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Item 1A. Risk Factors

2025-03-20 compared with 2024-03-21 · 306 added, 261 removed, 1483 unchanged (28% of the section changed)

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The risk factors set forth below represent a summary of some of the principal risk factors which potential investors in our securities should be aware of.

Although each of these risks is important, this list is not and is not

intended to be a substitute for investors reviewing all of the information in this Annual Report, including all risk factors which follow this summary.

Although each of these risks is important, this list is not and is not intended to be a substitute for investors reviewing all of the information in this Annual Report, including all risk factors which follow this summary.

• We are an early stage clinical biotechnology company with a history of losses.

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Our ability to continue as a going concern requires that we obtain sufficient funding to finance our operations.

• We may not achieve the intended objectives of our strategic prioritization plans announced in January 2023 and January 2024.

• We received clearance of our Investigational New Drug application, or IND, for our first product candidate, SENTI-202, in December 2023, under our collaboration with Celest Therapeutics for the clinical development of our SENTI-301A program, we anticipate that Celest Therapeutics will begin dosing patients with a product candidate for our SENTI-301A program in the second quarter of 2024, and the rest of our current product candidates are in preclinical development and our product candidates have never been tested in humans.

• In December 2024, we announced initial clinical data from the Phase 1 clinical trial of our first product candidate, SENTI-202 and the first patient dosed in a clinical trial of SN301A in China under our collaboration with Celest Therapeutics, and the rest of our current product candidates are in preclinical development.

One or all of our current product candidates may fail in clinical development or suffer delays that materially and adversely affect their ability to receive regulatory approval or to attain commercial viability.

• There can be no assurance that we will achieve all of the anticipated benefits of the transaction with GeneFab LLC and we could face unanticipated challenges.

• If any of our current or potential future product candidates is ever tested in humans, it may not demonstrate the safety, purity and potency, or efficacy, necessary to become approvable or commercially viable.

• There can be no assurance that we will receive any or all of the anticipated payments under, or achieve any or all of the anticipated benefits of the transaction with GeneFab and we could face unanticipated challenges.

• Clinical trials of our current or potential future product candidates may not demonstrate the safety, purity and potency, or efficacy, necessary to become approvable or commercially viable.

• Our gene circuit platform technologies are based on novel technologies that are unproven and may not result in approvable or marketable products, which exposes us to unforeseen risks and makes it difficult for us to predict the time and cost of product development and potential for regulatory approval.

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• We may not be able to conduct, or contract with others to conduct, animal testing in the future, which could harm our research and development activities.

• We rely on third parties to conduct our preclinical studies, and plan to rely on third parties to conduct clinical trials, and those third parties may not perform satisfactorily.

• We currently rely, and intend to continue to rely on third parties to conduct our clinical trials and preclinical studies, and those third parties may not perform satisfactorily.

• Supply of our product candidates for preclinical and clinical development may become limited or interrupted or may not be of satisfactory quantity or quality, and we could experience delays relying on third-party manufacturers.

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• Our business entails a significant risk of product liability, and our inability to obtain sufficient insurance coverage could have a material adverse effect on our business, financial condition, results of operations and prospects.

• Our business, operations and clinical development plans and timelines could be adversely affected by the impact of global economic and political developments, including high inflation and capital market disruption, the war in Ukraine, the current armed conflict in Israel and the Gaza Strip, economic sanctions and economic slowdowns or recession, including any lingering impact from the COVID-19 pandemic, or by the manufacturing, clinical trial and other business activities performed by us or by third parties with whom we may conduct business, including our anticipated contract manufacturers, contract research organizations (“CROs”), shippers and others.

• Our business, operations and clinical development plans and timelines could be adversely affected by the impact of global economic and political developments, including inflation and capital market disruption, global geopolitical disruptions, including various armed conflicts, tariffs, economic sanctions and economic slowdowns or recession, potential global health crises or by the manufacturing, clinical trial and other business activities performed by us or by third parties with whom we may conduct business, including our anticipated contract manufacturers, contract research organizations (“CROs”), shippers and others.

Risks Related to Our Limited Operating History and Financial Condition

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continue to advance our gene circuit platform technologies;

commence clinical trials of our current and future product candidates;

initiate and conduct clinical trials of our current and future product candidates;

continue preclinical development of our current and future product candidates and initiate additional preclinical studies;

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If we, or our existing or potential future collaborators, are unable to commercialize one or more of our product candidates, or if sales revenue from any product candidate that receives approval is insufficient, we will not achieve or sustain profitability, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

We will need substantial additional funding.

We will need substantial additional funding, and there is substantial doubt about our ability to continue as a going concern.

If we are unable to raise capital when needed on acceptable terms, or at all, we may be forced to restructure our business or delay, reduce, or terminate our research and product development programs, future commercialization efforts or other operations.

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In addition, we expect to incur significant additional costs associated with operating as a public company.

As of December 31, 2023, we had $35.9 million in cash, cash equivalents, and short-term investments.

As of December 31, 2024, we had $48.3 million in cash and cash equivalents.

In connection with the preparation of this Form 10-K, our management has concluded that there is substantial doubt as to whether we can continue as a going concern for twelve months following the filing of this Form 10-K.

Our future capital requirements and the period for which our existing resources will support our operations may vary significantly from what we expect.

Our monthly spending levels vary based on new and ongoing research and development and other corporate activities.

Because the length of time and activities associated with successful research and development of platform technologies and product candidates are highly uncertain, we are unable to

estimate the actual funds we will require for development and any approved marketing and commercialization activities.

Because the length of time and activities associated with successful research and development of platform technologies and product candidates are highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and commercialization activities.

Our future capital requirements and the timing and amount of our operating expenditures will depend largely on:

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the costs involved in obtaining, maintaining, enforcing and defending patents and other intellectual property rights;

supply chain disruptions, global political and market conditions, and inflationary pressures on our business;

supply chain disruptions, global political and market conditions, tariffs and inflationary pressures on our business;

the cost and timing of regulatory approvals;

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To date, we have primarily financed our operations through the sale of equity securities and the sale of assets related to our manufacturing operations.

We may seek to raise any necessary additional capital through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements, grants and other marketing and distribution arrangements.

We may seek to raise any necessary additional capital through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing

arrangements, grants and other marketing and distribution arrangements.

Any additional capital raising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our current and future product candidates, if approved.

We cannot assure you that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms acceptable to us, if at all.

If we are unable to obtain adequate financing when needed, our business, financial condition and results of operations will be harmed, and we may need to significantly modify our operational plans, or else we may not be able to continue as a going concern beyond twelve months from the issuance date of this Form 10-K.

For example, in January 2023 we announced a strategic plan to focus internal resources on SENTI-202 and SENTI-401, to develop gene circuits for other programs with potential partners, and to suspend research and development efforts for SENTI-301A.

If we are unable to obtain adequate financing when needed, our business, financial condition and results of operations will be harmed, and we may need to significantly modify our operational plans, or else we will not be able to continue as a going concern beyond twelve months from the issuance date of this Form 10-K.

In August 2023, we announced a transaction with GeneFab pursuant to which we transferred our in-house manufacturing operations and assets to GeneFab.

In January 2024, we announced a strategic plan to focus our resource allocation to investment on clinical development of SENTI-202 and on partnership of our SENTI-301A program in China.

In January 2024, we announced a strategic plan to focus our resource allocation to investment in clinical development of SENTI-202 and on partnership of our SENTI-301A program in China.

In September 2024, we subleased to BKBIOTECH, Inc., and JLSA2 Therapeutics, Inc., certain portions of our corporate headquarters.

In the future, we may have to delay, reduce the scope of or suspend one or more of our preclinical studies, clinical trials, research and development programs, or commercialization efforts.

Further, if we are unable to continue as a going concern, we might have to liquidate our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the

values reflected in our consolidated financial statements.

Because of the numerous risks and uncertainties associated with the development and commercialization of our current and potential future product candidates and the extent to which we may enter into collaborations with third parties to participate in their development and commercialization, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated preclinical studies and clinical trials, including related manufacturing costs.

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In January 2024, we announced a reduction in workforce by approximately 37% in connection with streamlining our business operations to enable increased focus on SENTI-202 and to continue SENTI-301A program clinical development through a partnership in China.

We have incurred certain one-time estimated severance and related costs as part of this resource allocation effort.

We incurred certain one-time estimated severance and related costs as part of this resource allocation effort.

We also cannot guarantee that we will not have to undertake additional workforce reductions or re-prioritization activities in the future.

Further, we may not be able to enter into partnerships for programs that we do not intend to develop internally on acceptable terms or within the timeframes that we expect, or we may not realize the anticipated benefits of those partnerships we do secure, and we may be forced to dedicate additional time and resources to the maintenance of these programs or to our efforts to enter new or additional partnerships.Furthermore, our strategic streamlined business plan may be disruptive to our operations.

Furthermore, our streamlined strategic business plan may be disruptive to our operations.

For example, our workforce reductions could yield unanticipated consequences, such as attrition beyond planned staff reductions, increased difficulties in our day-to-day operations and reduced employee morale.

In addition, if there are unforeseen expenses associated with such realignments in our business strategies, and we incur unanticipated charges or liabilities, then we may not be able to effectively realize the expected cost savings or other benefits of such actions which could have an adverse effect on our business, operating results and financial condition.

In addition, if

there are unforeseen expenses associated with such realignments in our business strategies, and we incur unanticipated charges or liabilities, then we may not be able to effectively realize the expected cost savings or other benefits of such actions which could have an adverse effect on our business, operating results and financial condition.

If employees who were not affected by the workforce reduction seek alternate employment, this could result in us seeking contract support resulting in unplanned additional expense or harm our productivity.

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As previously reported, in connection with our preparation and the audit of our consolidated financial statements as of and for the year ended December 31, 2023, we and our independent registered public accounting firm identified a material weakness, as defined under the Exchange Act and by the Public Company Accounting Oversight Board (United States), in our internal control over financial reporting.

The material weakness related to a

lack of sufficient and adequate resources in the finance and accounting function that resulted in 1.

lack of formalized risk assessment process, 2.

lack of segregation of duties, and 3.

ineffective process level control activities over (a) management review of journal entries, (b) account reconciliations and (c) non-routine, unusual or complex transactions.

The material weakness related to a lack of sufficient and adequate resources in the finance and accounting function that resulted in ineffective process level control activities over non-routine, unusual or complex transactions.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements will not be prevented or detected on a timely basis.

We implemented a risk assessment process and measures designed to improve our internal control over financial reporting and remediate the control deficiencies that led to the material weakness, including hiring additional accounting personnel, but have had additional turnover in our accounting group since that time which continues to harm these remediation efforts.

However, the process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company.

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Members of our management team have limited experience in managing the day-to-day operations of a public company and, as a result, we may incur additional expenses associated with the management of our company.

Members of our management team have limited experience in managing the day-to-day operations of a public company.

Certain members of our management team have limited experience in managing the day-to-day operations of a public company.

As a result, we may need to obtain outside assistance from legal, accounting, investor relations, or other professionals that could be more costly than planned.

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For these reasons, we may not be able to utilize a material portion of the NOLs reflected on our balance sheets, even if we attain profitability, which could potentially result in increased future tax liability to us and could adversely affect our operating results and financial condition.

Changes in tax law may adversely affect us or our investors.

Congress, the current U.S.

presidential administration, or any subsequent administration may make substantial changes to fiscal, tax, and other federal policies that may adversely affect our business.

rules dealing with federal, state, and local taxation are constantly under review by those involved in the legislative process, as well as by the U.S.

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In recent years, many such changes have been made and change are likely to continue to occur in the future.

For example, in 2017, the U.S.

Congress and the Trump administration made substantial changes to U.S.

policies, which included comprehensive corporate and individual tax reform.

In addition, the Trump administration called for significant changes to U.S.

trade, healthcare, immigration and government regulatory policy.

With the transition to the Biden administration in early 2021, changes to U.S.

policy occurred and since the start of the Trump Administration in 2025, U.S.

policy changes have been implemented at a rapid pace and additional changes are likely.

Future changes in tax laws could have a material adverse effect on our business, cash flow, financial conditions, or results of operations.

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We urge investors to consult with their legal and tax advisers regarding the implications of potential changes in tax laws on an investment in our common stock.

The sale or issuance of our common stock to GeneFab may cause significant dilution and the sale of the shares of common stock acquired by GeneFab, or the perception that such sales may occur, could cause the price of our common stock to fall.

Pursuant to an option under the transaction with GeneFab, GeneFab may choose to invest up to approximately $20 million to purchase up to 19,633,444 shares of our common stock, subject to certain limitations, including stockholder approval in certain circumstances and compliance with applicable law.

The option becomes exercisable by GeneFab upon the execution of the license agreement, no later than August 7, 2026.

The exercise of the option by GeneFab could result in a significant increase in the number of outstanding shares of our common stock and substantially dilute the ownership interest of our existing stockholders.

In addition, we have agreed to register for resale these shares purchased by GeneFab under their option, subject to certain restrictions.

If GeneFab chooses to sell its shares in the Company, the price of our shares could fluctuate based on the market price of the common stock during the period in which such sales occur.

Changes to U.S.

policy implemented by the U.S.

Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S.

and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S.

regulatory environment, inflation and other areas.

Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business.

Until we know what policy changes are made and whether those policy changes are challenged and subsequently upheld by the court system, we will not know if we will benefit from them or be negatively affected by them.

The sale or issuance of our common stock to Celadon Partners may cause significant dilution and the sale of the shares of common stock acquired by Celadon Partners, or the perception that such sales may occur, could cause the price of our common stock to fall.

Pursuant to an option under the transaction with GeneFab which was subsequently transferred to Celadon Partners, Celadon may choose to invest up to approximately $20 million to purchase up to 1,963,344 shares of our common stock, subject to certain limitations, including stockholder approval in certain circumstances and compliance with applicable law.

The option becomes exercisable by Celadon upon the execution of the license agreement, no later than August 7, 2026.

The exercise of the option by Celadon could result in a significant increase in the number of outstanding shares of our common stock and substantially dilute the ownership interest of our existing stockholders.

In addition, we have agreed to register for resale these shares purchased by Celadon under their option, subject to certain restrictions.

If Celadon chooses to sell its shares in the Company, the price of our shares could fluctuate based on the market price of the common stock during the period in which such sales occur.

Additionally, the sale of a substantial number of shares of our common stock, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.

It is not possible to predict the number of shares of our common stock, if any, that we may sell to Chardan Capital Markets LLC, or Chardan, under our common stock Purchase Agreement, or the Purchase Agreement, with Chardan, or the actual gross proceeds resulting from those sales, or the dilution to our stockholders from those sales.

On August 31, 2022, we entered into the Purchase Agreement with Chardan, pursuant to which Chardan may purchase from us up to $50.0 million in shares of our common stock (the “Total Commitment”), upon the terms and subject to the conditions and limitations set forth in the Purchase Agreement.

To date, we have sold $1.2 million in shares of our common stock to Chardan.

The shares of our common stock that may be issued under the Purchase Agreement may be sold by us to Chardan at our discretion from time to time until the earliest to occur of (i) October 1, 2025, (ii) the date on which Chardan has purchased the Total Commitment pursuant to the Purchase Agreement, (iii) the date on which our common stock fails to be listed or quoted on Nasdaq or any successor market, and (iv) the date on which, pursuant to or within the meaning of any bankruptcy law, we commence a voluntary case or any person or entity commences a proceeding against us, a custodian is appointed for us or for all or substantially all of our property, or we make a general assignment for the benefit of our creditors.

We generally have the right to control the timing and amount of any sales of our common stock to Chardan under the Purchase Agreement.

Sales of our common stock to Chardan under the Purchase Agreement will depend upon market conditions and other factors to be determined by us.

We may ultimately decide to sell to Chardan all or some of the common stock that may be available for us to sell to Chardan pursuant to the Purchase Agreement.

Accordingly, we cannot guarantee that we will be able to sell all of the Total Commitment or how much in proceeds we may obtain under the Purchase Agreement.

If we cannot sell securities under the Purchase Agreement, we may be required to utilize more costly and time-consuming means of accessing the capital markets, which could have a material adverse effect on our liquidity and cash position.

Because the purchase price per share of common stock to be paid by Chardan for the common stock that we may elect to sell to Chardan under the Purchase Agreement will fluctuate based on the market prices of our common stock at the time we elect to sell shares to Chardan pursuant to the Purchase Agreement it is not possible for us to predict, as of the date of this Annual Report on Form 10-K and prior to any such sales, the number of shares of common stock that we will sell to Chardan under the Purchase Agreement, the purchase price per share that Chardan will pay for shares of common stock purchased from us under the Purchase Agreement, or the aggregate gross proceeds that we will receive from those purchases by Chardan under the Purchase Agreement.

The actual number of shares of our common stock issuable will vary depending on the then current market price of shares of our common stock sold to Chardan and the number of shares of common stock we ultimately elect to sell to Chardan under the Purchase Agreement.

If it becomes necessary for us to issue and sell to Chardan under the Purchase Agreement more than the 8,727,049 shares of common stock we registered pursuant to the Purchase Agreement, in order to receive aggregate gross proceeds equal to $50.0 million under the Purchase Agreement, we will have to file with the SEC one or more additional registration statements to register under the Securities Act the

resale by Chardan of any such additional shares of common stock we wish to sell from time to time under the Purchase Agreement, which the SEC must declare effective, in each case before we may elect to sell any additional shares of our common stock under the Purchase Agreement.

Under applicable Nasdaq rules, in no event may we issue to Chardan more than 19.99% of the total number of shares of common stock that were outstanding immediately prior to the execution of the Purchase Agreement, unless we obtain prior stockholder approval or if such approval is not required in accordance with the applicable Nasdaq rules.

In addition, Chardan is not obligated to buy any common stock under the Purchase Agreement if such shares, when aggregated with all other shares of our common stock then beneficially owned by Chardan and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in Chardan beneficially owning common stock in excess of 4.99% of our outstanding shares of common stock.

Our inability to access a portion or the full amount available under the Purchase Agreement, in the absence of any other financing sources, could have a material adverse effect on our business or results of operation.

Investors who buy common stock from Chardan at different times will likely pay different prices.

Pursuant to the Purchase Agreement, the timing, price and number of shares sold to Chardan will vary depending on when we choose to sell shares, if any, to Chardan.

If and when we elect to sell any additional common stock to Chardan pursuant to the Purchase Agreement, after Chardan has acquired such common stock, Chardan may resell all, some or none of such shares at any time or from time to time in its sole discretion and at different prices.

As a result, investors who purchase shares from Chardan at different times will likely pay different prices for those shares, and so may experience different levels of dilution and in some cases substantial dilution and different outcomes in their investment results.

Investors may experience a decline in the value of the shares they purchase from Chardan as a result of future sales made by us to Chardan at prices lower than the prices such investors paid for their shares from Chardan.

The sale or issuance of shares of our common stock to Chardan will result in additional outstanding shares and the resale of shares of our common stock by Chardan that it acquires pursuant to the Purchase Agreement, or the perception that such sales may occur, could cause the price of shares of our common stock to decrease.

As of the date of this Form 10-K, we have issued 1,400,000 shares of common stock to Chardan under the Purchase Agreement, including 100,000 shares issued to Chardan as consideration for its execution and delivery of the Purchase Agreement.

The shares of common stock issuable under the Purchase Agreement may be sold by us to Chardan at our sole discretion, subject to the satisfaction of certain conditions in the Purchase Agreement, from time to time, until the earliest to occur of (i) October 1, 2025, (ii) the date on which Chardan has purchased the Total Commitment pursuant to the Purchase Agreement, (iii) the date on which our common stock fails to be listed or quoted on Nasdaq or any successor market, and (iv) the date on which, pursuant to or within the meaning of any bankruptcy law, we commence a voluntary case or any person or entity commences a proceeding against us, a custodian is appointed for us or for all or substantially all of our property, or we make a general assignment for the benefit of our creditors.

The purchase price for shares of our common stock that we may sell to Chardan under the Purchase Agreement will fluctuate based on the trading price of shares of our common stock.

Depending on market liquidity at the time, sales of shares of our common stock may cause the trading price of shares of our common stock to decrease.

We generally have the right to control the timing and amount of any future sales of shares of our common stock to Chardan.

Additional sales of shares of our common stock, if any, to Chardan will depend upon market conditions and other factors to be determined by us.

We may ultimately decide to sell to Chardan all or some of the additional shares of our common stock that may be available for us to sell pursuant to the Purchase Agreement.

If and when we do sell shares of our common stock to Chardan, after Chardan has acquired shares of our common stock, Chardan may resell all, some or none of such shares of common stock at any time or from time to time in its discretion.

Therefore, sales to Chardan by us could result in substantial dilution to the interests of other holders of shares of our common stock.

In addition, if we sell a substantial number of shares of our common stock to Chardan under the Purchase Agreement, or if investors expect that we will do so, the actual sales of shares of our common stock or the mere existence of our arrangement with Chardan may make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales.

We may use our cash resources, including proceeds from sales of our common stock made pursuant to the Purchase Agreement, in ways with which you may not agree or in ways which may not yield a significant return.

We have broad discretion over the use of capital we have raised, including proceeds from sales of our common stock made pursuant to the Purchase Agreement, and you will not have the opportunity, as part of any decision to invest in our common stock, to assess whether the proceeds are being used appropriately.

Accordingly, you will have to rely on the judgment of our management with respect to the use of these funds, with only limited information regarding management’s specific intentions.

We may spend all or a portion of the net proceeds of our prior financing activities, including sales of our common stock under the Purchase Agreement, in ways that are not what our stockholders may desire or that may not yield favorable results.

Because of the number and variability of factors that will determine our use of the net proceeds, their ultimate use may vary substantially from their currently intended use.

The failure by us to apply these funds effectively could harm our business, and the net proceeds may be used for corporate purposes that do not increase our operating results or enhance the value of our common stock.

Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our financial condition and results of operations.

Events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.

As of December 31, 2023, we had one letter of credit held with JPMorgan Chase Bank in the amount of approximately $2.9 million and one letter of credit with Silicon Valley Bank, or SVB, in the amount of approximately $0.5 million related to our facility leases.

As of December 31, 2024, we held a letter of credit with JPMorgan Chase Bank in the amount of approximately $2.9 million related to the Alameda facility and a letter of credit with JPMorgan Chase Bank in the amount of approximately $0.5 million related to our headquarter facility leases.

As of the date of this Form 10-K, we hold certain funds in accounts with Silicon Valley Bank, or SVB.

Due to the placement into receivership of SVB in March 2023, we may be unable to access such funds.

In addition, if any parties with whom we conduct business are unable to access funds pursuant to instruments or lending arrangements with such a financial institution, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.

In this regard, counterparties to credit agreements and arrangements with banks in receivership or other financial difficulty, and third parties (such as beneficiaries of letters of credit, among others), may experience direct impacts from the closure of or reorganization of such financial institution and uncertainty remains over liquidity concerns in the broader financial services industry.

closure of or reorganization of such financial institution and uncertainty remains over liquidity concerns in the broader financial services industry.

Similar impacts have occurred in the past, such as during the 2008-2010 financial crisis.

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In addition, investor concerns regarding the U.S.

or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire

financing on acceptable terms or at all.

Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our financial and/or contractual obligations or result in violations of federal or state wage and hour laws and otherwise have a material adverse impact on our business.

Risks Related to the Development and Clinical Testing of Our Product Candidates

Our current product candidates are in early clinical or preclinical development and have never been tested in humans.

Our current product candidates are in early clinical or preclinical development.

One or all of our current product candidates may fail in clinical development or suffer delays that materially and adversely affect their commercial viability.

We have no products on the market or that have gained regulatory approval and we are just beginning the clinical development of our lead product candidate.

None of our product candidates has ever been tested in humans.

We have no products on the market or that have gained regulatory approval and we are just beginning the clinical development of SENTI-202, our lead product candidate.

Our ability to achieve and sustain profitability depends on obtaining regulatory approvals for and successfully commercializing product candidates, either alone or with collaborators.

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There is no guarantee that the FDA will permit us to conduct clinical trials in accordance with our plans, or at all.

Further, we cannot be certain of the timely completion or outcome of our preclinical studies and cannot predict if the FDA or other regulatory authorities will accept our proposed clinical programs, our clinical protocols or if the outcome of our preclinical studies will ultimately support the further development of our preclinical programs or testing in humans.

Further, we cannot be certain of the timely completion or outcome of our clinical trials and preclinical studies and cannot predict if the FDA or other regulatory authorities will accept our proposed clinical programs, our clinical protocols or if the outcome of our clinical trials or preclinical studies will ultimately support the further development or commercialization of our programs or testing in humans.

As a result, we cannot be sure that we will be able to submit IND or similar applications for our proposed clinical programs on the timelines we expect, if at all, and we cannot be sure that our submission of additional INDs or similar applications will result in the FDA or other regulatory authorities allowing clinical trials for our product candidates to begin.

Our current product candidates are in early clinical and preclinical development and we are subject to the risks of failure inherent in the development of product candidates based on novel approaches, targets and mechanisms of action.

Although we received IND clearance for SENTI-202 from the FDA in December 2023 and we anticipate initiating a phase 1 clinical trials for SENTI-202 in the second quarter of 2024, there is no guarantee that we will be able to proceed with clinical development of SENTI-202 or any of our other product candidates or that any product candidate will demonstrate a clinical benefit once we advance these candidates to testing in patients.

Although we received IND clearance for SENTI-202 from the FDA in December 2023 and announced initial results from the Phase 1 clinical trial for SENTI-202 in the fourth quarter of 2024, there is no guarantee that SENTI-202 or any potential future product candidates will prove effective in humans or will receive approval.

Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by early clinical stage biotechnology companies such as ours.

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We or an existing or potential future collaborator may also be subject to post-marketing testing requirements to maintain regulatory approval.

If any of our current or potential future product candidates is ever tested in humans, it may not demonstrate the safety, purity and potency, or efficacy, necessary to become approvable or commercially viable.

None of our current product candidates have ever been tested in humans.

Clinical trials of our current or potential future product candidates may not demonstrate the safety, purity and potency, or efficacy, necessary for such product candidates to become approvable or commercially viable.

Other than SENTI-202 and SENTI-301A, none of our current product candidates have ever been tested in humans.

We may ultimately discover that our current product candidates do not possess certain properties that we believe are helpful for therapeutic effectiveness and safety or would otherwise support the submission of an IND on the timelines we expect, or at all.

We do not know if the observations we have made regarding our gene circuits generally and our product candidates in particular will translate into any clinical response when tested in humans.

In early clinical trials with the Celest Therapeutics’ SN301A program which incorporates our SENTI 301A gene circuit, our partner, Celest Therapeutics has observed certain dose limiting toxicities in some patients and is currently evaluating dosing levels below those that resulted in such toxicities that may or may not result in a meaningful clinical effect.

We also do not know if the observations we have made regarding our gene circuits generally and our product candidates in particular will translate into any clinical response when tested in humans.

As an example, while the TAA CD33 has been clinically validated as a target for an approved antibody-drug conjugate therapy, it has not been clinically validated as a target for CAR-NK or CAR-T therapies, and may not prove to be a clinically sufficient target for the CAR-NK therapies we are developing.

As a result of these uncertainties related to our gene circuit platform technologies and our product candidates, we may never succeed in developing a marketable product based on our current product candidates.

If any of our current or potential future product candidates prove to be ineffective,

unsafe or commercially unviable, our entire pipeline could have little, if any, value, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

If any of our current or potential future product candidates prove to be ineffective, unsafe or commercially unviable, our entire pipeline could have little, if any, value, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Our gene circuit platform technologies are based on novel technologies that are unproven and may not result in approvable or marketable products, which exposes us to unforeseen risks and makes it difficult for us to predict the time and cost of product development and potential for regulatory approval.

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As a result, we are exposed to a number of unforeseen risks and it is difficult to predict the types of challenges and risks that we may encounter during development of our product candidates.

For example, we have not tested any of our current product candidates in humans, and our current data is limited to animal models and preclinical cell lines, the results of which may not translate into humans.

For example, our current data is largely limited to animal models and preclinical cell lines, the results of which may not translate into humans.

Further, relevant animal models and assays may not accurately predict the safety and efficacy of our product candidates in humans, and we may encounter significant challenges creating appropriate models and assays for demonstrating the safety and efficacy of our product candidates.

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however, due to a lack of comparable experiences, the regulatory pathway with the FDA and comparable regulatory authorities may be more complex and time-consuming relative to other more well-known therapeutics.

Even if we obtain human data to support our product candidates, the FDA or comparable foreign regulatory agencies may lack experience in evaluating the safety and efficacy of our product candidates developed using our platforms, which could result in a longer than expected regulatory review process, increase our expected development costs, and delay or prevent commercialization of our product candidates.

or prevent commercialization of our product candidates.

The validation process takes time and resources, may require independent third-party analyses, and may not be accepted or approved by the FDA and comparable foreign regulatory authorities.

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Undesirable side effects caused by any of our current or potential future product candidates could cause regulatory authorities to interrupt, delay, or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities.

While we have not yet initiated clinical trials for SENTI-202, or any other product candidate, it is likely that there will be side effects associated with their use.

Results of our clinical trials could reveal a high and unacceptable severity and prevalence of these side effects.

For example, if the NOT GATE gene circuit, engineered into one of our product candidates, such as SENTI-202, does not provide a clinically sufficient level of inhibition, it may kill healthy cells that it has been designed to preserve or may cause systemic immune cytotoxicity.

We announced initial results from the Phase 1 clinical trial for SENTI-202 and our partner Celest Therapeutics initiated clinical trials for SN-301A in China, and have not initiated clinical trials for any other product candidates.

It is likely that there will be side effects associated with the use of certain of our products.

For example, we have seen dose limiting toxicities in early results from Celest Therapeutics’ clinical trial of SN-301A and are evaluating different dosing levels for that product candidate.

Further, if the NOT GATE gene circuit, engineered into one of our product candidates, such as SENTI-202, does not provide a clinically sufficient level of inhibition, it may kill healthy cells that it has been designed to preserve or may cause systemic immune cytotoxicity.

It is possible that safety events or concerns such as these or others could negatively affect the development of our product candidates, including adversely impacting patient enrollment among the patient populations that we intend to treat.

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Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm our business, results of operations, and prospects.

We may not be successful in our efforts to use and expand our gene circuit platform to expand our pipeline of product candidates.

We may not be successful in our efforts to use and expand our gene circuit platform to grow our pipeline of product candidates.

A key element of our strategy is to use and advance our gene circuit platform to design, test and build our portfolio of product candidates focused on allogeneic gene circuit-equipped CAR-NK cell therapies for the treatment of cancer.

We cannot assure you that any of our existing product candidates will advance to clinical trials or, if they do, that such trials will demonstrate these product candidates to be safe or effective therapeutics, and we may not be able to successfully develop any product candidates.

Although our research and development efforts to date have resulted in our discovery and preclinical development of SENTI-202, SENTI-301A, and other potential product candidates, we only received clearance of our IND for SENTI-202 in December 2023, and initiated our Phase 1 clinical trial for SENTI-202 in the second quarter of 2024 and announced initial results from the Phase 1 clinical trial for SENTI-202 in the fourth quarter of 2024 and have begun dosing in a clinical trial for SN-301A in a collaboration led by Celest Therapeutics in China in December 2024, and to date have not tested any other product candidates in humans.

We cannot assure you that any other existing product candidates will advance to clinical trials or, if they do, that such trials will demonstrate these product candidates to be safe or effective therapeutics, and we may not be able to successfully develop any product candidates.

Even if we are successful in expanding our pipeline of product candidates, any additional product candidates that we identify may not be suitable for clinical development or generate acceptable clinical data, including as a result of being shown to have unacceptable effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval from the FDA or other regulatory authorities or achieve market acceptance.

If we do not successfully develop and commercialize product candidates, we will not be able to generate product revenue in the future.

Although we intend to explore other therapeutic opportunities in addition to the product candidates that we are currently developing, we may fail to identify viable new product candidates for clinical development for a

number of reasons.

If we fail to identify additional potential product candidates, our business could be materially harmed.

Although a substantial amount of our efforts will focus on the planned clinical trials and potential approval of the current and potential future product candidates we are evaluating, an element of our long term strategy is to discover, develop, and globally commercialize additional targeted therapies beyond our current product candidates to treat various conditions and in a variety of therapeutic areas.

Although a substantial amount of our efforts will focus on our ongoing and planned clinical trials and potential approval of the current and potential future product candidates we are evaluating, an element of our long term strategy is to discover, develop, and globally commercialize additional targeted therapies beyond our current product candidates to treat various conditions and in a variety of therapeutic areas.

Even if we identify investigational therapies that initially show promise, we may fail to successfully develop and commercialize such products for many reasons, including the following:

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If any product candidate we commercialize fails to achieve market acceptance, it could have a material adverse impact on our business, financial condition, results of operations, and prospects.

While we believe our pipeline will yield multiple INDs, we may not be able to file additional INDs to commence clinical trials on the timelines we expect, and even if we are able to, the FDA may not permit us to proceed.

We expect our pipeline to yield multiple INDs in addition to our IND for SENTI-202 that was cleared by the FDA in December 2023.

We may not be able to file additional INDs to commence clinical trials on the timelines we expect, and even if we are able to, the FDA may not permit us to proceed.

We cannot be sure that submission of an IND will result in the FDA allowing testing and clinical trials to begin, or that, once begun, issues will not arise that suspend or terminate such clinical trials.

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Accordingly, we expect chemistry, manufacturing and control related topics, including product specifications, will be a focus of IND reviews, which may delay the clearance of any future INDs we may submit.

Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND or

clinical trial application, we cannot guarantee that such regulatory authorities will not change their requirements in the future.

Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND or clinical trial application, we cannot guarantee that such regulatory authorities will not change their requirements in the future.

In addition to the submission of an IND to the FDA before initiation of a clinical trial in the United States, certain human clinical trials involving recombinant or synthetic nucleic acid molecules are subject to oversight of institutional biosafety committees (“IBCs”), as set forth in the National Institutes of Health (“NIH”), Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules, NIH Guidelines.

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We also make assumptions, estimates, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.

As a result, the interim, preliminary or topline results that we report may differ from future results of the same study or trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated.

Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published.

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If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

We may not be able to initiate or continue any clinical trials for our current or potential future product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or other regulatory authorities.

required by the FDA or other regulatory authorities.

We cannot predict how difficult it will be to enroll patients for trials in the indications we are studying.

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Additionally, because some of our clinical trials will be in patients with advanced disease who may experience disease progression or adverse events independent from our product candidates, such patients may be unevaluable for purposes of the trial and, as a result, we may require additional enrollment.

Delays in patient enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our product candidates.

Delays in patient enrollment may result in increased costs or may affect the timing or outcome of our ongoing and planned clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our product candidates.

If clinical trials for our product candidates are prolonged, delayed or stopped, we may be unable to seek or obtain regulatory approval and commercialize our product candidates on a timely basis, or at all, which would require us to incur additional costs and delay our receipt of any product revenue.

We may experience delays in our ongoing or future preclinical studies or clinical trials, and we do not know whether future preclinical studies or clinical trials will begin on time, need to be redesigned, enroll an adequate number of patients on time or be completed on schedule, if at all.

number of patients on time or be completed on schedule, if at all.

The commencement or completion of these clinical trials could be substantially delayed or prevented by many factors, including:

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Animal testing activities have been the subject of controversy and adverse publicity.

Animal rights groups and other organizations and individuals have attempted to stop animal testing activities by pressing for legislation and regulation in these areas and by disrupting these activities through

protests and other means.

To the extent the activities of these groups are successful, our research and development activities may be interrupted or delayed.

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Moreover, the transition to a new company may require significant time and resources from the employees of GeneFab, which may disrupt GeneFab’s business and distract its management from other responsibilities, which may then result in GeneFab’s failure to achieve anticipated manufacturing production, which could adversely affect our timelines for clinical trials of our product candidates to the extent they are manufactured by GeneFab and our financial and operating results.

We rely on third parties to conduct our preclinical studies, and plan to rely on third parties to conduct clinical trials, and those third parties may not perform satisfactorily.

We expect to rely on third-party clinical investigators, CROs, testing laboratories, clinical data management organizations and consultants to design, conduct, supervise and monitor certain preclinical studies and any clinical trials.

We currently rely and intend to continue to rely on third parties to conduct our clinical trials and preclinical studies, and those third parties may not perform satisfactorily.

We currently rely and expect to continue to rely on third-party clinical investigators, CROs, testing laboratories, clinical data management organizations and consultants to design, conduct, supervise and monitor our ongoing and planned clinical trials and preclinical studies .

Because we intend to rely on these third parties and will not have the ability to conduct certain preclinical studies or clinical trials independently, we will have less control over the timing, quality and other aspects of such preclinical studies and clinical trials than we would have had we conducted them on our own.

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Some of these third parties may terminate their engagements with us at any time.

We also expect to have to negotiate budgets and contracts with CROs, clinical trial sites and contract manufacturing organizations and we may not be able to do so on favorable terms, which may result in delays to our development timelines and increased costs.

We also expect to have to negotiate budgets and

contracts with CROs, clinical trial sites and contract manufacturing organizations and we may not be able to do so on favorable terms, which may result in delays to our development timelines and increased costs.

If we need to enter into alternative arrangements with, or replace or add any third parties, it would involve substantial cost and require extensive management time and focus, or involve a transition period, and may delay our drug development activities, as well as materially impact our ability to meet our desired clinical development timelines.

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The third parties with which we may contract might not be diligent, careful or timely in conducting our preclinical studies or clinical trials, resulting in the preclinical studies or clinical trials being delayed or unsuccessful.

Despite our reliance on third parties, we will ultimately be responsible for ensuring that each of our studies and trials is conducted in accordance with applicable protocol, legal and regulatory requirements and scientific standards, including good laboratory practice, or GLP, good clinical practice, or GCP, cGMP, and cGTP.

For example, we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial.

Moreover, the FDA and other regulatory authorities require us to comply with GCP standards, regulations for conducting, recording and reporting the results of clinical trials to assure that data and reported results are reliable and accurate and that the rights, integrity and confidentiality of trial participants are protected.

Regulatory authorities enforce these GCP requirements through periodic inspections of

trial sponsors, principal investigators and trial sites.

Regulatory authorities enforce these GCP requirements through periodic inspections of trial sponsors, principal investigators and trial sites.

If we or any of our CROs, clinical sites and investigators fail to comply with applicable GCP requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, European Medicines Agency, or EMA, or other regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.

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As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed.

Ltd., or Celest, for the application of our gene circuit platform technology to the development and commercialization of potential product candidates in certain indications, and if these arrangements are unsuccessful, this could impair our ability to generate revenues and materially harm our results of operations.

We depend on strategic partnerships and collaboration arrangements, such as our collaboration arrangements with Spark Therapeutics, Inc., or Spark, BlueRock Therapeutics, Inc., or BlueRock, and Celest Therapeutics , for the application of our gene circuit platform technology to the development and commercialization of potential product candidates in certain indications, and if these arrangements are unsuccessful, this could impair our ability to generate revenues and materially harm our results of operations.

Our business strategy for exploiting the potential of our gene circuit platform technology is dependent upon maintaining our current arrangements and establishing new arrangements with strategic partners, research collaborators and other third parties.

We currently have collaboration agreements with Spark, BlueRock and Celest.

These collaboration agreements provide for, as the case may be, among other things, research funding and significant future payments should certain development, regulatory and commercial milestones be achieved.

These collaboration agreements provide for, as the case may be, among other things, research funding and significant future payments to us from our collaborators should certain development, regulatory and commercial milestones be achieved.

Under these arrangements, our collaborators are typically responsible for, in the applicable territories and fields:

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Any of these events could have a material adverse effect on our ability to develop and commercialize any of our product candidates and may adversely impact our business, prospects, financial condition, and results of operations.

Furthermore, pursuant to certain of our agreements, we are required to engage certain parties unless the parties determine that a party is unable to provide such services.

Furthermore, pursuant to certain of our

agreements, we are required to engage specified service providers in connection with certain activities under our collaboration agreements unless the parties determine that another party is unable to provide such services.

If we license or otherwise grant rights to certain products developed by us to a third party, we may need to impose this obligation on a third party acquirer or strategic partner.

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For example, we will evaluate and, if strategically attractive, seek to enter into collaborations, including with biotechnology or biopharmaceutical companies, contract development manufacturing organizations or hospitals.

On November 6, 2023, we announced that we had entered into a strategic collaboration with Celest for the clinical development of our SENTI-301A program to treat solid tumors in China.

On November 6, 2023, we announced that we had entered into a strategic collaboration with Celest Therapeutics for the clinical development of the SENTI-301A gene circuit in the SN301A product manufactured by Celest to treat solid tumors in China.

The competition for collaborators is intense, and the negotiation process is time-consuming and complex.

If we are not able to enter into strategic transactions, or if we fail to realize a benefit from the collaboration

with Celest or from a transaction with a different organization, we may not have access to required liquidity or expertise to further develop our potential future product candidates or our gene circuit platform.

If we are not able to enter into strategic transactions, or if we fail to realize a benefit from the collaboration with Celest or from a transaction with a different organization, we may not have access to required liquidity or expertise to further develop our potential future product candidates or our gene circuit platform.

Any such collaboration, or other strategic transaction, may require us to incur non-recurring or other charges, increase our near- and long-term expenditures and pose significant integration or implementation challenges or disrupt our management or business.

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Accordingly, although there can be no assurance that we will undertake or successfully complete any transactions of the nature described above, any transactions that we do complete may be subject to the foregoing or other risks and our business could be materially harmed by such transactions.

Conversely, any failure to enter any collaboration or other strategic transaction that would be beneficial to us could delay the development and potential commercialization of our product candidates and technologies and have a negative impact on the competitiveness of any product candidate or technology that reaches market.

Conversely, any failure to enter into

any collaboration or other strategic transaction that would be beneficial to us could delay the development and potential commercialization of our product candidates and technologies and have a negative impact on the competitiveness of any product candidate or technology that reaches market.

In addition, to the extent that any future collaborators terminate a collaboration agreement, we may be forced to independently develop our current and future product candidates and technologies, including funding preclinical studies or clinical trials, assuming marketing and distribution costs and maintaining, enforcing and defending intellectual property rights, or, in certain instances, abandon product candidates and technologies altogether, any of which could result in a change to our business plan and have a material adverse effect on our business, financial condition, results of operations and prospects.

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In some cases, the technical skills required to manufacture our product candidates or products, if approved, may be unique or proprietary to the original CMO and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills to a back-up or alternate supplier, or we may be unable to transfer such skills at all.

In addition, if we are required to change CMOs for any reason, we will be required to verify that the new CMO maintains facilities and procedures that comply with quality standards and with all applicable regulations.

Any adverse developments affecting manufacturing operations for our product candidates, if any are approved, may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls, or other interruptions in the supply of our products.

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The actual cost to manufacture our product candidates could be greater than we expect because we are early in our development efforts.

Supply of our product candidates for preclinical and clinical development may become limited or interrupted or may not be of satisfactory quantity or quality, and we may experience delays if GeneFab is unable to consistently and reliably manufacture any current and future products and we are required to rely on third-party back-up manufacturers.

consistently and reliably manufacture any current and future products and we are required to rely on third-party back-up manufacturers.

Initial manufacturing efforts under our agreements with GeneFab will focus on our lead program, SENTI-202.

GeneFab has never operated a cGMP facility before.

GeneFab may not have the ability to consistently and reliably manufacture SENTI-202 in sufficient quality and quantity to support the planned clinical trials, which could negatively impact our overall development timelines.

In addition, quality, reproducibility, stability, consistency issues may arise during manufacturing activities and may result in lower yields than initially expected.

GeneFab may not have the ability to consistently and reliably manufacture SENTI-202 in sufficient quality and quantity to support our ongoing and planned clinical trials, which could negatively impact our overall development timelines.

In addition, quality, reproducibility, stability, and consistency issues may arise during manufacturing activities and may result in lower yields than initially expected.

We do not currently have arrangements in place for a redundant or second-source supply in the event the facility we sublease to GeneFab is not operational or GeneFab is otherwise unable to meet our supply requirements for our preclinical studies and planned clinical trials.

Any delays in manufacturing our product candidates could impede, delay, limit or

prevent our drug development efforts, which could harm our business, results of operations, financial condition and prospects.

Any delays in manufacturing our product candidates could impede, delay, limit or prevent our drug development efforts, which could harm our business, results of operations, financial condition and prospects.

We do not currently produce our product candidates in quantities sufficient for preclinical and clinical development.

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If we receive regulatory approval for any product candidate and we are unable, for any reason, to have sufficient quantities of the product produced, or if we are unable to obtain or maintain third-party manufacturing arrangements on commercially reasonable terms, we may not be able to commercialize the product candidate successfully.

to execute on our manufacturing requirements and comply with cGMP and cGTP could adversely affect our business in a number of ways, including:

Failure to execute on our manufacturing requirements and comply with cGMP and cGTP could adversely affect our business in a number of ways, including:

an inability to initiate or continue clinical trials of product candidates under development;

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In order to conduct clinical trials for our current and potential future product candidates or to commercialize any approved product candidates, we will need to manufacture large quantities of these product candidates.

We currently expect to rely exclusively on GeneFab to produce required quantities of SENTI-202.

We currently rely exclusively on GeneFab to produce required quantities of SENTI-202.

We, GeneFab, or any future manufacturing partners, may be unable to successfully scale-up the manufacturing process or to otherwise increase capacity for any current or potential future product candidate in a timely or cost-effective manner, or at all.

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Reagents and other key materials from these suppliers may have inconsistent attributes and introduce variability into our manufactured product candidates, which may contribute to variable patient outcomes and possible adverse events.

We also do not have supply contracts with many of these suppliers

and may not be able to obtain supply contracts with them on acceptable terms or at all.

We also do not have supply contracts with many of these suppliers and may not be able to obtain supply contracts with them on acceptable terms or at all.

Accordingly, we may experience delays in receiving key materials and equipment to support clinical or commercial manufacturing.

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An inability to continue to source product from any of these suppliers, which could be due to regulatory actions or requirements affecting the supplier, adverse financial or other strategic developments experienced by a supplier, labor disputes or shortages, unexpected demands, or quality issues, could adversely affect our ability to satisfy demand for our product candidates, which could adversely and materially affect our product sales and operating results or our ability to conduct clinical trials, either of which could significantly harm our business.

Regional or single-source dependencies may in some cases accentuate these risks.

For example, the pharmaceutical industry generally, and in some instances we or our collaborators such as Celest or other third parties on which we rely, depend on China-based suppliers or service providers for certain materials, products and services, or other activities.

Our ability or the ability of our collaborators or such other third parties to continue to engage these China-based suppliers or service providers for certain preclinical research programs and clinical development programs could be restricted due to geopolitical developments between the United States and China, including as a result of the escalation of tariffs or other trade restrictions or if the previously proposed federal legislation known as the BIOSECURE Act or similar law were to be enacted.

As GeneFab continues to develop and scale the manufacturing process for our product candidates, we expect that there will be a need to obtain rights to and supplies of certain materials and equipment to be used as part of that process.

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Any inability to attract and retain qualified key management, technical personnel and employees would impair our ability to implement our business plan.

Our success largely depends on the continued service of key executive management, advisors and other specialized personnel, including Timothy Lu, our Chief Executive Officer and President, Kanya Rajangam, our Head of Research and Development and Chief Medical Officer, and Deborah Knobelman, our Chief Financial Officer and Head of Corporate Development.

Head of Research and Development and Chief Medical Officer.

Our senior management may terminate their employment with us at any time.

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The loss of one or more members of our executive team, management team or other key employees or advisors could delay our research and development programs and have a material adverse effect on our business, financial condition, results of operations and prospects.

As previously disclosed by us in our Current Reports on Form 8-K filed with the SEC on April 26, 2024 and May 2, 2024, Deborah Knobelman, Ph.D., our former Chief Financial Officer, Treasurer and Head of Corporate Development and our principal financial officer and principal accounting officer, resigned effective May 3, 2024.

Following Dr.

Knobelman’s resignation, the Board appointed Dr.

Lu, as the interim principal financial officer and principal accounting officer, effective as of May 4, 2024 until the filing of our quarterly report on form 10-Q for the quarter ended March 31, 2024.

The Board also appointed Yvonne Li as Interim Chief Financial Officer, effective May 4, 2024, and principal financial officer and principal accounting officer effective after our filing of our quarterly report on form 10-Q for the quarter ended March 31, 2024.

On January 31, 2025, the Consulting Agreement with Yvonne Li expired in accordance with its terms.

As such, effective January 31, 2025, Ms.

Li is no longer serving as our principal financial officer and principal accounting officer.

On February 5, 2025, we entered into a new consulting agreement pursuant to which Ms.

Li will serve as a consultant until March 31, 2025.

On February 25, 2025, we announced the appointment of Jay Cross as our Chief Financial Officer effective March 3 2025, and principal financial officer and principal accounting officer, effective following our filing the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

The effectiveness of our new Chief Financial Officer and our senior leadership team generally, following the transition could have a significant impact on our ability to operate the business effectively.

The failure to ensure a smooth transition, including required knowledge transfers, could negatively affect our results of operations and financial condition as well as our ability to execute our business strategies.

Recruiting and retaining qualified scientific and clinical personnel and, if we progress the development of any of our product candidates, commercialization, manufacturing and sales and marketing personnel, will be critical to our success.

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Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior, mid-level and senior managers, as well as junior, mid-level and senior scientific and medical personnel.

Competition to hire from this limited candidate pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous

pharmaceutical and biotechnology companies for similar personnel.

Competition to hire from this limited candidate pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel.

We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.

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To execute on our anticipated operating plans, we will need to continue to implement and improve our managerial, operational, and financial systems, and continue to recruit and train additional qualified personnel.

Due to our limited financial resources and the complexity in managing a company with such anticipated growth, we may not be able to effectively expand our operations, manage any expansion of our operations or recruit and train additional qualified personnel.

Due to our limited financial resources and the complexity in managing a company with such anticipated growth, we may

not be able to effectively expand our operations, manage any expansion of our operations or recruit and train additional qualified personnel.

The expansion of our operations may lead to significant costs and may divert our management and business development resources.

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Doing business internationally involves a number of risks, including but not limited to:

multiple, conflicting and changing laws and regulations such as those relating to privacy, data protection and cybersecurity, tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses;

multiple, conflicting and changing laws and regulations such as those relating to privacy, data protection and cybersecurity, tax laws, tariffs, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses;

failure by us to obtain and maintain regulatory approvals for the commercialization of our product candidates in various countries;

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Foreign Corrupt Practices Act, its accounting provisions or its anti-bribery provisions or provisions of anti-corruption or anti-bribery laws in other countries, including China among other countries.

In addition, legislative proposals are pending that, if enacted, could negatively impact U.S.

In addition, legislation has been proposed that, if enacted, could negatively impact U.S.

funding for certain biotechnology providers having relationships with foreign adversaries or which pose a threat to national security.

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Product liability claims could delay or prevent completion of our development programs.

If we succeed in marketing products, such claims could result in an FDA investigation of the safety and effectiveness of our products, our manufacturing processes and facilities or our marketing programs and potentially a recall of our products or more serious enforcement action, limitations on the approved indications for which they may be used or suspension or withdrawal of approvals.

If we succeed in marketing products, such claims could result in an FDA investigation of the safety and effectiveness of our products, our manufacturing processes and facilities or our

marketing programs and potentially a recall of our products or more serious enforcement action, limitations on the approved indications for which they may be used or suspension or withdrawal of approvals.

Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our products, injury to our reputation, costs to defend the related litigation, a diversion of management’s time and our resources, substantial monetary awards to trial participants or patients and a decline in our stock price.

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We depend on sophisticated information technology systems and data processing to operate our business.

If we experience security or data privacy breaches, security incidents or compromises, or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data or personal data, we may face costs, significant liabilities, harm to our brand and business disruption.

If we experience cybersecurity or data privacy breaches, security incidents or compromises, or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data or personal data, we may face costs, significant liabilities, harm to our brand and business disruption.

We rely on information technology systems and data processing that we or our service providers, collaborators, consultants, contractors or partners operate to collect, process, transmit and store electronic information in our day-to-day operations, including a variety of personal data, such as name, mailing address, email addresses, phone number and potentially clinical trial information.

Additionally, we, and our service providers, collaborators,

consultants, contractors or partners, do or will collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect and share personal information, health information and other information to host or otherwise process some of our anticipated future clinical data and that of users, develop our products, to operate our business, for clinical trial purposes, for legal and marketing purposes, and for other business-related purposes.

Our internal computer systems and data processing and those of our third-party vendors, consultants, collaborators, contractors or partners, including future CROs may be vulnerable to a cyber-attack (including supply chain cyber-attacks), malicious intrusion, breakdown, destruction, loss of data privacy, actions or inactions by our employees or contractors that expose security vulnerabilities, theft or destruction of intellectual property or other confidential or proprietary information, business interruption or other significant security incidents or compromises.

As the cyber-threat landscape evolves, these attacks are growing in frequency, level of persistence, sophistication and intensity, and are becoming increasingly difficult to detect.

In addition to traditional computer “hackers,” threat actors, software bugs, malicious code (such as viruses and worms), employee theft or misuse, denial-of-service attacks (such as credential stuffing), phishing and ransomware attacks, sophisticated nation-state and nation-state supported actors now engage in attacks (including advanced persistent threat intrusions).

Additionally, we, and our service providers, collaborators, consultants, contractors or partners, do or will collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect and share personal information, health information and other information to host or otherwise process some of our anticipated future clinical data and that of users, develop our products, to operate our business, for clinical trial purposes, for legal and marketing purposes, and for other business-related purposes.

Despite the implementation of security measures, our internal computer systems and information technology systems and infrastructure and those of our third-party vendors, consultants, collaborators, contractors or partners, including future CROs upon which our business relies are vulnerable to breakdown or damage or interruption from, among other things, natural disasters, terrorism, war, telecommunication and electrical failures, and sophisticated cyberattacks, including the theft, fraud, and subsequent misuse of employee credentials, wrongful conduct by insider employees or vendors, denial-of-service attacks, ransomware attacks, business email compromises, social engineering (including phishing attacks), computer malware, malicious codes, viruses, wrongful intrusions, and data breaches.

Like other companies in our industry, we, and our third party vendors, have experienced and will continue to experience threats and cybersecurity incidents relating to our information technology systems and infrastructure.

As the cyber-threat landscape evolves, these attacks are growing in frequency, level of persistence, sophistication

and intensity, and are becoming increasingly difficult to detect.

These risks may be increased as a result of pandemics, owing to an increase in personnel working remotely and higher reliance on internet technology.

Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.

We may also experience security breaches that may remain undetected for an extended period.

There can be no assurance that we, our service providers, collaborators, consultants, contractors or partners will be successful in efforts to detect, prevent or fully recover systems or data from all breakdowns, service interruptions, attacks, compromises, or breaches of systems that could adversely affect our business and operations and/or result in the loss of critical or sensitive data.

Any failure by us or our service providers, collaborators, consultants, contractors or partners to detect, prevent, respond to or mitigate security breaches, incidents, compromises, or improper access to, use of, or inappropriate disclosure of any of this information or other confidential or sensitive information, including patients’ personal data, or the perception that any such failure has occurred, could result in claims, litigation, regulatory investigations and other proceedings, significant liability under state, federal and international law, and other financial, legal or reputational harm to us.

We may also experience cybersecurity incidents or data breaches that may remain undetected for an extended period.

There can be no assurance that we, our service providers, collaborators, consultants, contractors or partners will be successful in efforts to detect, prevent or fully recover systems or data from all breakdowns, service interruptions, attacks, compromises, cybersecurity incidents or breaches of systems that could adversely affect our business and operations and/or result in the loss of critical or sensitive data.

Any failure by us or our service providers, collaborators, consultants, contractors or partners to detect, prevent, respond to or mitigate cybersecurity incidents, compromises, breaches or improper access to, use of, or inappropriate disclosure of our information or other confidential or sensitive information, including patients’ personal data, or the perception that any such failure has occurred, could result in legal notifications, disclosures, claims, litigation, regulatory investigations and other proceedings, significant liability under state, federal and international law, and other financial, legal or reputational harm to us, including class action lawsuits from affected individuals.

Further, such failures or perceived failures could result in liability and a material disruption of our development programs and our business operations, which could lead to significant delays or setbacks in our research, delays to commercialization of our product candidates, lost revenues or other adverse consequences, any of which could have a material adverse effect on our business, results of operations, financial condition, prospects and cashflow.

For example, the loss or alteration of clinical trial data from future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

Additionally, applicable laws and regulations relating to privacy, data protection or cybersecurity, external contractual commitments and internal privacy and security policies may require us to notify relevant stakeholders if there has been a security breach, including affected individuals, business partners and regulators.

Additionally, applicable laws and regulations relating to privacy, data protection or cybersecurity, external contractual commitments and internal privacy and security policies may require us to notify relevant stakeholders if there has been a cybersecurity incident or breach, including notification to affected individuals, business partners and regulators.

Such disclosures are costly, and the disclosures or any actual or alleged failure to comply with such requirements could lead to a materially adverse impact on the business, including negative publicity, a loss of confidence in our services or security measures by our business partners or breach of contract claims.

There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages if we fail to comply with applicable data protection laws, privacy policies or other data protection obligations related to information security incidents, compromises, or security breaches.

Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our privacy and data security obligations.

Further, although we maintain cyber liability insurance, this insurance may not provide adequate coverage against potential liabilities related to any experienced cybersecurity incident or breach.

If we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected.

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Department of Labor.

Although we believe that our

safety procedures for handling and disposing of these materials comply with the standards mandated by applicable regulations, the risk of accidental contamination or injury from these materials cannot be eliminated.

Although we believe that our safety procedures for handling and disposing of these materials comply with the standards mandated by applicable regulations, the risk of accidental contamination or injury from these materials cannot be eliminated.

If an accident occurs, we could be held liable for resulting damages, which could be substantial.

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Although we have some environmental liability insurance, we may not maintain adequate insurance for all environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological or hazardous materials.

Additional federal, state and local laws and regulations affecting our operations may be adopted in the future.

Additional federal, state and local laws and regulations affecting our operations

may be adopted in the future.

We may incur substantial costs to comply with, and substantial fines or penalties if we violate, any of these laws or regulations.

Our business, operations and clinical development plans and timelines could be adversely affected by global economic and political developments, including high inflation and capital market disruption, the war in Ukraine, the armed conflict in Israel and the Gaza Strip, economic sanctions and economic slowdowns or recessions, including any lingering impact from the COVID-19 pandemic, or the manufacturing, clinical trial and other business activities performed by us or by third parties with whom we may conduct business, including our anticipated contract manufacturers, CROs, shippers and others.

Our business, operations and clinical development plans and timelines could be adversely affected by global economic and political developments, including inflation and capital market disruption, global geopolitical disruptions, including various armed conflicts, economic sanctions and economic slowdowns or recessions, potential global health crises, or the manufacturing, clinical trial and other business activities performed by us or by third parties with whom we may conduct business, including our anticipated contract manufacturers, CROs, shippers and others.

Any global financial crisis or slowdown could cause volatility and disruptions in the capital and credit markets.

Similarly, any global health epidemic, such as the COVID-19 pandemic, could cause disruptions in our operations and in the operations of third-party manufacturers, CROs, and other third-parties on whom we rely.

More recently, the global economy has been impacted by increasing interest rates and high inflation, as well as by the war in Ukraine and the armed conflict in Israel and the Gaza Strip, and the possibility of a wider European and/or Middle-East or global conflict.

Similarly, any global health epidemic could cause disruptions in our operations and in the operations of third-party manufacturers, CROs, and other third-parties on whom we rely.

More recently, the global economy has been impacted by increasing interest rates and high inflation, as well as by global geopolitical disruptions, including various armed conflicts.

A severe or prolonged economic downturn could result in a variety of risks to our business, including a reduced ability to raise additional capital when needed on acceptable terms, or at all.

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Although we carefully manage our relationships with our suppliers and vendors, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not harm our business.

In addition, our preclinical studies and future clinical trials may be affected by global health emergencies.

Clinical site initiation, patient enrollment and activities that require visits to clinical sites, including data monitoring, may be delayed due to prioritization of hospital resources toward addressing pandemic concerns among patients about participating in clinical trials during a pandemic.

In addition, our ongoing and planned clinical trials and preclinical studies may be affected by global health emergencies.

Clinical site initiation, patient enrollment and activities that require visits to clinical sites, including data monitoring, may be delayed due to prioritization of hospital resources toward addressing concerns among patients about participating in clinical trials during a pandemic.

Some patients may have difficulty following certain aspects of clinical trial protocols if quarantines impede patient movement or interrupt healthcare services.

These challenges may also increase the costs of completing our clinical trials.

Similarly, if we are unable to successfully recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to illness during a global health emergency or experience additional restrictions by their institutions, city or state, our preclinical studies and future clinical trial operations could be adversely impacted.

Similarly, if we are unable to successfully recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to illness during a global health emergency or experience additional restrictions by their institutions, city or state, our ongoing and future clinical trial operations and preclinical studies could be adversely impacted.

The global COVID-19 pandemic disrupted healthcare delivery and healthcare regulatory systems.

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These and similar, and perhaps more severe, disruptions in our operations could have a material adverse effect on our business, results of operations, cash flows, financial condition and/or prospects.

The effects of a pandemic could have a material impact on our operations, and to the extent a pandemic adversely affects our business, results of operations, cash flows, financial condition and/or prospects, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section.

Market volatility and economic downturns may harm our business and results of operations and negatively affect our stock price.

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With uncertainty in the capital markets and other factors, such financing may not be available on terms favorable to us or at all.

If we raise additional funds through further issuances of equity or convertible debt securities, our existing

stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock.

Any debt financing secured by us in the future could involve additional restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock.

Any debt financing secured by us in the future could require us to pay high interest rates or involve additional restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

If we are unable to obtain adequate financing or financing on terms satisfactory to us, we could face significant limitations on our ability to invest in our operations and otherwise suffer harm to our business.

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Inflation rates, particularly in the United States, have increased recently to levels not seen in years.

Increased inflation may result in decreased demand for our products and services, increased operating costs (including our labor costs), reduced liquidity, and limitations on our ability to access credit or otherwise raise debt and equity capital.

Increased inflation may result in decreased demand for our products and services, increased operating costs (including our

labor costs), reduced liquidity, and limitations on our ability to access credit or otherwise raise debt and equity capital.

In addition, the United States Federal Reserve has raised, and may again raise, interest rates in response to concerns about inflation.

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Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.

Even if our owned or in-licensed patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection,

prevent competitors from competing with us or otherwise provide us with any competitive advantage.

Even if our owned or in-licensed patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage.

Our competitors may be able to circumvent our patents by developing similar or alternative product candidates in a non-infringing manner.

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We thus cannot know with certainty whether we or our licensors were the first to file for patent protection of such inventions.

In addition, the United States Patent and Trademark Office, or USPTO, might require that the term of a patent issuing from a pending patent application be disclaimed and limited to the term of another patent that is commonly owned or names a common inventor.

In addition, the United States Patent and Trademark Office, or USPTO, might require that the term of a patent issuing from a pending patent application be disclaimed and limited to the

term of another patent that is commonly owned or names a common inventor.

There is no assurance that all potentially relevant prior art relating to our owned or in-licensed patent applications has been found.

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Further, patents and other intellectual property rights in the pharmaceutical and biotechnology space are evolving and involve many risks and uncertainties.

For example, third parties may have blocking patents that could be used to prevent us from commercializing our product candidates and any future product candidates and practicing our proprietary technology, and any issued patents may be challenged, invalidated or circumvented, which could limit our ability to stop competitors from marketing related products or could limit the term of patent protection that

otherwise may exist for our product candidate and any future product candidates.

In addition, the scope of the rights granted under any issued patents may not provide us with protection or competitive advantages against competitors or other parties with similar technology.

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Our in-licensed patent rights may be subject to a reservation of rights by one or more third parties, such as the U.S.

In addition, our rights in such inventions may be subject to certain requirements to manufacture

product candidates embodying such inventions in the United States.

In addition, our rights in such inventions may be subject to certain requirements to manufacture product candidates embodying such inventions in the United States.

Any exercise by the U.S.

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In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.

We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at

We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all.

Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.

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In the future, we may need to obtain additional licenses from others to advance our research and development activities or allow the commercialization of our current and future product candidates we may identify and pursue.

These existing license agreements impose, and any future license agreements we enter into are likely to impose, various development, commercialization, funding, milestone, royalty, diligence, sublicensing,

insurance, patent prosecution and enforcement or other obligations on us.

For example, we are a party to three license agreements with the U.S.

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It is possible that defects of form in the preparation or filing of our patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope, or requests for patent term adjustments.

If we or our licensors fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated.

licensors fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated.

If our licensors are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised.

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Therefore, any limitations on our ability to utilize these technologies may impair our ability to develop, out-license or market and sell our product candidates.

property rights that may be necessary for developing, commercializing and protecting our current or future technologies or product candidates or we could lose certain rights to grant sublicenses.

If we fail to comply with our obligations or disputes arise under any existing or future license, collaboration or other intellectual property-related agreements, we may be required to pay damages and could lose intellectual property rights that may be necessary for developing, commercializing and protecting our current or future technologies or product candidates or we could lose certain rights to grant sublicenses.

We have certain obligations to third-party licensors from whom we license certain patent rights that are relevant to one or more current and future product candidates.

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the priority of invention of patented technology.

affected product candidates, which would have a material adverse effect on our business, financial condition, results of operations and prospects.

If disputes over intellectual property that we license in the future prevent or impair our ability to maintain our licensing arrangements on acceptable terms, we may not be able to successfully develop and commercialize the affected product candidates, which would have a material adverse effect on our business, financial condition, results of operations and prospects.

In addition, the agreements under which we currently license intellectual property or technology from the NCI are complex, and certain provisions in such agreements may be susceptible to multiple interpretations.

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As a result, our owned and in-licensed patent portfolio provides us with limited rights that may not last for a sufficient period of time to exclude others from commercializing product candidates similar or identical to ours.

Even if patents covering our product candidates are

obtained, once the patent life has expired, we may be open to competition from competitive products, including generics or biosimilars.

Even if patents covering our product candidates are obtained, once the patent life has expired, we may be open to competition from competitive products, including generics or biosimilars.

For example, given the large amount of time required for the research, development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.

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patent system from a “first-to-invent” system to a “first-to-file” system.

Under a first-to-file system, assuming the other requirements for patentability are met, the first inventor to file a patent application generally will be entitled to the patent on an invention regardless of whether another inventor had made the invention earlier.

Under a first-to-file system, assuming the other requirements for

patentability are met, the first inventor to file a patent application generally will be entitled to the patent on an invention regardless of whether another inventor had made the invention earlier.

A third party that files a patent application in the USPTO after March 16, 2013, but before us, could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by such third party.

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The laws and regulations governing patents could change in unpredictable ways that could weaken our and our licensors’ ability to obtain new patents or to enforce our existing owned or in-licensed patents and patents that we might obtain or in-license in the future.

Similarly, changes in patent law and regulations in other countries or jurisdictions or changes in the governmental bodies that enforce them or changes in how the relevant

governmental authority enforces patent laws or regulations may have a material adverse effect on our and our licensors’ ability to obtain new patents or to protect and enforce our owned or in-licensed patents or patents that we may obtain or in-license in the future.

Similarly, changes in patent law and regulations in other countries or jurisdictions or changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may have a material adverse effect on our and our licensors’ ability to obtain new patents or to protect and enforce our owned or in-licensed patents or patents that we may obtain or in-license in the future.

We may be subject to lawsuits or litigation to protect or enforce our patents or other intellectual property, which could result in substantial costs and liability and prevent us from commercializing our potential products.

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Even if such rights are not directly challenged, disputes could lead to the weakening of our or our licensors’ intellectual property rights.

Our defense against any attempt by third parties to circumvent or invalidate our intellectual property rights could be costly to us, could require significant time and attention of our management, and could have a material and adverse impact on our profitability, financial condition and prospects or ability to successfully compete.

Our defense against any attempt by third parties to circumvent or invalidate

our intellectual property rights could be costly to us, could require significant time and attention of our management, and could have a material and adverse impact on our profitability, financial condition and prospects or ability to successfully compete.

We or our licensors may find it necessary to pursue claims or to initiate lawsuits to protect or enforce our owned or in-licensed patent or other intellectual property rights.

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Our European patents and patent applications could be challenged in the UPC.

Though we may decide to opt out our European patents and patent applications from the UPC, if certain formalities and requirements are not met, our European patents and patent applications could be challenged for non-compliance and brought under the

jurisdiction of the UPC.

Potentially, a single proceeding under the UPC could result in loss of patent protection in numerous European countries rather than each validated country separately.

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As the field of gene and cell therapies advances, patent applications are being processed by national patent offices around the world.

There is uncertainty about which patents will issue, and, if

they do, there is uncertainty as to when, to whom, and with what claims.

There is uncertainty about which patents will issue, and, if they do, there is uncertainty as to when, to whom, and with what claims.

Any claims of patent infringement asserted by third parties would be time consuming and could:

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We or our licensors, or any future strategic collaborator, may be party to, or be threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to our current or any potential future product candidates and technologies, including derivation, reexamination, inter partes review or post-grant review before the USPTO and similar proceedings in jurisdictions outside of the United States such as opposition proceedings.

In some instances, we may be required to indemnify our licensors for the costs associated with any such adversarial

proceedings or litigation.

In some instances, we may be required to indemnify our licensors for the costs associated with any such adversarial proceedings or litigation.

Third parties may assert infringement claims against us, our licensors or our strategic collaborators based on existing patents or patents that may be granted in the future, regardless of their merit.

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In addition, we, or our licensors, or any future strategic collaborators may choose to seek, or be required to seek, a license from a third party, which may not be available on commercially reasonable terms, if at all.

Even if a license can be obtained on commercially reasonable terms, the rights may be non-exclusive, which could give our competitors access to the same technology or intellectual property rights licensed to us, and we could be required to make substantial licensing and royalty payments.

Even if a license can be obtained on commercially reasonable terms, the rights may be non-exclusive, which could give our

competitors access to the same technology or intellectual property rights licensed to us, and we could be required to make substantial licensing and royalty payments.

Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our current or future product candidates.

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There are also many issued patents that claim inventions that may be relevant to products we wish to develop.

The holders of such patents may be able to block our ability to develop and commercialize the applicable product candidate unless we obtain a license or until such patent expires.

The holders of such patents may be able to block our ability to develop and commercialize the applicable

product candidate unless we obtain a license or until such patent expires.

In either case, such a license may not be available on commercially reasonable terms or at all, or it may be non-exclusive, which could result in our competitors gaining access to the same intellectual property.

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If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

proprietary information, to maintain our competitive position and to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

In addition to seeking patent protection for certain aspects of our current or future technologies and product candidates, we rely on trade secrets, including confidential and unpatented know-how, technology and other proprietary information, to maintain our competitive position and to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

Elements of our product candidates, including processes for their preparation and manufacture, may involve proprietary know-how, information, or technology that is not covered by patents, and thus for these aspects we may consider trade secrets and know-how to be our primary intellectual property.

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We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants under which they are obligated to maintain confidentiality and to assign their inventions to us.

However, we cannot be certain that such agreements have been entered into with all relevant parties, and we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access (such as through a cybersecurity breach) to our trade secrets or independently develop substantially equivalent information and techniques.

However, we cannot be certain that such agreements have been entered into with all relevant parties, and we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access (such as through a cybersecurity incident or breach) to our trade secrets or independently develop substantially equivalent information and techniques.

Moreover, individuals with whom we have such agreements may not comply with their terms.

Any of these parties may breach such agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for any such breaches.

In addition, we take other appropriate precautions, such as physical and technological security measures, to guard against misappropriation of our proprietary technology by third parties.

we take other appropriate precautions, such as physical and technological security measures, to guard against misappropriation of our proprietary technology by third parties.

Enforcing a claim that a party illegally disclosed or misappropriated a trade secret, or securing title to an employee-or consultant-developed trade secret if a dispute arises, is difficult, expensive and time-consuming, and the outcome is unpredictable.

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Also, our licensors may have relied on third-party consultants or collaborators or on funds from third parties, such as the U.S.

government, such that our licensors are not the sole and exclusive owners of the patents we in-licensed.

government, such that our licensors are not the sole and exclusive owners of the patents we in-

If other third parties have ownership rights or other rights to our in-licensed patents, they may be able to license such patents to our competitors, and our competitors could market competing products and technology.

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Failure can occur at any time during the development process.

The results of preclinical studies and clinical trials of any of our current or potential future product candidates may not be predictive of the results of later-stage clinical trials.

The results of preclinical studies and clinical trials of any of our current or potential future product candidates may not be predictive of the results of

later-stage clinical trials.

Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials.

A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or safety profiles, notwithstanding promising results in earlier trials.

We may experience delays in completing our preclinical studies and initiating or completing our clinical studies.

We may experience delays in completing our preclinical studies and initiating, conducting or completing our clinical trials.

We do not know whether planned preclinical studies and clinical trials will be completed on schedule or at all, or whether planned clinical trials will begin on time, need to be redesigned, enroll patients on time or be completed on schedule, if at all.

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Satisfaction of these and other regulatory requirements is costly, time-consuming, uncertain and subject to unanticipated delays.

It is possible that none of the product candidates we

may develop will obtain the regulatory approvals necessary for us or our potential future collaborators to begin selling them.

It is possible that none of the product candidates we may develop will obtain the regulatory approvals necessary for us or our potential future collaborators to begin selling them.

We have very limited experience in conducting and managing the clinical trials necessary to obtain regulatory approvals, including approval by the FDA and other regulatory authorities.

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In order to market and sell our products in other jurisdictions, we must obtain separate marketing approvals and comply with numerous and varying regulatory requirements.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in

For example, even if the FDA or EMA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries.

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additional foreign regulatory requirements;

foreign exchange fluctuations;

compliance with foreign manufacturing, customs, shipment and storage requirements;

foreign exchange fluctuations and tariffs;

compliance with foreign manufacturing, customs, shipment, import and export controls and storage requirements;

cultural differences in medical practice and clinical research;

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Additionally, our current or potential future product candidates, if approved, could be subject to labeling and other restrictions and market withdrawal and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.

Any regulatory approvals that we or potential future collaborators obtain for any of our current or potential future product candidates will be subject to limitations on the approved indicated uses for which a product may be marketed or may be subject to the conditions of approval, or contain requirements for potentially costly post-marketing testing, and surveillance to monitor the safety and efficacy of such product candidate.

marketing testing, and surveillance to monitor the safety and efficacy of such product candidate.

In addition, if the FDA or any other regulatory authority approves any of our current or potential future product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, import, export, advertising, promotion and recordkeeping for such product will be subject to extensive and ongoing regulatory requirements.

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Companies may only share truthful and not misleading information that is otherwise consistent with a product’s FDA approved labeling.

The FDA and other authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses and a company that is found to have improperly promoted off-label uses may be subject to significant liability including, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties.

to significant liability including, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties.

The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined companies from engaging in off-label promotion.

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The FDA’s and other regulatory authorities’ policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates.

In addition, the U.S.

Supreme Court’s July 2024 decision to overturn established case law giving deference to regulatory agencies’ interpretations of ambiguous statutory language has introduced uncertainty regarding the extent to which the FDA’s regulations, policies and decisions may become subject to increasing legal challenges, delays, and/or changes.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad.

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Moreover, the extent to which a biosimilar, once approved, could be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products will depend on a number of marketplace and regulatory factors that are still developing.

Healthcare legislative reform measures may have a material adverse effect on our business and results of operations.

Healthcare legislative or regulatory reform measures may have a material adverse effect on our business and results of operations.

The United States and several other jurisdictions are considering, or have already enacted, a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell any of our product candidates profitably, if approved.

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In addition, increased scrutiny by Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.

In addition, the U.S.

Supreme Court’s 2024 decision in Loper Bright Enterprises v.

Raimondo overruled the Chevron doctrine, which for 40 years required federal courts to defer to permissible agency interpretations of statutes that are silent or ambiguous on a particular topic.

In Loper Bright, the Supreme Court held that the U.S.

Administrative Procedure Act requires courts to exercise their independent judgment when deciding whether an agency has acted within its statutory authority, and that courts may not defer to an agency interpretation solely because a statute is ambiguous.

This landmark Supreme Court decision may invite more companies and other stakeholders to bring lawsuits against the FDA to challenge longstanding decisions and policies of the FDA, which could undermine the FDA’s authority, lead to uncertainties in the industry, and disrupt the FDA’s normal operations, any of which could delay the FDA’s review of our regulatory submissions.

We cannot predict the full impact of this decision, future judicial challenges brought against the FDA, or the nature or extent of government regulation that may arise from future legislation or administrative action.

Any such challenges, if successful, could have an impact on our business, and any such impact could be material.

In addition to potential changes to regulations and agency guidance as a result of legal challenges, these decisions may result in increased regulatory uncertainty and delays in and other impacts to the agency rulemaking process, any of which could adversely impact our business and operations.

Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates, if approved.

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International data protection laws may also apply to health-related and other personal information obtained outside of the United States.

With respect to Europe, we are subject to the GDPR, as well as applicable data protection laws in effect in the Member States of the EEA and in the UK (including the UK Data Protection Act 2018), where we are collecting or otherwise processing personal data (including health data) in connection with (a) the offering of goods or services to/the monitoring of the behavior of individuals in the EEA/UK;

With respect to the European Economic Area, or the EEA, we are subject to the EU General Data Protection Regulations 2016/679, or the EU GDPR, as well as applicable data protection laws in effect in the Member States of the EEA and the incorporation of the EU GDPR into the laws of the UK (including the UK Data Protection Act 2018), or the UK GDPR and together with the EU GDPR, referred to as GDPR, where we are collecting or otherwise processing personal data (including health data) in connection with (a) the offering of goods or services to/the monitoring of the behavior of individuals in the EEA/UK;

or (b) the activities of a business establishment in the EEA/UK.

The UK’s data protection regime is independent from but aligned to the EU’s data protection regime.

The GDPR imposes stringent data protection requirements for processing personal data of individuals within the EEA, and the UK, as well as potential fines for noncompliant companies of up to the greater of €20 million (£17.5 million for the UK GDPR) or 4% of annual global revenue, and confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.

In addition, the GDPR places restrictions on cross-border transfers of personal data to countries outside the EEA/UK that do not ensure an adequate level of protection, including the United States in certain circumstances, unless a derogation exists or a valid GDPR transfer mechanism is put in place and transfer impact assessments carried out to assess whether the data importer can ensure sufficient guarantees for safeguarding the personal information under the GDPR, including an analysis of the laws in the recipient’s country.

The international transfer obligations under European data protection laws will require significant effort and cost and may result in us needing to make strategic considerations around where EEA and UK personal data is transferred and which service providers we can utilize for the processing of EEA and UK personal data.

The UK GDPR is independent from but aligned to the EU’s data protection regime.

The GDPR imposes stringent data protection requirements for processing personal data of individuals within the EEA, and the UK, such as including requirements relating to having legal bases or conditions for processing personal data relating to identifiable individuals and transferring such information outside the EEA/UK, including to the U.S., providing details to those individuals regarding the processing of their personal data, implementing safeguards to keep personal data secure, having data processing agreements with third parties who process personal data, providing information to individuals regarding data processing activities, responding to individuals’ requests to exercise their rights in respect of their personal data, where required obtaining consent of the individuals to whom the personal data relates, reporting security and privacy breaches involving personal data to the competent national data protection authority and affected individuals, appointing data protection officers, conducting data protection impact assessments, and record-keeping.

In the event of any non-compliance with the GDPR and any supplemental EEA Member State or UK national data protection laws, we could be subject to warning letters, mandatory audits, orders to cease/change the use of data, and financial penalties of up to the greater of €20 million (£17.5 million for the UK GDPR) or 4% of annual global revenue, and confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.

In addition, the GDPR places restrictions on cross-border transfers of personal data to countries outside the EEA/UK to other countries, such as the United States, that do not ensure an adequate level of protection.

The European Commission has issued standard contractual clauses for data transfers from controllers or processors in the EU (or otherwise subject to the GDPR) to controllers or processors established outside the EU.

The new standard contractual clauses require exporters to assess the risk of a data transfer on a case-by-case basis, including an analysis of the laws in the destination country.

The UK is not subject to the European Commission’s new standard

contractual clauses but has published a UK-specific transfer mechanism, which enables transfers from the UK.

The UK-specific mechanism, the “International Data Transfer Agreement”, requires a similar risk assessment of the transfer as the standard contractual clauses.

Further, the EU and United States have adopted its adequacy decision for the EU-U.S.

Data Privacy Framework (“Framework”), which entered into force on July 11, 2023.

This Framework provides that the protection of personal data transferred between the EU and the United States is comparable to that offered in the EU.

This provides a further avenue to ensuring transfers to the United States are carried out in line with GDPR.

There has been an extension to the Framework to cover UK transfers to the United States.

The Framework could be challenged like its predecessor frameworks.

This complexity and the additional contractual burden increases our overall risk exposure.

There may be further divergence in the future, including with regard to administrative burdens.

Any inability to transfer personal data from the EEA and UK to the United States in compliance with data protection laws may impede our operations and may adversely affect our business and financial position.

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Following the UK’s exit from the EU, or Brexit, there will be increasing scope for divergence in application, interpretation and enforcement of the data protection laws between these territories.

For example, the UK has recently introduced the Data Reform Bill into the UK legislative process with the intention for this bill to reform the UK’s data protection regime following Brexit.

If passed, the final version of the effect Data Reform Bill may have the effect of further altering the similarities between the UK and EEA data protection regimes and threaten the UK adequacy decision from the EU Commission which allows the free flow of personal data from the UK to the EEA.

For example, the UK introduced the Data Reform Bill into the UK legislative process with the intention for this bill to reform the UK’s data protection regime following Brexit.

The Data Reform Bill failed in the UK legislative process but may be reintroduced at some point in the future.

This may lead to additional compliance costs and could increase our overall risk.

This lack of clarity on future UK laws and regulations and their interaction with those of the EU could add legal risk, uncertainty, complexity, and cost to our handling of European personal data and our privacy and security compliance programs, and may require us to implement different compliance measures for the UK and EEA.

In addition, EEA Member States have adopted national laws to implement the EU GDPR that may partially deviate from the EU GDPR and competent authorities in the EEA Member States may interpret the EU GDPR obligations slightly differently from country to country.

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For example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act (the “CCPA”) gives California residents expanded rights to access, correct, and delete their personal information, opt out of certain personal information sharing and certain uses of sensitive data, and receive detailed information about how their personal information is used by requiring covered companies to provide disclosures to California consumers (as that term is broadly defined and includes any of our current or future employees who may be California residents) and provide such residents ways to opt-out of certain sales of personal information.

The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches and statutory damages, which is expected to increase data breach class action litigation and result in significant exposure to costly legal judgments and settlements.

It will also create a new California data protection agency authorized to issue substantive regulations which could result in increased privacy and information security enforcement.

and settlements.

It also created a California data protection agency authorized to issue substantive regulations which could result in increased privacy and information security enforcement.

Although the law includes limited exceptions for health-related information, including clinical trial data, such exceptions may not apply to all of our operations and processing activities.

As we expand our operations and trials (both preclinical and clinical), the CCPA may increase our compliance costs and potential liability.

Beyond the CCPA, broad and comprehensive privacy and data protection legislation has been passed in another twelve states.

Beyond the CCPA, similar laws have been passed and proposed in numerous other states.

In addition, certain states have passed privacy laws focused on particular types of data.

For example, the state of Washington has enacted a law that protects the privacy of health and medical information not subject to HIPAA and a small number of states have laws that apply specifically to biometric information.

For example, the state of Washington has enacted a law that, as of March 31, 2024, protects the privacy of health and medical information not subject to HIPAA, this law also has a private right of action, which further increases the relevant compliance risk.

Connecticut and Nevada have also passed similar laws regulating consumer health data.

Further, a small number of states have laws that apply specifically to biometric information.

Furthermore, other U.S.

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In the event that we are subject to or affected by HIPAA, the GDPR, the CCPA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.

These various privacy and security laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products.

State laws are changing rapidly and there is discussion in the U.S.

Congress of a new comprehensive federal data privacy law to which we may likely become subject, if enacted.

Compliance with U.S.

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While we strive to comply with applicable laws and regulations relating to privacy, data protection and cybersecurity, external and internal privacy and security policies and contractual obligations relating to privacy, data protection and cybersecurity to the extent possible, we may at times fail to do so, or may be perceived to have failed to do so.

Moreover, despite our efforts, we may not be successful in achieving compliance if our personnel, collaborators, partners or vendors do not comply

with applicable laws and regulations relating to privacy, data protection and cybersecurity, external and internal privacy and security policies and contractual obligations relating to privacy, data protection and cybersecurity.

Moreover, despite our efforts, we may not be successful in achieving compliance if our personnel, collaborators, partners or vendors do not comply with applicable laws and regulations relating to privacy, data protection and cybersecurity, external and internal privacy and security policies and contractual obligations relating to privacy, data protection and cybersecurity.

Actual or perceived failure to comply with any laws and regulations relating to privacy, data protection or cybersecurity in the U.S.

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Healthcare providers, physicians and third-party payors, among others, will play a primary role in the prescription and recommendation of any product candidates for which we obtain marketing approval.

Our current and future arrangements with third-party payors, providers and customers, among others, may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our product candidates for which we obtain marketing approval.

Our current and future arrangements with third-party payors, providers and customers, among others, may expose us to broadly

applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our product candidates for which we obtain marketing approval.

See section titled “Business - Government Regulation - Other U.S.

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Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors is critical to new product acceptance.

Further, due to the COVID-19 pandemic, millions of individuals have lost employer-based insurance coverage, which may adversely affect our ability to commercialize our products.

It is unclear what effect, if any, the American Rescue Plan will have on the number of covered individuals.

See section titled “ Business - Government Regulation - Coverage and Reimbursement” in thisForm 10-K .

Because our product candidates represent new approaches to the treatment of cancer, there is significant uncertainty as to the insurance coverage and reimbursement status of any product candidates for which we may receive regulatory approval.

In the United States, the principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services (“CMS”), an agency within the U.S.

Department of Health and Human Services.

CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare, and private payors tend to follow CMS determinations to a substantial degree.

See section titled “ Business - Government Regulation - Coverage and Reimbursement” in this Form 10-K .

Patients who are prescribed medications for the treatment of their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their prescription drugs.

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Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products.

Third-party payors also may request additional clinical evidence beyond the data required to obtain marketing approval,

requiring a company to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of its product.

Third-party payors also may request additional clinical evidence beyond the data required to obtain marketing approval, requiring a company to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of its product.

Commercial third-party payors often rely upon Medicare coverage policy and payment limitations in setting their reimbursement rates, but also have their own methods and approval process apart from Medicare determinations.

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We cannot be sure that coverage and adequate reimbursement will be available for any product that we commercialize and, if reimbursement is available, that the level of reimbursement will be adequate.

Even if coverage is provided, the approved reimbursement amount may not be sufficient to allow us to establish or maintain pricing to generate income.

Factors payors consider in determining reimbursement are based on whether the product is:

(i) a covered benefit under its health plan;

(ii) safe, effective and medically necessary;

(iii) appropriate for the specific patient;

(iv) cost-effective;

and (v) neither experimental nor investigational.

Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval.

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The market price for our shares of our Common Stock may be influenced by many factors, including the other risks described in the section of this 10-K entitled “ Risk Factors ” and the following:

our ability to advance our current or potential future product candidates into the clinic and through clinical development;

our ability to advance our current or potential future product candidates through clinical development;

results of preclinical studies and clinical trials for our current or potential future product candidates, or those of our competitors or potential future collaborators;

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This risk is especially relevant to us because biopharmaceutical and biotechnology companies have experienced significant stock price volatility in recent years, including since the public announcement of the Business Combination Agreement in December 2021.

In addition, recently there has been significant stock price volatility involving the shares of companies that have

recently completed a Merger with a SPAC.

In addition, recently there has been significant stock price volatility involving the shares of companies that have recently completed a Merger with a SPAC.

When the market price of a stock has been volatile as our stock price may be, holders of that stock have occasionally brought securities class action litigation against the company that issued the stock.

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If certain holders of our common stock sell a significant portion of their securities, it may negatively impact the market price of the shares of our common stock and such holders still may receive significant proceeds.

As of the date of this Annual Report on Form 10-K, the market price of our common stock is below $10.00 per share, which was the price per share of common stock sold in the initial public offering of our predecessor, DYNS, the per share price of the 5,060,000 shares of our Common Stock sold to certain investors in connection with our PIPE financing and also the per share value of the consideration issued to former stockholders of Senti Sub I, Inc.

As of the date of this Form 10-K, the market price of our common stock is below $100.00 per share, which was the price per share of common stock sold in the initial public offering of our predecessor, DYNS, the per share price of the 506,000 shares of our common stock sold to certain investors in connection with the private placement that was completed concurrently with the Merger and also the per share value of the consideration issued to former stockholders of Senti Sub I, Inc.

(formerly Senti Biosciences, Inc.) upon consummation of our Merger.

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Accordingly, holders of these 575,000 shares of our common stock could sell their securities at a per share price that is less than $100.00 and still realize a significant return from the sale of those securities that could not be realized by our other stockholders.

On March 18, 2024, the closing price of our common stock as reported on the Nasdaq Capital Market was $0.40 per share.

Furthermore, we have registered (a) up to 21,157 shares of Series A redeemable convertible preferred stock and (b) up to 31,735,500 shares of common stock underlying the accompanying Warrants pursuant to a resale registration statement on Form S-3, which were previously offered and sold by us in the 2024 PIPE transaction described herein.

None of the securities issued pursuant to the 2024 PIPE transaction were initially registered under the Securities Act or any state securities laws, rather, we offered the securities in reliance on exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof and Rule 506 of Regulation D under the Securities Act.

Pursuant to the Certificate of Designation of Preferences, Rights and Limitations of the Series A redeemable convertible preferred stock, or the Certificate of Designation, each share of Series A redeemable convertible preferred stock was issued at $2,250.00 per share in the 2024 PIPE transaction and was converted into 1,000 shares of common stock, effective March 10, 2025.

Subject to the terms and limitations contained in the Certificate of Designation, each share of Series A redeemable convertible preferred stock issued in the PIPE Transaction converted into such number of shares of common stock, at the conversion price of $2.25 per share, or the Conversion Price, subject to the terms and limitations contained in the Certificate of Designation.

Each Warrant has an exercise price per share of $2.30.

The Warrants are exercisable at any time and from time to time on or after March 6, 2025.On March 18, 2025, the closing price of our common stock as reported on the Nasdaq Capital Market was $3.65 per share.

Based on this closing price, the aggregate sales price of the Founder Shares would be approximately $1.8 million and the aggregate sales price of the shares of our common stock held by the Anchor Investors would be approximately $0.3 million.

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Such sales may also result in material dilution to existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of shares of our common stock.

For a more detailed description of our equity financing through sale of common shares to Chardan under the Purchase Agreement, see the Risk Factors titled “ It is not possible to predict the number of shares of our common stock, if any, that we may sell to Chardan Capital Markets LLC, or Chardan, under our common stock Purchase Agreement, or the Purchase Agreement, with Chardan, or the actual gross proceeds resulting from those sales, or the dilution to our stockholders from those sales ” and “ The sale or issuance of shares of our common stock to Chardan will result in additional outstanding shares and the resale of shares of our common stock by Chardan that it acquires pursuant to the Purchase Agreement, or the perception that such sales may occur, could cause the price of shares of our common stock to decrease ” in this Form 10-K.

Furthermore, the 31,735,500 shares of common stock issuable to our current stockholders upon the exercise of the Warrants issued pursuant to the 2024 PIPE transaction could cause our stock price to decline if the holders of such shares sell them over time or are perceived by the market as intending to sell them.

For a more detailed description of our equity financing through sale of common shares please see the Risk Factor entitled “ We have issued a substantial number of warrants which are exercisable into shares of our common stock which could result in substantial dilution to the ownership interests of our existing stockholders ” in this Form 10-K.

Pursuant to the Senti Biosciences, Inc.

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Unless our Board of Directors elects not to increase the number of shares available for future grant each year, our stockholders may experience additional dilution, which could cause our stock price to fall.

In addition, on August 5, 2022, our board of directors adopted the 2022 Inducement Plan, pursuant to which an aggregate of 2,000,000 shares of our common stock have been reserved for issuance.

Our issuance of additional shares of

common stock or other equity securities of equal or senior rank would, all else being equal, have the following effects:

On December 20, 2024, our Board of Directors approved the Amended and Restated 2022 Equity Incentive Plan (the “A&R 2022 Plan”).

The A&R 2022 Plan increased the aggregate number of shares of common stock that can be issued under the A&R 2022 Plan by an additional 4,300,000 shares, increased in the number of shares of common stock that may be issued under the 2022 Plan in respect of incentive stock options (“ISOs”), from 249,273 shares to 4,816,434 shares as of December 20, 2024, which amount will automatically increase each January 1 through the term of the A&R 2022 Plan by the lesser of the annual automatic increase or 20,000,000 shares and extended the term of the A&R 2022 Plan to the tenth anniversary of the date that our stockholders approve the A&R 2022 Plan.

On March 6, 2025, our stockholders approved and authorized the A&R 2022 Plan.

In addition, on August 5, 2022, our Board of Directors adopted the 2022 Inducement Plan and amended and restated the 2022 Inducement Plan on March 7, 2025 pursuant to which an aggregate of 2,500,000 shares of our common stock have been reserved for

Our issuance of additional shares of common stock or other equity securities of equal or senior rank would, all else being equal, have the following effects:

the amount of cash available per share, including for payment of dividends in the future, may decrease;

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As a result, it may be difficult for us to attract and retain qualified people to serve on our Board of Directors, our board committees or as executive officers.

Provisions in our second amended and restated certificate of incorporation (“Charter”), our amended and restated bylaws, or Bylaws, and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management, which could depress the trading price of shares of our common stock.

Provisions in our second amended and restated certificate of incorporation, as amended and/or restated from time to time (“Charter”), our amended and restated bylaws, or Bylaws, and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management, which could depress the trading price of shares of our common stock.

Our Charter, Bylaws and Delaware law contain provisions that may have the effect of discouraging, delaying or preventing a change in control of us or changes in our management that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares.

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expressly authorize our Board of Directors to make, alter, amend or repeal our Bylaws;

require supermajority votes of the holders of our common stock to amend specified provisions of our Charter and Bylaws.

require super majority votes of the holders of our common stock to amend specified provisions of our Charter and Bylaws.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.

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The Court of Chancery of the State of Delaware and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.

Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our securities.

On August 7, 2023, we received written notice from the Listing Qualifications Department of Nasdaq (“Nasdaq”) notifying us that, for the last 30 consecutive trading days, the closing bid price of our common stock was below the minimum bid price requirement of $1.00 per share for continued listing on the Nasdaq Global Market, i.e., the minimum closing bid price requirement.

We have been provided an initial compliance period of 180 calendar days, or until February 5, 2024 to regain compliance with the minimum closing bid price requirement.

On January 23, 2024, we were notified by Nasdaq that Nasdaq had granted our request to transfer the listing of our common stock from the Nasdaq Global Market tier to the Nasdaq Capital Market tier, effective January 25, 2024.

The transfer of the listing of our common stock from The Nasdaq Global Market to The Nasdaq Capital Market took effect with the open of business on January 25, 2024.

On February 6, 2024, Nasdaq granted our request for a second 180-calendar day period, or until August 5, 2024 to regain compliance with the $1.00 bid price requirement.

To regain compliance with such minimum price requirement, we must evidence a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days.

We intend to monitor the closing bid price of our common stock and may, if appropriate, consider taking actions to regain compliance with the minimum closing bid price requirement.

There can be no assurance that we will be able to regain compliance with the minimum closing bid price requirement or will otherwise be in compliance with other applicable Nasdaq listing rules.

If we fail to satisfy the continued listing requirements of Nasdaq such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist our securities.

Such a delisting would likely have a negative effect on the price of the securities and would impair your ability to sell or purchase the securities when you wish to do so.

In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our securities to become listed again, stabilize the market price or improve the liquidity of our securities, prevent our securities from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements.

Additionally, if our securities are not listed on, or become delisted from, Nasdaq for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if we were quoted or listed on Nasdaq or another national securities exchange.

You may be unable to sell your securities unless a market can be established or sustained.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be investors’ sole source of gain.

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If we were to be sued, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

We have issued a substantial number of warrants which are exercisable into shares of our common stock which could result in substantial dilution to the ownership interests of our existing stockholders.

Pursuant to the securities purchase agreement, dated December 2, 2024, with certain accredited investors in a private placement transaction, we issued warrants to purchase certain shares of common stock.

As of December 31, 2024, approximately 31,735,500 shares of our common stock were reserved for issuance upon exercise of outstanding warrants.

The exercise of these securities will result in a significant increase in the number of outstanding shares and substantially dilute the ownership interests of our existing stockholders.

Future sales, or the perception of future sales, of our securities by existing shareholders or by us could cause the market price for our common stock to decline.

Sales of a substantial number of our common stock in the public market could occur at any time, including by any of our major shareholders, directors or officers.

These sales, or the market perception that the holders of a large number of our common stock intend to sell their common stock, could significantly reduce the market price of our common stock.

We cannot predict the effect, if any, that future public sales of our common stock will have on the market price of our common stock.

If the market price of our common stock was to drop as a result, this might impede our ability to raise additional capital and might cause remaining shareholders to lose all or part of their investment.

We will file a registration statement on Form S-3 to register the 52,892,500 shares of our common stock that are issuable pursuant to the conversion of the Series A redeemable convertible preferred stock and exercise of the warrants that we sold and issued to certain investors in a private placement transaction in December 2024.

This registration statement will be filed in connection with the registration rights agreement dated December 2, 2024, among the Company and the investors in the private placement transaction.

The registration rights agreement requires the Company to maintain an effective registration statement which could force the Company to file a registration statement following the filing of this Annual Report.

We cannot predict the size of future sales of any such Common Shares or the effect, if any, that future sales of any such Common Shares will have on the market price of the Common Shares.

The market price of shares of our common stock could drop significantly if the holders of the shares described above sell them or are perceived by the market as intending to sell them.

These factors could also make it more difficult for us to raise additional funds through future offerings of shares of our common stock or other securities.

General Risk Factors

Disruptions at the FDA and other government agencies, such as those caused by funding shortages, could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent those agencies from performing normal business functions on which operations of our business may rely, and/or prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.

Disruptions at the FDA and other government agencies, such as those caused by funding shortages, could hinder their ability to hire, retain or deploy key personnel, and substantial leadership, personnel, and policy changes or otherwise, could prevent those agencies from performing normal business functions on which operations of our business may rely, and/or prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions.

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In addition, government funding of the SEC and other government agencies on which our operations and fundraising may rely, including those that fund research and development activities and regulate our access to public markets, is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs and biologics or modifications to approved drugs and biologics to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

Disruptions at the FDA and other agencies, including substantial leadership, personnel, and policy changes, may also slow the time necessary for new drugs and biologics or modifications to approved drugs and biologics to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

For example, over the past decade, the U.S.

government has shut down several times and certain regulatory agencies, such as the FDA and SEC, have had to furlough critical FDA employees and stop critical activities.

Currently, federal agencies in the U.S.

are operating under a continuing resolution that is set to expire on September 30, 2025.

If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submission, which could have a material adverse effect on our business.

Additionally, disruptions at the NIH or changes to the NIH’s budget may negatively impact our operations and ongoing clinical trials.

Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

We or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

Our current operations are located in the San Francisco Bay Area.

Any unplanned event, such as earthquake, flood, fire, explosion, extreme weather condition, medical epidemics, including any lingering effects from the global

spread of COVID-19, power shortage, telecommunication failure or other natural or man-made accidents or incidents that result in us being unable to fully utilize our headquarters, or the manufacturing facilities of our third-party contract manufacturers, may have a material adverse effect on our ability to operate our business, particularly on a daily basis and have significant negative consequences on our financial and operating conditions.

Any unplanned event, such as earthquake, flood, fire, explosion, extreme weather condition, medical epidemics, including any lingering effects from the global COVID-19 pandemic, power shortage, telecommunication failure or other natural or man-made accidents or incidents that result in us being unable to fully utilize our headquarters, or the manufacturing facilities of our third-party contract manufacturers, may have a material adverse effect on our ability to operate our business, particularly on a daily basis and have significant negative consequences on our financial and operating conditions.

Loss of access to these facilities may result in increased costs, delays in the development of our product candidates or interruption of our business operations.

Natural disasters or pandemics, such as the recent COVID-19 outbreak could further disrupt our operations and have a material adverse effect on our business, financial condition, results of operations and prospects.

Natural disasters or pandemics, such as the COVID-19 outbreak could further disrupt our operations and have a material adverse effect on our business, financial condition, results of operations and prospects.

If a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure, such as our research facilities or the manufacturing facilities of our third-party contract manufacturers, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time.

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Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

Our executive officers, directors, principal stockholders and their affiliates exercise significant influence over our company, which will limit your ability to influence corporate matters and could delay or prevent a change in corporate control.

As of March 18, 2025, the existing holdings of our executive officers, directors, and NEA, Bayer and Celadon and their affiliates represent beneficial ownership, in the aggregate, of approximately 77.85% of our outstanding common stock.

As a result, these stockholders, if they act together, will be able to influence our management and affairs and the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets.

This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders.

Some of these persons or entities may have interests different than yours.

For example, because many of these stockholders purchased their shares at prices substantially below the current trading price of our stock and have held their shares for a longer period, they may be more interested in selling our Company to an acquirer than other investors or they may want us to pursue strategies that deviate from the interests of other stockholders.

Additionally, from time to time, any of our non-affiliated shareholders may accumulate or acquire significant positions in our common stock and may similarly be able to influence our business or matters submitted to our stockholders for approval.

The concentration of voting power among these stockholders may also have an adverse effect on the price of our common stock by delaying, deferring or preventing a change of control of us;

impeding a merger, consolidation, takeover or other business combination involving us;

or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

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-K

Item 1A. Risk Factors