FATE THERAPEUTICS INC Fair Value Disclosure
5. Fair Value Measurements
The following tables presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024 (in thousands):
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Fair Value Measurements at |
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Total |
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Quoted Prices |
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Significant |
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Significant |
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As of December 31, 2025: |
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Financial assets: |
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Money market fund |
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$ |
31,693 |
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$ |
31,693 |
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$ |
— |
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$ |
— |
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U.S. Treasury debt securities |
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33,779 |
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33,779 |
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— |
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— |
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Non-US government securities |
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3,247 |
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— |
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3,247 |
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— |
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Corporate debt securities |
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87,710 |
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— |
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87,710 |
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— |
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Commercial paper |
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41,941 |
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— |
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41,941 |
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— |
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Total assets measured at fair value on a recurring basis |
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$ |
198,370 |
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$ |
65,472 |
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$ |
132,898 |
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$ |
— |
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Financial liabilities: |
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Stock price appreciation milestones |
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$ |
283 |
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$ |
— |
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$ |
— |
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$ |
283 |
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Total financial liabilities measured at fair value on a recurring basis |
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$ |
283 |
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$ |
— |
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$ |
— |
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$ |
283 |
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As of December 31, 2024: |
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Financial assets: |
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Money market fund |
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$ |
29,491 |
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$ |
29,491 |
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$ |
— |
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$ |
— |
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U.S. Treasury debt securities |
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50,036 |
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50,036 |
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— |
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— |
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Non-US government securities |
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2,995 |
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— |
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2,995 |
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— |
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Municipal securities |
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2,492 |
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— |
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2,492 |
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— |
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Corporate debt securities |
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188,239 |
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— |
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188,239 |
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— |
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Commercial paper |
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26,907 |
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— |
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26,907 |
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— |
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Total assets measured at fair value on a recurring basis |
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$ |
300,160 |
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$ |
79,527 |
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$ |
220,633 |
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$ |
— |
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Financial liabilities: |
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Stock price appreciation milestones |
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$ |
527 |
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$ |
— |
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$ |
— |
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$ |
527 |
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Total financial liabilities measured at fair value on a recurring basis |
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$ |
527 |
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$ |
— |
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$ |
— |
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$ |
527 |
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Level 1 assets consisted of money market funds and U.S. Treasury securities measured at fair value based on quoted prices in active markets as provided by the Company’s investment managers.
Level 2 assets consisted of corporate debt securities, commercial paper, municipal securities, and non-U.S. government securities measured at fair value using standard observable inputs, including reported trades, broker/dealer quotes, and bids and/or offers. The Company validates the quoted market prices provided by its investment managers by comparing the investment managers’
assessment of the fair values of the Company’s investment portfolio balance against the fair values of the Company’s investment portfolio balance obtained from an independent source.
There were no Level 3 assets held by the Company as of December 31, 2025.
Level 3 liabilities consisted of stock price appreciation milestones associated with the Amended MSKCC License as described in detail in Note 2.
The following table presents the changes in fair value of the Company’s Level 3 stock price appreciation milestones liability (in thousands):
Balance at December 31, 2023 |
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$ |
1,346 |
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Changes in fair value of stock price appreciation milestones liability |
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(819 |
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Balance at December 31, 2024 |
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$ |
527 |
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Changes in fair value of stock price appreciation milestones liability |
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(244 |
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Balance at December 31, 2025 |
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$ |
283 |
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None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 24, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.