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Item 8. Financial Statements and Supplementary Data

2024-03-14 compared with 2023-02-28 · 481 added, 128 removed, 858 unchanged (42% of the section changed)

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generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2023 expressed an unqualified opinion thereon.

Restatement of Financial Statements

As discussed in Note 1 to the consolidated financial statements, the 2022 and 2021 consolidated financial statements have been restated to correct misstatements.

Basis for Opinion

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Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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San Mateo, California

February 28, 2023

March 14, 2024

ALLOGENE THERAPEUTICS, INC.

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2023 December 31,

(As Restated)

Current assets:

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Other long-term assets 6,604 9,564

Equity method investment 12,817 18,005

Equity method investments 3,645 17,317

Total assets $ 642,837 $ 821,579

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Common stock, $ 0.001 par value:

400,000,000 and 200,000,000 shares authorized as of December 31, 2022 and December 31, 2021, respectively;

400,000,000 shares authorized as of December 31, 2023 and December 31, 2022;

168,642,238 and 144,438,304 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

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2023 2022 2021

(As restated) (As restated)

Collaboration revenue - related party $ 95 $ 156 $ 114,089

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General and administrative 71,673 79,305 74,105

Impairment of long-lived asset 13,245 — —

Total operating expenses 327,832 335,692 294,281

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Other comprehensive income:

Net unrealized loss on available-for-sale investments ( 7,359 ) ( 2,835 ) ( 877 )

Net unrealized gain (loss) on available-for-sale investments 8,971 ( 7,359 ) ( 2,835 )

Net comprehensive loss $ ( 318,294 ) $ ( 347,773 ) $ ( 184,886 )

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Shares Amount

Balance — December 31, 2019 124,267,358 124 1,023,876 ( 396,122 ) 1,145 629,023

Balance — December 31, 2020 (As Restated) 140,474,305 140 1,725,552 ( 712,503 ) 268 1,013,457

Issuance of common stock upon exercise of stock options and vesting of RSUs 1,961,554 2 8,344 — — 8,346

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Employee stock purchase plan 187,206 — 3,617 — — 3,617

Issuance of common stock from public ATM offering, net of commissions and offering costs of $ 0.6 million

848,663 1 26,202 — — 26,203

Issuance of common stock from public offering, net of commissions and offering costs of $ 36.8 million

13,457,447 13 595,717 — — 595,730

Net loss — — — ( 250,221 ) — ( 250,221 )

Net loss (As Restated) — — — ( 182,051 ) — ( 182,051 )

Net unrealized loss on available-for-sale investments — — — — ( 2,835 ) ( 2,835 )

Balance — December 31, 2020 140,474,305 140 1,725,552 ( 646,343 ) 268 1,079,617

Balance — December 31, 2021 (As Restated) 142,623,065 142 1,822,179 ( 894,554 ) ( 2,567 ) 925,200

Issuance of common stock upon exercise of stock options and vesting of RSUs 1,453,624 2 487 — — 489

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Employee stock purchase plan 361,615 — 2,461 — — 2,461

Net loss — — — ( 257,005 ) — ( 257,005 )

Net loss (As Restated)

— — — ( 340,414 ) — ( 340,414 )

Net unrealized loss on available-for-sale investments — — — — ( 7,359 ) ( 7,359 )

Balance — December 31, 2021 142,623,065 142 1,822,179 ( 903,348 ) ( 2,567 ) 916,406

Issuance of common stock upon exercise of stock options and vesting of RSU's

Balance — December 31, 2022 (As Restated) 144,438,304 144 1,911,632 ( 1,234,968 ) ( 9,926 ) 666,882

Issuance of common stock from ATM offering, net of commissions and offering costs of $ 1.7 million

20,894,565 21 91,091 — — 91,112

Issuance of common stock upon exercise of stock options and vesting of RSUs 2,718,410 3 2,084 — — 2,087

Vesting of early exercised common stock

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— — — ( 327,265 ) — ( 327,265 )

Net unrealized loss on available-for-sale investments

Net unrealized gain on available-for-sale investments

— — — — 8,971 8,971

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2023 2022 2021

(As Restated) (As Restated)

Cash flows from operating activities:

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Stock-based compensation 65,951 83,600 80,818

Amortization of other intangible assets acquired — — 151

Depreciation and amortization 14,199 14,295 10,454

Net amortization/accretion on investment securities ( 6,809 ) 2,891 6,955

Impairment of long-lived asset 13,245 — —

Impairment of equity investment and equity method investment 7,000 — —

Non-cash rent expense 642 2,433 2,611

Share of losses from equity method investments 5,188 3,444 1,154

Non-cash collaboration revenue - related party ( 63 ) ( 104 ) ( 75,740 )

Share of loss from equity method investments 10,672 12,883 4,090

Changes in operating assets and liabilities:

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Proceeds from issuance of common stock from ATM offering, net of commissions and issuance costs 91,112 — —

Proceeds from issuance of common stock from public offering, net of commissions and issuance costs — — 595,730

Proceeds from issuance of common stock and upon exercise of stock options 2,087 489 8,346

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Capitalized cloud computing costs included in accounts payable and accrued and other current liabilities $ — $ 415 $ —

Non-cash deferred revenue and other long-term liabilities $ 3,094 $ 3,157 $ 3,260

Supplemental disclosure:

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Public Offerings

In November 2019, the Company entered into a sales agreement with Cowen and Company, LLC (Cowen), as amended on November 2, 2022, under which the Company may from time to time issue and sell shares of its common stock through Cowen in at-the-market (ATM) offerings for an aggregate offering price of up to $ 250.0 million.

The aggregate compensation payable to Cowen as the Company's sales agent equals up to 3.0 % of the gross sales price of the shares sold through it pursuant to the sales agreement.

In November 2019, the Company entered into a sales agreement with Cowen and Company, LLC (Cowen), as amended on November 2, 2022 and November 2, 2023, under which the Company may from time to time issue and sell shares of its common stock through Cowen in at-the-market (ATM) offerings.

The aggregate compensation payable to Cowen as the Company's sales agent equals up to 3.0 % of the gross sales price of the shares sold through Cowen pursuant to the sales agreement.

During the year ended December 31, 2020, the Company sold an aggregate of 848,663 shares of common stock in ATM offerings resulting in net proceeds of $ 26.2 million.

As of December 31, 2022, $ 167.3 million remains available for sale under the sales agreement with Cowen.

During the year ended December 31, 2023, the Company sold an aggregate of 20,894,565 shares of common stock in ATM offerings resulting in net proceeds of $ 91.1 million.

The specified dollar limit on the amount of common stock that may be sold under the sales agreement was removed pursuant to the November 2, 2023 amendment to the sales agreement.

In June 2020, the Company sold 13,457,447 shares of its common stock, which included 1,755,319 shares sold pursuant to the full exercise of the underwriters' option to purchase additional shares, in an underwritten public offering at a price of $ 47.00 per share, which resulted in gross proceeds of approximately $ 632.5 million.

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All material intercompany balances and transactions have been eliminated during consolidation.

Restatement of financial statements

As described further in Note 6 and Note 8, on December 14, 2020, the Company entered into an Exclusive License Agreement (License Agreement) with Allogene Overland Biopharm (CY) Limited (Allogene Overland), a joint venture established by the Company and Overland Pharmaceuticals (CY) Inc.

(Overland) pursuant to a Share Purchase Agreement

(Share Purchase Agreement), dated December 14, 2020, for the purpose of developing, manufacturing and commercializing certain allogeneic CAR T cell therapies for patients in greater China, Taiwan, South Korea and Singapore, which resulted in the Company acquiring shares of Allogene Overland’s Seed Preferred Stock (Seed Preferred Shares) representing a 49 % ownership interest in exchange for entering into a License Agreement.

In 2023, the Company re-evaluated its application of ASC Topic 606, Revenue from Contracts with Customers (ASC 606) and ASC Topic 323, Investments - Equity Method and Joint ventures (ASC 323) to its License Agreement and Share Purchase Agreement with Allogene Overland.

Upon reassessment, the Company has determined the 49 % of Allogene Overland's outstanding Seed Preferred Shares received as a partial consideration for the License Agreement should be initially measured at fair value of $ 79.0 million rather than the zero carryover basis originally attributed to the Seed Preferred Shares.

The initial transaction price to determine revenue related to the License Agreement was revised to include the fair value of the Seed Preferred Shares of $ 79.0 million and was allocated to the identified performance obligations based on their estimated standalone selling price.

Additional revisions were made in the year ended December 31, 2020 whereby, on the date when the Seed Preferred Shares were received, the Company recorded as "Other expenses" in its consolidated statements of operations and comprehensive loss the basis difference of $ 67.5 million between the fair value of the Seed Preferred Shares of $ 79.0 million and the amount of the Company's underlying equity in net assets of Allogene Overland of $ 11.5 million and reduced the carrying value of the Seed Preferred Shares to $ 11.5 million.

In the year ended December 31, 2021, the collaboration revenue increased by $ 75.6 million and the remaining transaction price of $ 3.4 million will impact subsequent future periods when related performance obligations are satisfied.

Further, the Company recorded its share of net losses of Allogene Overland in each reporting period and reduced the carrying value of the Seed Preferred Shares.

Refer to the Impact of restatement section below which describes detailed impact of the restatement for all the periods presented.

The error resulted in an understatement of collaboration revenue and other expenses in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2022, 2021 and 2020, and an understatement of deferred revenue and equity method investment in the consolidated balance sheets as of December 31, 2022 and 2021.

These annual periods were restated in the Amendment No.

1 to the Annual Report on Form 10-K/A for the year ended December 31, 2022 filed with the Securities and Exchange Commission (the SEC) on March 14, 2024.

The consolidated financial statements (as restated) also include adjustments to correct certain other previously identified misstatements relating to prior periods that the Company had determined to be immaterial, both individually and in aggregate, with a decrease in other expenses of $ 0.7 million for the year ended December 31, 2021 and an increase in other expenses of $ 2.0 million for the year ended December 31, 2022 in the consolidated statements of operations and comprehensive loss.

Impact of restatement

See below for reconciliation from the previously reported to the restated amounts in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2022 and 2021, and in the consolidated balance sheets as of December 31, 2022.

The previously reported amounts were derived from the Company's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 28, 2023 (Original Report).

These amounts are labeled as "As Previously Reported" in the tables below.

The amounts labeled "Restatement Adjustment" represent the effects of this restatement described above.

The following presents a reconciliation of the impacted financial statement line items as previously reported to the restated amounts as of December 31, 2022, and for the years ended December 31, 2022 and 2021 (in thousands, except share and per share data):

December 31, 2022

Consolidated Balance Sheets As previously Reported Restatement Adjustment As Restated

Equity method investment $ 12,817 $ 4,500 $ 17,317

Total assets 817,079 4,500 821,579

Deferred revenue 885 ( 790 ) 95

Total current liabilities 54,518 ( 790 ) 53,728

Other long-term liabilities 1,569 4,278 5,847

Total liabilities 151,209 3,488 154,697

Accumulated deficit ( 1,235,980 ) 1,012 ( 1,234,968 )

Total stockholders' equity 665,870 1,012 666,882

Total liabilities and stockholders' equity 817,079 4,500 821,579

Year ended December 31, 2022 Year ended December 31, 2021

Consolidated Statements of Operations and Comprehensive Loss As Previously Reported Restatement Adjustment As Restated As Previously Reported Restatement Adjustment As Restated

Collaboration revenue - related party $ 243 $ ( 87 ) $ 156 $ 38,489 $ 75,600 $ 114,089

Operating expenses:

Research and development 256,387 — 256,387 220,176 — 220,176

General and administrative 79,305 — 79,305 74,105 — 74,105

Total operating expenses 335,692 — 335,692 294,281 — 294,281

Loss from operations ( 335,449 ) ( 87 ) ( 335,536 ) ( 255,792 ) 75,600 ( 180,192 )

Other income (expense), net:

Interest and other income, net 4,566 — 4,566 1,714 — 1,714

Other expenses ( 1,749 ) ( 7,695 ) ( 9,444 ) ( 2,927 ) ( 646 ) ( 3,573 )

Total other income (expense), net 2,817 ( 7,695 ) ( 4,878 ) ( 1,213 ) ( 646 ) ( 1,859 )

Net loss ( 332,632 ) ( 7,782 ) ( 340,414 ) ( 257,005 ) 74,954 ( 182,051 )

Other comprehensive income:

Net unrealized (loss) gain on available-for-sale investments, net of tax ( 7,359 ) — ( 7,359 ) ( 2,835 ) — ( 2,835 )

Net comprehensive loss ( 339,991 ) ( 7,782 ) ( 347,773 ) ( 259,840 ) 74,954 ( 184,886 )

Net loss per share, basic and diluted ( 2.32 ) ( 2.38 ) ( 1.89 ) ( 1.34 )

Weighted-average number of shares used in computing net loss per share, basic and diluted 143,147,165 143,147,165 135,820,386 135,820,386

Year ended December 31, 2022 Year ended December 31, 2021

Consolidated Statements of Stockholders' Equity As Previously Reported Restatement Adjustment As Restated As Previously Reported Restatement Adjustment As Restated

Net Loss $ ( 332,632 ) $ ( 7,782 ) $ ( 340,414 ) $ ( 257,005 ) $ 74,954 $ ( 182,051 )

Accumulated Deficit ( 1,235,980 ) 1,012 ( 1,234,968 ) ( 903,348 ) 8,794 ( 894,554 )

Total stockholders' equity 665,870 1,012 666,882 916,406 8,794 925,200

Year ended December 31, 2022 Year ended December 31, 2021

Consolidated Statements of Cash Flow As Previously Reported Restatement Adjustment As Restated As Previously Reported Restatement Adjustment As Restated

Net Loss $ ( 332,632 ) $ ( 7,782 ) $ ( 340,414 ) $ ( 257,005 ) $ 74,954 $ ( 182,051 )

Non-cash collaboration revenue - related party — ( 104 ) ( 104 ) — ( 75,740 ) ( 75,740 )

Share of losses from equity method investments 5,188 7,695 12,883 3,444 646 4,090

Changes in operating assets and liabilities:

Deferred revenue 462 ( 483 ) ( 21 ) ( 38,569 ) 272 ( 38,297 )

Other long-term liabilities ( 2,556 ) 674 ( 1,882 ) 1,042 ( 132 ) 910

Net cash used in operating activities ( 220,519 ) — ( 220,519 ) ( 184,812 ) — ( 184,812 )

The remainder of the notes to the Company's consolidated financial statements have been updated and restated, as applicable, to reflect the impacts from the restatement discussed above.

Included in Note 15 of these consolidated financial statements is the impact of restatement on previously issued (i) unaudited condensed balance sheets as of March 31, 2023 and 2022, June 30, 2023 and 2022 and September 30, 2023 and 2022, (ii) unaudited condensed statements of operations and comprehensive loss for the three months ended March 31, 2023 and 2022, three and six months ended June 30, 2023 and 2022, and three and nine months ended September 30, 2023 and 2022, (iii) unaudited condensed statements of cash flows for the three months ended March 31, 2023 and 2022, six months ended June 30, 2023 and 2022 and nine months ended September 30, 2023 and 2022, in each of the Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2023, June 30, 2023 and September 30, 2023.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the reporting period.

Significant estimates and assumptions made in the accompanying consolidated financial statements include but are not limited to the fair value of common stock, the fair value of stock options, the fair value of investments, income tax

uncertainties, and certain accruals.

Significant estimates and assumptions made in the accompanying consolidated financial statements include but are not

limited to the fair value of common stock, the fair value of stock options, the fair value of investments, income tax uncertainties, and certain accruals.

The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances change.

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The accounts are monitored by management and management believes that the financial institutions are financially sound, and, accordingly, minimal credit risk exists with respect to these financial institutions.

As of December 31, 2022 and 2021, the Company has not experienced any credit losses in such accounts or investments.

As of December 31, 2023 and 2022, the Company has not experienced any significant credit losses in such accounts or investments.

The Company is subject to a number of risks common for early-stage biopharmaceutical companies including, but not limited to, the ability to achieve any clinical or commercial success of its product candidates, ability to obtain regulatory approval of its product candidates, the need for substantial additional financing to achieve its goals, uncertainty of broad adoption of its approved products, if any, by physicians and patients, significant competition, dependency on the Company's contract manufacturing organization, and ability to manufacture.

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This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss as well as the Company’s ability and intent to hold the available-for-sale security until a forecasted recovery occurs.

Additionally, the Company assesses whether it has plans to sell the security or it is more likely than not it will be required to sell any available-for-sale securities before recovery of its amortized cost basis.

Realized gains and

losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest and other income, net.

Additionally, the Company assesses whether it has plans to sell the security or it is more likely than

not it will be required to sell any available-for-sale securities before recovery of its amortized cost basis.

Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest and other income, net.

The cost of investments sold is based on the specific-identification method.

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The Company measures its stock-based awards granted to employees, consultants and directors based on the estimated fair values of the awards and recognizes the compensation over the requisite service period.

The Company uses the Black-Scholes option-pricing model or the lattice option pricing model to estimate the fair value of its stock-based awards.

The Company uses the Black-Scholes option-pricing model, the lattice option pricing model or Monte Carlo simulation to estimate the fair value of its stock-based awards.

Stock-based compensation is recognized using the straight-line method.

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Impairment of Long-Lived Assets

Long-lived assets are reviewed annually for impairment or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability is measured by comparison of the carrying amount of an asset group to the future net undiscounted cash flows that the assets are expected to generate.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset.

There were impairment losses related to equipment disposals of less than $ 0.1 million for each of the years ended December 31, 2022 and 2021, respectively.

There were no impairment losses related to equipment disposals for the year ended December 31, 2020.

The long-lived assets recoverability test is performed at the asset group level, i.e., the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

If this test indicates that the carrying amount of the asset group is not recoverable, an impairment loss is measured as the amount by which the carrying amount of an asset group exceeds its fair value.

Any impairment loss is allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the carrying amount of an individual asset shall not be reduced below its fair value.

The Company recorded long-lived assets impairment loss of $ 13.2 million for the year ended December 31, 2023 (see Note 5).

There were no long-lived assets impairment losses recorded for the years ended December 31, 2022 and December 31, 2021.

Revenue Recognition

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This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement.

For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and, therefore, within the scope of Topic 606, Revenue from Contracts with Customers (ASC 606).

from Contracts with Customers (ASC 606).

For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to Topic 606.

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A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract.

The Company considers a performance obligation satisfied once the Company has transferred control of a good or

service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service.

A portion of the consideration should be allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

The Company considers a performance obligation satisfied once the Company has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service.

A portion of the consideration should be allocated to each distinct performance obligation.

The total consideration which the Company expects to collect in exchange for the Company’s products is an estimate and may be fixed or variable.

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Recent Accounting Pronouncements Not Yet Adopted

The Company continues to monitor new accounting pronouncements issued by the FASB and does not believe any accounting pronouncements issued through the date of this report will have a material impact on the Company's consolidated financial statements.

In September 2023, the FASB issued Accounting Standard Update No.

2023-09, Income taxes (Topic 740), Improvement to income tax disclosures, which requires to disclose some additional information in the consolidated financial statements.

This standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

Fair Value Measurements

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Money market funds ¹ $ 78,536 $ — $ — $ 78,536

Commercial paper — 4,954 — 4,954

Corporate bonds — 97,166 — 97,166

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Money market funds $ 78,536 $ — $ — $ 78,536

Commercial paper 4,956 — ( 2 ) 4,954

Corporate bonds 97,265 113 ( 212 ) 97,166

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Total cash equivalents and investments $ 444,078 $ 526,327

As of December 31, 2022 and 2021, the remaining contractual maturities of available-for-sale securities were less than three years .

There have been no significant realized losses on available-for-sale securities for the years ended December 31, 2022, 2021 and 2020.

As of December 31, 2023 and 2022, the remaining contractual maturities of available-for-sale securities were one year and less.

Realized losses on available-for-sale securities for the year ended December 31, 2023 were $ 1.0 million.

There were no significant realized losses on available-for-sale securities for the years ended December 31, 2022 and 2021.

As of December 31, 2023 and 2022, unrealized losses on available-for-sale securities are not attributed to credit risk.

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The Company believes that an allowance for credit losses is unnecessary because the unrealized losses on certain of the Company’s available-for-sale securities are due to market factors.

As of December 31, 2022 and 2021, securities with a fair value of $ 329.4 million and zero , respectively, were in a continuous net unrealized loss position for more than 12 months.

As of December 31, 2023 and 2022, securities with a fair value of $ 48.4 million and $ 329.4 million, respectively, were in a continuous net unrealized loss position for more than 12 months.

To date, the Company has not recorded any impairment charges on available-for-sale securities.

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Disposals of property and equipment were zero for the year ended December 31, 2021.

To date, the Company has not recorded any impairment loss on its Property and Equipment.

The Company continues to monitor its long-lived assets, including Property and Equipment, for events or changes in circumstances which indicate that the carrying amount of its long-lived assets may not be recoverable.

In December 2023, the Company made a decision to sublease one of its leased buildings in South San Francisco.

The Company vacated and ceased occupancy of this building in December 2023 and currently the Company is actively marketing the leased building for sublease.

The Company determined that the change in how this property is being used could indicate impairment.

The Company has determined it operates in a single operating segment and has one reportable segment.

The Company identified two asset groups for purposes of long-lived asset impairment assessment:

to be sublet property and

remaining operating segment.

The Company concluded that the carrying value of the sublet property asset group was not recoverable and the estimated fair value of this asset group was below its carrying value.

The lower fair value of the sublet property asset group was mainly due to the lower estimated sublease income compared to the lease payments in accordance with the initial operating lease agreement and higher discount rate.

The Company applied a discounted cash flow method to estimate fair value of its right-of-use asset.

It represents level 3 non-recurring fair value measurement.

Based on this analysis, the Company concluded the fair value of the right-of-use asset of $ 13.8 million was lower than its net book value of $ 27.0 million.

The key inputs to this valuation were expected sublease rental income of $ 22.7 million through March 31, 2032 and annual discount rate of 9 %.

The Company recognized pre-tax long-lived asset impairment charge of $ 13.2 million on the right-of-use asset.

Accrued Liabilities

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No milestone or royalty payments were made in the years ended December 31, 2023, 2022 and 2021.

Pfizer is also eligible to receive, on a product-by-product and country-by-country basis, royalties in single-digit percentages on annual net sales for products covered by the Pfizer Agreement or that use certain Pfizer intellectual property and for which an IND is first filed on or before April 6, 2023.

Pfizer is also eligible to receive, on a product-by-product and country-by-country basis, royalties in single-digit percentages on annual net sales for products covered by the Pfizer Agreement.

The Company’s royalty obligation with respect to a given product in a given country begins upon the first sale of such product in such country and ends on the later of (i) expiration of the last claim of any applicable patent or (ii) 12 years from the first sale of such product in such country.

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In connection with the execution of the Cellectis Agreement, on March 8, 2019, the Company and Cellectis also entered into a letter agreement (the Letter Agreement), pursuant to which the Company and Cellectis agreed to terminate the Original Cellectis Agreement.

The Original Cellectis Agreement included a research collaboration to conduct discovery and pre-clinical development activities to generate CAR T cells directed at targets selected by each party, which was completed in June 2018.

Pursuant to the Cellectis Agreement, Cellectis granted to the Company an exclusive, worldwide, royalty-bearing license, on a target-by-target basis, with sublicensing rights under certain conditions, under certain of Cellectis’s intellectual property, including its TALEN and electroporation technology, to make, use, sell, import, and otherwise exploit and commercialize CAR T products directed at certain targets, including BCMA, CD70, Claudin 18.2, DLL3 and FLT3 (the Allogene Targets), for human oncologic therapeutic, diagnostic, prophylactic and prognostic purposes.

In addition, certain Cellectis intellectual property rights granted by Cellectis to the Company and to Servier pursuant to the Exclusive License and

Collaboration Agreement by and between Servier and Pfizer, dated October 30, 2016, which Pfizer assigned to the Company in April 2018, will survive the termination of the Original Cellectis Agreement.

The Original Cellectis Agreement included a research

collaboration to conduct discovery and pre-clinical development activities to generate CAR T cells directed at targets selected by each party, which was completed in June 2018.

Pursuant to the Cellectis Agreement, Cellectis granted to the Company an exclusive, worldwide, royalty-bearing license, on a target-by-target basis, with sublicensing rights under certain conditions, under certain of Cellectis’ intellectual property, including its TALEN and electroporation technology, to make, use, sell, import, and otherwise exploit and commercialize CAR T products directed at certain targets, including BCMA, CD70, Claudin 18.2, DLL3 and FLT3 (the Allogene Targets), for human oncologic therapeutic, diagnostic, prophylactic and prognostic purposes.

In addition, certain Cellectis intellectual property rights granted by Cellectis to the Company and to Servier pursuant to the Exclusive License and Collaboration Agreement by and between Servier and Pfizer, dated October 30, 2016, which Pfizer assigned to the Company in April 2018, will survive the termination of the Original Cellectis Agreement.

Pursuant to the Cellectis Agreement, the Company granted Cellectis a non-exclusive, worldwide, royalty-free, perpetual and irrevocable license, with sublicensing rights under certain conditions, under certain of the Company's intellectual property, to make, use, sell, import and otherwise commercialize CAR T products directed at certain targets (the Cellectis Targets).

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Such royalties may be reduced, on a licensed product-by-licensed product and country-by-country basis, for generic entry and for payments due under licenses of third-party patents.

Pursuant to the Cellectis Agreement, and subject to certain exceptions, the Company is required to indemnify Cellectis against all third party claims related to the development, manufacturing, commercialization or use of any Allogene Product or arising out of the Company’s material breach of the representations, warranties or covenants set forth in the Cellectis Agreement, and Cellectis is required, subject to certain exceptions, to indemnify the Company against all third party claims related to the development, manufacturing, commercialization or use of CAR T products directed at Cellectis Targets or arising out of Cellectis’s material breach of the representations, warranties or covenants set forth in the Cellectis Agreement.

Pursuant to the Cellectis Agreement, and subject to certain exceptions, the Company is required to indemnify Cellectis against all thirdparty claims related to the development, manufacturing, commercialization or use of any Allogene Product or arising out of the Company’s material breach of the representations, warranties or covenants set forth in the Cellectis Agreement, and Cellectis is required, subject to certain exceptions, to indemnify the Company against all third party claims related to the development, manufacturing, commercialization or use of CAR T products directed at Cellectis Targets or arising out of Cellectis’ material breach of the representations, warranties or covenants set forth in the Cellectis Agreement.

The royalties are payable, on a licensed product-by-licensed product and country-by-country basis, until the later of (i) the expiration of the last to expire of the licensed patents covering such product;

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Unless earlier terminated in accordance with the Servier Agreement, the Servier Agreement will continue, on a licensed product-by-licensed product and country-by-country basis, until the Servier Royalty Term with respect to the sale of such licensed product in such country expires.

For the years ended December 31, 2022, 2021 and 2020, the Company recorded $ 19.9 million, $ 17.1 million, and $ 8.5 million, respectively, of net cost recoveries under the cost-sharing terms of the Servier Agreement as a reduction to research and development expenses.

As of December 31, 2022 and 2021, amounts due from Servier of $ 1.5 million and $ 4.1 million, respectively, were recorded in other current assets in the accompanying consolidated balance sheets.

For the year ended December 31, 2022, $ 8.0 million in costs were incurred related to the achievement of a clinical development milestone under the Servier Agreement.

Zero clinical development milestones were achieved for the years ended December 31, 2021 and 2020.

On September 15, 2022, Servier sent a notice of discontinuation (Discontinuation) of its involvement in the development of all licensed products directed against CD19, including UCART19, ALLO-501 and ALLO-501A (collectively, CD19 Products), pursuant to the Servier Agreement.

Servier’s Discontinuation provides the Company with the right to elect a license to the CD19 Products outside of the United States (Ex-US Option) and does not otherwise affect the Company's current exclusive license for the development and commercialization of CD19 Products in the United States.

However, Servier has disputed the implications of the Discontinuation, namely whether development cost contributions continue and the timeframe during which the Company has the right to elect a license to CD19 Products outside of the United States.

However, Servier has

disputed the implications of the Discontinuation, namely whether development cost contributions continue and the timeframe during which the Company has the right to elect a license to CD19 Products outside of the United States.

In December 2022, Servier sent the Company a notice for material breach due to the Company's purported refusal to allow an audit of certain manufacturing costs under the cost share arrangement.

While the Company does not believe Servier has such an audit right, the Company is currently progressing such audit with Servier to recover outstanding manufacturing costs owed by Servier to the Company.

While the Company does not believe Servier has such an audit right, the Company submitted to a review of the Company's manufacturing costs of CD19 Products to recover outstanding manufacturing costs owed by Servier to the Company.

In July 2023, Servier sent the Company a second notice for material breach alleging that the Company overcharged Servier based on Servier and its accounting firm’s review of costs eligible for cost-sharing under the Servier Agreement.

The Company disagrees with the material breach allegations and the Company is disputing such allegations.

Absent a resolution between the parties, disputed matters may be resolved in arbitration as specified in the Servier Agreement.

For the years ended December 31, 2023, 2022 and 2021, the Company recorded zero , $ 19.9 million, and $ 17.1 million, respectively, of net cost recoveries under the cost-sharing terms of the Servier Agreement as a reduction to research and development expenses.

As of December 31, 2023 and 2022, amounts due from Servier of zero and $ 1.5 million, respectively, were recorded in other current assets in the accompanying consolidated balance sheets.

For the year ended December 31, 2022, $ 8.0 million in costs were incurred related to the achievement of a clinical development milestone under the Servier Agreement.

Zero clinical development milestones were achieved for the years ended December 31, 2023 and 2021.

Research Collaboration and License Agreement with Notch Therapeutics

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Zero milestones were achieved for the years ended December 31, 2023 and 2022.

For the year ended December 31, 2023, the Company recorded $ 3.0 million in other expenses as impairment loss on its equity method investment in Notch.

Zero impairment loss was recorded for the years ended December 31, 2022 and 2021.

Strategic Alliance with The University of Texas MD Anderson Cancer Center

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Payment of this funding is contingent on mutual agreement to study orders in order for any study to be included under the alliance.

The Company made an upfront payment of $ 3.0 million to MD Anderson in the year ended December 31, 2020.

The Company made an upfront payment of $ 3.0 million to MD Anderson in the year ended December 31, 2020 and made an additional upfront payment of $ 3.0 million to MD Anderson in the year ended December 31, 2023.

The Company is obligated to make further payments to MD Anderson each year upon the anniversary of the agreement effective date through the duration of the agreement term.

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Where any legal or regulatory authorization is finally withdrawn or terminated, the relevant study will also terminate automatically.

For the years ended December 31, 2022, 2021, and 2020, the Company recorded $ 1.4 million, $ 1.0 million, and zero , respectively, in collaboration costs under this agreement as research and development expenses.

Joint Venture and License Agreement with Allogene Overland Biopharm (CY) Limited

On December 14, 2020, the Company entered into a License Agreement with Allogene Overland Biopharm (CY) Limited (Allogene Overland), a joint venture established by the Company and Overland Pharmaceuticals (CY) Inc.

(Overland), pursuant to a Share Purchase Agreement, dated December 14, 2020, for the purpose of developing, manufacturing and commercializing certain allogeneic CAR T cell therapies for patients in greater China, Taiwan, South Korea and Singapore (the JV Territory).

For the years ended December 31, 2023, 2022, and 2021, the Company recorded $ 0.9 million, $ 1.4 million, and $ 1.0 million, respectively, in collaboration costs under this agreement as research and development expenses.

Joint Venture and License Agreement with Allogene Overland Biopharm (CY) Limited (As Restated)

On December 14, 2020, the Company entered into the License Agreement with Allogene Overland, a joint venture established by the Company and Overland, pursuant to the Share Purchase Agreement, for the purpose of developing, manufacturing and commercializing certain allogeneic CAR T cell therapies for patients in greater China, Taiwan, South Korea and Singapore (the JV Territory).

Pursuant to the Share Purchase Agreement, the Company acquired Seed Preferred Shares in Allogene Overland representing 49 % of Allogene Overland's outstanding stock as partial consideration for the License Agreement, and Overland acquired Seed Preferred Shares representing 51 % of Allogene Overland's outstanding stock for $ 117.0 million in upfront and certain quarterly cash payments, to support operations of Allogene Overland.

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As consideration, the Company would also be entitled to additional regulatory milestone payments of up to $ 40.0 million and, subject to certain conditions, tiered low-to-mid single-digit sales royalties.

Subsequent to entering into the License Agreement, Allogene Overland assigned the License Agreement to a wholly-owned subsidiary, Allogene Overland BioPharm (HK) Limited.

Subsequent to entering into the License Agreement, Allogene Overland assigned the License Agreement to a wholly-owned subsidiary, Allogene Overland Biopharm (HK) Limited (Allogene Overland HK).

On April 1, 2022, Allogene Overland HK assigned the License Agreement to Allogene Overland Biopharm (PRC) Co., Limited.

Promises that the Company concluded were distinct performance obligations in the License Agreement included:

(1) the license of intellectual property and delivery of know-how, (2) the manufacturing license, related know-how and support, (3) if and when available know-how developed in future periods, and (4) participation in the joint steering committee.

In order to determine the transaction price, the Company evaluated all the payments to be received during the duration of the contract.

Fixed consideration exists in the form of the upfront payment.

(1) the license of intellectual property and delivery of know-how, (2) the manufacturing license, related know-how and support, (3) know-how developed in future periods, and (4) participation in the joint steering committee.

In order to determine the transaction price, the Company evaluated all the consideration to be received over the duration of the contract.

Fixed consideration exists in the form of the upfront payment and Seed Preferred Shares in Allogene Overland.

Regulatory milestones and royalties were considered variable consideration.

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The Company re-evaluates the transaction price, including the estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

The shares of Series Seed Preferred Stock were accounted for as part of the Company’s joint venture and equity method accounting upon formation of the joint venture, and as such, were excluded from the transaction price.

The Company determined that the initial transaction price consists of the upfront payment of $ 40.0 million.

The allocation of the transaction price is performed

based on standalone selling prices, which are based on estimated amounts that the Company would charge for a performance obligation if it were sold separately .

The transaction price allocated to the license of intellectual property and delivery of know-how will be recognized upon grant of license and delivery of know-how.

The transaction price allocated to (i) the manufacturing license, related know-how and support services, (ii) if and when available know-how developed in future periods, and (iii) participation in the joint steering committee, will be recognized over time as the services are delivered.

The Company estimated the fair value of the shares of Seed Preferred Stock at $ 79.0 million, using probability adjusted future cash infusions based on the upfront and certain quarterly cash payments of $ 117.0 million committed by Overland.

The probability for the future quarterly cash payments of 65 % was developed based on consideration of the Company's expectations for future cash infusions from Overland and was applied on a cumulative basis for each quarterly payment.

The present value of the future quarterly cash payments was estimated using 11.9 % annual discount rate.

The fair value measurement is based on significant inputs not observable in the market and, therefore, represents a Level 3 measurement.

The Company determined that the initial transaction price consists of the upfront payment of $ 40.0 million and noncash consideration of $ 79.0 million received in the form of the shares of Seed Preferred Stock.

The allocation of the transaction price is performed based on standalone selling prices, which are based on estimated amounts that the Company would charge for a performance obligation if it were sold separately .

The initial transaction price of $ 119.0 million was allocated as follows:

(i) $ 114.0 million to the license of intellectual property and know-how, which was recognized upon grant of license and delivery of know-how in the consolidated financial statements for the year ended December 31, 2021 when the know-how was delivered;

(ii) $ 2.3 million to the manufacturing license, related know-how and support, which will be recognized as services are delivered;

(iii) $ 2.1 million to the know-how developed in future periods, which will be recognized as services are delivered, and (iv) $ 0.6 million to participation in the joint steering committee, which will be recognized over time as the services are delivered.

Funds received in advance are recorded as deferred revenue and will be recognized as the performance obligations are satisfied.

The Company has determined that Allogene Overland is a variable interest entity as of December 31, 2023 and 2022, respectively.

The Company does not have the power to independently direct the activities which most significantly affect Allogene Overland's economic performance.

The Company does not have the power to direct the activities which most significantly affect Allogene Overland's economic performance.

Accordingly, for the years ended December 31, 2023 and 2022, the Company did not consolidate Allogene Overland because the Company determined that it was not the primary beneficiary.

For the years ended December 31, 2022, 2021 and 2020, the Company recognized $ 0.2 million, $ 38.5 million and zero , respectively, of collaboration revenue, primarily related to the delivery of a performance obligation consisting of a license of intellectual property and related know-how which was delivered in the first quarter of 2021.

The Company's total equity investment in Allogene Overland as of December 31, 2023 and 2022 was zero and $ 4.5 million, respectively (see Note 8).

For the years ended December 31, 2023, 2022 and 2021, the Company recognized $ 0.1 million, $ 0.2 million and $ 114.1 million, respectively, of collaboration revenue, primarily related to support services and the delivery of a performance obligation consisting of a license of intellectual property and related know-how which was delivered in the first quarter of 2021.

For the year ended December 31, 2022, the Company recorded $ 0.7 million of net cost recoveries under the terms of the license agreement as a reduction to research and development expenses.

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The upfront payment was fully recognized as research and development expense as the license had no foreseeable alternative future use.

In addition, the Company made a $ 3.0 million investment in Antion's preferred stock and is expected to make an additional $ 3.0 million investment in Antion's preferred stock upon achievement of an agreed milestone.

In addition, the Company made a $ 3.0 million investment in Antion's preferred stock.

The Company accounts for its investment in Antion's preferred stock as an equity investment measured at cost less any impairment.

In connection with this investment, a Company representative was appointed to Antion’s Board of Directors.

In July 2023, the Company and Antion entered into an amendment to the Antion Collaboration and License Agreement.

Under the terms of this amendment, Antion's exclusivity obligation relating to the collaboration was terminated;

however, Antion agreed to certain restrictions on its ability to pursue products directed against specific targets.

Also, in lieu of the Company's prior obligation to make a $ 3.0 million investment in Antion following the completion of certain milestones, the Company agreed to make a $ 2.0 million investment in Antion's preferred stock and acquired warrants to purchase an additional $ 3.0 million of Antion's preferred stock.

The Company accounts for the fair value of the new investment of $ 1.0 million as an equity investment and the remaining $ 1.0 million was recorded as research and development expense.

Under the Antion Collaboration and License Agreement, Antion will be eligible to receive up to $ 35.3 million for four products upon achievement of certain development and regulatory milestones.

1 unchanged sentence

Antion is also entitled to receive a low single-digit royalty on the Company’s sales of licensed products, subject to certain reductions.

For the year ended December 31, 2022, the Company recorded $ 5.0 million in research and development expenses related to the upfront payment and collaboration costs, of which $ 0.5 million is recorded in accrued and other liabilities as of December 31, 2022.

The Company's total equity investment in Antion was $ 3.0 million as of December 31, 2022 and is recognized in other long-term assets in the consolidated balance sheets.

For the years ended December 31, 2023 and 2022, the Company recorded $ 1.8 million and $ 5.0 million, respectively, in research and development expenses related to the upfront payment and collaboration costs.

For the years ended December 31, 2023 and 2022, the Company recorded $ 0.4 million and zero , respectively, in research and development expenses related to the achievement of a milestone under the Antion Collaboration and License Agreement.

For the year ended December 31, 2023 and 2022, the Company recorded $ 4.0 million and zero , respectively, in other expenses as impairment loss on its equity investment in Antion.

As of December 31, 2023 and 2022, research and development expenses recorded in accrued and other liabilities relating to Antion were zero and $ 0.5 million, respectively.

As of December 31, 2023 and 2022, the Company's total equity investment in Antion was zero and $ 3.0 million, respectively, and is recognized in other long-term assets in the consolidated balance sheets.

Commitments and Contingencies

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The lease term was 127 months beginning August 2018 through February 2029 with an option to extend the term for 7 years which was not reasonably assured of exercise.

The Company has made certain tenant improvements, including the addition of laboratory space, and has

received $ 5.0 million of tenant improvement allowances up to December 31, 2022.

The Company has made certain tenant improvements, including the addition of laboratory space, and has received $ 5.0 million of tenant improvement allowances up to December 31, 2023.

The rent payments began on March 1, 2019 after an abatement period.

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The lease term is 188 months and began in November 2020.

Upon certain conditions, the Company has two ten-year options to extend the lease, both of which are not reasonably assured of exercise.

Upon certain conditions, the Company has two ten-year options to extend the lease, both of which are not reasonably

assured of exercise.

The Company has received $ 3.0 million of tenant improvement allowances for costs related to the design and construction of certain Company improvements.

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As of December 31, 2023, the weighted average remaining lease term for our operating leases is 9.03 years.

Rent expense for short-term leases was $ 0.3 million, $ 0.3 million and $ 0.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The Company did no t incur any significant rent expense for short-term leases for the years ended December 31, 2023, 2022 and 2021, respectively.

Certain lease agreements require the Company to return designated areas of leased space to its original condition upon termination of the lease agreement.

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In subsequent periods, for each asset retirement obligation, the Company records interest expense to accrete the asset retirement obligation liability to full value and depreciate each capitalized asset retirement obligation asset, both over the term of the associated lease agreement.

Asset retirement obligations were $ 0.6 million and $ 0.5 million as of December 31, 2022 and 2021 respectively.

Asset retirement obligations were $ 0.6 million as of December 31, 2023 and 2022.

Other Commitments

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There have been no claims to date, and the Company has a directors and officers liability insurance policy that may enable it to recover a portion of any amounts paid for future claims.

Equity Method Investments

Equity Method Investments (As Restated)

Notch Therapeutics

5 unchanged sentences

The Company’s total equity investment in Notch as of December 31, 2023 and 2022 was $ 3.6 million and $ 12.8 million, respectively, and the Company accounted for the investment using the equity method of accounting.

During the years ended December 31, 2022, 2021 and 2020, the Company recognized its share of Notch's net loss under the other expenses caption within the consolidated statement of operations.

During the years ended December 31, 2023, 2022 and 2021, the Company recognized its share of Notch's net loss of $ 6.2 million, $ 7.2 million

and $ 2.7 million, respectively, under the other expenses caption within the consolidated statement of operations.

For the year ended December 31, 2023, the Company recorded $ 3.0 million in other expenses as impairment loss on its equity method investment in Notch.

Zero impairment loss was recorded for the years ended December 31, 2022 and 2021.

Allogene Overland Biopharm (CY) Limited

In conjunction with the execution of the License Agreement with Allogene Overland (see Note 6), the Company also entered into a Share Purchase Agreement and Shareholders' Agreement with the joint venture company acquiring shares of Allogene Overland’s Seed Preferred Shares representing a 49 % ownership interest in exchange for entering into a License Agreement which had a carrying value of zero .

The Company accounts for its investment in Allogene Overland as an equity method investment at carrying value.

The Company's total equity investment in Allogene Overland was zero as of December 31, 2022.

The Company’s equity investment in Allogene Overland as of December 31, 2022 and 2021 had a zero carryover basis.

Therefore, the Company did not account for its share of losses incurred by Allogene Overland.

See Note 6 for further details.

In conjunction with the execution of the License Agreement with Allogene Overland (see Note 6), the Company also entered into the Share Purchase Agreement and a Shareholders' Agreement with the joint venture company acquiring shares of Allogene Overland’s Seed Preferred Stock representing a 49 % ownership interest in exchange for entering into a License Agreement.

The Company's total equity investment in Allogene Overland as of December 31, 2023 and 2022 was zero and $ 4.5 million, respectively, and the Company accounted for the investment using the equity method of accounting.

During the years ended December 31, 2023, 2022 and 2021, the Company recognized its share of Allogene Overland's net loss of $ 4.5 million, $ 5.7 million, and $ 1.3 million, respectively, under the other expenses caption within the consolidated statement of operations.

Stockholders’ Equity

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Options forfeited ( 5,221,503 ) 11.31

Cancelled under the Option Exchange ( 3,666,600 ) $ 26.82

Granted under the Option Exchange 3,666,600 $ 13.31

Balance, December 31, 2023 21,812,946 $ 9.93 7.53 $ 662

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During the years ended December 31, 2023, 2022 and 2021, the estimated weighted-average grant-date fair value of employee options granted was $ 3.33 per share, $ 9.97 per share and $ 18.79 per share, respectively.

As of December 31, 2022 and 2021, there was $ 83.2 million and $ 75.5 million, respectively, of unrecognized stock-based compensation related to unvested stock options, which is expected to be recognized over a weighted-average period of 2 years, 256 days and 2 years, 176 days , respectively.

As of December 31, 2023 and 2022, there was $ 58.1 million and $ 83.2 million, respectively, of unrecognized stock-based compensation related to unvested stock options, which is expected to be recognized over a weighted-average period of 2.42 years and 2.70 years, respectively.

The fair value of employee, consultant and director stock option awards was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions:

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Vested and expected to vest, December 31, 2023 12,180,471 $ 6.68 2.00 $ 39,099

For the years ended December 31, 2022, 2021 and 2020, total stock-based compensation expense related to restricted stock units and performance based restricted stock units was $ 34.3 million, $ 26.6 million and $ 17.2 million, respectively .

For the years ended December 31, 2022, 2021 and 2020, total fair value of vested restricted stock units and performance based restricted stock units as of their grant dates was $ 32.8 million, $ 18.5 million and $ 13.4 million, respectively.

As of December 31, 2022 and 2021, there was $ 70.5 million and $ 90.7 million, respectively, of unrecognized stock-based compensation which is expected to be recognized over a weighted average period of 2.55 years.

For the year ended December 31, 2023, the Company granted 3,264,750 performance-based restricted stock units and 2,189,125 restricted stock units with a market condition to certain executive officers and other employees pursuant to the 2018

These awards are subject to the holders' continuous service to the Company through each applicable vesting event.

Through December 31, 2023, the Company believes that the achievement of the requisite performance conditions for these awards are not probable.

As a result, no compensation expense has been recognized related to the performance-based restricted stock units in the year ended December 31, 2023.

The Company recognized $ 2.2 million in stock-based compensation expense related to the restricted units with a market condition for the year ended December 31, 2023.

For the years ended December 31, 2023, 2022 and 2021, total stock-based compensation expense related to restricted stock units, performance based restricted stock units and restricted stock units with a market condition was $ 28.5 million, $ 34.3 million and $ 26.6 million, respectively .

For the years ended December 31, 2023, 2022 and 2021, total fair value of vested restricted stock units, performance based restricted stock units and restricted stock units with a market condition as of their grant dates was $ 33.3 million, $ 32.8 million and $ 18.5 million, respectively.

As of December 31, 2023 and 2022, there was $ 50.7 million and $ 70.5 million, respectively, of unrecognized stock-based compensation which is expected to be recognized over a weighted average period of 2.36 years and 2.55 years, respectively.

Employee Stock Purchase Plan

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Employees are eligible to participate if they are employed by the Company.

Under the ESPP, employees may purchase common stock through payroll deductions at a price equal to 85 % of the lower of the fair market value of common stock on the

first trading day of each offering period or on the purchase date.

Under the ESPP, employees may purchase common stock through payroll deductions at a price equal to 85 % of the lower of the fair market value of common stock on the first trading day of each offering period or on the purchase date.

The ESPP provides for consecutive, overlapping 24 -month offering periods.

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In relation to the modification, 24,230,750 shares of founders’ stock remained unvested at the modification date in April 2018.

For the years ended December 31, 2022, 2021 and 2020, $ 3.4 million, $ 13.7 million, and $ 13.7 million of stock-based compensation expense was recognized related to the vesting of 1,514,424 , 6,057,695 , and 6,057,684 shares, respectively, of founders' stock.

At December 31, 2021, there was $ 3.4 million of unrecognized stock-based compensation expense related to 1,514,424 shares of unvested founders’ stock which was recognized over 3 months.

For the years ended December 31, 2022, and 2021, $ 3.4 million and $ 13.7 million of stock-based compensation expense was recognized related to the vesting of 1,514,424 , and 6,057,695 shares, respectively, of founders' stock.

At December 31, 2022, there was no unrecognized stock-based compensation expense.

The weighted-average fair value at grant date for founders’ stock was $ 2.27 per share.

Total stock-based compensation expense related to stock options, restricted stock units, employee stock purchase plans and vesting of the founders’ common stock was as follows:

Year Ended December 31,

2022 2021 2020

(in thousands)

Research and development $ 42,497 $ 39,611 $ 31,309

General and administrative 41,103 41,207 33,952

Total stock-based compensation expense $ 83,600 $ 80,818 $ 65,261

Stock-based compensation expense

For the years ended December 31, 2023, 2022 and 2021, the Company recorded $ 66.0 million, $ 83.6 million and $ 80.8 million, respectively, of stock-based compensation expense related to stock options, restricted stock units, employee stock purchase plans and vesting of the founders’ common stock as research and development and general and administrative expense in its consolidated statements of operations and comprehensive loss.

Early Exercised Options

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The proceeds are reclassified to paid-in capital as the repurchase right lapses.

During the years ended December 31, 2022 and 2021, zero and 293,594 options were early exercised, respectively.

As of December 31, 2022 and 2021, there was $ 1.9 million and $ 2.9 million, respectively, recorded in accrued and other liabilities and $ 0.6 million and $ 2.5 million, respectively, recorded in other long-term liabilities related to shares held by employees and directors that were subject to repurchase.

During the years ended December 31, 2023 and 2022, no options were early exercised.

As of December 31, 2023 and 2022, there was $ 0.5 million and $ 1.9 million, respectively, recorded in accrued and other liabilities and zero and $ 0.6 million, respectively, recorded in other long-term liabilities related to shares held by employees and directors that were subject to repurchase.

The underlying shares are shown as outstanding in the consolidated financial statements since the exercise date but the shares which are subject to future vesting conditions are not included in the calculation of earnings per share.

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Based on a Form 4 filed on April 4, 2022 by PF Equity Holdings 2 B.V., Pfizer held the 22,032,040 shares as of March 31, 2022.

During the years ended December 31, 2022 and 2020, the Company sold zero in excess raw materials to Pfizer.

During the year ended December 31, 2021, the Company sold $ 0.1 million in excess raw materials to Pfizer.

Collaboration Revenue

In December 2020, the Company entered into a license agreement with Allogene Overland, a corporate joint venture entity and related party (see Note 6).

The license agreement was subsequently assigned to a wholly-owned subsidiary of Allogene Overland, Allogene Overland BioPharm (HK) Limited.

Collaboration Revenue and Equity Method Investment (As Restated)

In December 2020, the Company entered into the License Agreement with Allogene Overland, a corporate joint venture entity and related party (see Note 6).

The License Agreement was subsequently assigned to a wholly owned subsidiary of Allogene Overland, Allogene Overland HK.

On April 1, 2022, Allogene Overland HK assigned the License Agreement to Allogene Overland Biopharm (PRC) Co., Limited.

During the years ended December 31, 2022 and 2021, the Company recognized $ 0.2 million and $ 38.5 million, respectively, of collaboration revenue under this arrangement.

For the year ended December 31, 2022, 2021 and 2020, the Company recorded $ 0.7 million, $ 0.2 million, and zero , respectively, of net cost recoveries under the terms of the license agreement as a reduction to research and development expenses.

During the years ended December 31, 2023, 2022 and 2021, the Company recognized $ 0.1 million, $ 0.2 million and $ 114.1 million, respectively, of collaboration revenue under this arrangement.

For the year ended December 31, 2023, 2022 and 2021, the Company recorded zero , $ 0.7 million and $ 0.2 million, respectively, of net cost recoveries under the terms of the license agreement as a reduction to research and development expenses.

For the years ended December 31, 2023, 2022 and 2021, the Company recorded $ 4.5 million, $ 5.7 million and $ 1.3 million, respectively, of its share of Allogene Overland's net loss as other expenses (see Note 8).

Consulting Agreements

1 unchanged sentence

The costs incurred for services provided under this agreement were $ 0.3 million, $ 0.7 million and $ 0.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

In December 2023, the service agreement between the Company and Two River was terminated.

In August 2018, the Company entered into a consulting agreement with Bellco Capital LLC (Bellco).

1 unchanged sentence

Belldegrun, the Company's executive chair, and inc lude without limitation, providing advice and analysis with respect to the Company’s business, business strategy and potential opportunities in the field of allogeneic CAR T cell therapy and any other aspect of the CAR T cell therapy business as the Company may agree.

In consideration for these services, the Company paid Bellco $ 37,000 per month in arrears commencing January 2020, and $ 38,583 per month in arrears commencing January 2021, and $ 40,217 per month in arrears commencing January 2022.

In consideration for these services, the Company paid Bellco $ 38,583 per month in arrears commencing January 2021, and $ 40,217 per month in arrears commencing January 2022.

The Company may also, at its discretion, pay Bellco an annual performance award in an amount up to 60 % of the aggregate compensation payable to Bellco in a calendar year.

The Company also reimburses Bellco for out of pocket expenses incurred in performing the services.

The Company also reimburses Bellco for out of pocket expenses incurred in performing

the services.

The costs incurred for services provided, bonus and out-of-pocket expenses incurred under this consulting agreement were $ 0.9 million, $ 0.8 million and $ 0.7 million for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2022 and 2021, amounts due to Bellco of $ 0.3 million were recorded in accrued and other current liabilities in the accompanying consolidated balance sheets.

As of December 31, 2023 and 2022, amounts due to Bellco of $ 0.2 million and $ 0.3 million, respectively, were recorded in accrued and other current liabilities in the accompanying consolidated balance sheets.

Sublease Agreements

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The total right of use asset and associated liability recorded related to this related party lease was $ 0.1 million and $ 0.2 million at December 31, 2023 and 2022, respectively.

In February 2019, the Company subleased 2,180 square feet of its office space in New York, New York, to ByHeart, Inc., formerly known as Second Science, Inc.

ByHeart is a development-stage infant formula company.

Certain of the Company’s board members and executive officers have beneficial ownership in ByHeart and two serve on the board of directors of ByHeart.

In September 2019, the Company entered into an amendment to the sublease agreement and increased the subleased space to 2,907 square feet.

In October 2020, the sublease agreement between the Company and ByHeart was

Sublease income for the years ended December 31, 2022 and 2021 was zero .

Sublease income for the year ended December 31, 2020 was $ 0.3 million, and was recognized as other income.

In February 2023, the Company subleased an additional 2,030 square feet of office space in Los Angeles, California, from Bellco.

The sublease term is 115 months, subject to certain early termination rights.

The sublease is expected to commence January 1, 2024.

The Company paid approximately $ 0.2 million towards the monthly base rent due for the first month of the sublease term and its share of the security deposit.

The total estimated amount of base rent is $ 2.9 million, subject to rent abatement.

The Company also expects to contribute to certain tenant improvements to the space totaling to its share of the total tenant contribution.

In April 2018, the Company began to sponsor a 401(k) retirement savings plan for the benefit of its employees.

7 unchanged sentences

2023 2022 2021

(As Restated) (As Restated)

(in thousands)

10 unchanged sentences

2023 2022 2021

(As Restated) (As Restated)

(in thousands)

37 unchanged sentences

This guidance was effective for the Company in the first quarter of 2021 on a prospective basis, and early adoption was permitted.

The Company early adopted this standard as of January 1, 2020 on a prospective basis in accordance with ASC 250, Accounting Changes and Error Corrections.

The adoption resulted in the Company no longer

needing to determine the tax effect from unrealized gains on available for sale securities, which previously had been disclosed in the consolidated statement of operations as a benefit from income taxes.

The Company early adopted this standard as of January 1, 2020 on a prospective basis in

accordance with ASC 250, Accounting Changes and Error Corrections.

The adoption resulted in the Company no longer needing to determine the tax effect from unrealized gains on available for sale securities, which previously had been disclosed in the consolidated statement of operations as a benefit from income taxes.

The impact of the adoption is that the benefit from income taxes in the consolidated statement of operations and comprehensive loss is zero .

21 unchanged sentences

2023 2022 2021

(As Restated) (As Restated)

Net loss $ ( 327,265 ) $ ( 340,414 ) $ ( 182,051 )

11 unchanged sentences

Total 36,190,861 24,294,136 17,209,986

Selected Quarterly Financial Data (Unaudited)

The following tables present selected quarterly financial data for 2023 and 2022 (in thousands, except share and per share data):

March 31, 2023 March 31, 2022

Condensed Consolidated Balance Sheets As Previously Reported Restatement Adjustment As Restated As Previously Reported Restatement Adjustment As Restated

Current assets:

Cash and cash equivalents $ 109,931 $ — $ 109,931 $ 84,514 $ — $ 84,514

Short-term investments 361,293 — 361,293 364,536 — 364,536

Prepaid expenses and other current assets 10,241 — 10,241 20,694 — 20,694

Total current assets 481,465 — 481,465 469,744 — 469,744

Long-term investments 42,788 — 42,788 284,093 — 284,093

Operating lease right-of-use asset 81,964 — 81,964 57,057 — 57,057

Property and equipment, net 109,849 — 109,849 120,200 — 120,200

Restricted cash 10,292 — 10,292 10,292 — 10,292

Other long-term assets 9,389 — 9,389 9,042 — 9,042

Equity method investments 11,124 3,257 14,381 14,204 13,459 27,663

Total assets 746,871 3,257 750,128 964,632 13,459 978,091

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable 14,688 — 14,688 8,708 — 8,708

Accrued and other current liabilities 44,624 — 44,624 27,763 — 27,763

Deferred revenue 273 ( 187 ) 86 406 ( 259 ) 147

Total current liabilities 59,585 ( 187 ) 59,398 36,877 ( 259 ) 36,618

Lease liability, noncurrent 93,514 — 93,514 69,035 — 69,035

Other long-term liabilities 1,510 3,695 5,205 3,490 3,681 7,171

Total liabilities 154,609 3,509 158,118 109,402 3,421 112,823

Stockholders’ equity:

Preferred stock, $ 0.001 par value:

10,000,000 authorized as of March 31, 2023 and March 31, 2022;

no shares were issued and outstanding as of March 31, 2023 and March 31, 2022

Common stock, $ 0.001 par value:

400,000,000 and 200,000,000 shares authorized as of March 31, 2023 and March 31, 2022, respectively;

145,740,333 and 143,569,902 shares issued and outstanding as of March 31, 2023 and March 31, 2022, respectively

146 — 146 143 — 143

Additional paid-in capital 1,932,734 — 1,932,734 1,847,534 — 1,847,534

Accumulated deficit ( 1,334,684 ) ( 252 ) ( 1,334,936 ) ( 983,198 ) 10,037 ( 973,161 )

Accumulated other comprehensive loss ( 5,934 ) — ( 5,934 ) ( 9,249 ) — ( 9,249 )

Total stockholders’ equity (deficit) 592,262 ( 252 ) 592,010 855,230 10,037 865,267

Total liabilities and stockholders’ equity 746,871 3,257 750,128 964,632 13,459 978,091

Three Months ended March 31, 2023 Three Months ended March 31, 2022

Condensed Consolidated Statements of Operations and Comprehensive Loss As Previously Reported Restatement Adjustment As Restated As Previously Reported Restatement Adjustment As Restated

Collaboration revenue - related party $ 52 $ ( 22 ) $ 30 $ 61 $ ( 22 ) $ 39

Operating expenses:

Research and development 80,238 — 80,238 60,156 — 60,156

General and administrative 18,884 — 18,884 19,897 — 19,897

Total operating expenses 99,122 — 99,122 80,053 — 80,053

Loss from operations ( 99,070 ) ( 22 ) ( 99,092 ) ( 79,992 ) ( 22 ) ( 80,014 )

Other income (expense), net:

Interest and other income, net 2,059 — 2,059 492 — 492

Other expenses ( 1,693 ) ( 1,242 ) ( 2,935 ) ( 350 ) 1,265 915

Total other income (expense), net 366 ( 1,242 ) ( 876 ) 142 1,265 1,407

Net loss ( 98,704 ) ( 1,264 ) ( 99,968 ) ( 79,850 ) 1,243 ( 78,607 )

Other comprehensive income:

Net unrealized (loss) gain on available-for-sale investments, net of tax 3,992 — 3,992 ( 6,682 ) — ( 6,682 )

Net comprehensive loss ( 94,712 ) ( 1,264 ) ( 95,976 ) ( 86,532 ) 1,243 ( 85,289 )

Net loss per share, basic and diluted ( 0.68 ) ( 0.69 ) ( 0.56 ) ( 0.56 )

Weighted-average number of shares used in computing net loss per share, basic and diluted 144,563,829 144,563,829 141,356,306 141,356,306

Three Months ended March 31, 2023 Three Months ended March 31, 2022

Condensed Consolidated Statements of Cash Flow As Previously Reported Restatement Adjustment As Restated As Previously Reported Restatement Adjustment As Restated

Net Loss $ ( 98,704 ) $ ( 1,264 ) $ ( 99,968 ) $ ( 79,850 ) $ 1,243 $ ( 78,607 )

Non-cash collaboration revenue - related party — ( 20 ) ( 20 ) — ( 26 ) ( 26 )

Share of losses from equity method investments 1,693 1,242 2,935 3,800 ( 1,265 ) 2,535

Changes in operating assets and liabilities:

Deferred revenue ( 612 ) 609 ( 3 ) ( 17 ) 14 ( 3 )

Other long-term liabilities ( 59 ) ( 567 ) ( 626 ) ( 635 ) 34 ( 601 )

Net cash used in operating activities ( 66,639 ) — ( 66,639 ) ( 68,237 ) — ( 68,237 )

June 30, 2023 June 30, 2022

Condensed Consolidated Balance Sheets As Previously Reported Restatement Adjustment As Restated As Previously Reported Restatement Adjustment As Restated

Current assets:

Cash and cash equivalents $ 154,758 $ — $ 154,758 $ 96,041 $ — $ 96,041

Short-term investments 337,204 — 337,204 394,451 — 394,451

Prepaid expenses and other current assets 10,139 — 10,139 22,536 — 22,536

Total current assets 502,101 — 502,101 513,028 — 513,028

Long-term investments 52,586 — 52,586 195,637 — 195,637

Operating lease right-of-use asset 80,314 — 80,314 86,837 — 86,837

Property and equipment, net 106,386 — 106,386 117,216 — 117,216

Restricted cash 10,292 — 10,292 10,292 — 10,292

Other long-term assets 9,382 — 9,382 8,938 — 8,938

Equity method investments 9,910 2,036 11,946 15,696 7,977 23,673

Total assets 770,971 2,036 773,007 947,644 7,977 955,621

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable 10,229 — 10,229 9,713 — 9,713

Accrued and other current liabilities 44,263 — 44,263 34,360 — 34,360

Deferred revenue 229 ( 143 ) 86 836 ( 732 ) 104

Total current liabilities 54,721 ( 143 ) 54,578 44,909 ( 732 ) 44,177

Lease liability, noncurrent 91,821 — 91,821 98,232 — 98,232

Other long-term liabilities 1,523 3,674 5,197 2,554 4,175 6,729

Total liabilities 148,065 3,531 151,596 145,695 3,443 149,138

Stockholders’ equity:

Preferred stock, $ 0.001 par value:

10,000,000 authorized as of June 30, 2023 and June 30, 2022;

no shares were issued and outstanding as of June 30, 2023 and June 30, 2022

Common stock, $ 0.001 par value:

400,000,000 shares authorized as of June 30, 2023 and June 30, 2022;

167,133,664 and 143,723,171 shares issued and outstanding as of June 30, 2023 and June 30, 2022, respectively

167 — 167 144 — 144

Additional paid-in capital 2,039,263 — 2,039,263 1,871,262 — 1,871,262

Accumulated deficit ( 1,412,673 ) ( 1,495 ) ( 1,414,168 ) ( 1,057,985 ) 4,534 ( 1,053,451 )

Accumulated other comprehensive loss ( 3,851 ) — ( 3,851 ) ( 11,472 ) — ( 11,472 )

Total stockholders’ equity (deficit) 622,906 ( 1,495 ) 621,411 801,949 4,534 806,483

Total liabilities and stockholders’ equity 770,971 2,036 773,007 947,644 7,977 955,621

Three Months ended June 30, 2023 Three Months ended June 30, 2022

Condensed Consolidated Statements of Operations and Comprehensive Loss As Previously Reported Restatement Adjustment As Restated As Previously Reported Restatement Adjustment As Restated

Collaboration revenue - related party $ 44 $ ( 22 ) $ 22 $ 86 $ ( 22 ) $ 64

Operating expenses:

Research and development 62,038 — 62,038 57,171 — 57,171

General and administrative 18,524 — 18,524 19,509 — 19,509

Total operating expenses 80,562 — 80,562 76,680 — 76,680

Loss from operations ( 80,518 ) ( 22 ) ( 80,540 ) ( 76,594 ) ( 22 ) ( 76,616 )

Other income (expense), net:

Interest and other income, net 3,778 — 3,778 315 — 315

Other expenses ( 1,249 ) ( 1,221 ) ( 2,470 ) 1,492 ( 5,481 ) ( 3,989 )

Total other income (expense), net 2,529 ( 1,221 ) 1,308 1,807 ( 5,481 ) ( 3,674 )

Net loss ( 77,989 ) ( 1,243 ) ( 79,232 ) ( 74,787 ) ( 5,503 ) ( 80,290 )

Other comprehensive income:

Net unrealized (loss) gain on available-for-sale investments, net of tax 2,083 — 2,083 ( 2,223 ) — ( 2,223 )

Net comprehensive loss ( 75,906 ) ( 1,243 ) ( 77,149 ) ( 77,010 ) ( 5,503 ) ( 82,513 )

Net loss per share, basic and diluted ( 0.53 ) ( 0.54 ) ( 0.52 ) ( 0.56 )

Weighted-average number of shares used in computing net loss per share, basic and diluted 146,795,826 146,795,826 143,385,045 143,385,045

Six Months ended June 30, 2023 Six Months ended June 30, 2022

Condensed Consolidated Statements of Operations and Comprehensive Loss As Previously Reported Restatement Adjustment As Restated As Previously Reported Restatement Adjustment As Restated

Collaboration revenue - related party $ 96 $ ( 44 ) $ 52 $ 147 $ ( 44 ) $ 103

Operating expenses:

Research and development 142,276 — 142,276 117,327 — 117,327

General and administrative 37,408 — 37,408 39,406 — 39,406

Total operating expenses 179,684 — 179,684 156,733 — 156,733

Loss from operations ( 179,588 ) ( 44 ) ( 179,632 ) ( 156,586 ) ( 44 ) ( 156,630 )

Other income (expense), net:

Interest and other income, net 5,837 — 5,837 807 — 807

Other expenses ( 2,942 ) ( 2,463 ) ( 5,405 ) 1,142 ( 4,216 ) ( 3,074 )

Total other income (expense), net 2,895 ( 2,463 ) 432 1,949 ( 4,216 ) ( 2,267 )

Net loss ( 176,693 ) ( 2,507 ) ( 179,200 ) ( 154,637 ) ( 4,260 ) ( 158,897 )

Other comprehensive income:

Net unrealized (loss) gain on available-for-sale investments, net of tax 6,075 — 6,075 ( 8,905 ) — ( 8,905 )

Net comprehensive loss ( 170,618 ) ( 2,507 ) ( 173,125 ) ( 163,542 ) ( 4,260 ) ( 167,802 )

Net loss per share, basic and diluted ( 1.21 ) ( 1.23 ) ( 1.09 ) ( 1.12 )

Weighted-average number of shares used in computing net loss per share, basic and diluted 145,685,993 145,685,993 142,376,280 142,376,280

Six Months ended June 30, 2023 Six Months ended June 30, 2022

Condensed Consolidated Statements of Cash Flow As Previously Reported Restatement Adjustment As Restated As Previously Reported Restatement Adjustment As Restated

Net Loss $ ( 176,693 ) $ ( 2,507 ) $ ( 179,200 ) $ ( 154,637 ) $ ( 4,260 ) $ ( 158,897 )

Non-cash collaboration revenue - related party — ( 34 ) ( 34 ) — ( 69 ) ( 69 )

Share of losses from equity method investments 2,907 2,463 5,370 2,309 4,216 6,525

Changes in operating assets and liabilities:

Deferred revenue ( 656 ) 653 ( 3 ) 413 ( 430 ) ( 17 )

Other long-term liabilities ( 46 ) ( 575 ) ( 621 ) ( 1,571 ) 543 ( 1,028 )

Net cash used in operating activities ( 128,496 ) — ( 128,496 ) ( 110,768 ) — ( 110,768 )

September 30, 2023 September 30, 2022

Condensed Consolidated Balance Sheets As Previously Reported Restatement Adjustment As Restated As Previously Reported Restatement Adjustment As Restated

Current assets:

Cash and cash equivalents $ 69,246 $ — $ 69,246 $ 74,357 $ — $ 74,357

Short-term investments 396,259 — 396,259 477,872 — 477,872

Prepaid expenses and other current assets 7,949 — 7,949 16,832 — 16,832

Total current assets 473,454 — 473,454 569,061 — 569,061

Long-term investments 32,170 — 32,170 85,108 — 85,108

Operating lease right-of-use asset 78,643 — 78,643 85,245 — 85,245

Property and equipment, net 102,826 — 102,826 114,442 — 114,442

Restricted cash 10,292 — 10,292 10,292 — 10,292

Other long-term assets 9,576 — 9,576 9,378 — 9,378

Equity method investments 5,365 1,085 6,450 14,046 6,905 20,951

Total assets 712,326 1,085 713,411 887,572 6,905 894,477

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable 6,205 — 6,205 11,045 — 11,045

Accrued and other current liabilities 31,195 — 31,195 36,938 — 36,938

Deferred revenue 236 ( 150 ) 86 889 ( 790 ) 99

Total current liabilities 37,636 ( 150 ) 37,486 48,872 ( 790 ) 48,082

Lease liability, noncurrent 90,102 — 90,102 96,706 — 96,706

Other long-term liabilities 1,486 3,702 5,188 2,033 4,255 6,288

Total liabilities 129,224 3,552 132,776 147,611 3,465 151,076

Stockholders’ equity:

Preferred stock, $ 0.001 par value:

10,000,000 authorized as of September 30, 2023 and September 30, 2022;

no shares were issued and outstanding as of September 30, 2023 and September 30, 2022

Common stock, $ 0.001 par value:

400,000,000 shares authorized as of September 30, 2023 and September 30, 2022;

168,175,221 and 144,031,588 shares issued and outstanding as of September 30, 2023 and September 30, 2022, respectively

168 — 168 144 — 144

Additional paid-in capital 2,059,333 — 2,059,333 1,893,908 — 1,893,908

Accumulated deficit ( 1,473,988 ) ( 2,467 ) ( 1,476,455 ) ( 1,141,133 ) 3,440 ( 1,137,693 )

Accumulated other comprehensive loss ( 2,411 ) — ( 2,411 ) ( 12,958 ) — ( 12,958 )

Total stockholders’ equity (deficit) 583,102 ( 2,467 ) 580,635 739,961 3,440 743,401

Total liabilities and stockholders’ equity 712,326 1,085 713,411 887,572 6,905 894,477

Three Months ended September 30, 2023 Three Months ended September 30, 2022

Condensed Consolidated Statements of Operations and Comprehensive Loss As Previously Reported Restatement Adjustment As Restated As Previously Reported Restatement Adjustment As Restated

Collaboration revenue - related party $ 43 $ ( 21 ) $ 22 $ 49 $ ( 22 ) $ 27

Operating expenses:

Research and development 45,977 — 45,977 63,641 — 63,641

General and administrative 17,041 — 17,041 18,897 — 18,897

Total operating expenses 63,018 — 63,018 82,538 — 82,538

Loss from operations ( 62,975 ) ( 21 ) ( 62,996 ) ( 82,489 ) ( 22 ) ( 82,511 )

Other income (expense), net:

Interest and other income, net 6,205 — 6,205 1,002 — 1,002

Other expenses ( 4,545 ) ( 951 ) ( 5,496 ) ( 1,661 ) ( 1,072 ) ( 2,733 )

Total other income (expense), net 1,660 ( 951 ) 709 ( 659 ) ( 1,072 ) ( 1,731 )

Net loss ( 61,315 ) ( 972 ) ( 62,287 ) ( 83,148 ) ( 1,094 ) ( 84,242 )

Other comprehensive income:

Net unrealized (loss) gain on available-for-sale investments, net of tax 1,440 — 1,440 ( 1,486 ) — ( 1,486 )

Net comprehensive loss ( 59,875 ) ( 972 ) ( 60,847 ) ( 84,634 ) ( 1,094 ) ( 85,728 )

Net loss per share, basic and diluted ( 0.37 ) ( 0.37 ) ( 0.58 ) ( 0.59 )

Weighted-average number of shares used in computing net loss per share, basic and diluted 167,649,010 167,649,010 143,661,721 143,661,721

Nine Months ended September 30, 2023 Nine Months ended September 30, 2022

Condensed Consolidated Statements of Operations and Comprehensive Loss As Previously Reported Restatement Adjustment As Restated As Previously Reported Restatement Adjustment As Restated

Collaboration revenue - related party $ 139 $ ( 65 ) $ 74 $ 196 $ ( 66 ) $ 130

Operating expenses:

Research and development 188,253 — 188,253 180,968 — 180,968

General and administrative 54,449 — 54,449 58,303 — 58,303

Total operating expenses 242,702 — 242,702 239,271 — 239,271

Loss from operations ( 242,563 ) ( 65 ) ( 242,628 ) ( 239,075 ) ( 66 ) ( 239,141 )

Other income (expense), net:

Interest and other income, net 12,042 — 12,042 1,809 — 1,809

Other expenses ( 7,487 ) ( 3,414 ) ( 10,901 ) ( 519 ) ( 5,288 ) ( 5,807 )

Total other income (expense), net 4,555 ( 3,414 ) 1,141 1,290 ( 5,288 ) ( 3,998 )

Net loss ( 238,008 ) ( 3,479 ) ( 241,487 ) ( 237,785 ) ( 5,354 ) ( 243,139 )

Other comprehensive income:

Net unrealized (loss) gain on available-for-sale investments, net of tax 7,515 — 7,515 ( 10,391 ) — ( 10,391 )

Net comprehensive loss ( 230,493 ) ( 3,479 ) ( 233,972 ) ( 248,176 ) ( 5,354 ) ( 253,530 )

Net loss per share, basic and diluted ( 1.55 ) ( 1.58 ) ( 1.67 ) ( 1.70 )

Weighted-average number of shares used in computing net loss per share, basic and diluted 153,087,449 153,087,449 142,809,469 142,809,469

Nine Months ended September 30, 2023 Nine Months ended September 30, 2022

Condensed Consolidated Statements of Cash Flow As Previously Reported Restatement Adjustment As Restated As Previously Reported Restatement Adjustment As Restated

Net Loss $ ( 238,008 ) $ ( 3,479 ) $ ( 241,487 ) $ ( 237,785 ) $ ( 5,354 ) $ ( 243,139 )

Non-cash collaboration revenue - related party — ( 49 ) ( 49 ) — ( 87 ) ( 87 )

Share of losses from equity method investments 7,452 3,414 10,866 3,959 5,288 9,247

Changes in operating assets and liabilities:

Deferred revenue ( 649 ) 646 ( 3 ) 466 ( 485 ) ( 19 )

Other long-term liabilities ( 83 ) ( 532 ) ( 615 ) ( 2,092 ) 638 ( 1,454 )

Net cash used in operating activities ( 184,026 ) — ( 184,026 ) ( 158,423 ) — ( 158,423 )

Subsequent Events

On January 3, 2024, the Company entered into a Strategic Collaboration Agreement (the Foresight Agreement) with Foresight Diagnostics, Inc.

(Foresight Diagnostics).

Pursuant to the Foresight Agreement, the parties have agreed to collaborate on a non-exclusive basis in the development of Foresight Diagnostics' minimal residual disease (MRD) assay as an in vitro diagnostic to identify the MRD+ patient population to be enrolled in the Company's planned ALPHA3 trial of cemacabtagene ansegedleucel (known as ALLO-501A), or cema-cel, for treatment of large B cell lymphoma.

Under the Foresight Agreement, the Company has agreed to use its commercially reasonable efforts to obtain regulatory approval of cema-cel, and Foresight Diagnostics has agreed to use its commercially reasonable efforts to obtain regulatory approval of an MRD assay for use as an in vitro diagnostic with cema-cel.

The Company has agreed to fund approximately $ 26.0 million in MRD assay development costs, milestone payments for regulatory submissions and assay utilization to process clinical samples.

On January 25, 2024, the Company entered into an Amended and Restated Collaboration and License Agreement (the Amended Notch Agreement) with Notch.

The Amended Notch Agreement amends and restates the Notch Agreement, dated as of November 1, 2019.

Under the Amended Notch Agreement, the Company has relinquished its exclusive rights to all original CAR targets (the Released Targets) except for one CAR target, and has agreed to limit its option right to only one additional CAR target.

If the option is exercised, the Company will have a minimum funding commitment for the overall development program.

If Notch subsequently out-licenses any of the Released Targets, the Company will be entitled to receive a percentage of upfront and/or milestone payments associated therewith up to a set cap, and will be entitled to a low, single-digit royalty on net sales of products containing a Released Target.

In addition, with respect to the Company’s previous equity investments in Notch, the Amended Notch Agreement grants the Company certain anti-dilution protections up to certain limits for certain pre-IPO equity financings.

On January 4, 2024, the Company’s Board of Directors approved a reduction in the Company’s workforce of approximately 22 % of the Company’s employees in connection with the Company’s pipeline prioritization and clinical development strategy.

The reduction in workforce was substantially completed by the end of January 2024.

The Company estimates that it will incur charges of approximately $ 2.9 million for severance payments and employee benefits, primarily in the first quarter of 2024.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data