Allogene Therapeutics Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission File Number 001-38693

Allogene Therapeutics, Inc.

(Exact name of Registrant as specified in its Charter)

210 East Grand Avenue, South San Francisco, California 94080

(Address of principal executive offices including zip code)

Registrant’s telephone number, including area code: (650)457-2700

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No ☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☒

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b).¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2023 (the last business day of the registrant’s most recently completed second fiscal quarter) was approximately $557 million based on the closing price of the registrant’s common stock on June 30, 2023 of $4.97 per share, as reported by The Nasdaq Global Select Market.

The number of shares of Registrant’s Common Stock outstanding as of March 12, 2024 was 169,091,992.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Definitive Proxy Statement relating to the 2024 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission on or before April 29, 2024, are incorporated by reference into Part III of this Annual Report.

EXPLANATORY NOTE

Restatement Background

As described in our Current Report on Form 8-K filed with the Securities and Exchange Commission (SEC) on February 16, 2024, the Company received a comment letter (Comment Letter) from the staff of the Division of Corporation Finance of the SEC relating to its Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023. The Comment Letter included a comment related to the Company’s accounting for 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 entered into on December 14, 2020 (Share Purchase Agreement), and also related to the associated Exclusive License Agreement between the Company and Allogene Overland entered into on December 14, 2020 (License 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. Pursuant to the Share Purchase Agreement, the Company acquired shares of Seed Preferred Stock in Allogene Overland (Seed Preferred Shares) 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 which Overland committed to pay $117.0 million to Allogene Overland, which included an upfront payment and certain quarterly cash payments, to support operations of Allogene Overland. The Company also received $40 million from Allogene Overland as partial consideration for the License Agreement. The Company’s equity investment in Allogene Overland, as represented by the Seed Preferred Shares, was determined to be an equity method investment and originally recorded at zero. Given that the Seed Preferred Shares were recorded at zero and the Company does not have an obligation to contribute capital to Allogene Overland, the Company did not account for its share of losses incurred by Allogene Overland.

Following the receipt of the Comment Letter and a re-evaluation of the accounting for its Seed Preferred Shares, the Company determined that the Seed Preferred Shares should have been initially measured at fair value, and the accounting for the Seed Preferred Shares should be restated. Accordingly, the Company recorded the fair value of the Seed Preferred Shares on the date when they were received in December 2020. Consequently, the initial transaction price to determine revenue related to the License Agreement was also revised to include the fair value of the Seed Preferred Shares. As a result, the Company reflected additional revenues under “Collaboration revenue – related party” in its consolidated statements of operations and comprehensive loss. Further, 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 between the fair value of the Seed Preferred Shares and the amount of the Company's underlying equity in net assets of Allogene Overland and reduced the carrying value of the Seed Preferred Shares. 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. This restatement is non-cash in nature and did not have an impact on cash, cash equivalents and marketable investments.

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 periods were restated in Amendment No. 1 to the Annual Report on Form 10-K/A for the year ended December 31, 2022 filed with the SEC on March 14, 2024 (as amended, the 2022 Annual Report).

In this Annual Report on Form 10-K for the year ended December 31, 2023 (this Annual Report), the Company is restating its previously issued (i) unaudited condensed consolidated balance sheets as of March 31, 2023 and 2022, June 30, 2023 and 2022 and September 30, 2023 and 2022, (ii) unaudited condensed consolidated 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 consolidated 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 (the Prior Quarterly Financial Statements).

Restatement Overview

In connection with the restatement of the Prior Quarterly Financial Statements, the Company, in this Annual Report:

1. Restated the Prior Quarterly Financial Statements, in Note 1. Description of Business and Summary of Significant Accounting Policies, and Note 15. Selected Quarterly Financial Data (Unaudited), as set forth in Part II, Item 8, Financial Statements and Supplementary Data of this Annual Report; and

2. Amended the results of operation discussion for each of the quarterly periods ended March 31, 2023 and 2022, June 30, 2023 and 2022 and September 30, 2023 and 2022 in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report.

The financial information that has been previously filed or otherwise reported for the Prior Quarterly Financial Statements is superseded by the information in this Annual Report. Note 1. Description of Business and Summary of Significant Accounting Policies, and Note 15. Selected Quarterly Financial Data (Unaudited), as set forth in Part II, Item 8, Financial Statements and Supplementary Data of this Annual Report contain additional information on the restatement and the related financial statement impact.

We have not filed and do not intend to file amendments to our Quarterly Reports on Form 10-Q for any of the quarterly periods in the fiscal year 2023. Accordingly, investors should rely only on the restated financial statements and related disclosures included in the 2022 Annual Report and this Annual Report for the applicable periods or in future filings with the SEC (as applicable), and not on any previously issued or filed reports, earnings releases or similar communications including the aforementioned financial statements.

Internal Control Considerations

As a result of the information described above, management has concluded that the Company's disclosure controls and procedures were not effective at the reasonable assurance level and the Company's internal control over financial reporting was not effective as of the end of each of the periods covered by restatement. In connection with the restatement, the Company has identified a material weakness in the operation of internal control over financial reporting with respect to the technical accounting analysis of significant non-routine transactions. For a discussion of management’s evaluation of our disclosure controls and procedures and the material weakness identified, see Part II, Item 9A, “Controls and Procedures” of this Annual Report.