IOVANCE BIOTHERAPEUTICS, INC. Leases Disclosure

NOTE 16. LEASES

Operating Leases

The Company leases corporate office space in San Carlos, California, manufacturing, research and development lab facilities and office space in Philadelphia, Pennsylvania, including 136,000 square feet of commercial manufacturing and lab space at the iCTC, and research and development lab facilities in Tampa, Florida. The determination whether an arrangement is a lease occurs at inception, and for leases with terms greater than 12 months, the Company records a related right-of-use asset and lease liability at the present value of lease payments over the term. Many leases include fixed rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. The Company’s leases do not provide an implicit rate, and thus the Company estimated the incremental borrowing rate in calculating the present value of the lease payments.

The Company’s leases have remaining lease terms that range from less than one year to approximately 16 years. Some of the Company’s leases include one or more options to renew with renewal terms that can extend the lease for additional years, or options to terminate the leases, both at the Company’s discretion. The Company’s leases may include options to extend or terminate the lease, which is considered in the lease term when it is reasonably certain that the Company will exercise any such options. Lease expense for minimum lease payments is recognized on a straight-line basis based on the fixed components of a lease arrangement.

Variable lease cost is determined based on performance or usage in accordance with the contractual agreements and not based on an index or rate. Such costs that are not fixed in nature are recognized as incurred.

The Company also leases certain furniture and equipment that has a lease term of 12 months or less. Since the lease agreements do not include an option to purchase the underlying asset, the Company elected not to apply the recognition requirements of Topic 842 for short-term leases, however, the lease costs that pertain to the short-term leases are disclosed in the components of lease costs table below.

Headquarters Office Lease

On November 15, 2024, the Company entered into a sublease agreement (the “Headquarters Lease”) to relocate its office within the same building of its former San Carlos headquarters to lease approximately 16,731 square feet office space with the lease term of 24 months. The Headquarters Lease commenced on December 15, 2024 and includes two options to extend the terms of the lease for 12 months each, exercisable under certain conditions and at a rate increase by 3% from the applicable monthly base rent of approximately $0.1 million. Upon the commencement date, the Company recognized operating lease liabilities and right-of-use assets of $2.3 million.

Simultaneously, the Company entered into an Agreement for Termination of Lease and Voluntary Surrender of Premises with its landlord related to its lease for its then existing and now former headquarters location to surrender 49,918 square feet office and laboratory space and paid an early lease termination payment to its landlord of $0.6 million and $2.5 million of related brokerage fees. In accordance with ASC 842, the termination of this lease resulted in derecognition of right-of-use assets and corresponding lease liabilities of $13.7 million and $22.3 million, respectively, which resulted in a $8.6 million gain, partially offset by the aforementioned lease termination related fees, recorded as interest and other income, net in the consolidated statement of operations for the year ended December 31, 2024.

In addition, as a result of the early termination of the former headquarters lease, the Company impaired approximately $7.4 million of long-lived assets, which included leasehold improvements, and furniture and fixtures, previously funded by the landlord

through a tenant improvement allowance for the former corporate headquarters office lease (as discussed further below), and is included in the research and development expenses and selling, general and administrative expenses in the consolidated statement of operations for the year ended December 31, 2024.

Manufacturing Contracts

The Company uses contract manufacturing organizations (collectively the “CMOs” and each a “CMO”) to manufacture and supply TILs for clinical and commercial purposes. The CMO contractual obligations consist of the use of manufacturing facilities and minimum fixed commitment fees, such as personnel, general support fees, and minimum production or material fees. In addition to the minimum fixed commitment fees, the CMO contractual obligations include variable costs such as production and material costs in excess of the minimum quantity specified in each CMO agreement. During the term of each CMO agreement, the Company has access to and control of the use of a dedicated suite in each of the CMOs’ facilities for manufacturing activities. The contracts with CMOs generally contain embedded operating leases based on the fact that the suites are used for the Company’s production are implicitly identified, are used exclusively by the Company during the contractual term of the arrangements, and the CMOs have no substantive contractual rights to substitute the facilities used by the Company.

Further, the Company controls the use of the facilities by obtaining all of the economic benefits from the use of the facilities and directs the use of the facilities throughout the period of use. The terms of the CMO contracts include options to terminate the lease with advance notice of five to six months. The termination clauses and extension clauses are included in the calculation of the lease term for each of the CMOs when it is reasonably certain that it will not exercise such options.

For contracts with multiple deliverables, Topic 842 requires the Company to first identify a lease deliverable and non-lease deliverable included in the arrangements, and then allocate the fixed contractual consideration to the lease deliverable(s) and the non-lease deliverable(s) on a relative standalone selling price basis to determine the amount of operating lease right-of-use assets and liabilities. The Company identified the use of a dedicated suite as a single lease deliverable, and related labor services as a single non-lease deliverable in each of the CMO arrangements. Judgment is required to determine the relative standalone selling price of each deliverable as the observable standalone selling prices are not readily available. Therefore, management uses estimates and assumptions in determining relative standalone selling price of lease of a suite and labor service using information that includes market and other observable inputs to the extent possible.

The balance sheet classification of the Company’s right-of-use asset and lease liabilities was as follows (in thousands):

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The following table summarizes components of lease expenses, which were included in total expenses in the Company’s consolidated statements of operations and in inventory in the consolidated balance sheets, and other information related to the Company’s operating leases as follows (in thousands, except weighted-average remaining lease terms and discount rates):

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As of December 31, 2025, maturities of the Company's operating lease liabilities were as follows (in thousands):

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