FATE THERAPEUTICS INC

Previous wording

We were incorporated in Delaware in 2007 and are headquartered in San Diego, California. Since our inception in 2007, we have devoted substantially all of our resources to our cell programming approach and the research and development of our product candidates, the creation, licensing and protection of related intellectual property, and the provision of general and administrative support for these activities. To date, we have funded our operations primarily through the public and private sale of common stock, the private placement of preferred stock and convertible notes, commercial bank debt and revenues from collaboration activities and grants.

Current wording

We were incorporated in Delaware in 2007 and are headquartered in San Diego, California. Since our inception in 2007, we have devoted substantially all of our resources to our cell programming approach and the research and development of our product candidates, the creation, licensing and protection of related intellectual property, and the provision of general and administrative support for these activities. To date, we have funded our operations primarily through the public and private sale of common stock and warrants, the private placement of preferred stock and convertible notes, commercial bank debt and revenues from collaboration activities and grants.

Previous wording

During the three and six months ended June 30, 2025, we recognized $1.9 million and $3.5 million of collaboration revenue, respectively, and $1.3 million and $3.3 million of contra-research and development expense, respectively, under the Ono Arrangement. During the three and six months ended June 30, 2024, we recognized $6.8 million and $8.7 million of collaboration revenue, respectively, and $1.1 million and $2.0 million of contra-research and development expense, respectively, under the Ono Arrangement.

Current wording

During the three and nine months ended September 30, 2025, we recognized $1.7 million and $5.3 million of collaboration revenue, respectively, and $1.3 million and $4.5 million of contra-research and development expense, respectively, under the Ono Arrangement. During the three and nine months ended September 30, 2024, we recognized $3.1 million and $11.8 million of collaboration revenue, respectively, and $1.7 million and $3.6 million of contra-research and development expense, respectively, under the Ono Arrangement.

Previous wording

Since we may, at our election, repay some or all of the FT836 CIRM Award, we account for the award as a liability until the time of election. As of June 30, 2025, we have received one disbursement under the FT836 CIRM Award in the amount of $1.3 million. As of June 30, 2025, the total amount received is recorded as a CIRM liability in the consolidated balance sheets, with $0.8 million classified as current and the remaining $0.5 million as non-current, based on the portion we expect to be payable within twelve months from the balance sheet date.

Current wording

Since we may, at our election, repay some or all of the FT836 CIRM Award, we account for the award as a liability until the time of election. As of September 30, 2025, we have received three disbursements under the FT836 CIRM Award in the aggregate amount of $3.8 million. As of September 30, 2025, the total amount received is recorded as a CIRM liability in the consolidated balance sheets, with $2.3 million classified as current and the remaining $1.5 million as non-current, based on the portion we expect to be payable within twelve months from the balance sheet date.

Previous wording

The estimates and judgments involved in our accounting policies, as described in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, continue to be our critical accounting policies and there have been no other material changes to our critical accounting policies during the six months ended June 30, 2025.

Current wording

The estimates and judgments involved in our accounting policies, as described in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, continue to be our critical accounting policies and there have been no other material changes to our critical accounting policies during the nine months ended September 30, 2025.

Previous wording

Collaboration Revenue. During the six months ended June 30, 2025 and 2024, we recognized revenue of $3.5 million and $8.7 million, respectively, under our collaboration agreement with Ono. The decrease in collaboration revenue was primarily due to our achievement of a clinical development milestone during the six months ended June 30, 2024, resulting in the recognition of $5.0 million in revenue during that period.

Current wording

Collaboration Revenue. During the three months ended September 30, 2025 and 2024, we recognized revenue of $1.7 million and $3.1 million, respectively, under our collaboration agreement with Ono. The decrease in collaboration revenue was primarily driven by an increase in research and preclinical development fees during the three months ended September 30, 2024 payable by Ono under the 2024 Ono Amendment, which did not occur during the three months ended September 30, 2025.

Previous wording

Research and development expenses. Research and development expenses were $27.4 million for the three months ended June 30, 2025, compared to $34.6 million for the three months ended June 30, 2024. The decrease in research and development expenses was attributable primarily to the following:

Current wording

Research and development expenses. Research and development expenses were $25.8 million for the three months ended September 30, 2025, compared to $34.7 million for the three months ended September 30, 2024. The decrease in research and development expenses was attributable primarily to the following:

Previous wording

$1.5 million decrease in depreciation expense;

Current wording

$1.4 million decrease in depreciation expense.

Previous wording

General and administrative expenses. General and administrative expenses were $25.2 million for the six months ended June 30, 2025, compared to $38.1 million for the six months ended June 30, 2024. The decrease in general and administrative expenses was attributable primarily to a $9.8 million decrease in patent and legal expenses and a $3.4 million decrease in employee compensation and benefits expense, including a $2.8 million decrease in employee stock-based compensation expense.

Current wording

General and administrative expenses. General and administrative expenses were $10.7 million for the three months ended September 30, 2025, compared to $20.8 million for the three months ended September 30, 2024. The decrease in general and administrative expenses was attributable primarily to a $5.9 million decrease in patent and legal expenses and a $4.1 million decrease in employee stock-based compensation expense.

Previous wording

Other income (expense), net. Other income (expense), net was $2.9 million and $6.7 million for the three months ended June 30, 2025 and 2024, respectively. During the three months ended June 30, 2025, we recorded $0.1 million in other expense attributable to the change in fair value of the stock price appreciation milestones under the Amended MSKCC License. Other income (expense), net for the three months ended June 30, 2025 also consisted of interest income earned on cash and cash equivalents and interest income from investments (including the amortization of discounts and premiums).

Current wording

Other income (expense), net. Other income (expense), net was $2.5 million and $4.7 million for the three months ended September 30, 2025 and 2024, respectively. During the three months ended September 30, 2025, we recorded $0.1 million in other expense attributable to the change in fair value of the stock price appreciation milestones under the Amended MSKCC License. Other income (expense), net for the three months ended September 30, 2025 also consisted of interest income earned on cash and cash equivalents and interest income from investments (including the amortization of discounts and premiums).

Previous wording

The following table summarizes the results of our operations for the six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following table summarizes the results of our operations for the nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

Collaboration Revenue. During the three months ended June 30, 2025 and 2024, we recognized revenue of $1.9 million and $6.8 million, respectively, under our collaboration agreement with Ono. The decrease in collaboration revenue was primarily due to our achievement of a clinical development milestone during the three months ended June 30, 2024, resulting in the recognition of $5.0 million in revenue during that period.

Current wording

Collaboration Revenue. During the nine months ended September 30, 2025 and 2024, we recognized revenue of $5.3 million and $11.8 million, respectively, under our collaboration agreement with Ono. The decrease in collaboration revenue was primarily due to our achievement of a clinical development milestone during the nine months ended September 30, 2024, resulting in the recognition of $5.0 million in revenue during that period.

Previous wording

Research and development expenses. Research and development expenses were $56.6 million for the six months ended June 30, 2025, compared to $66.7 million for the six months ended June 30, 2024. The decrease in research and development expenses was attributable primarily to the following:

Current wording

Research and development expenses. Research and development expenses were $82.4 million for the nine months ended September 30, 2025, compared to $101.4 million for the nine months ended September 30, 2024. The decrease in research and development expenses was attributable primarily to the following:

Previous wording

$2.9 million decrease in depreciation expense;

Current wording

$4.3 million decrease in depreciation expense;

Previous wording

$3.2 million decrease in employee stock-based compensation expense;

Current wording

$3.2 million decrease in third-party professional consultant and advisory fees;

Previous wording

$2.1 million decrease in laboratory materials and supplies expenses relating to the manufacture of our product candidates; and

Current wording

$1.9 million decrease in laboratory materials and supplies expenses relating to the manufacture of our product candidates; and

Previous wording

General and administrative expenses. General and administrative expenses were $11.4 million for the three months ended June 30, 2025, compared to $17.3 million for the three months ended June 30, 2024. The decrease in general and administrative expenses was attributable primarily to a $4.4 million decrease in patent and legal expenses and a $1.2 million decrease in employee compensation and benefits expense, including a $1.1 million decrease in employee stock-based compensation expense.

Current wording

General and administrative expenses. General and administrative expenses were $35.9 million for the nine months ended September 30, 2025, compared to $58.9 million for the nine months ended September 30, 2024. The decrease in general and administrative expenses was attributable primarily to a $15.7 million decrease in patent and legal expenses and a $7.3 million decrease in employee compensation and benefits expense, including a $6.9 million decrease in employee stock-based compensation expense.

Previous wording

Other income (expense), net. Other income (expense), net was $6.6 million and $9.7 million for the six months ended June 30, 2025 and 2024, respectively. During the six months ended June 30, 2025, we recorded $0.2 million in other income attributable to the change in fair value of the stock price appreciation milestones under the Amended MSKCC License. Other income (expense), net for the six months ended June 30, 2025 also consisted of interest income earned on cash and cash equivalents and interest income from investments (including the amortization of discounts and premiums).

Current wording

Other income (expense), net. Other income (expense), net was $9.0 million and $14.4 million for the nine months ended September 30, 2025 and 2024, respectively. During the nine months ended September 30, 2025, we recorded $0.1 million in other income attributable to the change in fair value of the stock price appreciation milestones under the Amended MSKCC License. Other income (expense), net for the nine months ended September 30, 2025 also consisted of interest income earned on cash and cash equivalents and interest income from investments (including the amortization of discounts and premiums).

Previous wording

During the six months ended June 30, 2025, cash used in operating activities was $58.4 million and primarily consisted of a net loss of $71.2 million adjusted for non-cash items including stock-based compensation of $14.5 million and depreciation and amortization of $6.6 million.

Current wording

During the nine months ended September 30, 2025, cash used in operating activities was $82.8 million and primarily consisted of a net loss of $103.9 million adjusted for non-cash items including stock-based compensation of $19.4 million and depreciation and amortization of $9.8 million.

Previous wording

During the six months ended June 30, 2024, cash used in operating activities was $65.7 million and primarily consisted of a net loss of $86.4 million adjusted for non-cash items including stock-based compensation of $20.6 million and depreciation and amortization of $9.5 million.

Current wording

During the nine months ended September 30, 2024, cash used in operating activities was $95.1 million and primarily consisted of a net loss of $134.1 million adjusted for non-cash items including stock-based compensation of $32.4 million and depreciation and amortization of $14.1 million.

Previous wording

During the six months ended June 30, 2025, investing activities provided cash of $62.3 million compared to cash used by investing activities of $36.1 million during the six months ended June 30, 2024. During the six months ended June 30, 2025, we purchased $99.4 million of investments, which were offset by $164.1 million in maturities of investments. During the six months ended June 30, 2024, we purchased $215.0 million of investments, which were offset by $179.1 million in maturities of investments. The remaining investing activities for the periods presented were primarily attributable to the purchase of property and equipment.

Current wording

During the nine months ended September 30, 2025, investing activities provided cash of $83.5 million compared to cash used by investing activities of $10.6 million during the nine months ended September 30, 2024. During the nine months ended September 30, 2025, we purchased $157.4 million of investments, which were offset by $245.6 million in maturities of investments. The remaining investing activities for the periods presented were primarily attributable to the purchase of $4.8 million in property and equipment. During the nine months ended September 30, 2024, we purchased $279.7 million of investments, which were offset by $269.8 million in maturities of investments. The remaining investing activities for the periods presented were primarily attributable to the purchase of property and equipment.

Previous wording

For the six months ended June 30, 2025, financing activities provided cash of $1.3 million from proceeds of the FT836 CIRM award.

Current wording

For the nine months ended September 30, 2025, financing activities provided cash of $3.8 million from proceeds of the FT836 CIRM award.

Previous wording

For the six months ended June 30, 2024, financing activities provided cash of $96.8 million, which primarily consisted of (i) the issuance of 14,545,454 shares of common stock at a purchase price of $5.50 per share in an underwritten offering of common stock in March 2024, (ii) the issuance of pre-funded warrants to purchase an aggregate of 3,636,364 shares of common stock at a purchase price of $5.499 per pre-funded warrant, which represents the offering price per share of common stock in the underwritten offering less the $0.001 exercise price per share of each pre-funded warrant, in a private placement concurrent with the underwritten offering and (iii) the issuance of common stock from equity incentive plans pursuant to the exercise of employee stock options.

Current wording

For the nine months ended September 30, 2024, financing activities provided cash of $96.8 million, which primarily consisted of (i) the issuance of 14,545,454 shares of common stock at a purchase price of $5.50 per share in an underwritten offering of common stock in March 2024, (ii) the issuance of pre-funded warrants to purchase an aggregate of 3,636,364 shares of common stock at a purchase price of $5.499 per pre-funded warrant, which represents the offering price per share of common stock in the underwritten offering less the $0.001 exercise price per share of each pre-funded warrant, in a private placement concurrent with the underwritten offering, and (iii) the issuance of common stock from equity incentive plans pursuant to the exercise of employee stock options.

Previous wording

From our inception through June 30, 2025, we have funded our consolidated operations primarily through the public and private sale of common stock, the issuance of warrants, the private placement of preferred stock and convertible notes, commercial bank debt and revenues from collaboration activities and grants. As of June 30, 2025, we had aggregate cash and cash equivalents and investments of $248.9 million.

Current wording

From our inception through September 30, 2025, we have funded our consolidated operations primarily through the public and private sale of common stock, the issuance of warrants, the private placement of preferred stock and convertible notes, commercial bank debt and revenues from collaboration activities and grants. As of September 30, 2025, we had aggregate cash and cash equivalents and investments of $225.7 million.