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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-37507
_____________________________________
IMMUNITYBIO, INC.
(Exact name of registrant as specified in its charter)
_____________________________________
Delaware43-1979754
(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: (858) 633-0300
_____________________________________
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 shareIBRXThe Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
þ
Accelerated filer
¨
Non-accelerated filer
¨
Smaller reporting company
¨
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ
The number of shares of the Registrant’s common stock outstanding as of May 5, 2022 was 397,956,762 (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
 
 
 
-i-

PART I—FINANCIAL INFORMATION
ITEM 1.     FINANCIAL STATEMENTS.
ImmunityBio, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
March 31,
2022
December 31,
2021
(Unaudited)  
ASSETS  
Current assets:  
Cash and cash equivalents$36,385 $181,101 
Marketable securities155,947 136,015 
Due from related parties3,893 1,333 
Prepaid expenses and other current assets (including amounts with related parties)16,116 15,898 
Total current assets212,341 334,347 
Marketable securities, noncurrent865 822 
Property, plant and equipment, net105,217 82,863 
Intangible assets, net22,349 1,420 
Convertible note receivable6,441 6,379 
Operating lease right-of-use assets, net (including amounts with related parties)35,897 36,304 
Other assets (including amounts with related parties)6,477 6,775 
Total assets$389,587 $468,910 
LIABILITIES AND STOCKHOLDERS’ DEFICIT  
Current liabilities:  
Accounts payable$9,832 $11,418 
Accrued expenses and other liabilities62,468 51,387 
Related-party promissory notes, current portion299,612 299,236 
Due to related parties5,595 3,943 
Operating lease liabilities (including amounts with related parties)3,507 3,011 
Total current liabilities381,014 368,995 
Related-party promissory notes, less current portion309,428 306,349 
Operating lease liabilities, less current portion (including amounts with related parties)36,251 37,068 
Deferred income tax liability162 162 
Other liabilities288 249 
Total liabilities727,143 712,823 
Commitments and contingencies (Note 7)
Stockholders’ deficit:  
Common stock, $0.0001 par value; 900,000,000 shares authorized; 397,956,762 and
   397,830,044 shares issued and outstanding as of March 31, 2022 and
   December 31, 2021, respectively; excluding treasury stock, 163,800 shares
   outstanding as of March 31, 2022 and December 31, 2021, respectively
40 40 
Additional paid-in capital1,729,430 1,719,704 
Accumulated deficit(2,064,747)(1,961,921)
Accumulated other comprehensive (loss) income(367)4 
Total ImmunityBio stockholders’ deficit(335,644)(242,173)
Noncontrolling interests(1,912)(1,740)
Total stockholders’ deficit(337,556)(243,913)
Total liabilities and stockholders’ deficit$389,587 $468,910 
The accompanying notes are an integral part of these condensed consolidated financial statements.
1

ImmunityBio, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended
March 31,
20222021
Revenue$14 $139 
Operating expenses:
Research and development (including amounts
   with related parties)
55,378 41,128 
Selling, general and administrative (including amounts
   with related parties)
40,608 45,275 
Total operating expenses95,986 86,403 
Loss from operations(95,972)(86,264)
Other (expense) income, net:  
Interest and investment income, net1,666 8,944 
Interest expense (including amounts with related parties)(8,491)(3,168)
Loss on equity method investment(197) 
Other (expense) income, net (including amounts
   with related parties)
(4)13 
Total other (expense) income, net(7,026)5,789 
Loss before income taxes and noncontrolling interests(102,998)(80,475)
Income tax expense (6)
Net loss(102,998)(80,481)
Net loss attributable to noncontrolling interests, net of tax(172)(867)
Net loss attributable to ImmunityBio common stockholders$(102,826)$(79,614)
Net loss per ImmunityBio common share – basic$(0.26)$(0.21)
Net loss per ImmunityBio common share – diluted$(0.26)$(0.21)
Weighted-average number of common shares used in computing
   net loss per share – basic and diluted
397,882,441 382,741,464 
The accompanying notes are an integral part of these condensed consolidated financial statements.
2

ImmunityBio, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
(Unaudited)
Three Months Ended
March 31,
20222021
Net loss$(102,998)$(80,481)
Other comprehensive loss, net of income taxes:
Net unrealized losses on available-for-sale securities(310)(1)
Reclassification of net realized losses on
   available-for-sale securities included in net loss
 3 
Foreign currency translation adjustments(61)(162)
Total other comprehensive loss(371)(160)
Comprehensive loss(103,369)(80,641)
Less: Comprehensive loss attributable to noncontrolling interests(172)(867)
Comprehensive loss attributable to ImmunityBio
   common stockholders
$(103,197)$(79,774)
The accompanying notes are an integral part of these condensed consolidated financial statements.
3

ImmunityBio, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Deficit
(in thousands, except share amounts)
(Unaudited)
Three Months Ended March 31, 2022Common 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, 2021
397,830,044 $40 $1,719,704 $(1,961,921)$4 $(242,173)$(1,740)$(243,913)
Stock-based compensation expense
— — 10,024 — — 10,024 — 10,024 
Exercise of stock options14,767 — 74 — — 74 — 74 
Vesting of restricted stock units (RSUs)
177,783 — — — — — — — 
Net share settlement for RSUs vesting
(65,832)— (372)— — (372)— (372)
Other comprehensive loss, net of tax
— — — — (371)(371)— (371)
Net loss— — — (102,826)— (102,826)(172)(102,998)
Balance as of March 31, 2022
397,956,762 $40 $1,729,430 $(2,064,747)$(367)$(335,644)$(1,912)$(337,556)
The accompanying notes are an integral part of these condensed consolidated financial statements.
4

ImmunityBio, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Deficit
(in thousands, except share amounts)
(Unaudited)
Three Months Ended March 31, 2021Common 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, 2020
382,243,142 $38 $1,495,163 $(1,615,131)$122 $(119,808)$1,318 $(118,490)
Stock-based compensation expense
— — 15,298 — — 15,298 — 15,298 
Exercise of stock options690,465 — 1,121 — — 1,121 — 1,121 
Vesting of RSUs235,725 — — — — — — — 
Net share settlement for RSUs vesting
(102,011)— (2,624)— — (2,624)— (2,624)
Other comprehensive loss, net of tax
— — — — (160)(160)— (160)
Net loss— — — (79,614)— (79,614)(867)(80,481)
Balance as of March 31, 2021
383,067,321 $38 $1,508,958 $(1,694,745)$(38)$(185,787)$451 $(185,336)
The accompanying notes are an integral part of these condensed consolidated financial statements.
5

ImmunityBio, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
 Three Months Ended
March 31,
 20222021
Operating activities: 
Net loss$(102,998)$(80,481)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense10,024 15,298 
Unrealized gains on equity securities(1,419)(8,834)
Depreciation and amortization4,090 2,972 
Non-cash interest items, net (including amounts with related parties)3,398 3,435 
Non-cash lease expense related to operating lease right-of-use assets1,318 1,555 
Loss on equity method investment197  
Other848 100 
Changes in operating assets and liabilities:
Prepaid expenses and other current assets(218)(934)
Other assets101 693 
Accounts payable795 6,497 
Accrued expenses and other liabilities10,891 (1,893)
Related parties(1,618)2,597 
Operating lease liabilities(339)(1,474)
Net cash used in operating activities(74,930)(60,469)
Investing activities:
Purchases of property, plant and equipment(27,347)(7,083)
Purchase of intangible assets(21,229) 
Purchases of marketable debt securities, available-for-sale(34,082)(91)
Maturities of marketable debt securities, available for sale14,345 31,925 
Investment in joint venture – an equity method investment(1,000) 
Proceeds from sales of marketable debt and equity securities 7,094 
Net cash (used in) provided by investing activities(69,313)31,845 
Financing activities:
Proceeds from issuance of related-party promissory notes,
   net of issuance costs paid
 40,000 
Proceeds from exercises of stock options74 1,121 
Net share settlement for RSUs vesting(372)(2,624)
Net cash (used in) provided by financing activities(298)38,497 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(175)(109)
Net change in cash, cash equivalents, and restricted cash(144,716)9,764 
Cash, cash equivalents, and restricted cash, beginning of period181,280 35,094 
Cash, cash equivalents, and restricted cash, end of period$36,564 $44,858 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6

ImmunityBio, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Continued)
(in thousands)
(Unaudited)
 Three Months Ended
March 31,
 20222021
Reconciliation of cash, cash equivalents, and restricted cash, end of period:  
Cash and cash equivalents$36,385 $44,679 
Restricted cash 179 179 
Cash, cash equivalents, and restricted cash, end of period$36,564 $44,858 
Supplemental disclosure of cash flow information:  
Cash paid during the period for:  
Interest$5,036 $12 
Income taxes 2 
Supplemental disclosure of non-cash activities:  
Property and equipment purchases included in accounts payable,
   accrued expenses and due to related parties
$1,061 $4,267 
Right-of-use assets obtained in exchange for operating lease liabilities911 1,388 
Unrealized (losses) gains on marketable debt securities, net(310)14 
The accompanying notes are an integral part of these condensed consolidated financial statements.
7

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,” “the combined company,” “we,” “us,” and “our” refer to ImmunityBio and subsidiaries.
Our Business
ImmunityBio, Inc. is a clinical-stage biotechnology company developing next-generation therapies and vaccines that complement, harness, and amplify the immune system to defeat cancers and infectious diseases. We strive to be a vertically-integrated immunotherapy company designing and manufacturing our products so they are more effective, accessible, more conveniently stored, and more easily administered to patients.
Our broad immunotherapy and cell therapy platforms are designed to attack cancer and infectious pathogens by activating both the innate immune system—natural killer (NK) cells, dendritic cells, and macrophages—and the adaptive immune system—B cells 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 employ this approach to establish an “immunological memory” that confers long-term benefit for the patient.
Although such designations may not lead to a faster development process or regulatory review and may not increase the likelihood that a product candidate will receive approval, N-803 (Anktiva), our novel antibody cytokine fusion protein, has received Breakthrough Therapy and Fast Track designations in combination with bacillus Calmette-Guérin (BCG) from the United States (U.S.) Food and Drug Administration (FDA) for BCG-unresponsive non-muscle invasive bladder cancer (NMIBC) carcinoma in situ (CIS).
Based on the reported results of our Phase 2/3 trial (QUILT 3.032), we have initiated discussions with the FDA to file a BLA for N-803 plus BCG for BCG-unresponsive NMIBC CIS. We held a pre-BLA meeting with the FDA in May and reached agreement with the agency with regard to the content and plan to submit our BLA for N-803 plus BCG for BCG-unresponsive NMIBC CIS.
Our platforms include 8 first-in-human therapeutic agents that are currently being studied in 27 clinical trials—18 of which are in Phase 2 or 3 development—across 13 indications in liquid and solid tumors, including bladder, pancreatic and lung cancers. These are among the most frequent and lethal cancer types for which there are high failure rates for existing standards of care or, in some cases, no available effective treatment. In infectious disease, our pipeline currently targets such pathogens as the novel strain of the coronavirus (SARS-CoV-2) and human immunodeficiency virus (HIV).
We have established Good Manufacturing Practice (GMP) manufacturing capacity at scale with cutting-edge cell manufacturing expertise and ready-to-scale facilities, as well as extensive and seasoned research and development (R&D), clinical trial, and regulatory operations, and development teams.
The Merger
On December 21, 2020, NantKwest, Inc. (NantKwest) and NantCell, Inc. (formerly known as ImmunityBio, Inc., a private company) (NantCell) entered into an Agreement and Plan of Merger (the Merger Agreement), pursuant to which NantKwest and NantCell agreed to combine their businesses. The Merger Agreement provided that a wholly-owned subsidiary of the company would merge with and into NantCell (the Merger), with NantCell surviving the Merger as a wholly-owned subsidiary of the company.
8

On March 9, 2021, we completed the Merger pursuant to the terms of the Merger Agreement. Under the terms of the Merger Agreement, at the effective time of the Merger (the Effective Time), each share of NantCell common stock, par value $0.001 per share, issued and outstanding immediately prior to the Effective Time, subject to certain exceptions as set forth in the Merger Agreement, was converted automatically into a right to receive 0.8190 (the Exchange Ratio) newly issued shares of common stock, par value $0.0001 per share, of the company (Company Common Stock), with cash paid in lieu of any fractional shares. At the Effective Time, each share of the company’s common stock issued and outstanding immediately prior to the Effective Time, remained an issued and outstanding share of the combined company. At the Effective Time, each outstanding option, RSU or warrant to purchase NantCell common stock was converted using the Exchange Ratio into an option, RSU or warrant, respectively, on the same terms and conditions immediately prior to the Effective Time, to purchase shares of Company Common Stock.
Immediately following the Effective Time, the former stockholders of NantCell held approximately 71.5% of the outstanding shares of Company Common Stock and the stockholders of NantKwest as of immediately prior to the Merger held approximately 28.5% of the outstanding shares of Company Common Stock. As a result of the Merger and immediately following the Effective Time, Dr. Patrick Soon-Shiong, our Executive Chairman and Global Chief Scientific and Medical Officer, and his affiliates beneficially owned, in the aggregate, approximately 81.8% of the outstanding shares of Company Common Stock. Following the consummation of the Merger, the symbol for shares of the company’s common stock was changed to “IBRX.”
Accounting Treatment of the Merger
The Merger represents a business combination pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 805-50, Mergers, which is accounted for as a transaction between entities under common control as Dr. Soon-Shiong and his affiliates were the controlling stockholders of both the company and NantCell for all of the periods presented in this report. As a result, all of the assets and liabilities of NantCell were combined with ours at their historical carrying amounts on the closing date of the Merger. We have recast our prior period financial statements to reflect the conveyance of NantCell’s common shares as if the Merger had occurred as of the earliest date of the financial statements presented. All material intercompany accounts and transactions have been eliminated in consolidation.
The following table provides the impact of the change in reporting entity on our condensed consolidated statements of operations (in thousands):
Three Months Ended
March 31, 2021
(Unaudited)
NantCellNantKwestIntercompany
Eliminations
ImmunityBio,
Inc.
Revenue$183 $ $(44)$139 
Operating expenses:
Research and development (including amounts
with related parties)
21,509 19,725 (106)41,128 
Selling, general and administrative (including amounts
with related parties)
24,382 20,903 (10)45,275 
Loss from operations(45,708)(40,628)72 (86,264)
Other (expense) income, net (including amounts
with related parties)
(848)6,637  5,789 
Income tax expense (6) (6)
Net loss$(46,556)$(33,997)$72 $(80,481)
9

2.    Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (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. 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 on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 1, 2022. These interim financials are not necessarily indicative of results expected for the full fiscal year.
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of the company, our wholly owned subsidiaries, and a variable interest entity (VIE) for which we are 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 interest on the unaudited condensed consolidated statements 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.
Liquidity
As of March 31, 2022, the company had an accumulated deficit of $2.1 billion. We also had negative cash flows from operations of $74.9 million for the three months ended March 31, 2022. The company will likely need additional capital to further fund the development of, and to seek regulatory approvals for, our product candidates, and to begin to commercialize any approved products.
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, 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, together with capital to be raised through equity offerings (including but not limited to the offering, issuance and sale by us of our common stock that may be issued and sold under an “at-the-market” sales agreement with Jefferies LLC (the ATM), of which we had $330.8 million available for future issuance as of March 31, 2022), and our potential ability to borrow from affiliated entities, will be sufficient to fund our operations through at least the next 12 months following the issuance date of the condensed consolidated financial statements based primarily upon our 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. We may also seek to sell additional equity, through one or more follow-on public offerings, or in separate financings, or obtain a credit facility. However, we may not be able to secure such external financing in a timely manner or on favorable terms. Without additional funds, we may choose to delay or reduce our operating or investment expenditures. Further, because of the risk and uncertainties associated with the potential commercialization of our product candidates in development, we may need additional funds to meet our needs sooner than planned.
10

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, contingent value right measurement and assessments, the measurement of right-of-use assets and lease liabilities, useful lives of long-lived assets, loss contingencies, fair value measurements, asset acquisition, 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, such as the economic considerations related to the impact that the ongoing coronavirus pandemic could have on our significant accounting estimates. Actual results could differ from those estimates.
Significant Accounting Policies
There have been no material changes to our significant accounting policies from those 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 on Form 10-K filed with the SEC on March 1, 2022.
Acquisitions
We make certain judgments to determine whether transactions should be accounted for as acquisitions of assets or as business combinations. If it is determined that substantially all of the fair value of gross assets acquired in a transaction is concentrated in a single asset (or a group of similar assets), the transaction is treated as an acquisition of assets. We evaluate the inputs, processes, and outputs associated with the acquired set of activities and assets. If the assets in a transaction include an input and a substantive process that together significantly contribute to the ability to create outputs, the transaction is treated as an acquisition of a business.
We account for business combinations using the acquisition method of accounting, which requires that assets acquired and liabilities assumed generally be recorded at their fair values as of the acquisition date. Excess of consideration over the fair value of net assets acquired is recorded as goodwill. Estimating fair value requires us to make significant judgments and assumptions. We perform impairment testing of goodwill annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.
In transactions accounted for as asset acquisitions, the cost of an asset acquisition, including transaction costs, are allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. In an asset acquisition, upfront payments allocated to in-process research and development projects at the acquisition date are expensed unless there is an alternative future use. In addition, product development milestones are expensed upon achievement. Any contingent consideration, such as payments upon achievement of various developmental, regulatory and commercial milestones, generally is not recognized at the acquisition date.
11

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 those securities that have been excluded from the computation of potentially dilutive securities:
As of March 31,
20222021
(Unaudited)
Outstanding stock options8,819,466 4,978,314 
Outstanding RSUs6,149,411 7,636,132 
Outstanding related-party warrants1,638,000 1,638,000 
Total16,606,877 14,252,446 
Amounts in the table above reflect the common stock equivalents of the noted instruments, including awards issued under the NantKwest 2015 Equity Incentive Plan (the 2015 Plan) and the NantKwest 2014 Equity Incentive Plan. At the Effective Time, each outstanding option or RSU issued under the 2015 NantCell Stock Incentive Plan and warrants issued by NantCell to purchase or acquire NantCell common stock were converted using the Exchange Ratio into an option, RSU or warrant, respectively, on the same terms and conditions immediately prior to the Effective Time. See Note 11, Stock-Based Compensation, for further information.
Recent Accounting Pronouncements
Application of New or Revised Accounting Standards – Adopted
In May 2021, the FASB issued Accounting Standards Update (ASU) 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). This update provides guidance to clarify and reduce diversity in an accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that is not within the scope of another Topic. An entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. This update additionally provides further guidance on measuring the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange on the basis of the substance of the transaction, in the same manner as if cash had been paid as consideration. This guidance is effective for the fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The company adopted this guidance on January 1, 2022 on a prospective basis. The adoption did not have a material impact on the company’s condensed consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies and clarifies certain calculation and presentation matters related to convertible equity and debt instruments. Specifically, ASU 2020-06 removes requirements to separately account for conversion features as a derivative under ASC Topic 815 and removing the requirement to account for beneficial conversion features on such instruments. In addition, ASU 2020-06 eliminates the treasury stock method when calculating diluted earnings per share for convertible instruments that can be settled in whole or in part with equity and requires the use of the if-converted method. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The company adopted this guidance on January 1, 2022 on a modified prospective basis. The adoption did not have a material impact on the company’s condensed consolidated financial statements.
12

Other recent authoritative guidance issued by the FASB (including technical corrections to the ASC), the American Institute of Certified Public Accountants, and the SEC during the three months ended March 31, 2022 did not, or are not expected to, have a material effect on our condensed consolidated financial statements.
3.    Financial Statement Details
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following (in thousands):
March 31,
2022
December 31,
2021
(Unaudited)
Prepaid services$8,435 $6,966 
Prepaid insurance2,146 2,266 
Prepaid license fees1,552 1,111 
Other3,983 5,555 
Prepaid expenses and other current assets$16,116 $15,898 
Property, Plant and Equipment, Net
Property, plant and equipment, net, consist of the following (in thousands):
March 31,
2022
December 31,
2021
(Unaudited)
Leasehold improvements$68,725 $62,482 
Equipment58,738 54,284 
Construction in progress31,423 16,575 
Software1,658 1,544 
Furniture & fixtures1,522 1,052 
Gross property, plant and equipment162,066 135,937 
Less: Accumulated depreciation and amortization56,849 53,074 
Property, plant and equipment, net$105,217 $82,863 
Depreciation and amortization expense related to property, plant and equipment totaled $3.8 million and $3.0 million for the three months ended March 31, 2022 and 2021, respectively.
13

Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consist of the following (in thousands):
March 31,
2022
December 31,
2021
(Unaudited) 
Accrued litigation payable (Note 7)
$17,507 $7,118 
Accrued construction costs9,340 8,145 
Accrued professional and service fees8,836 6,909 
Accrued preclinical and clinical trial costs6,027 5,842 
Accrued laboratory equipment, supplies and related services5,499 2,144 
Accrued research and development costs5,033 2,107 
Accrued compensation4,281 5,613 
Accrued bonus3,054 8,316 
Other2,891 5,193 
Accrued expenses and other liabilities$62,468 $51,387 
Interest and Investment Income, Net
Interest and investment income, net consists of the following (in thousands):
Three Months Ended
March 31,
20222021
(Unaudited)
Unrealized gains from equity securities$1,419 $8,833 
Interest income1,296 339 
Investment amortization expense, net(1,049)(225)
Net realized losses on investments (3)
Interest and investment income, net$1,666 $8,944 
Interest income includes interest from marketable securities, convertible notes receivable, other assets, and interest from bank deposits.
14

4.    Financial Instruments
Investments in Marketable Debt Securities
As of March 31, 2022, the weighted-average remaining contractual life, amortized cost, gross unrealized gains, gross unrealized losses and fair value of marketable debt securities, which were considered as available-for-sale, by type of security were as follows (in thousands):
 March 31, 2022
 (Unaudited)
Weighted-
Average
Remaining
Contractual Life
(in years)
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Current:
Corporate debt securities0.3$147,983 $3 $(307)$147,679 
Foreign bonds0.1114  (1)113 
Mutual funds34 9 (5)38 
Current portion148,131 12 (313)147,830 
Noncurrent:
Foreign bonds4.8893 1 (29)865 
Noncurrent portion893 1 (29)865 
Total$149,024 $13 $(342)$148,695 
As of December 31, 2021, the amortized cost, gross unrealized gains, gross unrealized losses and fair value of marketable debt securities, which were considered as available-for-sale, by type of security were as follows (in thousands):
December 31, 2021
Weighted-
Average
Remaining
Contractual Life
(in years)
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair 
Value
Current:
Corporate debt securities0.5$129,190 $10 $(36)$129,164 
Foreign bonds0.4116  (1)115 
Mutual funds35 3  38 
Current portion129,341 13 (37)129,317 
Noncurrent:
Foreign bonds5.0719 103  822 
Noncurrent portion719 103  822 
Total$130,060 $116 $(37)$130,139 
15

Accumulated unrealized losses on marketable debt securities that have been in a continuous loss position for less than 12 months and more than 12 months were as follows (in thousands):
March 31, 2022
(Unaudited)
Less than 12 monthsMore than 12 months
Estimated
Fair
Value
Gross
Unrealized
Losses
Estimated
Fair
Value
Gross
Unrealized
Losses
Corporate debt securities$138,072 $(307)$ $ 
Mutual funds  32 (5)
Foreign bonds649 (21)113 (9)
Total$138,721 $(328)$145 $(14)

December 31, 2021
Less than 12 monthsMore than 12 months
Estimated
Fair
Value
Gross
Unrealized
Losses
Estimated
Fair
Value
Gross
Unrealized
Losses
Corporate debt securities$86,158 $(36)$ $ 
Mutual funds  34 (2)
Foreign bonds115 (1)113 (1)
Total$86,273 $(37)$147 $(3)
Realized gains and losses on sales of available-for-sale marketable debt securities were not material for the three months ended March 31, 2022 and 2021.
Marketable Equity Securities
We held investments in marketable equity securities with readily determinable fair values of $8.1 million and $6.7 million as of March 31, 2022 and December 31, 2021, respectively. Unrealized gains recorded on these securities totaled $1.4 million and $8.8 million in interest and investment income, net, on the condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021, respectively.
16

5.    Fair Value Measurements
Fair value is defined as an exit price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We use a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires us to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value.
The three tiers are defined as follows:
Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets at the measurement date. Since valuations are based on quoted prices that are readily and regularly available in an active market, the valuation of these products does not entail a significant degree of judgment. Our Level 1 assets consist of bank deposits, money market funds, and marketable equity securities.
Level 2—Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities. Our Level 2 assets consist of corporate debt securities including commercial paper, government-sponsored securities and corporate bonds, as well as foreign municipal securities.
Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
We utilize a third-party pricing service to assist in obtaining fair value pricing for our investments in marketable debt securities. Inputs are documented in accordance with the fair value disclosure hierarchy. The fair values of financial instruments other than marketable securities and cash and cash equivalents are determined through a combination of management estimates and third-party valuations.
Recurring Valuations
Financial assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):
Fair Value Measurements at March 31, 2022
(Unaudited)
TotalLevel 1Level 2Level 3
Assets:
Current:
Cash and cash equivalents$36,385 $36,385 $ $ 
Equity securities8,117 8,117   
Corporate debt securities147,679  147,679  
Foreign bonds113 113   
Mutual funds38 38   
Noncurrent:
Foreign bonds865 865   
Total assets measured at fair value$193,197 $45,518 $147,679 $ 
Liabilities:
Accrued litigation payable$12,507 (1)$12,507 $ $ 
Contingent consideration401 (2)380  21 
Total liabilities measured at fair value$12,908 $12,887 $ $21 
17

Fair Value Measurements at December 31, 2021
TotalLevel 1Level 2Level 3
Assets:    
Current:    
Cash and cash equivalents$181,101 (3)$51,421 $129,680 $ 
Equity securities6,698 6,698   
Corporate debt securities129,164  129,164  
Foreign bonds