ImmunityBio Inc

Previous wording

•the timing or likelihood of regulatory filings or other actions and related regulatory authority responses, including any planned IND, BLA or NDA filings or pursuit of accelerated regulatory approval pathways or orphan drug status and Breakthrough Therapy designations;

Current wording

•the timing or likelihood of regulatory filings or other actions and related regulatory authority responses in the U.S. and jurisdictions outside of the U.S., including any planned IND, BLA, NDA or MAA or similar filings or pursuit of accelerated regulatory approval pathways or orphan drug status and Breakthrough Therapy designations;

Previous 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.

Current wording

As of September 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 17 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

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.

Current wording

We have incurred net losses in each year since our inception and, as of September 30, 2024, we had an accumulated deficit of $3.3 billion. During the nine months ended September 30, 2024 and 2023, net losses attributable to ImmunityBio common stockholders were $354.4 million and $349.8 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 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.

Current wording

As of September 30, 2024, we had 672 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

Our Executive Chairman, Global Chief Scientific and Medical Officer and principal stockholder, founded and has a controlling interest in NantWorks, which is a collection of companies in the healthcare and technology space. We have entered into arrangements with NantWorks, and certain affiliates of NantWorks. Affiliates of NantWorks are also affiliates of the company due to the common control by and/or common ownership interest of our Executive Chairman and Global Chief Scientific and Medical Officer.

Current wording

Our Executive Chairman and Global Chief Scientific and Medical Officer founded and has a controlling interest in NantWorks, which is a collection of companies in the healthcare and technology space. We have entered into arrangements with NantWorks, and certain affiliates of NantWorks. Affiliates of NantWorks are also affiliates of the company due to the common control by and/or common ownership interest of our Founder, Executive Chairman and Global Chief Scientific and Medical Officer.

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 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.

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 nine months ended September 30, 2024 and 2023, we incurred $2.1 million and $1.9 million, respectively, inresearch and development expense, on the condensed consolidated statements of operations related to clinical trial and transition services provided by the Clinic.

Previous 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.

Current wording

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

Cost of product revenue consists primarily of third-party manufacturing costs, distribution, and overhead costs related to ANKTIVA sales. Cost of 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 our products prior to regulatory approval, all of the costs of producing ANKTIVA sold to date were expensed inresearch and development expense, on the condensed consolidated statement of operations prior to the FDA approval of ANKTIVA and therefore are not reflected in the cost of revenue.

Current wording

Cost of product revenue consists primarily of third-party manufacturing costs, distribution, and overhead costs related to ANKTIVA sales. 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. All costs associated with the production of ANKTIVA prior to receiving regulatory approval were expensed inresearch and development expense, on the condensed consolidated statement of operations in the period incurred and therefore are not reflected in cost of product 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 expanding our product into new indications and developing our other 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 expanding our product into new indications and markets, developing our other product candidates, and conducting our ongoing and planned clinical trials.

Previous 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.

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 in the foreseeable future, if ever.

Previous wording

Product revenue, net increased $1.0 million during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, due to sales of ANKTIVA, which was approved during the quarter.

Current wording

Product revenue, net increased $6.0 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, due to sales of ANKTIVA, which was approved in April 2024.

Previous wording

Other revenues increased nominally during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, driven by higher consumable sales over the prior period.

Current wording

Other revenues increased $0.1 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, driven by higher bioreactor and related consumable product sales over the prior period.

Previous wording

We did not report cost of revenue during the three months ended June 30, 2024. Cost of revenue consists primarily of third-party manufacturing, distribution and overhead costs. All costs of producing ANKTIVA sold to date was expensed as a component of research and development expense prior to the FDA approval of ANKTIVA and therefore it is not reflected in the cost of revenue. As a result, our initial product gross margin is higher as our pre-launch inventory costs are not included in cost of revenue. We expect the cost of revenue for ANKTIVA to increase in relation to product revenues as we deplete these inventories.

Current wording

We did not report cost of product revenue during the three months ended September 30, 2024. Cost of product revenue consists primarily of third-party manufacturing, distribution and overhead costs. All costs associated with the production of ANKTIVA prior to receiving regulatory approval were expensed inresearch and development expense, on the condensed consolidated statement of operations in the period incurred and therefore are not reflected in cost of product revenue. As a result, our initial product gross margin is higher as our pre-launch inventory costs are not included in the cost of product revenue. We expect the cost of product revenue for ANKTIVA to increase in relation to product revenues as we deplete these inventories.

Previous 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):

Current wording

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

Previous wording

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

Current wording

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

Previous 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;

Current wording

•a $4.5 million decrease in external research and development expenses, primarily due to a reduction in outside services, lower CMO fees and fewer drug materials purchased and used in manufacturing, partially offset by higher clinical trial activities; offset by

Previous wording

•a $0.1 million decrease in personnel-related costs, primarily due to reductions in stock-based compensation expense and shared service costs, partially offset by higher recruiting and employee training costs; and

Current wording

•a $4.3 million increase in personnel-related costs, primarily due to an increase in bonus and termination benefits, partially offset by lower stock-based compensation expense and shared service costs compared to the prior period; and

Previous 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.

Current wording

Selling, general and administrative expense increased $4.1 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase in selling, general and administrative expense was primarily driven by a$5.3 million increase in salary and benefits expenses, primarily due to the reversal of accrued discretionary bonuses for 2022 not paid and a reduction in headcount during the three months ended September 30, 2023, an increase of$4.9 million in consulting costs, primarily associated with commercial activities, an increase of $0.6 million in equipment, depreciation and facility costs, an increase of $0.5 million in recruiting fees, an increase of$0.4 million in travel expenses, and an increase of$0.3 million in license fees. The increase in selling, general and administrative expense was partially offset by a$4.3 million decrease in legal expenses and a$3.6 million decrease in stock-based compensation expense.

Previous 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.

Current wording

Other expense, net decreased $10.0 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. Thedecrease in other expense, net was primarily driven by adecrease of$17.1 million due to the change in fair value of warrant liabilities, adecrease of$5.7 million in interest expense, a$1.8 million increase in interest and investment income primarily resulting from accretion income on our marketable debt securities, adecrease of$1.6 million due to the change in fair value of derivative liabilities, and a$1.0 million decrease in other expenses, net. The decrease in other expense, net was partially offset by anincrease of$10.9 million from interest expense related to the revenue interest liability, and anincrease of$6.3 million due to the change in fair value of a related-party convertible note and a loss in an equity method investment recorded during the prior period.

Previous wording

Product revenue, net increased $1.0 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The increase was driven by sales of ANKTIVA after FDA approval in April.

Current wording

Product revenue, net increased $6.9 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase was driven by sales of ANKTIVA after FDA approval in April 2024.

Previous 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.

Current wording

Other revenues decreased $0.2 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023 as a result of a decline in grant revenue.

Previous wording

We did not report cost of revenue during the six months ended June 30, 2024. Cost of revenue consists primarily of third-party manufacturing, distribution and overhead costs. All costs of producing ANKTIVA sold to date was expensed as a component of research and development expense prior to the FDA approval of ANKTIVA and therefore it is not reflected in the cost of revenue. As a result, our initial product gross margin is higher as our pre-launch inventory costs are not included in cost of revenue. We expect the cost of revenue for ANKTIVA to increase in relation to product revenues as we deplete these inventories.

Current wording

We did not report cost of product revenue during the nine months ended September 30, 2024. Cost of product revenue consists primarily of third-party manufacturing, distribution and overhead costs. All costs associated with the production of ANKTIVA prior to receiving regulatory approval were expensed inresearch and development expense, on the condensed consolidated statement of operations in the period incurred and therefore are not reflected in cost of product revenue. As a result, our initial product gross margin is higher as our pre-launch inventory costs are not included in the cost of product revenue. We expect the cost of product revenue for ANKTIVA to increase in relation to product revenues as we deplete these inventories.

Previous wording

Research and development expense decreased $28.0 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The following table summarizes our research and development expenses during the six months ended June 30, 2024 and 2023, together with the changes in those items (in thousands):

Current wording

Research and development expense decreased $25.9 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The following table summarizes our research and development expenses during the nine months ended September 30, 2024 and 2023, together with the changes in those items (in thousands):

Previous wording

Research and development expense decreased $28.0 million primarily attributable to the following:

Current wording

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

Previous wording

•a $26.4 million decrease in external research and development expenses that was primarily due to a reduction in CMO fees and drug materials purchased and used in manufacturing, a reduction in clinical trial costs, and a reduction in outside services costs;

Current wording

•a $30.8 million decrease in external research and development expenses that was primarily due to a reduction in CMO fees and drug materials purchased and used in manufacturing, a reduction in clinical trial costs, and a reduction in outside services costs; partially offset by

Previous wording

•a $0.3 million decrease in equipment, depreciation, and facility costs that was primarily due to a decrease in depreciation expense due to fully depreciated assets, partially offset by increased equipment qualification and repairs expense; and

Current wording

•a $0.3 million decrease in equipment, depreciation, and facility costs that was primarily due to a decrease in lease expense due to the termination of a lease used for R&D in the prior period and a decrease in depreciation expense due to fully depreciated assets, partially offset by increased facility costs; and partially offset by

Previous 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.

Current wording

•a $1.4 million increase in other research and development costs, primarily attributable to no costs allocated to a joint venture and higher research agreements cost due to new agreements, partially offset by lower manufacturing cost due to decreased production activities.

Previous wording

Selling, general and administrative expense increased $26.4 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The increase in selling, general and administrative expense was primarily driven by an increase of$21.2 million in legal expenses, driven by higher defense costs and increased general legal services, an increase of$7.2 million in consulting costs, primarily associated with commercial readiness activities, a$1.1 million increase in salary and benefits expenses, and a $0.6 million increase in license fees, partially offset by a$3.7 million reduction in stock-based compensation expense.

Current wording

Selling, general and administrative expense increased $30.5 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase in selling, general and administrative expense was primarily driven by an increase of$16.9 million in legal expenses, driven by higher defense costs and increased general legal services, an increase of$12.2 million in consulting costs, primarily associated with commercial readiness activities, a$7.0 million increase in salary and benefits expenses primarily due to the reversal of accrued discretionary bonuses for 2022 not paid and a reduction in headcount during the nine months ended September 30, 2023, a $0.9 million increase in license fees, and a $0.7 million increase in marketing expenses, partially offset by a$7.2 million reduction in stock-based compensation expense.

Previous wording

Other expense, net increased $16.1 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The increase in other expense, net was primarily driven by an increase in expense of $38.6 million due to the change in the fair value of warrant liabilities and an increase of $17.2 million from interest expense related to the revenue interest liability. These increases were partially offset by a decrease of$18.4 million due to the change in fair value of the derivative liabilities, a decrease of$13.1 million due to the change in fair value of related-party convertible notes and loss on equity method investments recorded during the prior period,$4.4 million increase in interest and investment income, net, a decrease of$2.8 million in interest expense (including amounts with related parties), and a decrease of$1.0 million in other expense, net (including amounts with related parties).

Current wording

Other expense, net increased $6.1 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase in other expense, net was primarily driven by an increase of $28.2 million of interest expense related to the revenue interest liability, an increase of $21.6 million due to the change in fair value of warrant liabilities, and a $0.7 million decrease from a gainin the fair value of a related-party convertible note recorded during the prior period. These increases were partially offset by a decrease of$20.1 million due to the change in fair value of derivative liabilities, a decrease of$8.5 million in interest expense (including amounts with related parties), a decrease of $7.5 million due to loss on equity method investments recorded during the prior period, an increase of$6.1 million in interest and investment income, net, and a decrease of$2.2 million in other expense, net (including amounts with related parties).

Previous 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.

Current wording

As of September 30, 2024, we had cash and cash equivalents, and marketable securities of $130.4 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

During April 2024, we filed a shelf registration statement with the SEC on Form S-3 pursuant to which we may, from time to time, sell an indeterminate amount of our common stock, preferred stock, debt securities, depositary shares, warrants, subscription rights, purchase contracts, or units. On May 2, 2024, the registration statement was declared effective by the SEC.

Current wording

During April 2024, we filed a shelf registration statement with the SEC on Form S-3 pursuant to which we may, from time to time, sell an indeterminate amount of our common stock, preferred stock, debt securities, depositary shares, warrants, subscription rights, purchase contracts, or units, and an associated prospectus related to the ATM.

Previous 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.

Current wording

During the nine months ended September 30, 2024, 22,242,740 of the February and July 2023 Warrants were exercised from which we received proceeds of $73.3 million. As of September 30, 2024, a total of 15,490,080 warrants remained outstanding at exercise prices ranging from $3.2946 per share to $6.60 per share.

Previous 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.

Current wording

During the three months ended September 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.

Previous 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.

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 ranging from 4.5% to 10.0% (before funding of the Second Payment, 3.0% to 7.0%) 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, 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.

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 ranging from 4.5% to 10.0% (before funding of the Second Payment, 3.0% to 7.0%), 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 $2.1 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 $2.2 million of contingent consideration upon the achievement of a regulatory milestone relating to the GMP-in-a-Box technology.

Previous 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.

Current wording

During the nine months ended September 30, 2024, net cash used in operating activities of $306.1 million consisted of a net loss of $354.5 million and $8.5 million of cash used in net working capital, partially offset by $56.9 million in adjustments for non-cash items. The changes in net working capital consisted primarily of an increase of $4.2 million in accounts receivable, net, a decrease of $3.9 million in operating lease liabilities, an increase of $2.0 million in inventories and an increase of $0.1 million in other assets, partially offset by an increase of $0.7 million in accounts payable and accrued expenses and other liabilities, an increase of $0.6 million with related parties, and a decrease of $0.4 million in prepaid expenses and other current assets. Adjustments for non-cash items primarily consisted of $27.7 million of non-cash interest expense related to the revenue interest liability, $25.4 million in stock-based compensation expense, $17.6 million in amortization of related-party note discounts, $13.4 million in depreciation and amortization expense, $4.1 million in non-cash lease expense related to operating lease right‑of‑use assets, and $0.5 million in unrealized losses on equity securities driven by a decrease in the value of our investments, reduced by a $20.1 million change in the fair value of derivative liabilities, a $10.2 million change in the fair value of warrant liabilities, and $1.5 million of accretion of discounts on marketable debt securities.

Previous 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.

Current wording

During the nine months ended September 30, 2023, net cash used in operating activities of $251.5 million consisted of a net loss of $350.4 million, partially offset by $69.2 million in adjustments for non-cash items and $29.7 million of cash provided by net working capital. Adjustments for non-cash items primarily consisted of $36.4 million in stock-based compensation expense, $35.3 million in amortization of related-party note discounts, $13.9 million in depreciation and amortization expense, $9.0 million in non-cash interest primarily related to related-party promissory notes, $4.8 million in non-cash lease expense related to operating lease right‑of‑use assets, $2.0 million in transaction costs allocable to warrant liabilities, and $0.9 million in unrealized losses on equity securities driven by a decrease in the value of our investments, reduced by a $31.8 million change in the fair value of warrant liabilities, a $0.7 million change in the fair value of a related-party convertible note, and $0.6 million in other non-cash items. The changes in net working capital consisted primarily of an increase of $26.2 million in accrued expenses and other liabilities, a decrease of $9.5 million in prepaid and other current assets, and a decrease of $1.3 million in other assets, partially offset by decreases of $3.6 million in accounts payable, $2.4 million in operating lease liabilities, and $1.3 million with related parties.

Previous 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.

Current wording

During the nine months ended September 30, 2024, net cash used in investing activities was $22.1 million, which included cash outflows of $134.1 million of purchases of marketable debt securities, $4.8 million of purchases of property, plant and equipment, $1.0 million used for the acquisition of a business, net of transaction costs, and $0.7 million cash paid for other investments, partially offset by proceeds of $118.5 million from maturities and sales of marketable debt securities.

Previous 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.

Current wording

During the nine months ended September 30, 2023, net cash used in investing activities was $32.7 million, which included cash outflows of $22.6 million of purchases of property, plant and equipment, and $10.2 million of purchases of marketable debt securities, partially offset by proceeds of $0.1 million from maturities and sales of marketable debt and equity securities.