingent value right
DGCL						Delaware General Corporation Law

Duley Road						Duley Road, LLC
Dunkirk Facility						a leasehold interest in a cGMP ISO Class 5 pharmaceutical manufacturing space in western New York
EMA						European Medicines Agency
EU						European Union
Exchange Act						Securities Exchange Act of 1934, as amended
Exyte						Exyte U.S., Inc.
FASB						Financial Accounting Standards Board
FCA						False Claims Act
FCPA						U.S. Foreign Corrupt Practices Act
FDA						U.S. Food and Drug Administration
FIFO						First In First Out inventory method
FSMC						Fort Schuyler Management Corporation, a not-for-profit corporation affiliated with the State of New York
FTO						freedom-to-operate
FVO						fair value option
GBM						glioblastoma multiforme
GCP						Good Clinical Practice
GDPR						General Data Protection Regulation
GLP						Good Laboratory Practice
GMP						Good Manufacturing Practice
GTP						Good Tissue Practice
hAd5						human adenovirus serotype 5
Hatch-Waxman Act						Drug Price Competition and Patent Term Restoration Act of 1984
HCW						HCW Biologics, Inc.
HIPAA						Health Insurance Portability and Accountability Act of 1996
HITECH						Health Information Technology for Economic and Clinical Health Act
HIV						human immunodeficiency virus

IgDraSol						IgDraSol, Inc., a subsidiary of the company
IND						investigational new drug
Infinity						Infinity SA LLC, as purchaser agent for affiliates of Oberland
IPR&D						In-process research and development
IRA						Inflation Reduction Act of 2022
IRS						Internal Revenue Service
LMIC						low- and middle-income countries
mAbs						monoclonal antibodies

iii


Term						Definition

Nant Capital						Nant Capital, LLC
NantBio						NantBio, Inc.
NantCell						NantCell, Inc., a subsidiary of the company
NANTibody						Immunotherapy NANTibody, LLC, a subsidiary of the company
NantKwest						NantKwest, Inc.

NantPharma						NantPharma, LLC
NantWorks						NantWorks, LLC, a related-party
NCCN						National Comprehensive Cancer Network
NCI						National Cancer Institute
NCSC						NantCancerStemCell, LLC
NDA						New Drug Application
NEO						named executive officer
NK						natural killer
NMIBC						non-muscle invasive bladder cancer
NOL						net operating loss
NSCLC						non-small cell lung cancer
Oberland						Oberland Capital Management LLC and its affiliates (including Purchasers as defined in the RIPA)
OFAC						U.S. Treasury Department’s Office of Foreign Assets Control
PHI						Protected Health Information
PMA						premarket approval
QMSR						Quality Management System Regulation
QSR						Quality System Regulation
Quarterly Report						Quarterly Report on Form 10-Q for the three and six months ended June 30, 2024
QUILT						QUantitative Integrated Lifelong Trial
RDO						registered direct offering
REMS						Risk Evaluation and Mitigation Strategy
RIPA						Revenue Interest Purchase Agreement
RSU						restricted stock unit
Sarbanes-Oxley						Sarbanes-Oxley Act of 2002
saRNA						self-amplifying RNA
SARS-CoV-2						novel strain of the coronavirus (COVID-19)

SEC						U.S. Securities and Exchange Commission
Section 404						Section 404 of the Sarbanes-Oxley Act of 2002
Securities Act						Securities Act of 1933, as amended

Sorrento						Sorrento Therapeutics, Inc.
SPOA						Stock Purchase and Option Agreement
TAA						tumor-associated antigen
TCJA						Tax Cuts and Jobs Act of 2017


Term						Definition

TF Platform						tissue factor-based fusion discovery platform
Term SOFR						Term Secured Overnight Financing Rate
Test Date						when used in connection with the RIPA, December 31, 2029
TGF-β						transforming growth factor beta
TLR						toll-like receptor
U.S. GAAP						accounting principles generally accepted in the United States of America
UK GDPR						UK Data Protection Act of 2018
USPTO						U.S. Patent and Trademark Office
VBC Holdings						VBC Holdings, LLC, a subsidiary of the company
VIE						variable interest entity
VivaBioCell						VivaBioCell, S.p.A., a wholly-owned subsidiary of VBC Holdings

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

ImmunityBio, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)


	June 30, 2024		December 31, 2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	130,104	$	265,453
Marketable securities	87,875		1,009
Accounts receivable, net	1,033		—
Inventories	1,811		—
Due from related parties	1,027		2,019
Prepaid expenses and other current assets (including amounts with related parties)	20,980		25,603
Total current assets	242,830		294,084
Marketable securities, noncurrent	—		891
Property, plant and equipment, net	141,956		146,082
Intangible assets, net	16,058		17,093
Convertible note receivable	7,004		6,879
Operating lease right-of-use assets, net (including amounts with related parties)	33,817		36,543
Other assets (including amounts with related parties)	2,660		2,880
Total assets	$	444,325	$	504,452
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	20,317	$	9,195
Accrued expenses and other liabilities	35,344		42,708

Due to related parties	200		1,136
Operating lease liabilities (including amounts with related parties)	6,249		5,244
Total current liabilities	62,110		58,283
Related-party nonconvertible note, net of discount (Note 11)	108,811		104,586
Related-party convertible notes and accrued interest, net of discount (Note 11)	584,107		576,951
Revenue interest liability (Note 10)	263,342		155,415
Operating lease liabilities, less current portion (including amounts with related parties)	36,427		39,942
Derivative liabilities (Note 10) and (Note 11)	20,807		35,333
Warrant liabilities	65,395		118,770

Other liabilities	704		1,109
Total liabilities	1,141,703		1,090,389

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

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ImmunityBio, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Continued)

(in thousands, except share and per share amounts)


	June 30, 2024		December 31, 2023
	(Unaudited)
Commitments and contingencies (Note 8)
Stockholders’ deficit:
Common stock, $0.0001 par value; 1,350,000,000 shares authorized as of June 30, 2024 and December 31, 2023; 691,793,169 and 670,867,344 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively; excluding treasury stock, 163,800 shares outstanding as of June 30, 2024 and December 31, 2023	$	69	$	67
Additional paid-in capital	2,531,909		2,374,620
Accumulated deficit	(3,230,357)		(2,961,684)
Accumulated other comprehensive (loss) income	(8)		10
Total ImmunityBio stockholders’ deficit	(698,387)		(586,987)
Noncontrolling interests	1,009		1,050
Total stockholders’ deficit	(697,378)		(585,937)
Total liabilities and stockholders’ deficit	$	444,325	$	504,452

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

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ImmunityBio, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023

Revenue
Product revenue, net	$	990	$	—	$	990	$	—
Other revenues	57		41		97		401
Total revenue	1,047		41		1,087		401
Operating costs and expenses
Cost of product revenue	—		—		—		—
Research and development (including amounts with related parties)	51,129		53,168		104,480		132,432
Selling, general and administrative (including amounts with related parties)	49,251		32,018		91,136		64,694

Total operating costs and expenses	100,380		85,186		195,616		197,126
Loss from operations	(99,333)		(85,145)		(194,529)		(196,725)
Other income (expense), net
Interest and investment income (loss), net	1,891		(61)		4,990		612
Interest expense (including amounts with related parties)	(29,794)		(32,235)		(59,277)		(62,051)
Change in fair value of derivative liabilities	21,194		—		18,470		—
Change in fair value of warrant liabilities	(19,300)		(10,019)		(21,102)		17,535
Interest expense related to revenue interest liability	(9,225)		—		(17,229)		—
Change in fair value of related-party convertible note	—		(6,768)		—		(6,768)
Loss on equity method investment	—		(3,957)		—		(6,294)
Other expense, net (including amounts with related parties)	(17)		(28)		(37)		(1,105)
Total other expense, net	(35,251)		(53,068)		(74,185)		(58,071)
Loss before income taxes and noncontrolling interests	(134,584)		(138,213)		(268,714)		(254,796)
Income tax expense	—		—		—		—
Net loss	(134,584)		(138,213)		(268,714)		(254,796)
Net loss attributable to noncontrolling interests, net of tax	(20)		(334)		(41)		(574)
Net loss attributable to ImmunityBio common stockholders	$	(134,564)	$	(137,879)	$	(268,673)	$	(254,222)

Net loss per ImmunityBio common share – basic and diluted	$	(0.20)	$	(0.32)	$	(0.40)	$	(0.59)

Weighted-average number of common shares used in computing net loss per share – basic and diluted	686,938,120		437,456,657		679,884,678		432,944,133

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

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ImmunityBio, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023

Net loss	$	(134,584)	$	(138,213)	$	(268,714)	$	(254,796)
Other comprehensive loss, net of income taxes:
Net unrealized gains (losses) on available-for-sale securities	9		(6)		(8)		(2)
Reclassification of net realized (gains) losses on available-for-sale securities included in net loss	(4)		—		45		6
Foreign currency translation adjustments	(6)		(1)		(55)		(227)

Total other comprehensive loss	(1)		(7)		(18)		(223)
Comprehensive loss	(134,585)		(138,220)		(268,732)		(255,019)
Less: Comprehensive loss attributable to noncontrolling interests	20		334		41		574
Comprehensive loss attributable to ImmunityBio common stockholders	$	(134,565)	$	(137,886)	$	(268,691)	$	(254,445)

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

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ImmunityBio, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Deficit

(in thousands, except share amounts)

(Unaudited)


	Six Months Ended June 30, 2024
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total ImmunityBio Stockholders’ Deficit		Noncontrolling Interests		Total Stockholders’ Deficit
	Shares	Amount

Balance as of December 31, 2023	670,867,344	$	67	$	2,374,620	$	(2,961,684)	$	10	$	(586,987)	$	1,050	$	(585,937)

Stock-based compensation expense	—	—		8,266		—		—		8,266		—		8,266

Vesting of RSUs	2,969,156	—		—		—		—		—		—		—
Net share settlement for RSUs vesting	(1,117,737)	—		(3,867)		—		—		(3,867)		—		(3,867)
Exercise of warrants	4,284,648	1		24,701		—		—		24,702		—		24,702
Other comprehensive loss, net of tax	—	—		—		—		(17)		(17)		—		(17)
Net loss	—	—		—		(134,109)		—		(134,109)		(21)		(134,130)
Balance as of March 31, 2024	677,003,411	68		2,403,720		(3,095,793)		(7)		(692,012)		1,029		(690,983)
Issuance of common stock “at-the-market” offering, net of commissions and offering costs of $660	427,368	—		3,625		—		—		3,625		—		3,625
Stock-based compensation expense	—	—		9,639		—		—		9,639		—		9,639
Exercise of stock options	146,199	—		429		—		—		429		—		429
Vesting of RSUs	222,578	—		—		—		—		—		—		—
Net share settlement for RSUs vesting	(83,220)	—		(496)		—		—		(496)		—		(496)
Exercise of warrants	13,217,843	1		107,438		—		—		107,439		—		107,439
Exercise of Oberland stock option, net of commissions of $150	858,990	—		7,554		—		—		7,554		—		7,554
Other comprehensive loss, net of tax	—	—		—		—		(1)		(1)		—		(1)
Net loss	—	—		—		(134,564)		—		(134,564)		(20)		(134,584)
Balance as of June 30, 2024	691,793,169	$	69	$	2,531,909	$	(3,230,357)	$	(8)	$	(698,387)	$	1,009	$	(697,378)

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

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ImmunityBio, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Deficit (Continued)

(in thousands, except share amounts)

(Unaudited)


	Six Months Ended June 30, 2023
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total ImmunityBio Stockholders’ Deficit		Noncontrolling Interests		Total Stockholders’ Deficit
	Shares	Amount

Balance as of December 31, 2022	421,569,115	$	42	$	1,930,936	$	(2,378,488)	$	183	$	(447,327)	$	(2,493)	$	(449,820)
Issuance of shares in an RDO, net of discount and offering costs of $2,046 and value ascribed to associated warrants	14,072,615	1		24,255		—		—		24,256		—		24,256
Stock-based compensation expense	—	—		10,878		—		—		10,878		—		10,878
Exercise of stock options	81,037	—		126		—		—		126		—		126
Vesting of RSUs	313,975	—		—		—		—		—		—		—
Net share settlement for RSUs vesting	(113,638)	—		(357)		—		—		(357)		—		(357)
Other comprehensive loss, net of tax	—	—		—		—		(216)		(216)		—		(216)
Net loss	—	—		—		(116,343)		—		(116,343)		(240)		(116,583)
Balance as of March 31, 2023	435,923,104	43		1,965,838		(2,494,831)		(33)		(528,983)		(2,733)		(531,716)
Issuance of common stock “at-the-market” offering, net of commissions and offering costs of $313	4,605,323	1		13,615		—		—		13,616		—		13,616
Stock-based compensation expense	—	—		11,062		—		—		11,062		—		11,062
Exercise of stock options	26,583	—		135		—		—		135		—		135
Vesting of RSUs	140,269	—		—		—		—		—		—		—
Net share settlement for RSUs vesting	(21,382)	—		(60)		—		—		(60)		—		(60)
Other comprehensive loss, net of tax	—	—		—		—		(7)		(7)		—		(7)
Net loss	—	—		—		(137,879)		—		(137,879)		(334)		(138,213)
Balance as of June 30, 2023	440,673,897	$	44	$	1,990,590	$	(2,632,710)	$	(40)	$	(642,116)	$	(3,067)	$	(645,183)

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

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ImmunityBio, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)


	Six Months Ended June 30,
	2024		2023

Operating activities:
Net loss	$	(268,714)	$	(254,796)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of warrant liabilities	21,102		(17,535)
Change in fair value of derivative liabilities	(18,470)		—
Stock-based compensation expense	17,905		21,940
Non-cash interest expense related to the revenue interest liability	17,211		—
Amortization of related-party notes discounts	11,381		23,824
Depreciation and amortization	8,961		9,363
Non-cash lease expense related to operating lease right-of-use assets	2,726		3,233
Accretion of discounts on marketable debt securities	(885)		—
Non-cash interest items, net (including amounts with related parties)	(125)		5,026
Unrealized losses on equity securities	15		258
Change in fair value of convertible note	—		6,768
Transaction costs allocated to warrant liabilities	—		984





Other	94		123
Changes in operating assets and liabilities:
Accounts receivable	(1,033)		—
Inventories	(1,811)		—
Prepaid expenses and other current assets	3,148		11,240
Other assets	181		1,047
Accounts payable	8,969		(869)
Accrued expenses and other liabilities	(5,620)		27,864
Related parties	56		(1,232)
Operating lease liabilities	(2,420)		(1,321)
Net cash used in operating activities	(207,329)		(164,083)
Investing activities:
Purchases of marketable debt securities, available-for-sale	(134,129)		(236)
Maturities of marketable debt securities, available-for-sale	48,021		—
Proceeds from sales of marketable debt securities	981		102
Purchases of property, plant and equipment	(1,985)		(16,954)



Net cash used in investing activities	(87,112)		(17,088)

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

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ImmunityBio, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

(in thousands)

(Unaudited)


	Six Months Ended June 30,
	2024		2023

Financing activities:
Proceeds from the RIPA, net of issuance costs	$	96,956	$	—
Proceeds from exercises of warrants	57,664		—
Proceeds from exercise of Oberland stock option, net of commissions	4,850		—
Net share settlement for RSUs vesting	(4,363)		(417)

Proceeds from equity offerings, net of discounts and issuance costs	3,625		60,794

Proceeds from exercises of stock options	429		261
Principal payments of finance leases	(42)		(38)
Proceeds from issuance of related-party promissory notes, net of issuance costs paid	—		59,700


Net cash provided by financing activities	159,119		120,300
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(27)		(264)
Net change in cash, cash equivalents, and restricted cash	(135,349)		(61,135)
Cash, cash equivalents, and restricted cash, beginning of period	265,787		104,965
Cash, cash equivalents, and restricted cash, end of period	$	130,438	$	43,830

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

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ImmunityBio, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

(in thousands)

(Unaudited)


	Six Months Ended June 30,
	2024		2023

Reconciliation of cash, cash equivalents, and restricted cash, end of period:
Cash and cash equivalents	$	130,104	$	43,506
Restricted cash	334		324
Cash, cash equivalents, and restricted cash, end of period	$	130,438	$	43,830

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	47,891	$	25,520
Income taxes	$	13	$	—

Supplemental disclosure of non-cash activities:


Property and equipment purchases included in accounts payable, accrued expenses and due to related parties	$	2,995	$	11,992
Unrealized gains on marketable debt securities, net	$	37	$	4
Initial measurement of warrants issued in connection with RDOs accounted for as liabilities	$	—	$	23,698


Unpaid offering costs included in accounts payable and accrued expenses	$	—	$	208

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

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ImmunityBio, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

1. Description of Business

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

Our Business

ImmunityBio is a vertically-integrated biotechnology company developing next-generation therapies and vaccines that bolster the natural immune system to defeat cancers and infectious diseases. The company’s range of immunotherapy and cell therapy platforms, alone and together, act to drive and sustain an immune response with the goal of creating durable and safe protection against disease. We are applying our science and platforms to treating cancers, including the development of potential cancer vaccines, as well as developing immunotherapies and cell therapies that we believe sharply reduce or eliminate the need for standard high-dose chemotherapy. These platforms and their associated product candidates are designed to be more effective, accessible, and easily administered than current standards of care in oncology and infectious diseases.

Our platforms and their associated product and product candidates are designed to attack cancer and infectious pathogens by activating both the innate immune system, including—NK cells, dendritic cells, and macrophages, as well as—the adaptive immune system comprising—B and T cells,—in an orchestrated manner. The goal of this potentially best-in-class approach is to generate immunogenic cell death thereby eliminating rogue cells from the body whether they are cancerous or virally-infected. Our ultimate goal is to overcome the limitations of current treatments, such as checkpoint inhibitors, and/or reduce the need for standard high-dose chemotherapy in cancer by employing this coordinated approach to establish “immunological memory” that confers long-term benefit for the patient.

Our proprietary platforms for the development of biologic product candidates include: (i) antibody-cytokine fusion proteins, (ii) DNA, RNA, and recombinant protein vaccines, and (iii) cell therapies. As of June 2024, our platforms have generated nine first-in-human therapeutic agents (including one FDA-approved agent) that are currently or planned to be studied in clinical trials in liquid and solid tumors. Specifically, our clinical focus includes bladder, lung, and colorectal cancers and GBM, which are among the most frequent and lethal cancer types, and where there are high failure rates for existing standards of care or no available effective treatment.

Our lead biologic product ANKTIVA is a novel first-in-class IL-15 agonist antibody-cytokine fusion protein. On April 22, 2024, the FDA approved our product, ANKTIVA with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with CIS, with or without papillary tumors (the “approved product”). We began commercial distribution of our approved product in May 2024.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC. The unaudited condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations. Certain items in the prior year’s consolidated financial statements have been reclassified to conform to the current presentation. These reclassifications had no effect on the reported results of operations. The unaudited condensed consolidated financial statements do not include all information and notes required by U.S. GAAP for annual reports and therefore should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report filed with the SEC on March 19, 2024. These interim financials are not necessarily indicative of results expected for the full fiscal year.

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Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the company, its wholly-owned subsidiaries, and a VIE for which the company is the primary beneficiary. Any material intercompany transactions and balances have been eliminated upon consolidation. For consolidated entities where we have less than 100% of ownership, we record net loss attributable to noncontrolling interests, net of tax, on the condensed consolidated statement of operations equal to the percentage of the ownership interest retained in such entities by the respective noncontrolling parties.

We assess whether we are the primary beneficiary of a VIE at the inception of the arrangement and at each reporting date. This assessment is based on our power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and our obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

If the entity is within the scope of the variable interest model and meets the definition of a VIE, we consider whether we must consolidate the VIE or provide additional disclosures regarding our involvement with the VIE. If we determine that we are the primary beneficiary of the VIE, we will consolidate the VIE. This analysis is performed at the initial investment in the entity or upon any reconsideration event.

For entities we hold as an equity investment that are not consolidated under the VIE model, we consider whether our investment constitutes a controlling financial interest in the entity and therefore should be considered for consolidation under the voting interest model.

Liquidity

As of June 30, 2024, the company had an accumulated deficit of $3.2 billion. We also had negative cash flows from operations of $207.3 million during the six months ended June 30, 2024. The company will likely need additional capital to commercialize our approved product, and to further fund the development of, and to seek regulatory approvals for, our other product candidates.

The condensed consolidated financial statements have been prepared assuming the company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from the outcome of the uncertainty of our ability to continue as a going concern. As a result of continuing anticipated operating cash outflows as we commercialize our approved product and accelerate our development efforts, we believe that substantial doubt exists regarding our ability to continue as a going concern without additional funding or financial support. However, we believe our existing cash, cash equivalents, and investments in marketable securities; sales of our approved product; capital to be raised through equity offerings, including but not limited to, the offering, issuance and sale by us of our common stock under the ATM, of which we had $296.5 million available for future issuance as of June 30, 2024; and our potential ability to borrow from affiliated entities will be sufficient to fund our operations through at least the next 12 months following the issuance date of the consolidated financial statements based primarily upon our Executive Chairman and Global Chief Scientific and Medical Officer’s intent and ability to support our operations with additional funds, including loans from affiliated entities, as required, which we believe alleviates such doubt.

In addition to funds from the future sales of our approved product, which we expect to take time to establish, we may also seek to sell additional equity, through one or more follow-on offerings, or in separate financings, or obtain incremental subordinated debt in compliance with our existing revenue interest liability. However, we may not be able to secure such external financing in a timely manner or on favorable terms. Without significant sales of our approved product or additional funds, we may choose to delay or reduce our operating or investment expenditures. Further, because of the risk and uncertainties associated with the commercialization of our approved product and our other product candidates, we may need additional funds to meet our needs sooner than planned.

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Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to the valuation of equity-based awards, deferred income taxes and related valuation allowances, preclinical and clinical trial accruals, impairment assessments, CVR measurement and assessments, the measurement of right-of-use assets and lease liabilities, useful lives of long-lived assets, loss contingencies, fair value calculation of warrants, stock options, derivative liabilities, and convertible promissory notes, fair value measurements, revenue interest liability, revenue recognition, accruals for research and development activities, and the assessment of our ability to fund our operations for at least the next 12 months from the date of issuance of these condensed consolidated financial statements. We base our estimates on historical experience and on various other market-specific and relevant assumptions that we believe to be reasonable under the circumstances. Estimates are assessed each period and updated to reflect current information and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates.

Significant Accounting Policies

Our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8. “Financial Statements and Supplementary Data” of our Annual Report filed with the SEC on March 19, 2024, except as updated herein or as it relates to revenue recognition, cost of revenue, accounts receivable, inventory, warrants, convertible notes, debt, revenue interest liability, derivative liabilities and the adoption of new accounting standards during the six months ended June 30, 2024. Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the company’s consolidated financial statements.

Revenues

Product Sales

After FDA approval in April 2024, the company began recognizing revenue from the sale of ANKTIVA in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606). Revenue from product sales is recorded at the net sales price (“transaction price”), which includes an estimate of variable consideration. An estimate of variable consideration is based on an amount that reflects the consideration to which we expect to be entitled, net of accruals for estimated rebates, chargebacks, discounts and other deductions and returns established at the time of sale.

Where appropriate, these estimates are based on factors such as industry data and forecasted customer buying and payment patterns, our experience, current contractual and statutory requirements, specific known market events and trends. These reductions to gross sales reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the contract. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in future periods vary from our estimates, we adjust these estimates, which would affect product revenue and earnings in the period such variances become known. As we gain more experience, estimates will be more heavily based on the expected utilization from historical data we have accumulated since the ANKTIVA product launch.

The company entered into a third-party logistics agreement to engage a 3PL Agent to distribute the company’s products to its customers. The 3PL Agent provides services to the company that include storage, shipping and distribution, processing product returns, as well as customer service, order to cash, and logistics support. The company’s customers are currently limited to pharmaceutical specialty distributors (each a “Customer”) pursuant to a drop-ship arrangement whereby the 3PL Agent will ship products to end customers of such Customers. Our Customers subsequently sell ANKTIVA to hospitals, medical facilities, physician practices, pharmacies and government agencies. Revenue from product sales is recognized when our performance obligations are satisfied, which is upon delivery to the end customer.

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Other Revenues

Prior to the approval of ANKTIVA for commercial sale, we primarily generated revenues from non-exclusive license agreements related to our cell lines, the sale of our bioreactors and related consumables, and grant programs. The company expects to continue to generate revenue from these programs.

License Agreements with Third Parties

The company has nonexclusive license agreements with a limited number of pharmaceutical and biotechnology companies that grant them the right to use our cell lines and intellectual property for non-clinical use. These agreements generally include upfront fees and annual research license fees for such use, as well as commercial license fees for sales of the licensee products developed or manufactured using our intellectual property and cell lines.

Under our license agreements with customers, we typically promise to provide a license to use certain cell lines and related patents, the related know-how, and future research and development data that affect the license. We have concluded that these promises represent one performance obligation due to the highly interrelated nature of the promises. We provide the cell lines and know-how immediately upon entering into the contracts. Research and development data are provided throughout the term of the contract when and if available. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation based on relative standalone selling price and recognized as revenue when, or as, the performance obligation is satisfied.

Our license agreements may include non-refundable upfront payments, event-based milestone payments, sales-based royalty payments, or some combination of these. The event-based milestone payments represent variable consideration and we use the most likely amount method to estimate this variable consideration. Given the high degree of uncertainly around the achievement of these milestones, we do not recognize revenue from these milestone payments until the uncertainty associated with these payments is resolved. We currently estimate variable consideration related to milestone payments to be zero and, as such, no revenue has been recognized for milestone payments. We recognize revenue from sales-based royalty payments when or as sales occur. On a quarterly basis, we re-evaluate our estimate of milestone variable consideration to determine whether any amount should be included in the transaction price and recorded in revenue prospectively.

Other Product and Services Revenue

We sell our proprietary GMP-in-a-Box bioreactors and related consumables to affiliated companies and third parties. The arrangements typically include delivery of bioreactors, consumables, and providing installation service and perpetual software licenses for using the equipment. We recognize revenue when customers obtain control and can benefit from the promised goods or services, generally upon installation of the bioreactors, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. Upfront payments and fees are recorded as deferred revenue upon receipt and recognized as revenue when we satisfy our performance obligations under these arrangements.

Grant Revenue

Grant revenue is typically paid for reimbursable costs incurred over the duration of the associated research project or clinical trial and is recognized either when expenses reimbursable under the grants have been incurred and payments under the grants become contractually due or when cash is received, depending on the certainty of payment and other factors specific to each grant.

Cost of Product Revenue

Cost of product revenue consists primarily of third-party manufacturing costs, distribution, and overhead costs related to sales of approved product subsequent to receiving regulatory approval. Cost of product revenue may also include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances. Based on our policy to expense costs associated with the manufacture of products prior to receiving regulatory approval, all costs associated with the production of ANKTIVA were expensed in research and development expense, on the condensed consolidated statement of operations in the period incurred and therefore are not reflected in cost of product revenue.

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Accounts Receivable, Net

Accounts receivable is recorded net of allowances for prompt payment discounts, returns, and credit losses. The company estimates an allowance for credit losses by considering factors such as credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. As of June 30, 2024, the credit profile for the company’s counterparty was deemed to be in good standing, and as such an allowance for credit losses was not recorded.

Inventory

We began to capitalize inventory costs associated with ANKTIVA during the three months ended June 30, 2024 after receiving FDA approval in April 2024 when it was determined that the inventory had a probable future economic benefit.

Inventory is stated at the lower of cost or estimated net realizable value with cost determined using the FIFO method. Inventory costs include the cost of materials, third-party contract manufacturing, third-party packaging services, freight, labor costs for personnel involved in the manufacturing process, and indirect overhead costs. Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation.

The company performs an assessment of the recoverability of capitalized inventory during each reporting period, and it writes down any excess and obsolete inventories to their estimated net realizable value in the period in which the impairment is first identified. Such impairment charges, if they occur, are recorded in cost of product revenue, on the condensed consolidated statement of operations.

Because FDA approval was recently received and the company capitalized its first inventory as of June 30, 2024, no reserve has been established. The company will continue to monitor if a reserve is needed at each reporting period.

Warrants

The company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC Topic 480, Distinguishing Liabilities from Equity (ASC 480), and ASC Topic 815, Derivatives and Hedging (ASC 815). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the company’s own stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For warrants that meet all criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital, on the condensed consolidated statement of stockholders’ deficit at the time of issuance. For warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and on each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recorded as a non-cash gain or loss in other income (expense), net, on the condensed consolidated statement of operations. The fair value of the warrants was estimated using the Black-Scholes option pricing model.

Fair Value Option Election

The company accounted for a convertible note issued on March 31, 2023 under the FVO election of ASC Topic 825, Financial Instruments (ASC 825) until it was amended and restated on December 29, 2023. Prior to its extinguishment on December 29, 2023, the convertible note was a debt host financial instrument containing embedded features wherein the entire financial instrument was initially measured at its issuance-date fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date.

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Changes in the estimated fair value of this convertible note were recorded in other (expense) income, net, on the condensed consolidated statement of operations, except that changes in estimated fair value caused by changes in the instrument-specific credit risk are included in other comprehensive income (loss). In accordance with FASB ASC Topic 470-50, Debt – Modifications and Extinguishments (ASC 470-50), when the convertible note was extinguished on December 29, 2023, the cumulative amount previously recorded in other comprehensive (loss) income resulting from changes in the instrument-specific credit risk were reclassified and reported in current earnings on the condensed consolidated statement of operations. See Note 11, Related-Party Debt, for more information.

Debt Modification and Extinguishment

The company evaluates amendments to its debt instruments in accordance with ASC 470-50. This evaluation includes comparing (1) if applicable, the net present value of future cash flows of the amended debt to that of the original debt and (2) the change in fair value of an embedded conversion feature to that of the carrying amount of the debt immediately prior to amendment to determine, in each case, if a change greater than 10% occurred. In instances where the net present value of future cash flows or the fair value of an embedded conversion feature, if any, changed more than 10%, the company applies extinguishment accounting. In instances where the net present value of future cash flows and the fair value of an embedded conversion feature, if any, changed less than 10%, the company accounts for the amendment to the debt as a debt modification. Gains and losses on debt amendments that are considered extinguishments are recognized in current earnings or in additional paid-in capital if the transactions are with entities under common control. Debt amendments that are considered debt modifications are accounted for prospectively through yield adjustments, based on the revised terms. The increase in fair value of the embedded conversion feature from the debt modification was accounted for as an increase in debt discount with a corresponding increase in additional paid-in capital. Legal fees and other costs incurred with third parties that are directly related to debt modifications are expensed as incurred. Amounts paid by the company to the lenders, are reflected as additional debt discount and amortized as an adjustment of interest expense over remaining term of modified debt using the effective interest method.

Revenue Interest Liability

On December 29, 2023, we entered into the RIPA with Infinity and Oberland. Pursuant to the RIPA, Oberland acquired certain Revenue Interests (as defined in the RIPA) from us for a gross purchase price of $200.0 million paid on closing and acquired additional Revenue Interests from us for a gross purchase price of $100.0 million paid on May 13, 2024. Under the RIPA, Oberland has the right to receive quarterly payments from us based on, among other things, a certain percentage of our worldwide net sales, excluding those in China, during such quarter. The RIPA is considered a sale of future revenues and is accounted for as a liability net of a debt discount comprised of deferred issuance costs, the fair value of a freestanding option agreement related to the SPOA, and the fair value of embedded derivatives requiring bifurcation on the consolidated balance sheet. The company imputes interest expense associated with this liability using the effective interest rate method. The effective interest rate is calculated based on the rate that would enable the debt to be repaid in full over the anticipated life of the arrangement. Interest expense is recognized over the estimated term on the consolidated statement of operations. The interest rate on this liability may vary during the term of the agreement depending on a number of factors, including the level of actual and forecasted net sales. The company evaluates the interest rate quarterly based on actual and forecasted net sales utilizing the prospective method. A significant increase or decrease in actual or forecasted net sales will materially impact the revenue interest liability, interest expense, and the time period for repayment.

Derivative Liabilities

Embedded derivatives that are required to be bifurcated from the underlying debt instrument that do not meet the derivative scope exception and equity classification criteria are accounted for and valued as separate financial instruments. The terms of an embedded derivative related to a contingent exercisable prepayment feature of a convertible note have been evaluated and deemed to require bifurcation. This embedded derivative was initially measured at fair value and will be remeasured to fair value at each reporting date until the derivative is settled.

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In addition, the RIPA contains certain features that meet the definition of being an embedded derivative requiring bifurcation as a separate compound financial instrument apart from the RIPA. In May 2024, Oberland acquired additional Revenue Interests for a gross purchase price of $100.0 million, and the company recorded an incremental portion of the fair value of the derivative liability as of the funding date of $6.2 million as a debt discount, which is being amortized in interest expense, on the condensed consolidated statement of operations along with the initial debt discount over the expected term of the debt using the effective interest rate method. The fair value of the derivative liability is subject to remeasurement at each reporting period, with changes in fair value recognized in other income (expense), net, on the condensed consolidated statement of operations.

Basic and Diluted Net Loss per Share of Common Stock

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

For all periods presented, potentially dilutive securities are excluded from the computation of fully diluted loss per share as their effect is anti-dilutive. The following table details the number of shares of common stock underlying those securities that have been excluded from the computation of potentially dilutive securities:


	As of June 30,
	2024	2023
	(Unaudited)

Related-party convertible notes	162,471,837	60,340,936
Outstanding third-party warrants	20,230,329	23,163,524
Outstanding stock options	15,714,486	10,002,722
Outstanding RSUs	6,444,196	6,029,582
Outstanding related-party warrants	1,638,000	1,638,000
Total	206,498,848	101,174,764

The dilutive securities shown in the table above as of June 30, 2024 exclude an option to purchase up to approximately $5.0 million of the company’s common stock pursuant to the SPOA entered in connection with the RIPA, as the exercise price cannot be determined until the date of exercise.

Recent Accounting Pronouncements

Application of New or Revised Accounting Standards – Adopted

In June 2022, the FASB, issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. This ASU also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction and introduces certain disclosure requirements for equity securities subject to such restrictions. We adopted this ASU on January 1, 2024 on a prospective basis with no impact on our condensed consolidated financial statements.

In March 2023, the FASB issued ASU 2023-01, Leases-Common Control Arrangements (Topic 842). This ASU provides updated guidance for accounting for leasehold improvements associated with common control leases. We adopted this ASU on January 1, 2024 on a prospective basis with no impact on our condensed consolidated financial statements.

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Application of New or Revised Accounting Standards – Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to improve its income tax disclosure requirements. Under the ASU, entities must annually (1) disclose specific categories in the rate reconciliation, (2) provide additional information for reconciling items that meet a quantitative threshold, and (3) disclose more detailed information about income taxes paid, including by jurisdiction; pretax income (or loss) from continuing operations; and income tax expense (or benefit). The ASU is effective for fiscal years beginning after December 15, 2024, and interim periods beginning after December 15, 2025, with early adoption permitted. We are currently evaluating the impact of this standard on our disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis. We are currently evaluating the impact of this standard on our disclosures.

In August 2023, the FASB issued ASU 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement, which requires a joint venture to initially measure all contributions received upon its formation at fair value. This ASU is applicable to joint venture entities with a formation date on or after January 1, 2025 on a prospective basis. We will apply this guidance prospectively in future reporting periods after the guidance is effective to any future arrangements meeting the definition of a joint venture.

Other recent authoritative guidance issued by the FASB (including technical corrections to the ASC), and the SEC during the six months ended June 30, 2024 did not, or are not expected to, have a material effect on our condensed consolidated financial statements.

3. Revenues

As discussed in Note 2, Summary of Significant Accounting Policies, revenues are recognized in accordance with ASC 606. The following table presents our disaggregated revenue for the periods presented (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(Unaudited)				(Unaudited)

Product revenue, net	$	990	$	—	$	990	$	—
Other revenues	57		41		97		401
Total revenue	$	1,047	$	41	$	1,087	$	401

Product Revenue, Net

During the three months ended June 30, 2024, our only source of product revenue has been from U.S. sales of ANKTIVA, which we began shipping to customers in May 2024.

As of June 30, 2024, approximately $49 thousand of gross-to-net accruals have been recorded as a reduction to revenue, of which approximately $5 thousand as a reduction of accounts receivable, net and approximately $44 thousand is presented in accrued expenses and other current liabilities on the condensed consolidated balance sheet.

Other Revenues

During the three and six months ended June 30, 2024, our primary source of other revenues was consumable product sales.

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4. Financial Statement Details

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):


	June 30, 2024		December 31, 2023
	(Unaudited)

Prepaid research and development costs	$	8,695	$	7,847
Prepaid services	4,168		5,869
Prepaid software license fees	3,227		2,100
Prepaid insurance	1,428		2,242
Prepaid rent	1,254		1,113
Prepaid equipment maintenance	1,253		1,183
ERP system implementation cost	475		1,087
Insurance premium financing asset	—		1,475
Insurance claims receivable	—		1,149





Other	480		1,538
Prepaid expenses and other current assets	$	20,980	$	25,603

Inventories

Inventories consist of the following (in thousands):


	June 30, 2024		December 31, 2023
	(Unaudited)

Raw materials	$	—	$	—
Work-in-progress	1,811		—
Finished goods	—		—
Inventories	$	1,811	$	—

Inventory is stated at the lower of cost or net realizable value and consists of raw materials, work-in-progress and finished goods. Cost is determined using a standard cost method, which approximates actual cost, and assumes a FIFO flow of goods. Inventory that is used for clinical development purposes is expensed in research and development expense, on the condensed consolidated statement of operations when consumed.

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The work-in-progress materials consists of bulk drug substance and drug product, which have a multi-year shelf life. When the bulk drug substance is manufactured into ANKTIVA drug product, those goods have a shelf life of two years from the date of manufacture. The work-in-progress drug product gets converted to finished goods at the time of labeling. Our expectation is to sell finished goods at least twelve months prior to expiration. Due to our long manufacturing lead time, it was necessary to build up inventory in support of ANKTIVA forecasted sales. As a result of being in the early stages of the ANKTIVA product launch, the company is continuing to evaluate the length of its operating cycle.

On a quarterly basis, the company analyzes its inventory levels for excess quantities and obsolescence (expiration), taking into account factors such as historical and anticipated future sales compared to quantities on hand and the remaining shelf-life. At June 30, 2024, we determined that a reserve related to ANKTIVA inventory for excess quantities and obsolescence is not required. In addition, since the FDA approval of ANKTIVA the company has not recorded any inventory write downs.

Property, Plant and Equipment, Net

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


	June 30, 2024		December 31, 2023
	(Unaudited)

Leasehold improvements	$	72,533	$	72,552
Equipment	72,827		69,915
Construction in progress	85,322		84,436
Furniture & fixtures	1,878

ImmunityBio, Inc. [IBRX] Filings
10-Q	[2024-08-12]
10-Q	[2024-05-09]
10-K	[2024-03-19]
10-Q	[2023-11-09]
10-Q	[2023-08-08]
10-Q	[2023-05-11]
10-K	[2023-03-01]
10-Q	[2022-11-09]
10-Q	[2022-08-08]
10-Q	[2022-05-10]
10-K	[2022-03-01]
10-Q	[2021-11-12]
10-Q	[2021-08-12]
10-Q	[2021-05-14]
10-K	[2021-03-04]
10-Q	[2020-11-09]
10-Q	[2020-08-07]
10-Q	[2020-05-11]
10-K	[2020-03-25]
10-Q	[2019-11-05]
10-Q	[2019-08-06]
10-Q	[2019-05-08]
10-K	[2019-03-13]
10-Q	[2018-11-07]
10-Q	[2018-08-06]
10-Q	[2018-05-07]
10-K	[2018-03-12]
10-Q	[2017-11-07]
10-Q	[2017-08-07]
10-Q	[2017-05-08]
10-K	[2017-03-15]
10-Q	[2016-11-10]
10-Q	[2016-08-15]
10-Q	[2016-05-16]
10-K	[2016-03-30]
10-Q	[2015-11-12]
10-Q	[2015-09-10]
S-1	[2015-06-19]