ImmunityBio Inc

Previous wording

•our ability to commercialize any future approved products;

Current wording

•our ability to successfully commercialize our approved product or any future approved products;

Previous wording

Our product candidates, other than ANKTIVA, are investigational agents that are restricted by federal law to investigational use only. Safety and efficacy have not been established by any agency, including the FDA.

Current wording

Our product candidates are investigational agents that are restricted by federal law to investigational use only. Safety and efficacy have not been established by any agency, including the FDA.

Previous wording

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. These platforms have generated 9 novel therapeutic agents for which clinical trials are either underway or planned in solid and liquid 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.

Current wording

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.

Previous wording

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. Based on ANKTIVA’s unique mechanism of action, we believe it has the potential to play a key role as a backbone for immunotherapy beyond T cells alone across multiple tumor types in the years to come.

Current wording

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. Based on ANKTIVA’s unique mechanism of action, we believe it has the potential to play a key role as a backbone for immunotherapy beyond T cells alone across multiple tumor types in the years to come. We began commercial distribution of our approved product in May 2024.

Previous wording

As of March 2024, our platforms have generated 9 first-in-human therapeutic agents that are currently being or planned to be studied in 24 clinical trials across 12 indications in liquid and solid tumors, including bladder, lung and colorectal cancers, and GBM. These indications 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. We are constantly monitoring and prioritizing clinical development based upon the availability of our resources and the efficacy and market developments of our competitors’ products and product candidates, among other factors. 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.

Current wording

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 24 clinical trials across 16 indications in liquid and solid tumors, including bladder, lung and colorectal cancers, and GBM. These indications 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. We are constantly monitoring and prioritizing clinical development based upon the availability of our resources and the efficacy and market developments of our competitors’ products and product candidates, among other factors.

Previous wording

The following is a summary of selected significant developments affecting our business that occurred since the filing of our Annual Report with the SEC on March 19, 2024.

Current wording

The following is a summary of selected significant developments affecting our business that occurred since the filing of our Quarterly Report dated March 31, 2024 with the SEC on May 9, 2024.

Previous wording

On April 25, 2024, we announced positive overall survival results of ANKTIVA combined with checkpoint inhibitors in NSCLC. In our completed QUILT 3055 trial, the median overall survival was almost double that of standard of care chemotherapy in second- and third-line NSCLC patients whose cancer did not respond to checkpoint inhibitors, with or without chemotherapy. Positive results were seen in both PD-L1 negative and PD-L1 positive patients with NSCLC. A meeting is scheduled with FDA in June 2024 to discuss a path to a registration filing of ANKTIVA plus checkpoint inhibitors in second- and third-line NSCLC patients whose cancer previously did not respond to checkpoint therapy.

Current wording

On April 25, 2024, we announced positive overall survival results of ANKTIVA combined with checkpoint inhibitors in NSCLC from the completed QUILT 3.055 trial. In that trial, the median overall survival was almost double that of standard-of-care chemotherapy in second- and third-line NSCLC patients whose cancer did not respond to checkpoint inhibitors, with or without chemotherapy. After a meeting with the FDA in June 2024 to discuss a path to a registration filing for ANKTIVA plus checkpoint inhibitors for this indication, we are preparing additional study information responsive to the FDA’s input on a NSCLC pivotal trial. We plan to have a subsequent meeting with the FDA to discuss the study end points for a potential approval on various timelines.

Previous wording

From inception through the date of this Quarterly Report, we have generated minimal revenue from non-exclusive license agreements related to our cell lines, the sale of our bioreactors and related consumables, and grant programs. Until April 2024, we had no clinical products approved for commercial sale and thus had not generated any revenue from therapeutic and vaccine product candidates that are or were under development. Now that we have FDA approval for ANKTIVA, we expect to begin generating revenue although we expect it to take some time to generate significant revenue from our approved product and we can provide no assurances when, or if, this will occur. We do not expect additional revenue from our other product candidates unless and until we obtain regulatory approval of and commercialize any of our other product candidates, and we do not know when, or if, this will occur.

Current wording

From inception through June 30, 2024, we have generated minimal revenue from non-exclusive license agreements related to our cell lines, the sale of our bioreactors and related consumables, and grant programs. Until April 2024, we had no clinical products approved for commercial sale and thus had not generated any revenue from therapeutic and vaccine product candidates that are or were under development. Now that we have received FDA approval for ANKTIVA, we have begun to generate revenue although we expect it to take some time to generate significant revenue from our approved product and we can provide no assurances when, or if, this will occur. We began commercial distribution of our approved product in May 2024; however, we can provide no assurance with respect to our future revenues, market acceptance, reimbursement from third-party payors, or the profitability of our approved product or any other product candidate for which we may obtain approval. We do not expect additional revenue from our other product candidates unless and until we obtain regulatory approval of and commercialize any of our other product candidates, and we do not know when, or if, this will occur.

Previous wording

We have incurred net losses in each year since our inception and, as of March 31, 2024, we had an accumulated deficit of $3.1 billion. During the three months ended March 31, 2024 and 2023, net losses attributable to ImmunityBio common stockholders were $134.1 million and $116.3 million, respectively. Substantially all of our net losses resulted principally from costs incurred in connection with our ongoing clinical trials and operations, our research and development programs, and from selling, general and administrative costs associated with our operations, including stock-based compensation expense.

Current wording

We have incurred net losses in each year since our inception and, as of June 30, 2024, we had an accumulated deficit of $3.2 billion. During the six months ended June 30, 2024 and 2023, net losses attributable to ImmunityBio common stockholders were $268.7 million and $254.2 million, respectively. Substantially all of our net losses resulted principally from costs incurred in connection with our ongoing clinical trials and operations, our research and development programs, and from selling, general and administrative costs associated with our operations, including stock-based compensation expense.

Previous wording

As of March 31, 2024, we had 628 employees. Personnel of related companies who provide corporate, general and administrative, certain research and development, and other support services under our shared services agreement with NantWorks are not included in this number. See Note 11, Related-Party Agreements, of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for more information. In anticipation of the commercialization of our approved product, we expect to continue to incur significant expenses and increasing operating expenses for the foreseeable future, which may fluctuate significantly from quarter-to-quarter and year-to-year. See “—Future Funding Requirements” below for a discussion of our anticipated expenditures and sources of capital we expect to access to fund these expenditures.

Current wording

As of June 30, 2024, we had 622 employees. Personnel of related companies who provide corporate, general and administrative, certain research and development, and other support services under our shared services agreement with NantWorks are not included in this number. See Note 12, Related-Party Agreements, of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for more information. In anticipation of the ongoing commercialization of our approved product, we expect to continue to incur significant expenses and increasing operating expenses for the foreseeable future, which may fluctuate significantly from quarter-to-quarter and year-to-year. See “—Future Funding Requirements” below for a discussion of our anticipated expenditures and sources of capital we expect to access to fund these expenditures.

Previous wording

In 2021, we completed a review of alternative structures that could support our more complex clinical trial requirements and made a decision to explore a potential transition of clinical trials at the Clinic to a new structure (including contracting with a new, non-affiliated professional corporation) to be determined and agreed upon by all parties. While we have not yet finalized the potential transaction, we continue discussions with potential partners around alternative structures. During the three months ended March 31, 2024 and 2023, we incurred $0.5 million and $0.6 million, respectively, inresearch and development expense, on the condensed consolidated statements of operations related to clinical trial and transition services provided by the Clinic.

Current wording

In 2021, we completed a review of alternative structures that could support our more complex clinical trial requirements and made a decision to explore a potential transition of clinical trials at the Clinic to a new structure (including contracting with a new, non-affiliated professional corporation) to be determined and agreed upon by all parties. While we have not yet finalized the potential transaction, we continue discussions with potential partners around alternative structures. During the six months ended June 30, 2024 and 2023, we incurred $1.4 million inresearch and development expense, on the condensed consolidated statements of operations related to clinical trial and transition services provided by the Clinic.

Previous wording

We generally classify our operating expenses into research and development, and selling, general and administrative expenses. Personnel costs, including salaries, benefits, bonuses, and stock-based compensation expense comprise a significant component of our research and development, and selling, general and administrative expense categories. We allocate expenses associated with our facilities and information technology costs between these two categories, primarily based on the nature of each cost.

Current wording

We generally classify our operating expenses into cost of product revenue, research and development, and selling, general and administrative expenses. Personnel costs, including salaries, benefits, bonuses, and stock-based compensation expense comprise a significant component of our research and development, and selling, general and administrative expense categories. We allocate expenses associated with our facilities and information technology costs between these two categories, primarily based on the nature of each cost.

Previous wording

We have only one approved product, ANKTIVA, for which we received approval from the FDA on April 22, 2024. There can be no assurance that our other product candidates will be approved for commercial sale by the FDA in the near term, if ever. We do not expect any of our other product candidates to be commercially available for the foreseeable future, if ever.

Current wording

We have only one approved product, ANKTIVA, for which we received approval from the FDA on April 22, 2024. We began commercial distribution of our approved product in May 2024. There can be no assurance that our other product candidates will be approved for commercial sale by the FDA in the near term, if ever. We do not expect any of our other product candidates to be commercially available for the foreseeable future, if ever.

Previous wording

Other expense, net consists primarily of interest and investment income, interest expense (including amortization of debt discounts), unrealized gains and losses from investments in equity securities and equity-method investments, changes in fair value of warrants, derivative liabilities, and a convertible note, realized gains and losses on debt and equity securities, and gains and losses on foreign currency transactions.

Current wording

Other income (expense), net consists primarily of interest and investment income, interest expense (including amortization of debt discounts), unrealized gains and losses from investments in equity securities and equity-method investments, changes in fair value of warrants, derivative liabilities, and a convertible note, realized gains and losses on debt and equity securities, and gains and losses on foreign currency transactions.

Previous wording

Research and development expense decreased $25.9 million during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The following table summarizes our research and development expenses during the three months ended March 31, 2024 and 2023, together with the changes in those items (in thousands):

Current wording

Research and development expense decreased $2.0 million during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The following table summarizes our research and development expenses during the three months ended June 30, 2024 and 2023, together with the changes in those items (in thousands):

Previous wording

Research and development expense decreased $25.9 million primarily attributable to the following:

Current wording

Research and development expense decreased $2.0 million primarily attributable to the following:

Previous wording

•a $24.3 million decrease in external research and development expenses, primarily due to a reduction in CMO fees and drug materials purchased and used in manufacturing, a reduction in regulatory and compliance costs associated with the BLA submission of our approved product, as well as a reduction in clinical trial activities;

Current wording

•a $2.0 million decrease in external research and development expenses, primarily due to a reduction in CMO fees and drug materials purchased and used in manufacturing, partially offset by higher regulatory costs associated with the BLA submission of our approved product, as well as higher clinical trial activities;

Previous wording

•a $0.2 million decrease in equipment, depreciation, and facility costs, primarily due to reductions in services at non-manufacturing facilities, and fewer qualification and certification costs incurred by our manufacturing facilities, partially offset by higher purchases of IT equipment and software licenses; and

Current wording

•a $0.1 million decrease in equipment, depreciation, and facility costs, primarily due to reductions in services at non-manufacturing facilities; partially offset by

Previous wording

•a $1.0 million decrease in other research and development costs, primarily due to reductions in laboratory and test supplies and material supplies used for internal manufacturing, and reductions in distribution costs, partially offset by increased costs related to research and development licenses, and fewer R&D activities and costs allocated to a joint venture.

Current wording

•a $0.2 million increase in other research and development costs, primarily due to fewer R&D activities and costs allocated to a joint venture, partially offset by reductions in laboratory and test supplies and material supplies used for internal manufacturing.

Previous wording

Selling, general and administrative expense increased $9.2 million during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The increase in selling, general and administrative expense was primarily driven by a $8.3 million increase in legal expenses due to higher defense costs and increased general legal services, an increase of $2.9 million in consulting costs associated with commercial readiness activities, and an increase of $0.4 million in professional fees associated with accounting services performed in connection with the Oberland transaction, partially offset by a $2.4 million decrease in personnel costs driven mainly by a decrease in stock-based compensation expense.

Current wording

Selling, general and administrative expense increased $17.2 million during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The increase in selling, general and administrative expense was primarily driven by a$12.9 million increase in legal expenses due to higher defense costs and increased general legal services, an increase of$4.2 million in consulting costs, primarily associated with commercial readiness activities, an increase of$0.8 million in marketing and conference costs, and an increase of$0.3 million in license fees, partially offset by a$1.0 million decrease in stock-based compensation expense.

Previous wording

Other expense, net increased $33.9 million during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. Theincrease in other expense, net was primarily driven by an increase of $29.3 million from fluctuations in the fair value of warrant liabilities, an increase of $2.7 million from fluctuations in the fair value of derivative liabilities, and an increase of $8.0 million from higher interest expense related to the royalty interest liability. The increases in expenses were offset by a $2.4 million increase in interest and investment income resulting from accretion income and unrealized gains on our marketable equity securities, as well as a decrease of $2.3 million in loss on equity method investment, a reduction of $0.3 million in interest expense, and a decrease of $1.1 million in other expenses.

Current wording

Other expense, net decreased $17.8 million during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. Thedecrease in other expense, net was primarily driven by adecrease of$21.2 million due to the change in fair value of derivative liabilities, adecrease of$10.7 million due to the change in fair value of a related-party convertible note and loss on equity method investment recorded during the prior period, adecrease of$2.4 million in interest expense, and a$2.0 million increase in interest and investment income primarily resulting from accretion income on our marketable debt securities. The decrease in other expense, net was partially offset by anincrease of$9.3 million due to the change in fair value of warrant liabilities and anincrease of$9.2 million from interest expense related to the revenue interest liability.

Previous wording

Revenue decreased $0.3 million during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, mainly due to a decline in grant revenue.

Current wording

Other revenues decreased $0.3 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023 as a result of a decline in grant revenue.

Previous wording

We expect our research and development expenses to increase significantly for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates and conducting our ongoing and planned clinical trials.

Current wording

We expect our research and development expenses to increase significantly for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates and conduct our ongoing and planned clinical trials.

Previous wording

Since our inception, we have funded our operations primarily through proceeds from the issuance of related-party promissory notes and sales of our common stock under the ATM and our shelf registration statement, and through registered direct offerings.

Current wording

From inception through June 30, 2024, we have funded our operations primarily through proceeds from the issuance of related-party promissory notes, sales of our common stock, our shelf registration statements and through RDOs, and a RIPA financing.

Previous wording

As of March 31, 2024, we had cash and cash equivalents, and marketable securities of $170.5 million compared to $267.4 million as of December 31, 2023. We have typically invested our cash in a variety of financial instruments and classified these investments as available-for-sale. However, after our entry into the RIPA we can no longer invest our excess funds in corporate or European bonds. Certain of our investments are subject to credit, liquidity, market, and interest-rate risks. The general condition of the financial markets and the economy may increase those risks and may affect the value and liquidity of investments and restrict our ability to access the capital markets.

Current wording

As of June 30, 2024, we had cash and cash equivalents, and marketable securities of $218.0 million compared to $267.4 million as of December 31, 2023. We have typically invested our cash in a variety of financial instruments and classified these investments as available-for-sale. However, after our entry into the RIPA we can no longer invest our excess funds in corporate or European bonds. Certain of our investments are subject to credit, liquidity, market, and interest-rate risks. The general condition of the financial markets and the economy may increase those risks and may affect the value and liquidity of investments and restrict our ability to access the capital markets.

Previous wording

As of March 31, 2024, we had $208.8 million available for future stock issuances under the ATM. In April 2024, we filed a shelf registration statement and associated prospectus that increased the amount available under the ATM to $300.8 million. See “Subsequent Events”below for more information.

Current wording

In April 2024, we filed a shelf registration statement and associated prospectus that increased the amount available under the ATM to $300.8 million. As of June 30, 2024, we had $296.5 million available for future stock issuances under the ATM.

Previous wording

During February 2023, we filed a $750.0 million shelf registration statement with the SEC on Form S-3 for the offering and sale of equity and equity-linked securities, including common stock, preferred stock, debt securities, depositary shares, warrants to purchase common stock, preferred stock or debt securities, subscription rights, purchase contracts, and units. As of March 31, 2024, we had $565.6 million available for use under the shelf. This available shelf is in addition to the ATM.

Current wording

During February 2023, we filed a $750.0 million shelf registration statement with the SEC on Form S-3 for the offering and sale of equity and equity-linked securities, including common stock, preferred stock, debt securities, depositary shares, warrants to purchase common stock, preferred stock or debt securities, subscription rights, purchase contracts, and units. As of June 30, 2024, we had $565.6 million available for use under the shelf.

Previous wording

During the three months ended March 31, 2024, 4,284,648 of the July 2023 Warrants were exercised from which we received proceeds of $14.1 million. As of March 31, 2024, a total of 33,448,172 warrants remained outstanding at exercise prices ranging from $3.2946 per share to $6.60 per share.

Current wording

During the six months ended June 30, 2024, 17,502,491 of the February and July 2023 Warrants were exercised from which we received proceeds of $57.7 million. As of June 30, 2024, a total of 20,230,329 warrants remained outstanding at exercise prices ranging from $3.2946 per share to $6.60 per share.

Previous wording

•From March 19, 2024 through the date of this Quarterly Report, institutional holders exercised a total of 16,217,843 warrants pursuant to the February and July 2023 Warrant agreements at an exercise price of $3.2946 per share resulting in the issuance of 16,217,843 shares of the company’s common stock for proceeds totaling $53.4 million.

Current wording

Subsequent to June 30, 2024, institutional holders exercised a total of 4,740,249 warrants pursuant to the February 2023 Warrant agreement at an exercise price of $3.2946 per share resulting in the issuance of 4,740,249 shares of the company’s common stock for proceeds totaling $15.6 million. As of August 12, 2024, a total of 2,814,523 warrants remain outstanding under the February 2023 Warrant agreement. See“Subsequent Events” below for more information.

Previous wording

On December 29, 2023, we entered into the RIPA with Infinity and Oberland under which Oberland may purchase Revenue Interests from us in exchange for a $100.0 million Second Payment upon satisfaction of certain conditions specified in the RIPA, including the receipt of approval by the FDA of our BLA for ANKTIVA on or before June 30, 2024. Now that we have received such approval from the FDA, we have requested and expect to receive the $100.0 million Second Payment from Oberland in mid-May 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. See Note 9, Revenue Interest Purchase Agreement, of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for more information.

Current wording

As consideration for the aforementioned payments, Oberland has the right to receive quarterly Revenue Interest Payments from us based on, among other things, a certain percentage of our net sales during such quarter, which are tiered payments initially ranging from 3.00% to 7.00% (now after funding of the Second Payment, 4.50% to 10.00%) of the company’s worldwide net sales, excluding those in China. See Note 10, Revenue Interest Purchase Agreement, of the “Notes to Unaudited Condensed Consolidated Financial Statements” that appears in Item 1. “Financial Statements” of this Quarterly Report for more information.

Previous wording

On December 29, 2023 and in connection with the RIPA, we entered into an SPOA with Oberland. Under this agreement, Oberland has an option to purchase up to $10.0 million of our common stock, at a price per share to be determined by reference to the 30-day trailing volume weighted-average price of our common stock, calculated from the date of exercise. The option is exercisable by Oberland at any time until the earliest of (i) December 29, 2028, (ii) a change of control of the company, or (iii) a sale of substantially all of the company’s assets. Among other limitations, the option may only be exercised to the extent that the common stock issuable pursuant to such exercise would not exceed 19.9% of the common stock outstanding immediately after giving effect to such exercise.

Current wording

On December 29, 2023 and in connection with the RIPA, we entered into an SPOA with Oberland. Under this agreement, Oberland had an option to purchase up to $10.0 million of our common stock, at a price per share to be determined by reference to the 30-day trailing volume weighted-average price of our common stock, calculated from the date of exercise. The option is exercisable by Oberland at any time until the earliest of (i) December 29, 2028, (ii) a change of control of the company, or (iii) a sale of substantially all of the company’s assets. Among other limitations, the option may only be exercised to the extent that the common stock issuable pursuant to such exercise would not exceed 19.9% of the common stock outstanding immediately after giving effect to such exercise.

Previous wording

Pursuant to the SPOA, in April 2024 Oberland exercised its option to purchase 858,990 shares of our common stock at an exercise price of $5.8208 per share generating proceeds of approximately $5.0 million. Following such exercise, approximately $5.0 million remains available for future exercise under the SPOA.

Current wording

Pursuant to the SPOA, in April 2024 Oberland exercised part of their option and purchased 858,990 shares of our common stock at an exercise price of $5.8208 per share generating net proceeds of approximately $4.9 million. Following such exercise, approximately $5.0 million remains available for future exercise under the SPOA as of June 30, 2024.

Previous wording

•On December 29, 2023, we entered into the RIPA with Infinity and Oberland. Oberland has the right to receive quarterly Revenue Interest Payments from us based on, among other things, our worldwide net sales, excluding those in China, which are tiered payments initially ranging from 3.00% to 7.00% (or after funding of the Second Payment,4.50% to 10.00%), subject to increase or decrease, following December 31, 2029 (the Test Date)depending onwhether our aggregate payments made to Oberland as of the Test Date have met or exceeded the Cumulative Purchaser Payments. In addition, if our aggregate payments made as of the Test Date to Oberland do not equal or exceed the amount of the Cumulative Purchaser Payments as of such date, then we are obligated to make a one-time True-Up Payment to Oberland in an amount equal to 100% of the Cumulative Purchaser Payments as of the Test Date, less the aggregate amount of our previous payments to Oberland as of the Test Date. See Note 9, Revenue Interest Purchase Agreement, of the “Notes to Unaudited Condensed Consolidated Financial Statements”that appears in Item 1. “Financial Statements” of this Quarterly Report for more information regarding the RIPA.

Current wording

•On December 29, 2023, we entered into the RIPA with Infinity and Oberland. Oberland has the right to receive quarterly Revenue Interest Payments from us based on, among other things, our worldwide net sales, excluding those in China, which are tiered payments initially ranging from 3.00% to 7.00% (now after funding of the Second Payment,4.50% to 10.00%), subject to increase or decrease, following December 31, 2029 (the Test Date)depending onwhether our aggregate payments made to Oberland as of the Test Date have met or exceeded the Cumulative Purchaser Payments. In addition, if our aggregate payments made as of the Test Date to Oberland do not equal or exceed the amount of the Cumulative Purchaser Payments as of such date, then we are obligated to make a one-time True-Up Payment to Oberland in an amount equal to 100% of the Cumulative Purchaser Payments as of the Test Date, less the aggregate amount of our previous payments to Oberland as of the Test Date. See Note 10, Revenue Interest Purchase Agreement, of the “Notes to Unaudited Condensed Consolidated Financial Statements”that appears in Item 1. “Financial Statements” of this Quarterly Report for more information regarding the RIPA.

Previous wording

•In connection with our acquisition of VivaBioCell, we are obligated to pay the former owners approximately $2.2 million of contingent consideration upon the achievement of a regulatory milestone relating to the GMP-in-a-Box technology.

Current wording

•In connection with our acquisition of VivaBioCell, we are obligated to pay the former owners approximately $2.1 million of contingent consideration upon the achievement of a regulatory milestone relating to the GMP-in-a-Box technology.

Previous wording

During the three months ended March 31, 2024, net cash used in operating activities of $107.0 million consisted of a net loss of $134.1 million and $3.9 million of cash used in net working capital, partially offset by $31.0 million in adjustments for non-cash items. The changes in net working capital consisted primarily of decreases of $8.9 million in accrued expenses and other liabilities, $0.9 million in operating lease liabilities and an increase of $0.1 million with related parties partially offset by an increase of $4.3 million in accounts payable, a decrease of $1.6 million in prepaid and other current assets, and a decrease of $0.1 million in other assets. Adjustments for non-cash items primarily consisted of $8.3 million in stock-based compensation expense, $7.9 million in non-cash interest primarily related to the revenue interest liability and related-party promissory notes, $5.5 million in amortization of related-party note discounts, $4.6 million in depreciation and amortization expense, a $2.7 million change in fair value of derivative liabilities, a $1.8 million change in the fair value of warrant liabilities and $1.3 million in non-cash lease expense related to operating lease right‑of‑use assets and $0.1 million of other non-cash items, reduced by $0.7 million in unrealized gains on equity securities driven by an increase in the value of our investments, and $0.5 million of accretion of discounts, on marketable debt securities.

Current wording

During the six months ended June 30, 2024, net cash used in operating activities of $207.3 million consisted of a net loss of $268.7 million, partially offset by $59.9 million in adjustments for non-cash items and $1.5 million of cash provided by net working capital. Adjustments for non-cash items primarily consisted of a $21.1 million change in the fair value of warrant liabilities, $17.9 million in stock-based compensation expense, $17.1 million in non-cash interest primarily related to the revenue interest liability and related-party promissory notes, $11.4 million in amortization of related-party note discounts, $9.0 million in depreciation and amortization expense, $2.7 million in non-cash lease expense related to operating lease right‑of‑use assets, and $0.1 million in other non-cash items, reduced by an $18.5 million change in fair value of derivative liabilities and $0.9 million of accretion of discounts on marketable debt securities. The changes in net working capital consisted primarily of an increase of $9.0 million in accounts payable, a decrease of $3.1 million in prepaid and other current assets and a decrease of $0.2 million in other assets, partially offset by decreases of $5.6 million in accrued expenses and other liabilities and $2.4 million in operating lease liabilities, an increase of $1.8 million in inventories and an increase of $1.0 million in accounts receivable, net.

Previous wording

During the three months ended March 31, 2023, net cash used in operating activities of $84.3 million consisted of a net loss of $116.6 million, partially offset by $27.7 million of cash provided by net working capital and $4.6 million in adjustments for non-cash items. The changes in net working capital consisted primarily of an increase of $18.6 million in accrued expenses and other liabilities, a decrease of $9.7 million in prepaid and other current assets, an increase of $0.7 million in accounts payable, and a decrease of $0.3 million in other assets, partially offset by decreases of $1.5 million in operating lease liabilities, and $0.1 million with related parties. Adjustments for non-cash items primarily consisted of $11.5 million in amortization of related-party notes discounts, $10.9 million in stock-based compensation expense, $4.7 million in depreciation and amortization expense, $2.5 million in non-cash interest, $1.6 million in non-cash lease expense related to operating lease right-of-use assets, $1.0 million in transaction costs allocated to warrant liabilities, and $0.1 million of other, reduced by a $27.6 million change in fair value of warrant liabilities, and $0.1 million in unrealized gains on equity securities driven by an increase in the value of our investments.

Current wording

During the six months ended June 30, 2023, net cash used in operating activities of $164.1 million consisted of a net loss of $254.8 million, partially offset by $54.0 million in adjustments for non-cash items and $36.7 million of cash provided by net working capital. Adjustments for non-cash items primarily consisted of $23.8 million in amortization of related-party note discounts, $21.9 million in stock-based compensation expense, $9.4 million in depreciation and amortization expense, a $6.8 million change in the fair value of a related-party convertible note, $5.0 million in non-cash interest and debt discount amortization primarily related to related-party promissory notes, $3.2 million in non-cash lease expense related to operating lease right‑of‑use assets, $1.0 million in transaction costs allocable to warrant liabilities, $0.3 million in unrealized losses on equity securities driven by a decrease in the value of our investments, and $0.1 million of other, reduced by a $17.5 million change in the fair value of warrant liabilities. The changes in net working capital consisted primarily of an increase of $27.9 million in accrued expenses and other liabilities, a decrease of $11.2 million in prepaid and other current assets, and a decrease of $1.0 million in other assets, partially offset by decreases of $1.3 million in operating lease liabilities, $1.2 million with related parties, and $0.9 million in accounts payable.

Previous wording

During the three months ended March 31, 2024, net cash used in investing activities was $35.6 million, which included cash outflows of $48.4 million of purchases of marketable debt securities, and $1.2 million of purchases of property, plant and equipment, partially offset by proceeds of $14.0 million from maturities and sale of marketable debt securities.

Current wording

During the six months ended June 30, 2024, net cash used in investing activities was $87.1 million, which included cash outflows of $134.1 million of purchases of marketable debt securities, and $2.0 million of purchases of property, plant and equipment, partially offset by proceeds of $49.0 million from maturities and sales of marketable debt securities.

Previous wording

During the three months ended March 31, 2023, net cash used in investing activities was $8.5 million, which included cash outflows of $8.4 million of purchases of property, plant and equipment (including construction in process and depreciable property acquired in the Dunkirk acquisition), and $0.2 million of purchases of marketable debt securities, partially offset by $0.1 million from maturities and sales of marketable debt and equity securities.

Current wording

During the six months ended June 30, 2023, net cash used in investing activities was $17.1 million, which included cash outflows of $17.0 million of purchases of property, plant and equipment, and $0.2 million of purchases of marketable debt securities, partially offset by $0.1 million from sales of marketable debt securities.

Previous wording

Our investments in property, plant and equipment are primarily related to acquisitions of equipment that will be used for the manufacturing of our product candidates and expenditures related to the build out of our manufacturing facilities. We expect to accelerate our capital spending as we scale our GMP manufacturing capabilities, which will require significant capital for the foreseeable future.

Current wording

Our investments in property, plant and equipment are primarily related to acquisitions of equipment that will be used for the manufacturing of our approved product and product candidates and expenditures related to the build out of our manufacturing facilities. We expect to accelerate our capital spending as we scale our GMP manufacturing capabilities, which will require significant capital for the foreseeable future.

Previous wording

During the three months ended March 31, 2024, net cash provided by financing activities was $10.2 million, which consisted of $14.1 million of proceeds from the exercise of warrants, partially offset by $3.9 million related to net share settlement of vested RSUs for payment of payroll tax withholding.

Current wording

During the six months ended June 30, 2024, net cash provided by financing activities was $159.1 million, which consisted of $96.9 million in net proceeds from payments received pursuant to the RIPA, $57.7 million of proceeds from the exercise of warrants, $4.9 million in net proceeds from the partial exercise of the Oberland stock option, $3.6 million in net proceeds from equity offerings, and $0.4 million in proceeds from the exercise of stock options, partially offset by $4.4 million related to net share settlement of vested RSUs for payment of payroll tax withholding.