PART I [Business](index=4&type=section&id=Item%201.%20Business) ImmunityBio is a clinical-stage biotechnology company developing therapies and vaccines for cancers and infectious diseases [Our Business and Strategy](index=7&type=section&id=Our%20Business%20and%20Strategy) The company develops therapies to defeat cancers and infectious diseases by activating both innate and adaptive immune systems - The company's core approach is to activate both the **innate (NK cells, dendritic cells) and adaptive (B and T cells) immune systems** to achieve long-term immunological memory[32](index=32&type=chunk) - Key strategic elements include advancing the approval of its lead product, **Anktiva**, and accelerating its immunotherapy platform[37](index=37&type=chunk) - The company has **17 first-in-human therapeutic agents** being studied in 26 actively recruiting clinical trials across 13 indications[35](index=35&type=chunk) [Our Next-Generation Platforms](index=10&type=section&id=Our%20Next-Generation%20Platforms) The company's business is built on five core technology platforms including antibody fusion proteins, vaccines, and NK cell therapy - **Anktiva (N-803)**, an IL-15 superagonist fusion protein, has received **Breakthrough Therapy and Fast Track designations** from the FDA for BCG-unresponsive NMIBC CIS[38](index=38&type=chunk) - The company is developing multiple vaccine technologies, including **self-amplifying RNA (saRNA)** and a **second-generation human adenovirus (hAd5) vector**[40](index=40&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) - The NK Cell Therapy platform includes off-the-shelf engineered cells like **haNK and t-haNK**, which have three modes of killing: innate, antibody-mediated, and CAR-directed[48](index=48&type=chunk)[49](index=49&type=chunk) - The DAMP Inducers platform includes **Aldoxorubicin**, designed to target immune evasion with lower cardiotoxicity than doxorubicin[53](index=53&type=chunk)[54](index=54&type=chunk) [Our Pipeline](index=16&type=section&id=Our%20Pipeline) The pipeline spans oncology and infectious diseases, led by Anktiva in bladder cancer and a T-cell based COVID-19 vaccine Anktiva Phase 2/3 NMIBC CIS Trial (QUILT 3.032) Results | Metric | Result | | :--- | :--- | | Complete Response (CR) Rate | 71% (59 of 83 patients) | | Median Duration of CR | 24.1 months | | Probability of avoiding progression & cystectomy at 24 months (in responders) | >90% | | Treatment-Related Serious Adverse Events (SAEs) | 0% | | Bladder Cancer-Specific Overall Survival at 24 months | 100% | - In a metastatic pancreatic cancer trial, the combination of PD-L1 t-haNK with Anktiva showed a median overall survival of **6.3 months**, more than doubling historical survival[49](index=49&type=chunk)[72](index=72&type=chunk) - The company's COVID-19 vaccine program focuses on a **dual-antigen (Spike + Nucleocapsid) hAd5 vector** to generate T-cell and antibody immunity[87](index=87&type=chunk)[91](index=91&type=chunk) - Multiple HIV studies are active, including a Phase 1 "HIV Cure Study" evaluating **Anktiva** after interrupting antiretroviral therapy (ART)[94](index=94&type=chunk)[95](index=95&type=chunk) [Manufacturing, Competition, and IP](index=26&type=section&id=Manufacturing,%20Competition,%20and%20IP) The company pursues a vertically integrated manufacturing strategy and faces competition from major pharmaceutical firms - The company has adopted a **vertically integrated strategy** to develop products to GMP standards, with established plants and global facility access[98](index=98&type=chunk) - In February 2022, the company acquired a leasehold interest in a **409,000 sq. ft. cGMP manufacturing facility** in Dunkirk, New York[106](index=106&type=chunk) - The company's owned patent portfolio for Anktiva includes approximately **13 issued U.S. patents and 43 foreign patents**, with expirations from 2028 to 2035[118](index=118&type=chunk) - Competition is faced from major pharmaceutical companies in areas such as **checkpoint inhibitors, cancer vaccines, and NK cell therapies**[113](index=113&type=chunk) [Collaboration and License Agreements](index=33&type=section&id=Collaboration%20and%20License%20Agreements) The company maintains several key strategic collaborations and licensing agreements to advance its pipeline and technology platforms - A **50:50 joint venture** was formed with Amyris in December 2021 to commercialize a next-generation COVID-19 RNA vaccine[133](index=133&type=chunk) - The company has an exclusive worldwide license from CytRx for aldoxorubicin, with potential milestone payments up to **$345.7 million**[136](index=136&type=chunk) - An exclusive, worldwide license was established with EnGeneIC for its **EDV nanocell technology** for COVID-19 and certain cancers[137](index=137&type=chunk) - The company licensed an RNA vaccine platform from IDRI, involving annual maintenance fees of **$5.5 million** from 2023-2030[139](index=139&type=chunk)[140](index=140&type=chunk) [Government Regulation and Human Capital](index=37&type=section&id=Government%20Regulation%20and%20Human%20Capital) The company's operations are subject to extensive regulation by the FDA and other global authorities and it employed 587 people in 2021 - The company's products are regulated by the FDA, requiring a rigorous process of **preclinical and clinical trials** before a BLA or NDA can be submitted[151](index=151&type=chunk)[153](index=153&type=chunk) - The company may seek accelerated approval pathways such as **Fast Track and Breakthrough Therapy designations** to expedite development[165](index=165&type=chunk)[167](index=167&type=chunk) - Post-approval, products are subject to ongoing FDA regulation, including **cGMP compliance** for manufacturing facilities[176](index=176&type=chunk) - As of December 31, 2021, the company had **587 employees**, with 45% in manufacturing and quality roles[217](index=217&type=chunk) [Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from operating losses, financing needs, clinical trial failures, and high insider voting control - The company has a history of operating losses, with an accumulated deficit of **$2.0 billion** as of December 31, 2021[229](index=229&type=chunk)[237](index=237&type=chunk)[247](index=247&type=chunk) - The company's Executive Chairman and his affiliates beneficially own approximately **78.7% of the company's common stock**, giving him voting control[447](index=447&type=chunk) - The company relies on **third parties and related parties** to conduct clinical trials, exposing it to risks of delays and regulatory scrutiny[232](index=232&type=chunk)[320](index=320&type=chunk)[333](index=333&type=chunk) - The company's product candidates are novel and face uncertainties regarding development, **market acceptance, and reimbursement coverage**[251](index=251&type=chunk)[257](index=257&type=chunk)[290](index=290&type=chunk) [Properties](index=114&type=section&id=Item%202.%20Properties) The company leases multiple facilities for laboratory, manufacturing, and office functions, including a new 409,000 sq. ft. plant Principal Leased Properties as of Dec 31, 2021 | Location | Approx. Rentable Square Feet | Primary Function(s) | | :--- | :--- | :--- | | El Segundo, CA | 168,570 | Laboratory - Research & Manufacturing | | Louisville, CO | 50,838 | Laboratory - Research & Manufacturing | | San Diego, CA | 44,681 | Laboratory - Research & Corporate Office | - On February 14, 2022, the company acquired a leasehold interest in a **409,000 sq. ft. cGMP pharmaceutical manufacturing facility** in Dunkirk, New York[478](index=478&type=chunk) [Legal Proceedings](index=115&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, though none are currently expected to have a material adverse effect - The company is not currently a party to any legal proceedings that management believes are likely to have a **material adverse effect** on the business[481](index=481&type=chunk) - Complaints have been filed concerning the recent merger, but the company has **not yet been served**[481](index=481&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=116&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on Nasdaq as "IBRX", it has never paid dividends, and a stock repurchase program is authorized - The company's common stock began trading under the symbol **"IBRX"** on the Nasdaq Global Select Market on March 9, 2021[485](index=485&type=chunk) - The company has **never paid cash dividends** and does not plan to in the foreseeable future[487](index=487&type=chunk) - As of December 31, 2021, **$18.3 million** remained available for share repurchases under the company's stock repurchase program[492](index=492&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=118&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company reported a net loss of $346.8 million in 2021, driven by increased R&D and SG&A expenses Results of Operations (in thousands) | | For the Year Ended December 31, | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | | **2021** | **2020** | | | | **Revenue** | $934 | $605 | $329 | 54.4% | | **Research and development** | $195,958 | $139,507 | $56,451 | 40.5% | | **Selling, general and administrative** | $135,256 | $71,318 | $63,938 | 89.7% | | **Loss from operations** | ($330,280) | ($220,880) | ($109,400) | 49.5% | | **Net loss** | ($349,848) | ($224,187) | ($125,661) | 56.1% | - The increase in R&D expense was driven by a **$32.1 million** increase in compensation and a **$6.9 million** increase in clinical trial costs[540](index=540&type=chunk) - The increase in SG&A expense was mainly due to a **$42.2 million** increase in compensation and a **$19.3 million** increase in professional services fees[542](index=542&type=chunk) - As of December 31, 2021, the company had **$317.9 million** in cash, cash equivalents, and marketable securities and noted **substantial doubt** about its ability to continue as a going concern[547](index=547&type=chunk)[563](index=563&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=138&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure relates to interest rate changes affecting its investment portfolio and variable-rate debt - The company's main market risk is **interest rate sensitivity** on its cash, investments, and a **$300.0 million variable-rate loan**[590](index=590&type=chunk)[593](index=593&type=chunk) - A hypothetical **100 basis point change** in interest rates would not have a material impact on the company's financial statements[591](index=591&type=chunk) - The company is exposed to **foreign currency exchange risk** from its subsidiary in Italy, but this exposure is not currently considered material[594](index=594&type=chunk)[595](index=595&type=chunk) [Financial Statements and Supplementary Data](index=139&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The company's 2021 financial statements show a net loss of $349.8 million and a total stockholders' deficit of $243.9 million Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | $468,910 | $221,381 | | **Total Liabilities** | $712,823 | $339,871 | | **Total Stockholders' Deficit** | ($243,913) | ($118,490) | Consolidated Statement of Operations Data (in thousands) | | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | | :--- | :--- | :--- | | **Revenue** | $934 | $605 | | **Total operating expenses** | $331,214 | $221,485 | | **Net loss** | ($349,848) | ($224,187) | Consolidated Cash Flow Data (in thousands) | | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | | :--- | :--- | :--- | | **Net cash used in operating activities** | ($274,419) | ($171,724) | | **Net cash (used in) provided by investing activities** | ($84,886) | ($19,812) | | **Net cash provided by financing activities** | $505,443 | $150,675 | [Controls and Procedures](index=203&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and the independent auditor concluded that the company's disclosure controls and internal controls were effective as of year-end 2021 - Management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2021, based on the COSO 2013 framework[888](index=888&type=chunk) - The independent auditor, Ernst & Young LLP, issued an **unqualified opinion** on the effectiveness of the company's internal control over financial reporting[889](index=889&type=chunk) - There were **no material changes** in internal control over financial reporting during the fourth quarter of 2021[890](index=890&type=chunk) PART III [Directors, Executive Officers, Corporate Governance, Compensation, Security Ownership, and Accountant Fees](index=205&type=section&id=Items%2010-14) Information regarding directors, compensation, and corporate governance is incorporated by reference from the 2022 proxy statement - Information for Items 10, 11, 12, 13, and 14 is **incorporated by reference** from the company's definitive proxy statement for the 2022 Annual Meeting of Stockholders[896](index=896&type=chunk)[897](index=897&type=chunk)[898](index=898&type=chunk)[899](index=899&type=chunk)[900](index=900&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=206&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Annual Report - All required financial statement schedules have been omitted because the information is **included in the consolidated financial statements** or notes thereto[904](index=904&type=chunk) - A comprehensive list of exhibits is provided, incorporating by reference or filing herewith documents such as the **Merger Agreement and material contracts**[905](index=905&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 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 i ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 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) Delaware 43-1979754 (State or o ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10‑Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 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) Delaware 43-1979754 (State or ...

Commission file number: 001-37507 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO NANTKWEST, INC. (Exact name of Registrant as specified in its Charter) (State or other jurisdiction of incorporation or organi ...

| --- | --- | |-------|----------------------------------------| | | | | | | | | 39th Annual JP Morgan | | | Healthcare Conference January 13, 2021 | NantKwest, Inc. & ImmunityBio, Inc. – Presented at 39th Annual JP Morgan Healthcare Conference – January 13, 2021 1 Forward-Looking Statements This presentation contains forward-looking statements relating to the proposed transaction involving NantKwest, Inc. ("NantKwest") and ImmunityBio, Inc. ("ImmunityBio"), including financial estimates and statements as t ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10‑Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 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 NANTKWEST, INC. (Exact name of Registrant as specified in its Charter) Delaware 43-1979754 (State or other jurisdicti ...

(Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10‑Q Delaware 43-1979754 (State or other jurisdiction of incorporation or organization) 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 ...

[Part I—FINANCIAL INFORMATION](index=3&type=section&id=Part%20I%E2%80%94FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents NantKwest's unaudited condensed consolidated financial statements for Q1 2020, detailing a net loss of **$18.4 million** and an accumulated deficit of **$680.6 million** [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2020, total assets decreased to **$127.0 million** from **$143.1 million**, reflecting a net loss and reduced marketable debt securities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2020 (Unaudited) | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $16,952 | $15,508 | | Marketable debt securities (current & noncurrent) | $23,263 | $37,641 | | Total current assets | $44,125 | $55,757 | | Total assets | $127,023 | $143,123 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $14,248 | $11,559 | | Total liabilities | $24,428 | $22,444 | | Accumulated deficit | $(680,574) | $(662,191) | | Total stockholders' equity | $102,595 | $120,679 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2020, the company reported minimal revenue and a net loss of **$18.4 million** ($0.19 per share), a slight increase from **$17.9 million** in Q1 2019 Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Revenue | $21 | $5 | | Research and development | $13,234 | $12,598 | | Selling, general and administrative | $5,373 | $5,742 | | Loss from operations | $(18,586) | $(18,335) | | **Net loss** | **$(18,383)** | **$(17,885)** | | Net loss per share (basic and diluted) | $(0.19) | $(0.22) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$12.6 million** for Q1 2020, offset by **$14.2 million** from investing activities, resulting in a **$1.4 million** net increase in cash Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(12,596) | $(13,078) | | Net cash provided by (used in) investing activities | $14,163 | $(19,459) | | Net cash (used in) provided by financing activities | $(123) | $39,195 | | **Net increase in cash, cash equivalents, and restricted cash** | **$1,444** | **$6,658** | | Cash, cash equivalents, and restricted cash, end of period | $17,131 | $23,658 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business, accounting policies, liquidity challenges with an accumulated deficit of **$680.6 million**, and significant related-party transactions - The company is a clinical-stage immunotherapy firm focused on using Natural Killer (NK) cells to treat cancer and viral diseases. It faces significant liquidity challenges, with an accumulated deficit of approximately **$680.6 million** and negative operating cash flow of **$12.6 million** for the quarter. Management believes existing cash and the ability to borrow from affiliates will fund operations for at least the next 12 months[30](index=30&type=chunk)[33](index=33&type=chunk)[35](index=35&type=chunk) - In January 2020, the company entered into a Cost Allocation Agreement with related party ImmunityBio to jointly conduct a Phase 2 study (QUILT 3.063) for Merkel Cell Carcinoma, combining NantKwest's haNK cells with ImmunityBio's N-803. The parties will split certain study costs equally[78](index=78&type=chunk)[79](index=79&type=chunk) - The company settled securities litigation in 2019 for **$12.0 million**, of which **$10.8 million** was funded by insurance carriers. A separate stockholder derivative action was settled for **$0.5 million**, with half funded by insurance[87](index=87&type=chunk)[89](index=89&type=chunk) - NantKwest has extensive related-party agreements, primarily with entities affiliated with its Chairman and CEO, including shared services, clinical trial, supply, and collaboration agreements[101](index=101&type=chunk)[102](index=102&type=chunk)[106](index=106&type=chunk) Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Research and development | $128 | $111 | | Selling, general and administrative | $317 | $1,240 | | **Total** | **$445** | **$1,351** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operations, focusing on NK cell immunotherapy, the COVID-19 impact, clinical updates, and a Q1 2020 net loss of **$18.4 million** [Overview and COVID-19 Impact](index=27&type=section&id=Overview%20and%20COVID-19%20Impact) NantKwest focuses on its NK cell platform, anticipating COVID-19 will likely slow clinical trial enrollment and delay commercialization - The company focuses on harnessing the innate immune system using its proprietary Natural Killer (NK) cell platform to treat cancer and viral infectious diseases[140](index=140&type=chunk) - The COVID-19 pandemic has not materially impacted Q1 2020 results, but is expected to slow future clinical trial enrollment, potentially delaying commercialization timelines and revenue generation[147](index=147&type=chunk)[149](index=149&type=chunk) - The company's most advanced platform, t-haNK, integrates innate killing, antibody-mediated killing (haNK), and CAR-directed killing (taNK) into a single product[151](index=151&type=chunk)[159](index=159&type=chunk) [Clinical and Regulatory Update](index=32&type=section&id=Clinical%20and%20Regulatory%20Update) The company received FDA clearance for the QUILT 88 Phase II study in pancreatic cancer and anticipates Q2 2020 regulatory clearance for two COVID-19 related clinical trials - The FDA cleared the IND application for QUILT 88, a Phase II study of PD-L1.t-haNK combined with other therapies for pancreatic cancer[165](index=165&type=chunk) - Regulatory clearance is anticipated in Q2 2020 for two COVID-19 clinical trials: one using haNK cells for hospitalized adults and another using mesenchymal stem cells for severe cases[167](index=167&type=chunk)[169](index=169&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Net loss increased to **$18.4 million** in Q1 2020, with R&D expenses rising to **$13.2 million** and SG&A decreasing to **$5.4 million** Comparison of Operations (in thousands) | Line Item | Q1 2020 | Q1 2019 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $13,234 | $12,598 | $636 | 5% | | Selling, general and administrative | $5,373 | $5,742 | $(369) | (6%) | | Loss from operations | $(18,586) | $(18,335) | $(251) | 1% | | **Net loss** | **$(18,383)** | **$(17,885)** | **$(498)** | **3%** | - The **$0.6 million** increase in R&D expense was primarily due to a **$0.5 million** increase in facility and manufacturing validation costs and a **$0.4 million** increase in depreciation, partially offset by a **$0.6 million** decrease in amortization expense[196](index=196&type=chunk) - The **$0.4 million** decrease in SG&A expense was mainly driven by a **$0.9 million** reduction in stock-based compensation expense, as executive grants finished vesting in March 2019[198](index=198&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2020, the company held **$17.1 million** in cash and **$23.3 million** in marketable securities, expecting sufficient liquidity for the next 12 months - As of March 31, 2020, the company held **$17.1 million** in cash, cash equivalents, and restricted cash, and **$23.3 million** in marketable debt securities[201](index=201&type=chunk)[202](index=202&type=chunk) Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Cash used in operating activities | $(12,596) | $(13,078) | | Cash provided by (used in) investing activities | $14,163 | $(19,459) | | Cash (used in) provided by financing activities | $(123) | $39,195 | - Management expects existing cash, marketable securities, and the ability to borrow from affiliated entities will fund operations for at least the next 12 months, supported by the Chairman and CEO's intent to provide additional funds[212](index=212&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes to financial market risks related to interest rates, foreign currency, or inflation have occurred since the 2019 Annual Report on Form 10-K - As of March 31, 2020, there have been no material changes to the financial market risks (interest rate, foreign currency, inflation) described in the company's 2019 Annual Report on Form 10-K[219](index=219&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2020, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2020, the CEO and CFO concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[221](index=221&type=chunk) - No changes in internal control over financial reporting during Q1 2020 have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[222](index=222&type=chunk) [Part II—OTHER INFORMATION](index=44&type=section&id=Part%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings expected to have a material adverse effect on its business - The company is not currently a party to any legal proceedings that are expected to have a material adverse effect on the business[227](index=227&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant investment risks, including historical losses, financing needs, unproven immunotherapy, clinical trial challenges, and related-party reliance [Risks Related to Financial Condition and Capital Requirements](index=44&type=section&id=Risks%20Related%20to%20Financial%20Condition%20and%20Capital%20Requirements) The company faces significant financial risks, including historical losses, an accumulated deficit of **$680.6 million**, the need for substantial financing, and COVID-19 impacts - The company is a clinical-stage firm with a history of significant losses, an accumulated deficit of approximately **$680.6 million** as of March 31, 2020, and expects to incur losses for the foreseeable future[230](index=230&type=chunk) - Substantial additional financing is required to complete development and commercialization, and failure to obtain it could force delays, reduction, or termination of its efforts[235](index=235&type=chunk) - The COVID-19 pandemic poses significant risks, including potential disruptions to the supply chain, delays in clinical trial enrollment and completion, and adverse effects on the overall economy and capital markets[239](index=239&type=chunk)[240](index=240&type=chunk) [Risks Relating to Business and Industry](index=48&type=section&id=Risks%20Relating%20to%20Business%20and%20Industry) Business risks include reliance on its novel aNK cell platform, intense competition, dependence on senior management and related parties, and significant manufacturing challenges - The company's business success depends on its novel aNK cell platform, which faces significant development, manufacturing, and regulatory challenges[243](index=243&type=chunk)[244](index=244&type=chunk) - The company faces intense competition from numerous well-resourced biopharmaceutical companies in various cell-based immunotherapy approaches[252](index=252&type=chunk)[253](index=253&type=chunk)[256](index=256&type=chunk) - The company has limited manufacturing experience, may struggle with large-scale or cost-effective production, and relies on third parties for key supplies[288](index=288&type=chunk)[290](index=290&type=chunk) - The Chairman and CEO, Dr. Soon-Shiong, has significant interests in affiliated companies with agreements with NantKwest, potentially creating conflicts of interest[284](index=284&type=chunk) [Risks Relating to Government Regulation](index=65&type=section&id=Risks%20Relating%20to%20Government%20Regulation) Extensive government regulation poses risks, including potential delays or failure to obtain regulatory approval, ongoing compliance burdens, and uncertainty regarding pricing and reimbursement - Obtaining regulatory approval is challenging, as the FDA's limited experience with cell-based therapies may lengthen the review process, increasing costs and delaying commercialization[333](index=333&type=chunk) - Approved products will be subject to continuous regulatory review and cGMP compliance, with non-compliance potentially leading to sanctions, recalls, or market withdrawal[335](index=335&type=chunk)[336](index=336&type=chunk) - Market acceptance and sales depend on adequate coverage and reimbursement from third-party payors, which is uncertain and subject to downward pressure from healthcare reform[344](index=344&type=chunk)[350](index=350&type=chunk) [Risks Relating to Intellectual Property](index=72&type=section&id=Risks%20Relating%20to%20Intellectual%20Property) Intellectual property risks include uncertain patent protection, challenges in global enforcement, potential third-party infringement claims, and reliance on third-party licenses - The company relies on patents, trade secrets, and agreements for IP protection, but patent applications may not issue, and issued patents may be challenged or invalidated[361](index=361&type=chunk) - Protecting intellectual property globally is difficult and expensive, especially in countries with limited legal recourse, and the company suspects illicit use of its NK-92 cell line in China[371](index=371&type=chunk)[372](index=372&type=chunk) - Third-party patent infringement claims could block product commercialization, require substantial damage payments, or necessitate costly licenses[377](index=377&type=chunk)[378](index=378&type=chunk) [Risks Relating to Our Common Stock](index=78&type=section&id=Risks%20Relating%20to%20Our%20Common%20Stock) Risks include concentrated ownership by the CEO and affiliates (**~67.2%**), controlled company status, stock price volatility, reduced disclosure, and potential NOL limitations - As of March 31, 2020, the Chairman and CEO, Dr. Patrick Soon-Shiong, and his affiliates collectively own approximately **67.2%** of the outstanding common stock, granting them significant influence over corporate matters[392](index=392&type=chunk) - The company's status as a 'controlled company' under Nasdaq rules allows it to forgo certain corporate governance requirements, such as having a majority of independent directors[408](index=408&type=chunk) - As an 'emerging growth company' and 'smaller reporting company,' the company can rely on exemptions from certain disclosure requirements, potentially making its common stock less attractive to investors[409](index=409&type=chunk) - The company's ability to use its net operating loss (NOL) carryforwards of approximately **$291.8 million** (federal) and **$255.7 million** (state) may be limited under IRC Section 382 due to past and future ownership changes[411](index=411&type=chunk)[412](index=412&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=84&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or issuer purchases of equity securities were reported during the period - There were no unregistered sales of equity securities or issuer purchases of equity securities during the quarter[422](index=422&type=chunk)[423](index=423&type=chunk) [Exhibits](index=84&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the quarterly report, including an agreement amendment, CEO/CFO certifications, and XBRL data files - Exhibits filed include the First Amendment to the agreement with Immuno-Oncology Clinic, Inc., CEO/CFO certifications under Rule 13a-14(a) and Section 1350, and XBRL data files[428](index=428&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 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 NANTKWEST, INC. (Exact name of Registrant as specified in its Charter) Delaware 43-1979754 (State or other jurisdiction of inc ...