What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-13 compared with 2025-08-07 · 116 added, 80 removed, 281 unchanged (41% of the section changed)

27 unchanged sentences

In 2024, we initiated a clinical trial of SENTI-202 for blood cancers and our partner, Celest Therapeutics, (Shanghai) Co.

Ltd., initiated a clinical trial for SENTI-301A/SN301A for solid tumors, which has ceased enrolling patients due to the observance of dose limiting toxicities.

We have incurred net losses of $14.7 million and $11.2 million for the three months ended June 30, 2025 and 2024, respectively, and net losses to $28.8 million and $23.3 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025 and December 31, 2024, we had cash and cash equivalents of $21.6 million and $48.3 million, respectively, and an accumulated deficit of $326.0 million and $297.1 million, respectively.

Net cash flows used in operating activities were $27.1 million and $20.0 million during the six months ended June 30, 2025 and 2024, respectively.

Ltd., initiated a clinical trial for SENTI-301A for solid tumors manufactured using Celest Therapeutics’ process, which has ceased enrolling patients due to the observance of dose limiting toxicities.

We have incurred net losses of $18.1 million and $28.9 million for the three months ended September 30, 2025 and 2024, respectively, and net losses to $47.0 million and $52.2 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025 and December 31, 2024, we had cash and cash equivalents of $12.2 million and $48.3 million, respectively, and an accumulated deficit of $344.1 million and $297.1 million, respectively.

Net cash flows used in operating activities were $36.6 million and $27.9 million during the nine months ended September 30, 2025 and 2024, respectively.

Substantially all of our net losses resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

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Appointment of Principal Financial Officer and Principal Accounting Officer

Following approval by the Board, Timothy Lu, M.D., Ph.D., our Chief Executive Officer, was appointed to serve as our interim principal financial officer and principal accounting officer, effective as of January 31, 2025, until immediately following the Company’s filing of the Annual Report, when Mr.

until immediately following the Company’s filing of the Annual Report, when Mr.

Cross assumed responsibilities as the Company’s principal financial officer and principal accounting officer as noted below.

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Effective July 31, 2025, Ed Mathers, who was previously appointed as a member of the Audit Committee of the Board, tendered his resignation as a member of that committee.

Mathers continues to serve as a member of the

Board and as a member of the Nominating and Corporate Governance Committee and the Compensation Committee of the Board.

Mathers continues to serve as a member of the Board and as a member of the Nominating and Corporate Governance Committee and the Compensation Committee of the Board.

Effective July 31, 2025, the Board unanimously appointed Bryan Baum to serve as a member of the Audit Committee.

Following this appointment, the Audit Committee is now comprised of Fran Schulz (Chair), Feng Hsiung and Bryan Baum.

ChEF Termination

Termination of Chardan Common Stock Purchase Agreement

On March 17, 2025, we provided notice to Chardan Capital Markets LLC (“Chardan”) that we were terminating the Common Stock Purchase Agreement and Registration Rights Agreement, as amended and restated on July 16, 2024, between us and Chardan.

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We pay Leerink Partners a commission of equal to 3.0% of the gross proceeds of any common shares sold, reimburse certain fees and disbursements and provide Leerink Partners with customary indemnification and contribution rights.

For the six months ended June 30, 2025, we sold 155,840 shares of common stock under the 2025 ATM Agreement at a weighted average price of $3.53 per share, resulting in gross proceeds of $0.6 million and net proceeds of zero after sales agent commissions and offering costs.

For the nine months ended September 30, 2025, we sold 244,960 shares of common stock under the 2025 ATM Agreement at a weighted average price of $2.82 per share, resulting in gross proceeds of $0.7 million and net proceeds of less than $0.1 million after sales agent commissions and offering costs.

SENTI-202 Update

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On June 18, 2025, we announced that the FDA has granted Orphan Drug Designation to SENTI-202 for the treatment of relapsed/refractory hematologic malignancies including acute myeloid leukemia.

On August 5, 2025, we announced the determination of the recommended Phase 2 dose (“RP2D”) for SENTI-202 following completion of the dose-escalation portion of the ongoing Phase 1 clinical trial.

The RP2D was established at 1.5 × 10⁹ CAR-positive NK cells per dose, administered on Days 0, 7, and 14 of a 28-day cycle following lymphodepletion.

The safety profile observed to date has been manageable, and the maximum tolerated dose was not reached.

Enrollment is ongoing in the expansion cohort at the RP2D, with topline data expected before the end of 2025.

SN301A Update

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SN301A is a Celest product which incorporates our SENTI-301A gene circuit into Celest’s CAR-NK cells, which are made using Celest’s manufacturing platform in China, which is distinct from our manufacturing process.

Based on the observation of certain dose limiting toxicities in the SN301A Investigator Sponsored Trial, enrollment has been stopped.

Based on the observation of certain dose limiting toxicities in the SN301A

Investigator Sponsored Trial, enrollment has been stopped.

We are evaluating next steps with SENTI-301A/SN301A as part of ongoing pipeline prioritization.

GeneFab Sublease Default

GeneFab is currently in default under the GeneFab Sublease and has not indicated when it will pay us the full amount of overdue rent payments.

We are working with GeneFab on a plan to address the nonpayment.

As of September 30, 2025, GeneFab owed us $4.7 million in past-due sublease rent payments, of which $1.0 million was received in October 2025.

On September 28, 2025, we received a notice of default from the landlord of the Alameda lease stating that, as of September 26, 2025, we were in default (the “Default”) for nonpayment of rent in the amount of approximately $0.4 million (the “Default Amount”).

Our obligations under the Alameda lease are expected to be substantially funded by sublease payments from GeneFab.

As of September 30, 2025, the Alameda lease had not been terminated, and we continue to recognize the right-of-use asset and lease liability associated with the Alameda lease.

We are currently in discussions with the landlord to cure the Default.

Components of Results of Operations

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Our direct external development program expenses reflect external costs attributable to our preclinical development candidates selected for further development as well as INDs and clinical development activities.

Such expenses include third-party contract costs relating to manufacturing, clinical trial activities, translational medicine and toxicology activities.

expenses include third-party contract costs relating to manufacturing, clinical trial activities, translational medicine and toxicology activities.

We do not allocate internal research and development costs which include personnel, facility costs, laboratory consumables and discovery and research related activities associated with our pipeline because these costs are deployed across multiple programs and our platform, and, as such, are not separately classified.

Research and development expenses consisted of the following:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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In addition, future regulatory factors beyond our control may impact our preclinical development programs.

Product candidates in clinical development generally have higher development costs than those in

preclinical stages of development, primarily due to the increased size and duration of clinical trials.

Product candidates in clinical development generally have higher development costs than those in preclinical stages of development, primarily due to the increased size and duration of clinical trials.

At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical development of any of our product candidates.

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General and administrative expenses consisted of the following:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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Total $ 6,432 $ 6,560 $ 20,317 $ 18,288

Other Income (expense), net

Interest Income

Interest income consists of interest earned on our cash and cash equivalents, and restricted cash held during the year.

GeneFab sublease Income - related party

Sublease income is primarily comprised of income from our sublease agreements with GeneFab.

GeneFab sublease Income (expense)- related party

GeneFab sublease Income (expense) - related party represents income from our sublease agreements with GeneFab.

In the third quarter of 2025, we determined that collectibility of certain rent payments under our related-

party sublease with GeneFab were no longer probable.

As a result, we reversed $3.3 million of previously recognized sublease income in accordance with ASC 842 and will recognize future lease income only as payments are received.

Refer to Part I, Item 1.

“Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) — Note 5 — Operating Leases ” in this Quarterly Report for details.

Other income (expense), net

Other income (expense) primarily consists of income from the sublease of a portion of our headquarters space to BKPBIOTECH and JLSA2 Therapeutics, partially offset by miscellaneous tax and other expense items.

Change in Fair Value of GeneFab Option - related party

The change in fair value of the GeneFab Option consists of the remeasurement to fair value of the derivative liability related to the option provided to GeneFab to acquire up to $20.0 million in shares of our common stock at a purchase price of $10.18670 per share.

As of June 30, 2025 and December 31, 2024, the Company determined that the fair value of the GeneFab Option was zero.

As of September 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Option was zero.

Refer to Part I, Item 1.

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The change in fair value of GeneFab Economic Share is a result of the change in the equity value of GeneFab and the volatility at each reporting period.

As of June 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Economic Share was zero.

As of September 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Economic Share was zero.

Refer to Part I, Item 1.

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The change in fair value of GeneFab Note Receivable consists of the remeasurement to fair value at each reporting period of the deferred consideration due from GeneFab for which we have elected the fair value option.

As of December 31, 2024, the GeneFab Note Receivable was waived and we no longer remeasures its fair value.

to Part I, Item 1.

As of December 31, 2024, the GeneFab Note Receivable was waived and we no longer remeasure its fair value.

Refer to Part I, Item 1.

“Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) — Note 3 — GeneFab Transaction ” in this Quarterly Report for details.

Results of Operations

Comparison of the Three Months Ended June 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024:

Three Months Ended June 30,

Comparison of the Three Months Ended September 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024:

Three Months Ended September 30,

2025 2024 Change

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Operating expenses:

Research and development (including related party costs of $3,586 and $3,637 for the three months ended June 30, 2025 and 2024, respectively)

Research and development (including related party costs of $3,417 and $3,790 for the three months ended September 30, 2025 and 2024, respectively)

$ 10,516 $ 8,655 $ 1,861

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Loss from operations (16,948) (15,215) (1,733)

Other income:

Other income (expense):

Interest income 166 150 16

GeneFab sublease income - related party 1,586 1,587 (1)

Other income 209 6 203

GeneFab sublease income (expense) - related party (1,567) 1,657 (3,224)

Other income (expense), net 223 (11) 234

Change in fair value of GeneFab Option - related party — 2,386 (2,386)

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Change in fair value of GeneFab Note Receivable - related party — (17,435) 17,435

Total other income 2,065 2,153 (88)

Total other expense, net

(1,178) (13,651) 12,473

Net loss $ (18,126) $ (28,866) $ 10,740

Research and development expenses .

Research and development expenses were $10.0 million and $9.2 million for the three months ended June 30, 2025 and 2024, respectively.

The increase of $0.8 million was primarily due to an increase in external services and supplies cost.

Research and development expenses were $10.5 million and $8.7 million for the three months ended September 30, 2025 and 2024, respectively.

The increase of $1.8 million was primarily due to an increase of $1.4 million in external services and supplies cost and an increase of $0.7 million in personnel-related expenses, offset by a decrease of $0.3 million in facilities and other costs.

General and administrative expenses .

General and administrative expenses were $6.8 million and $4.2 million for the three months ended June 30, 2025 and 2024, respectively.

The increase of $2.6 million was primarily due to an increase of $2.5 million in personnel-related expenses and an increase of $0.2 million in external services and supplies cost, partially offset by a decrease of $0.1 million in facilities and other costs.

General and administrative expenses were $6.4 million and $6.6 million for the three months ended September 30, 2025 and 2024, respectively.

The decrease of $0.2 million was primarily due to a decrease of $0.7 million in external services and supplies cost and a decrease of $0.6 million in facilities and other costs, partially offset by an increase of $1.1 million in personnel-related expenses.

Interest income.

Interest income was $0.3 million and $0.2 million for the three months ended June 30, 2025 and 2024, respectively.

The increase is attributed to higher average cash balances in the relevant periods.

GeneFab sublease income - related party.

GeneFab sublease income - related party was $1.6 million for both the three months ended June 30, 2025 and 2024.

Interest income was $0.2 million for both the three months ended September 30, 2025 and 2024.

GeneFab sublease income (expense) - related party.

The decrease of $3.2 million was primarily due to a $3.3 million reversal of previously recognized sublease income in accordance with ASC 842.

Refer to Part I, Item 1.

“Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) — Note 5 — Operating Leases ” in this Quarterly Report for details.

Other income (expense), net.

The increase in other income of $0.2 million was primarily due to income from the sublease of a portion of our headquarters space to BKPBIOTECH and JLSA2 Therapeutics which commenced in October 2024.

Change in fair value of GeneFab Option - related party.

As of June 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Option was zero due to the probability that a suitable license agreement, which is a condition of GeneFab obtaining the Option, would not be signed.

For the three months ended June 30, 2025, there was no change in fair value for the GeneFab Option.

As of September 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Option was zero due to the probability that a suitable license agreement, which is a condition of GeneFab obtaining the Option, would not be signed.

For the three months ended September 30, 2025, there was no change in fair value for the GeneFab Option.

Change in fair value of GeneFab Economic Share - related party.

As of June 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Economic Share was zero due to the low probability of the events

triggering the payment underlying the GeneFab Economic Share.

For the three months ended June 30, 2025, there was no change in fair value for the GeneFab Economic Share.

As of September 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Economic Share was zero due to the low probability of the

events triggering the payment underlying the GeneFab Economic Share.

For the three months ended September 30, 2025, there was no change in fair value for the GeneFab Economic Share.

Change in Fair Value of GeneFab Note Receivable - related party.

As of December 31, 2024, the GeneFab Note Receivable was waived and we no longer remeasure the fair value.

Comparison of the Six Months Ended June 30, 2025 and 2024

Six Months Ended June 30,

Comparison of the Nine Months Ended September 30, 2025 and 2024

Nine Months Ended September 30,

2025 2024 Change

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Operating expenses:

Research and development (including related party costs of $7,656 and $7,269 for the six months ended June 30, 2025 and 2024, respectively)

Research and development (including related party costs of $11,073 and $11,059 for the nine months ended September 30, 2025 and 2024, respectively)

$ 29,826 $ 26,584 $ 3,242

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Loss from operations (50,143) (44,872) (5,271)

Other income:

Other income (expense):

Interest income 830 718 112

GeneFab sublease income - related party

Other income 387 6 381

1,732 4,705 (2,973)

Other income (expense), net 610 (6) 616

Change in fair value of GeneFab Option - related party — 6,331 (6,331)

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Change in fair value of GeneFab Note Receivable - related party — (17,240) 17,240

Total other income 4,350 6,343 (1,993)

Total other income (expense), net 3,172 (7,308) 10,480

Net loss $ (46,971) $ (52,180) $ 5,209

Research and development expenses .

Research and development expenses were $19.3 million and $17.9 million for the six months ended June 30, 2025 and 2024, respectively.

The increase of $1.4 million was primarily due to an increase of $2.3 million in external services and supplies cost, partially offset by a decrease of $0.7 million in personnel-related expenses, including stock-based compensation and $0.2 million in facilities and other cost.

Research and development expenses were $29.8 million and $26.6 million for the nine months ended September 30, 2025 and 2024, respectively.

The increase of $3.2 million was primarily due to an increase of $3.7 million in external services and supplies cost, partially offset by $0.5 million in facilities and other cost.

General and administrative expenses .

General and administrative expenses were $13.9 million and $11.7 million for the six months ended June 30, 2025 and 2024, respectively.

The increase of $2.2 million was primarily due to an increase of $1.6 million in personnel-related expense and an increase of $0.7 million in external services and supplies cost, partially offset by a decrease of $0.1 million in facilities and other costs.

General and administrative expenses were $20.3 million and $18.3 million for the nine months ended September 30, 2025 and 2024, respectively.

The increase of $2.0 million was primarily due to an increase of $2.7 million in personnel-related expense, partially offset by a decrease of $0.7 million in facilities and other costs.

Interest income.

Interest income was $0.7 million and $0.6 million for the six months ended June 30, 2025 and 2024, respectively.

Interest income was $0.8 million and $0.7 million for the nine months ended September 30, 2025 and 2024, respectively.

The increase is attributed to higher average cash balances in the relevant periods.

GeneFab sublease income - related party.

GeneFab sublease income - related party was $3.3 million and $3.0 million for the six months ended June 30, 2025 and 2024, respectively.

The increase was due to sublease income from a portion of our HQ lease, which started on June 12, 2024.

The decrease of $3.0 million was primarily due to a $3.3 million reversal of previously recognized sublease income in accordance with ASC 842, offset by increased sublease income from a portion of our HQ lease, which started on June 12, 2024.

Refer to Part I, Item 1.

“Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) — Note 5 — Operating Leases ” in this Quarterly Report for details.

Other income (expense), net.

The increase in other income of $0.6 million was primarily due to income from the sublease of a portion of our headquarters space to BKPBIOTECH and JLSA2 Therapeutics which commenced in October 2024.

Change in fair value of GeneFab Option - related party.

For the six months ended June 30, 2025, there was no change in fair value for the GeneFab Option.

For the nine months ended September 30, 2025, there was no change in fair value for the GeneFab Option.

Change in fair value of GeneFab Economic Share - related party.

As of June 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Economic Share was zero due to the low probability of the events

triggering the payment underlying the GeneFab Economic Share.

For the six months ended June 30, 2025, there was no change in fair value for the GeneFab Economic Share.

As of September 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Economic Share was zero due to the low probability of the events triggering the payment underlying the GeneFab Economic Share.

For the nine months ended September 30, 2025, there was no change in fair value for the GeneFab Economic Share.

Change in Fair Value of GeneFab Note Receivable - related party.

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We have incurred net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future.

As of June 30, 2025 , we had $21.6 million in cash and cash equivalents, and an accumulated deficit of $326.0 million.

As of September 30, 2025 , we had $12.2 million in cash and cash equivalents, and an accumulated deficit of $344.1 million.

We will need substantial additional funding to support our continuing operations and pursue our development strategy.

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As substantial doubt exists about our ability to continue as a going concern, we may also be required to sell or license to other parties’ rights to develop or commercialize our product candidates that we would prefer to retain.

From inception to June 30, 2025 , we raised aggregate gross proceeds of $356.9 million from the merger in 2022, the issuance of shares of common stock, the issuance of shares of redeemable convertible preferred stock, the issuance of convertible notes, and, to a lesser extent, through collaboration agreements and governmental grants and loans.

From inception to September 30, 2025 , we raised aggregate gross proceeds of $356.9 million from the merger in 2022, the issuance of shares of common stock, the issuance of shares of redeemable convertible preferred stock, the issuance of convertible notes, and, to a lesser extent, through collaboration agreements and governmental grants and loans.

On August 31, 2022, we entered into an Amended & Restated Purchase Agreement with Chardan (the “A&R Purchase Agreement”).

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As consideration for Chardan’s commitment to purchase shares of our common stock at our direction upon the terms and subject to the conditions set forth in the A&R Purchase Agreement, upon execution of the A&R Purchase Agreement, we issued 10,000 shares of our common stock to Chardan and paid a $0.4 million document preparation fee.

For the nine months ended September 30, 2024, we sold 3,593 shares of common stock under the A&R Purchase Agreement.

On March 17, 2025, we terminated the A&R Purchase Agreement.

Prior to termination, we issued 384,313 shares of common stock to Chardan under the A&R Purchase Agreement, for aggregate net proceeds of $3.0 million.

On March 20, 2025, we entered into the 2025 ATM Agreement with Leerink Partners with respect to an at-the-market offering program under which we may offer and sell, from time to time at our sole discretion, up to a maximum aggregate offering price of $17.5 million of our common stock through Leerink Partners as our sales agent.

Under 2025 ATM Agreement, we are not obligated to sell any shares, and either party may suspend or terminate the offering of common stock upon notice to the other party and subject to certain conditions.

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We pay Leerink Partners a commission equal to 3.0% of the gross proceeds of any common shares sold, reimburse certain fees and disbursements and provide Leerink Partners with customary indemnification and contribution rights.

For the six months ended June 30, 2025, we sold 155,840 shares of common stock under the 2025 ATM Agreement at a

weighted average price of $3.53 per share, resulting in gross proceeds of $0.6 million and net proceeds of zero after sales agent commissions and offering costs.

The agreement with CIRM, as described in Part I, Item 1.

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We derived the following summary of our condensed consolidated cash flows for the periods indicated from Part I, Item 1, “Financial Information—Condensed Consolidated Financial Statements (Unaudited)” in this Quarterly Report:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) (unaudited) (unaudited)

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Operating Activities

For the six months ended June 30, 2025, net cash used in operating activities of $27.1 million was primarily due to our loss of $28.8 million with non-cash adjustments of $1.8 million for depreciation and $2.7 million for stock-based compensation expense.

Other material changes included a $1.9 million increase in GeneFab receivable - related party, a $1.2 million decrease in GeneFab prepaid expenses - related party, a $1.1 million decrease in operating lease right-of-use assets, a $1.2 million decrease in accrued expenses and other current liabilities, and a $2.2 million decrease in operating lease liabilities.

For the six months ended June 30, 2024, net cash used in operating activities of $20.0 million was primarily due to our loss of $23.3 million with non-cash adjustments of a $3.9 million gain from change in fair value of the GeneFab Option, a $1.4 million loss from change in fair value of GeneFab Economic Share, $2.0 million for depreciation, and $0.5 million for stock-based compensation expense.

Other material changes included a $7.1 million decrease in GeneFab prepaid expenses, and a $0.8 million decrease in prepaid expenses and other assets offset by a $3.1 million decrease in accounts payable and accrued expenses and a $1.9 million decrease in operating lease liabilities.

For the nine months ended September 30, 2025, net cash used in operating activities of $36.6 million was primarily due to our loss of $47.0 million with non-cash adjustments of $2.7 million for depreciation and $4.3 million for stock-based compensation expense.

Other material changes included a $4.6 million decrease in GeneFab prepaid expenses - related party, a $1.7 million decrease in operating lease right-of-use assets, and a $3.4 million decrease in operating lease liabilities.

For the nine months ended September 30, 2024, net cash used in operating activities of $27.9 million was primarily due to our loss of $52.2 million with non-cash adjustments of $17.2 million loss from change in fair value of the GeneFab Note Receivable, $6.3 million gain from change in fair value of the GeneFab Option, $1.8 million loss from change in fair value of GeneFab Economic Share, $2.9 million for depreciation and $1.2 million for stock-based compensation expense.

Other material changes were comprised of $10.9 million decrease in GeneFab prepaid expenses, $1.1 million decrease in prepaid expenses and other assets, $0.1 million increase in other liabilities, net of

current portion, offset by $3.1 million decrease in accounts payable and accrued expenses and $3.0 million decrease in operating lease liabilities.

Investing Activities

For the six months ended June 30, 2025, net cash used in investing activities of $0.2 million was primarily due to purchases of property and equipment.

For the six months ended June 30, 2024, net cash used in investing activities was nominal.

For the nine months ended September 30, 2025, net cash used in investing activities of $0.2 million was primarily due to purchases of property and equipment.

For the nine months ended September 30, 2024, net cash provided by investing activities was nominal.

Financing Activities

For the six months ended June 30, 2025, net cash provided by financing activities was $0.6 million, primarily due to $2.5 million received under the CIRM Grant and proceeds from issuance of common stock related to the ATM Agreement, net of commissions of $0.5 million, offset by the payment of issuance costs of $2.5 million.

For the six months ended June 30, 2024, there was no cash provided by financing activities.

For the nine months ended September 30, 2025, net cash provided by financing activities was $0.7 million, primarily due to $2.5 million received under the CIRM Grant and proceeds from issuance of common stock related to the ATM Agreement, net of commissions of $0.7 million, offset by the payment of issuance costs of $2.5 million.

For the nine months ended September 30, 2024, net cash provided by financing activities was primarily due to $2.4 million proceeds received under the CIRM Grant.

Funding Requirements

We concluded that substantial doubt about our ability to continue as a going concern continues to exist and that our cash and cash equivalents of $21.6 million as of June 30, 2025, are not sufficient for us to continue as a going concern for at least one year from the issuance date of the condensed consolidated financial statements.

We concluded that substantial doubt about our ability to continue as a going concern continues to exist and that our cash and cash equivalents of $12.2 million as of September 30, 2025, are not sufficient for us to continue as a going concern for at least one year from the issuance date of the condensed consolidated financial statements.

Additional funds will be necessary to maintain current operations and to continue research and development activities.

Our continued existence is dependent upon management’s ability to raise capital and ultimately develop profitable operations.

While management is devoting substantially all of its efforts to developing our business and raising capital, there can be no assurance that our efforts will be successful.

Our continued existence is dependent upon management’s ability to raise capital, collect amounts owed to us under existing agreements and ultimately develop profitable operations.

While management is devoting substantially all of its efforts to developing our business, raising capital and collecting amounts owed to us under existing agreements, there can be no assurance that our efforts will be successful.

Moreover, no assurance can be given that management’s actions will result in raising additional financing or profitable operations.

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• the costs, timing and outcome of regulatory review of our product candidates;

• our ability to collect amounts owed to us by our sublessee, GeneFab;

• the scope and costs of any commercial manufacturing activities;

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Contractual Obligations and Commitments

There were no material changes outside of the ordinary course of business in our contractual obligations as of June 30, 2025 , from those as of December 31, 2024 as reported in our Annual Report.

Our obligations under the Alameda lease are expected to be substantially funded by sublease payments from GeneFab.

GeneFab is currently in default under the GeneFab Sublease and has not indicated when it will pay us the full amount of overdue rent payments, but we are working with GeneFab on a plan to address the nonpayment.

As of September 30, 2025, GeneFab owed us $4.7 million in past-due sublease rent payments, of which $1.0 million was received in October 2025.

In addition, on September 28, 2025, we received a notice of default from the landlord on our Alameda lease stating that, as of September 26, 2025, we were in default (the “Default”) for nonpayment of rent in the amount of approximately $0.4 million (the “Default Amount”).

We are currently in discussions with the landlord to cure the default.

As of September 30, 2025, the Alameda lease has not been terminated, and we continue to recognize the right-of-use asset and lease liability associated with the Alameda lease.

There were no other material changes outside of the ordinary course of business in our contractual obligations as of September 30, 2025 , from those as of December 31, 2024 as reported in our Annual Report.

Off-Balance Sheet Arrangements

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Critical Accounting Estimates

For the six months ended June 30, 2025, there have been no material changes to our critical accounting policies and estimates compared to those disclosed in Part II, Item 7 of our Annual Report.

For the nine months ended September 30, 2025, there have been no material changes to our critical accounting policies and estimates compared to those disclosed in Part II, Item 7 of our Annual Report.

Emerging Growth Company Status

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We expect to remain an emerging growth company until the earlier of:

(1) the last day of the fiscal year (a) following the fifth anniversary of the closing of the Dynamics Initial Public Offering (“IPO”) (which occurred on May 25, 2021), (b) in which we have total annual revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of that fiscal year’s second fiscal quarter and our net sales for the year exceed $100 million;

$100 million;

and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the preceding, rolling three-year period.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis