IO Biotech, Inc. Files for Chapter 7 Bankruptcy and Ceases Operations

Key Points:

• IO Biotech, Inc. has filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the District of Delaware.
• The company has ceased all operations as of March 31, 2026.
• A Chapter 7 trustee will take control of the company’s assets and liabilities, with the board of directors and officers losing all authority to act on behalf of the company.
• It is highly unlikely that shareholders will receive any payment or distribution for their shares after the bankruptcy proceedings.
• There is a default under a major finance contract with the European Investment Bank (EIB), which could accelerate repayment obligations of €22.5 million plus interest and fees.
• All directors and key officers have resigned concurrent with the bankruptcy filing.
• The company will be unable to file its annual report or any further periodic reports with the SEC.

Details of the Bankruptcy Filing

On March 31, 2026, IO Biotech, Inc. (Nasdaq: IOBT) announced that it has ceased operations and filed a voluntary petition for relief under Chapter 7 of the U.S. Bankruptcy Code. This filing was made in the United States Bankruptcy Court for the District of Delaware.

Under Chapter 7, the company’s assets will be liquidated, and claims will be paid in accordance with the priorities set forth by the Bankruptcy Code. The court will appoint a Chapter 7 trustee, who will assume control over the company’s assets and liabilities. This effectively removes all power and authority from IO Biotech’s board of directors and officers to act for the company.

Impact on Shareholders

Shareholders are strongly advised that it is highly unlikely they will receive any payment or distribution on their shares as a result of these proceedings. The company’s statement explicitly warns that trading in IO Biotech’s common stock after the bankruptcy filing is highly speculative and carries a substantial risk of total loss. This type of news is extremely price-sensitive and is expected to have a significant negative impact on the share price.

Triggering of Financial Defaults

The bankruptcy filing triggers an event of default under the finance contract between the company’s subsidiary, IO Biotech ApS, and the European Investment Bank (EIB). As a result, EIB will have the right to terminate the finance contract and demand immediate repayment of the €22.5 million already drawn, together with any accrued interest, prepayment fees, and additional costs or expenses. While actions by EIB may be stayed due to bankruptcy proceedings, this is a material development that could further erode any residual value for creditors or shareholders.

Resignation of the Board and Key Officers

Coinciding with the bankruptcy petition, the entire board of directors—Peter Hirth, Hen Collins, Christian Elling, Kathleen Glaub, Heidi Hunter, and David Smith—have resigned from all positions and committees. The resignations are solely due to the bankruptcy filing, which legally eliminates the board’s authority. There are now no members serving on IO Biotech’s board of directors.

Key officers, including the Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer, have also been terminated, as their roles and powers have been eliminated by the proceedings.

Suspension of SEC Reporting and Financial Filings

Due to the bankruptcy, IO Biotech’s independent registered public accounting firm did not complete the audit of the company’s financial statements for the fiscal year ended December 31, 2025. Therefore, IO Biotech will not be able to prepare or file its annual report on Form 10-K, or any other periodic reports, with the Securities and Exchange Commission going forward.

Potential Share Price Impact

This series of events is highly material and negative for the company and its shareholders. Delisting from the Nasdaq exchange is likely to follow, and the value of IO Biotech’s common stock is expected to be severely impaired, with liquidation under Chapter 7 providing little to no recovery for shareholders. Trading in the company’s shares after this announcement should be considered extremely risky.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions. The information presented is based on the company’s public filings and is subject to change based on future developments in the bankruptcy proceedings.

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