Allogene Therapeutics, Inc.ALLO
Allogene Therapeutics, Inc. Commitments Disclosure
Commitments and Contingencies
Leases
In August 2018, the Company entered into an operating lease agreement (HQ Lease) for office and laboratory space which consists of approximately 68,000 square feet located in South San Francisco, California. In December 2021, the Company amended its lease agreement to lease an additional 47,566 square feet of office and laboratory space in South San Francisco, California, as part of the same building as the Company’s current headquarters. The lease term commenced in April
2022. The rent payments for the expansion premises began in August 2022. The lease term for both the existing and expansion premises will expire on March 31, 2032 with an option to extend the term for eight years which is not reasonably assured of exercise.
In October 2018, the Company entered into an operating lease agreement for office and laboratory space which consists of 14,943 square feet located in South San Francisco, California. The lease term will expire March 31, 2032 with an option to extend the term for eight years which is not reasonably assured of exercise.
In February 2019, the Company entered into a lease agreement for approximately 118,000 square feet of space to develop a cell therapy manufacturing facility in Newark, California. The lease term will expire on July 31, 2036 with two ten-year options to extend the lease, both of which are not reasonably assured of exercise.
In February 2023, the Company entered into a sublease with Bellco Capital Advisors Inc. (Bellco) for 2,218 square feet of office space in Los Angeles, California. The sublease term is 115 months, subject to certain early termination rights. The sublease commenced on January 1, 2024.
The Company maintains letters of credit for the benefit of landlords which is disclosed as restricted cash in the consolidated balance sheets. Restricted cash related to letters of credit due to landlords was $6.0 million as of December 31, 2025 and 2024.
The balance sheet classification of the Company's lease liabilities were as follows:
| December 31, 2025 | December 31, 2024 | |||||||||||||
| (in thousands) | ||||||||||||||
| Operating lease liabilities | ||||||||||||||
| $ | 8,208 | $ | 7,509 | |||||||||||
| Long-term portion of lease liabilities | 75,045 | 83,247 | ||||||||||||
| Total operating lease liabilities | $ | 83,253 | $ | 90,756 | ||||||||||
The components of lease costs for operating leases, which were recognized in operating expenses, were as follows:
| Year Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in thousands) | ||||||||||||||
| Operating lease cost | $ | 9,774 | $ | 11,468 | ||||||||||
| Variable lease cost | 2,507 | 3,105 | ||||||||||||
| Total lease costs | $ | 12,281 | $ | 14,573 | ||||||||||
Cash paid for amounts included in the measurement of lease liabilities for the year ended December 31, 2025 was $12.9 million and was included in net cash used in operating activities in the Company's consolidated statements of cash flows.
The undiscounted future non-cancellable lease payments under the Company's operating leases as of December 31, 2025 is as follows:
| Year ending December 31: | (in thousands) | |||||||
| 2026 | $ | 13,164 | ||||||
| 2027 | 13,613 | |||||||
| 2028 | 14,078 | |||||||
| 2029 | 15,480 | |||||||
| 2030 and thereafter | 49,910 | |||||||
| Total undiscounted lease payments | 106,245 | |||||||
| Less: Present value adjustment | (22,992) | |||||||
| Total | $ | 83,253 | ||||||
Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company uses its estimated incremental borrowing rate. The weighted average discount rate used to determine the operating lease liability was 6.49%. As of December 31, 2025, the weighted average remaining lease term for the Company's operating leases is 7.17 years.
In December 2024 and January 2025, the Company entered into non-cancelable agreements under which it subleased approximately 46,011 square feet of its HQ Lease to two unaffiliated companies. In July 2025, the Company entered into a non-
cancelable agreement under which it subleased one of its leased buildings in South San Francisco to one unaffiliated company. As a result of continued market deterioration there was a trigger of an additional indicator of impairment of the Company’s leased property and leasehold improvements, as described further in Note 5, which resulted in the recognition of a long-lived asset impairment charge of $1.0 million and $15.7 million for the years ended December 31, 2025 and 2024, respectively.
During the year ended December 31, 2025 and 2024, the Company recognized $2.6 million and $0.1 million in sublease income, respectively, under the caption within the condensed consolidated statements of operations.
Certain lease agreements require the Company to return designated areas of leased space to its original condition upon termination of the lease agreement. At the inception of such leases, the Company records an asset retirement obligation and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. To determine the fair value of the obligation, the Company estimates the cost for a third-party to perform the restoration work. 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 $0.7 million as of December 31, 2025 and 2024.
Other Commitments
Solar Power Purchase and Energy Services Agreement
In July 2020, the Company entered into a Solar Power Purchase and Energy Services Agreement for the installation and operation of a solar photovoltaic generating system and battery energy storage system at the Company's cell therapy manufacturing facility in Newark, California. The agreement has a term of 20 years and commenced in September 2022. The Company is obligated to pay for electricity generated from the system at an agreed rate for the duration of the agreement term. Termination of the agreement by the Company will result in a termination payment due of approximately $4.3 million. In connection with the agreement, the Company maintains a letter of credit for the benefit of the service provider in the amount of $4.3 million which is recorded as restricted cash in the consolidated balance sheets as of December 31, 2025 and 2024.
License Agreements for Intellectual Property
The Company has entered into certain license agreements for intellectual property which is used as part of its development and manufacturing processes. Each of these respective agreements are generally cancellable by the Company. These agreements require payment of annual license fees and may include conditional milestone payments for achievement of specific research, clinical and commercial events, and royalty payments. The timing and likelihood of any significant conditional milestone payments or royalty payments becoming due was not probable as of December 31, 2025 and 2024.
Contingencies
In the ordinary course of business, the Company or its business partners may be subject to legal claims and regulatory actions that could have a material adverse effect on its business or financial position. The Company assesses its potential liability in such situations by analyzing the possible outcomes of various litigation, regulatory, and settlement strategies. If the Company determines that a material loss is probable and its amount can be reasonably estimated, it will accrue an amount equal to the estimated loss. As of December 31, 2025 and 2024, the Company did not accrue any estimated losses related to its ongoing legal proceedings.
Indemnification
In accordance with the Company’s amended and restated certificate of incorporation and amended and restated bylaws, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving in such capacity. 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.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
| 2023 | Mar 14, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Mar 8, 2019 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.