STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2024

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

NOTE 10. STOCKHOLDERS’ EQUITY

Common Stock

The Company’s certificate of incorporation, as amended, authorizes the issuance of up to 500,000,000 shares of the Company’s common stock, par value $0.000041666. As of September 30, 2024, 304,620,470 shares of the Company’s common stock were issued and outstanding.

Public Offering

On February 22, 2024, the Company closed an underwritten public offering of 23,014,000 shares of its common stock at a public offering price of $9.15 per share, before underwriting discounts and commissions. The total net proceeds to the Company from the offering were $197.4 million after deducting underwriting discounts and commissions and offering expenses payable by the Company.

On July 13, 2023, the Company closed an underwritten public offering of 23,000,000 shares of the Company’s common stock, which included 3,000,000 shares of common stock issued pursuant to the exercise of the option granted to the underwriters, at a public offering price of $7.50 per share, before underwriting discounts and commissions. The total net proceeds to the Company from the

offering, including the exercise of the option by the underwriters, were $161.5 million after deducting underwriting discounts and commissions and offering expenses payable by the Company.

At the Market Offering Program

On November 18, 2022, the Company entered into an Open Market Sale Agreement (the “2022 Sale Agreement”) with Jefferies LLC (“Jefferies”). Under the terms of the 2022 Sale Agreement, the Company was able to, from time to time, at its sole discretion, issue and sell through Jefferies, acting as a sales agent, up to $500.0 million of shares of the Company’s common stock. On June 16, 2023, the Company entered into a new Open Market Sale Agreement (the “2023 Sale Agreement”), which superseded and replaced in its entirety the 2022 Sale Agreement, which was terminated by the Company. Under the terms of the 2023 Sale Agreement, the Company may, from time to time, in its sole discretion, issue and sell through Jefferies, acting as a sales agent, up to $450.0 million of shares of the Company’s common stock. The issuance and sale, if any, of the shares of common stock by the Company under the 2023 Sale Agreement was or will be made pursuant to a prospectus supplement dated June 16, 2023 to the Company’s Registration Statement on Form S-3ASR, which became effective immediately upon filing with the SEC on June 16, 2023.

Pursuant to the 2023 Sale Agreement, Jefferies may sell Common Shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act of 1933, as amended. Jefferies will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the Common Shares of common stock from time to time, based upon instructions from the Company (including any price or size limits or other customary parameters or conditions the Company may impose). The Company will pay Jefferies a commission of up to 3.0% of the gross sales proceeds of any Common Shares sold through Jefferies under the 2023 Sale Agreement.

The Company is not obligated to make any sales of Common Shares under the 2023 Sale Agreement. The offering of Common Shares pursuant to the 2023 Sale Agreement will terminate upon the earlier to occur of (i) the issuance and sale, through Jefferies, of all Common Shares subject to the 2023 Sale Agreement and (ii) termination of the 2023 Sale Agreement in accordance with its terms.

During the three months ended September 30, 2024, the Company raised approximately $47.5 million in net proceeds, after offering costs, through the sale of 6,110,234 shares of common stock pursuant to the 2023 Sale Agreement at a weighted average price per share of $7.94. During the nine months ended September 30, 2024, the Company raised approximately $200.0 million in net proceeds, after offering costs, through the sale of 23,127,726 shares of common stock pursuant to the 2023 Sale Agreement at a weighted average price per share of $8.82. During the three months ended September 30, 2023, the Company received approximately $41.7 million in net proceeds, after offering costs, through the sale of 8,000,000 shares of common stock pursuant to the 2023 Sale Agreement at a weighted average price per share of $5.33. During the nine months ended September 30, 2023, the Company received approximately $301.7 million in net proceeds, after offering costs, through the sale of 44,080,226 shares of common stock pursuant to the Sale Agreements at a weighted average price per share of $6.99.

Preferred Stock

The Company’s certificate of incorporation authorizes the issuance of up to 50,000,000 shares of “blank check” preferred stock. As of September 30, 2024, 17,000 shares were designated as Series A Convertible Preferred Stock and 11,500,000 shares were designated as Series B Convertible Preferred Stock.

Series A Convertible Preferred Stock

A total of 17,000 shares of Series A Convertible Preferred Stock have been authorized for issuance under the Company’s Certificate of Designation of Preferences and Rights of Series A Convertible Preferred Stock. The shares of Series A Convertible Preferred Stock have a stated value of $1,000 per share and are initially convertible into shares of common stock at a price of $2.00 per share, subject to adjustment. Each share of Series A Preferred Stock is initially convertible into 500 shares of common stock.

The Series A Convertible Preferred Stock may, at the option of each investor, be converted into fully paid and non-assessable shares of common stock. The holders of shares of Series A Convertible Preferred Stock do not have the right to vote on matters that come before the Company’s stockholders. In the event of any dissolution or winding up of the Company, proceeds shall be paid pari passu among the holders of common stock and preferred stock, pro rata based on the number of shares held by each holder. The Company may not declare, pay, or set aside any dividends on shares of capital stock of the Company (other than dividends on shares of common stock payable in shares of common stock) unless the holders of the Series A Convertible Preferred Stock shall first receive an equal dividend on each outstanding share of Series A Convertible Preferred Stock.

During the three and nine months ended September 30, 2024 and 2023, no shares of Series A Convertible Preferred Stock were converted into shares of common stock. As of September 30, 2024 and December 31, 2023, 194 shares of Series A Convertible Preferred Stock (that are convertible into 97,000 shares of common stock) remained outstanding.

Series B Convertible Preferred Stock

A total of 11,500,000 shares of Series B Convertible Preferred Stock are authorized for issuance under the Company’s Series B Certificate of Designation of Rights, Preferences and Privileges of Series B Convertible Preferred Stock. The shares of Series B Convertible Preferred Stock have a stated value of $4.75 per share and are convertible into shares of the Company’s common stock at an initial conversion price of $4.75 per share. Each share of Series B Preferred Stock is initially convertible into 1 share of common stock.

The Series B Convertible Preferred Stock may, at the option of each investor, be converted into fully paid and non-assessable shares of common stock. The holders of Series B Convertible Preferred Stock do not have the right to vote on matters that come before the Company’s stockholders. In the event of any dissolution or winding up of the Company, proceeds shall be paid pari passu among the holders of common stock and preferred stock, pro rata based on the number of shares held by each holder. Holders of Series B Convertible Preferred Stock are entitled to dividends on an as-if-converted basis in the same form as any dividends actually paid on shares of the Series A Convertible Preferred Stock or the Company’s common stock. So long as any Series B Convertible Preferred Stock remains outstanding, the Company may not redeem, purchase, or otherwise acquire any material amount of the Series A Convertible Preferred Stock or any securities junior to the Series B Convertible Preferred Stock.

During the three and nine months ended September 30, 2024 and 2023, no shares of Series B Convertible Preferred Stock were converted into shares of common stock. As of September 30, 2024 and December 31, 2023, 2,842,158 shares of Series B Preferred Stock (that are convertible into 2,842,158 shares of common stock) remained outstanding.

Equity Incentive Plans

The Company has multiple equity incentive plans under which it grants awards.

As of June 11, 2024, the Company’s stockholders approved the termination of the 2014 Equity Incentive Plan (the “2014 Plan”). In addition, the Company’s stockholders approved the recapture by the 2018 Equity Incentive Plan (the “2018 Plan”) of awards granted under the 2014 Plan that expire, terminate, or are cancelled or forfeited without being settled, vested, or exercised after the stockholders approval.

On April 22, 2018, the Company’s Board of Directors (the “Board”) adopted the 2018 Plan, which was approved by the Company’s stockholders in June 2018. The 2018 Plan as approved initially authorized the issuance up to an aggregate of 6,000,000 shares of the Company’s common stock in the form of incentive (qualified) stock options, non-qualified options, common stock, stock appreciation rights, restricted stock awards, restricted stock units, other stock-based awards, other cash-based awards or any combination of the foregoing. On June 8, 2020, the Company’s stockholders approved an amendment to the 2018 Plan to increase the number of shares available for issuance under the 2018 Plan from 6,000,000 to 14,000,000 shares, which became effective immediately. Additionally on June 10, 2022, the Company’s stockholders approved an amendment to the 2018 Plan to increase the number of shares available for issuance under the 2018 Plan from 14,000,000 to 20,700,000, which became effective immediately. On June 6, 2023, the Company’s stockholders approved an amendment to the 2018 Plan to increase the number of shares available for issuance under the 2018 Plan from 20,700,000 to 29,700,000, which became effective immediately. On June 11, 2024, the Company’s stockholders approved an amendment to the 2018 Plan to increase the number of shares available for issuance under the 2018 Plan from 29,700,000 to 36,700,000 and permit share recapture from the 2014 Plan, which amendment became effective immediately. As of September 30, 2024, 8,503,825 shares of the Company’s common stock were available for grant under the 2018 Plan, including shares recaptured from the 2014 Plan.

On September 22, 2021, the Board adopted the Iovance Biotherapeutics, Inc. 2021 Inducement Plan (the “2021 Inducement Plan”). The 2021 Inducement Plan provides for the grant of non-qualified options, common stock, stock appreciation rights, restricted stock awards, restricted stock units, other stock-based awards, other cash-based awards, or any combination of the foregoing. The 2021 Inducement Plan was recommended for approval by the Compensation Committee of the Board (the “Compensation Committee”), and subsequently approved and adopted by the Board without stockholder approval pursuant to Rule 5635(c)(4) of the rules and regulations of The Nasdaq Stock Market LLC (the “Nasdaq Listing Rules”).

The Board initially reserved 1,000,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the 2021 Inducement Plan, and the 2021 Inducement Plan is administered by the Compensation Committee. On January 12, 2022, the Compensation Committee approved an amendment to the 2021 Inducement Plan solely to increase the number of shares reserved for issuance under the 2021 Inducement Plan from 1,000,000 to 1,750,000 shares of the Company’s common stock without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules.

The Compensation Committee approved additional amendments to the 2021 Inducement Plan solely to increase the number of shares reserved for issuance under the 2021 Inducement Plan from 1,750,000 to 2,250,000 shares of the Company’s common stock on March 13, 2023 and from 2,250,000 to 2,750,000 shares of the Company’s common stock on February 26, 2024 without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, equity awards under the 2021 Inducement Plan may only be made to an employee if such employee is granted such equity awards in connection with his or her commencement of employment with the Company or a subsidiary and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. In addition, awards under the 2021 Inducement Plan may only be made to employees who have not previously been an employee or member of the Board (or any parent or subsidiary of the Company) or following a bona fide period of non-employment of the employee by the Company (or a parent or subsidiary of the Company). As of September 30, 2024, 34,463 shares of the Company’s common stock were available for grant under the Inducement Plan.

Stock Options

A summary of the status of stock options as of September 30, 2024 and the changes during the nine months ended September 30, 2024 is presented in the following table:

				Weighted
		Weighted		Average	Aggregate
	Number	Average		Remaining	Intrinsic
	of	Exercise		Contract	Value
	Options	Price		Life (Years)	( in thousands)
Outstanding at December 31, 2023	18,899,849	$	18.57		$
Issued	1,171,565		10.23
Exercised	(175,534)		8.36
Expired/Cancelled	(1,043,198)		22.57
Outstanding at September 30, 2024	18,852,682	$	17.92	6.13	$	14,898
Ending vested and expected to vest at September 30, 2024	18,852,682	$	17.92	6.13	$	14,898
Options exercisable at September 30, 2024	14,649,266	$	20.55	5.39	$	8,398

As of September 30, 2024, there was $22.4 million of total unrecognized compensation expense related to unvested employee stock options. The unrecognized compensation expense is estimated to be recognized over a period of 1.66 years as of September 30, 2024. The weighted average grant date fair value for employee options granted under the Company’s stock option plans during the nine months ended September 30, 2024 was $7.33 per option.

The aggregate intrinsic value in the table above reflects the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the quarter ended September 30, 2024 and the exercise price of the options, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all option holders exercised their options on September 30, 2024. The intrinsic value of the Company’s stock options changes based on the closing price of the Company’s common stock.

Employee Stock Purchase Plan

In June 2020, the Company adopted the 2020 ESPP upon its approval by the Company’s shareholders at its Annual Stockholders Meeting on June 8, 2020. The Company reserved 500,000 shares of its common stock for issuance under the 2020 ESPP. On June 6, 2023, the Company's stockholders approved an amendment to the 2020 ESPP to increase the number of shares reserved for issuance under the 2020 ESPP from 500,000 to 1,400,000 shares of the Company’s common stock, which became effective immediately. On June 11, 2024, the Company's stockholders approved an amendment to the 2020 ESPP, to increase the number of

shares reserved for issuance under the 2020 ESPP from 1,400,000 to 1,900,000 shares of the Company’s common stock, which became effective immediately.

Under the 2020 ESPP, employees of the Company can purchase shares of its common stock based on a percentage of their compensation subject to certain limits. The purchase price per share is equal to the lower of 85% of the fair market value of its common stock on the offering date or the purchase date with a six-month look-back feature. The 2020 ESPP purchases are settled with common stock from the 2020 ESPP’s previously authorized and available pool of shares.

The compensation expense related to the 2020 ESPP for the three and nine months ended September 30, 2024 was $0.4 million and $1.1 million, respectively, The compensation expense related to the 2020 ESPP for the three and nine months ended September 30, 2023 was $0.3 million and $0.9 million, respectively. As of September 30, 2024, there was $0.3 million of unrecognized compensation cost associated with the 2020 ESPP, which is expected to be recognized over the remaining 2.3 months.

Restricted Stock Units

A summary of the status of RSUs as of September 30, 2024 and the changes during the nine months ended September 30, 2024 is presented in the following table:

		Weighted
	Number	Average
	of	Grant Date
	RSUs and PRSUs	Fair Value
Outstanding at December 31, 2023	3,453,901	$	8.97
Granted	9,924,555		16.53
Vested/Released	(2,877,028)		13.16
Canceled/Forfeited	(585,865)		15.12
Outstanding at September 30, 2024	9,915,563	$	14.96
Ending vested and expected to vest at September 30, 2024	9,915,563	$	14.96

As of September 30, 2024, there was $111.6 million of unrecognized stock-based compensation expense associated with unvested RSUs, which the Company expects to recognize over a remaining weighted-average period of 1.84 years. The aggregate intrinsic value of the unvested RSUs outstanding as of September 30, 2024 was $93.1 million.

Stock-Based Compensation

Total stock-based compensation expense related to all of the Company’s stock-based awards, which was recorded in total costs and expenses in the condensed consolidated statements of operations, was as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Cost of sales	$	3,065	$	—	$	5,362	$	—
Research and development		13,803		8,787		35,825		27,036
Selling, general and administrative		14,138		7,034		37,463		21,190
Total stock-based compensation expense	$	31,006	$	15,821	$	78,650	$	48,226

The amount included in capitalized inventory for stock-based compensation expense for personnel engaged with manufacturing activities was $1.7 million as of September 30, 2024. No such cost was included in inventory as of December 31, 2023.

Total stock-based compensation expense by type of award was as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Stock option expense	$	5,050	$	11,392	$	16,080	$	34,987
Restricted stock expense		25,528		4,088		61,470		12,291
ESPP expense		428		341		1,100		948
Total stock-based compensation expense	$	31,006	$	15,821	$	78,650	$	48,226