Form 4: Patrick Soon-Shiong Converts Note to ImmunityBio Stock

Patrick Soon-Shiong, a director and significant shareholder of ImmunityBio, Inc., has converted a $25 million promissory note into over 4.6 million shares of common stock.

Summary

• Patrick Soon-Shiong, a key figure at ImmunityBio, Inc. (IBRX), has converted a Second Amended and Restated Convertible Promissory Note with a principal amount of $25,000,000 into 4,606,596 shares of the company's common stock.
• The conversion occurred on March 31, 2026, at a conversion price of $5.427 per share.
• This transaction increases Soon-Shiong's direct and indirect beneficial ownership of ImmunityBio shares.
• The promissory note had a conversion window between December 10, 2024, and December 31, 2027.
• The filing also details various entities through which Soon-Shiong holds beneficial ownership, including Nant Capital, LLC, Cambridge Equities, LP, MP 13 Ventures, LLC, California Capital Equity, LLC, NantBio, Inc., NantWorks, LLC, NantMobile, LLC, NantCancerStemCell, LLC, and the Chan Soon-Shiong Family Foundation.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral to slightly positive event. While the conversion reduces debt, it also dilutes existing shareholders. The significance lies in the insider's continued investment, but the lack of strategic context tempers a strongly positive outlook.

Positives

• Conversion of a significant debt instrument ($25 million) into equity, potentially strengthening the company's balance sheet by reducing liabilities.
• Patrick Soon-Shiong, a director and 10% owner, has increased his direct stake in the company, signaling continued commitment.
• The conversion price of $5.427 per share may indicate a valuation at or above that level at the time of conversion.

Negatives

• The conversion of a promissory note into stock dilutes existing shareholders' ownership percentage.
• The filing does not provide context for the reason behind the conversion, which could be strategic or a response to market conditions.

Risks

• Potential for further dilution if other convertible instruments are exercised or converted.
• The complexity of beneficial ownership structures could obscure the true extent of control and influence by Patrick Soon-Shiong.
• Dependence on key individuals like Patrick Soon-Shiong for strategic direction and funding can pose a risk if their involvement changes.

Future Outlook

The filing itself is a historical record of a transaction and does not contain forward-looking statements or guidance. However, the existence of the convertible note with a maturity date of December 31, 2027, implies potential future conversions or repayments.

Management Comments

• Patrick Soon-Shiong is listed as Founder, Executive Chairman, Global Chief Scientific and Medical Officer.
• Signatures indicate Charles Kenworthy acting as Manager for MP 13 Ventures and California Capital Equity, and Nant Capital.

Industry Context

StockSavvy.ai notes that insider conversions of debt to equity are common in the biotechnology sector, especially for companies with significant R&D investments. This move by a major shareholder like Patrick Soon-Shiong can be interpreted as a vote of confidence in ImmunityBio's long-term prospects, though it also introduces dilution.

Related Party Transactions

• The conversion of a promissory note held by Nant Capital, LLC (an investment vehicle of Patrick Soon-Shiong) into shares of ImmunityBio, Inc. common stock.

Stakeholder Impact

• Shareholders: Potential dilution of ownership percentage due to the issuance of new shares.
• Creditors: Reduction in the company's debt obligations by $25 million.
• Management/Insiders: Increased beneficial ownership for Patrick Soon-Shiong, aligning his interests more directly with equity holders.

Next Steps

• Monitor future SEC filings for any further transactions by Patrick Soon-Shiong or related entities.
• Observe the company's financial performance and strategic execution following this equity increase.

Key Dates

Recommendation

The conversion of a significant debt instrument by a key insider like Patrick Soon-Shiong can be seen as a positive signal of commitment. However, the inherent dilution from converting debt to equity, coupled with the lack of new strategic information or financial performance data in this specific filing, warrants a 'hold' recommendation. Investors should await further updates on the company's operational and financial progress.

Keywords

ImmunityBio, IBRX, Patrick Soon-Shiong, Form 4, Beneficial Ownership, Convertible Promissory Note, Stock Conversion, Equity, SEC Filing, Insider Trading