FATE THERAPEUTICS, INC. (NASDAQ:FATE) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement.

On November 21, 2016, Fate Therapeutics, Inc. (the Company)
entered into a Securities Purchase Agreement (the Securities
Purchase Agreement) for a private placement (the Private
Placement) with a select group of institutional investors,
including entities affiliated with Redmile Group, LLC (Redmile),
entities affiliated with BVF Partners L.P., EcoR1 Capital, LLC
and Franklin Advisers, Inc., and other accredited investors,
certain of whom are affiliated with the directors and officers of
the Company (collectively, the Purchasers). to the Securities
Purchase Agreement, Redmile has agreed to purchase 2,819,549
shares of the Companys Class A Convertible Preferred Stock, par
value $0.001 per share (the Preferred Shares), at a price of
$13.30 per share, and the remaining Purchasers have agreed to
purchase an aggregate of 7,236,837 shares of the Companys common
stock, par value $0.001 per share (the Common Shares, and
together with the Preferred Shares, the Shares), at a price of
$2.66 per share, for an aggregate purchase price of approximately
$57.0 million. The closing of the purchase and sale of the Shares
is expected to occur on or about November 23, 2016, subject to
customary closing conditions.

Each Preferred Share is convertible into five shares of the
Companys common stock.Redmile will be prohibited from converting
the Preferred Shares into shares of the Companys common stock if,
as a result of such conversion, Redmile, together with its
affiliates, would own more than 9.99% of the shares of the
Companys common stock then issued and outstanding, which
percentage may change at Redmiles election upon 61 days notice to
the Company to (i) any other number less than or equal to 19.99%
or (ii) subject to approval of the Companys stockholders to the
extent required in accordance with the NASDAQ Global Market
rules, any number in excess of 19.99%.

In the event of the Companys liquidation, dissolution or winding
up, holders of Preferred Shares will participate pari passu with
the holders of the Companys common stock in any distribution of
proceeds, pro rata based on the number of shares held by each
such holder.The Preferred Shares will generally have no voting
rights.

The Company also entered into a registration rights agreement
(the Registration Rights Agreement) with certain of the
Purchasers, excluding those Purchasers affiliated with the
Companys directors and officers, requiring the Company to
register the resale of the Shares.The Company is required to
prepare and file a registration statement with the Securities and
Exchange Commission (the SEC) within 60 days of the closing of
the Private Placement, and to use commercially reasonable efforts
to have the registration statement declared effective within 135
days if there is no review by the SEC, and within 160 days in the
event of such review.The Registration Rights Agreement provides,
among other things, that in the event (i) the Company does not
file the registration statement within the prescribed time
period, (ii) the SEC does not declare the registration statement
effective within the prescribed time period, or (iii) the
registration statement ceases to be effective under certain
circumstances, the Company will pay to the holders on the
occurrence of each such event and for each 30-day period
thereafter until the applicable event is cured, an amount in cash
equal to 1% of the aggregate amount invested by the holders with
respect to the affected securities (as specified in greater
detail in the Registration Rights Agreement) for each 30-day
period (prorated for any period of less than 30 days) during
which such registration statement was not effective, subject to
certain limitations.

In addition, Redmile shall also receive the right to designate an
individual to attend all meetings of the Companys board of
directors in a non-voting observer capacity, which right is
non-assignable and shall terminate upon the earlier of (i) the
third anniversary of the closing of the Private Placement or (ii)
the date upon which Redmiles total ownership no longer exceeds
15% of the Companys total shares of common stock on an
as-converted basis.

The Shares to be issued to the Purchasers under the Securities
Purchase Agreement will be issued to an exemption from
registration under Rule 506 of Regulation D, which is promulgated
under the Securities Act of 1933 (the Securities Act). The
Company relied on this exemption from registration based in part
on representations made by the Purchasers.

Leerink Partners LLC acted as exclusive placement agent in
connection with the Private Placement, and the Company has agreed
to pay a customary placement fee and reimburse certain expenses
of the placement agent.

The sale of the Shares to the Securities Purchase Agreement has
not been registered under the Securities Act or any state
securities laws. The Shares may not be offered or sold in the
United States absent registration or an applicable exemption from
registration requirements. Neither this Current Report on Form
8-K, nor the exhibits attached hereto is an offer to sell or the
solicitation of an offer to buy the securities described herein.

The Company expects to use the proceeds from the financing
towards working capital and general corporate purposes.

The above description of the material terms of the Private
Placement is qualified in its entirety by reference to the
Securities Purchase Agreement attached hereto as Exhibit 10.1 and
the Registration Rights Agreement attached hereto as Exhibit
10.2.

Item 3.02 Unregistered Sales of Equity Securities.

The information contained above under Item 1.01 is hereby
incorporated by reference in response to this Item 3.02 of Form
8-K.

Item 5.03 Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year.

In connection with and prior to the closing of the Private
Placement, the Company will designate 2,819,549 shares of its
authorized and unissued preferred stock as Class A Convertible
Preferred Stock and file a Certificate of Designation of
Preferences, Rights and Limitations of Class A Convertible
Preferred Stock with the Secretary of State of Delaware. A
summary of the rights, preferences and privileges of the Class A
Convertible Preferred Stock is described above under Item 1.01
Entry into a Material Definitive Agreement, which is incorporated
by reference herein.

Item 7.01. Regulation FD Disclosure.

On November 22, 2016, the Company issued a press release
announcing its entry into the Securities Purchase Agreement with
the Purchasers. A copy of the press release is being furnished as
Exhibit 99.1 to this Report on Form 8-K.

The information in Item 7.01 of this Current Report on Form 8-K
and Exhibit 99.1 attached hereto is being furnished and shall not
be deemed filed for the purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (Exchange Act) or otherwise
subject to the liability of that section, nor shall such
information be deemed incorporated by reference in any filing
under the Exchange Act or the Securities Act of 1933, as amended,
regardless of the general incorporation language of such filing,
except as shall be expressly set forth by specific reference in
such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

About FATE THERAPEUTICS, INC. (NASDAQ:FATE)

Fate Therapeutics, Inc. (Fate Therapeutics) is a clinical-stage biopharmaceutical company. The Company is engaged in development of programmed cellular immunotherapies for cancer and immune disorders. The Company’s cell therapy pipeline consists of immuno-oncology programs, including cancer immunotherapies derived from engineered induced pluripotent cells, and immuno-regulatory programs, including hematopoietic cell immunotherapies for protecting the immune system of patients undergoing hematopoietic cell transplantation and for suppressing autoimmunity. Its lead clinical program is ProTmune, which is a programmed immuno-regulatory cell therapy. The Company programs immune cells, such as CD34+ cells, Natural Killer (NK) cells and T cells, by utilizing its cell programming approach. Its adoptive cell therapy programs are based on the Company’s ex vivo cell programming approach, which it applies to modulate the therapeutic function and direct the fate of immune cells.

FATE THERAPEUTICS, INC. (NASDAQ:FATE) Recent Trading Information

FATE THERAPEUTICS, INC. (NASDAQ:FATE) closed its last trading session up +0.08 at 2.74 with 98,471 shares trading hands.