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Item 8. Financial Statements and Supplementary Data

2025-03-20 compared with 2024-03-21 · 493 added, 359 removed, 848 unchanged (50% of the section changed)

5 unchanged sentences

Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Years Ended December 31, 2023 and 2022

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023

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We have audited the accompanying consolidated balance sheets of Senti Biosciences, Inc.

and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, redeemable convertible preferred stock and stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, redeemable convertible preferred stock and stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with U.S.

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The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Emphasis of Matter

As discussed in Note 4 and 16 to the consolidated financial statements, the Company entered into a significant related party transaction with GeneFab, LLC that met the criteria to be reported as discontinued operations.

Our opinion with respect to this matter is not modified.

Basis for Opinion

18 unchanged sentences

GeneFab receivable - related party 1,646 17,592

Short-term investments — 40,942

GeneFab prepaid expenses - related party 6,639 14,787

Prepaid expenses and other current assets 2,240 2,783

Current assets of discontinued operations — 209

Total current assets 58,961 71,200

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Other long-term assets 105 215

Noncurrent assets of discontinued operations — 4,785

Total assets $ 97,841 $ 119,484

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Early exercise liability, current portion 11 135

Deferred revenue — 799

GeneFab sublease deferred income - related party 660 989

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Early exercise liability, net of current portion — 10

Other liabilities, net of current portion 5,049 —

Total liabilities 47,086 52,571

Commitments and contingencies (Note 15)

Series A redeemable convertible preferred stock, $ 0.0001 par value;

21,200 and no shares authorized at December 31, 2024 and December 31, 2023, respectively;

21,157 and no shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively;

aggregate liquidation preference of $ 147.6 million and none at December 31, 2024 and December 31, 2023, respectively

Stockholders’ equity:

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Additional paid-in capital 322,782 311,256

Accumulated other comprehensive income — 1

Accumulated deficit ( 297,134 ) ( 244,344 )

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Total liabilities, redeemable convertible preferred stock and stockholders’ equity $ 97,841 $ 119,484

All periods presented have been retroactively adjusted to reflect the 1-for-10 reverse stock split effected on July 17, 2024.

Refer to Note 2.

Summary of Significant Accounting Policies, for further information.

The accompanying notes are an integral part of these consolidated financial statements.

7 unchanged sentences

Operating expenses

Research and development (included related party cost of $ 3,113 and $ — , respectively)

Research and development (included related party costs of $ 14,266 and $ 3,113 , respectively)

34,356 32,150

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Change in fair value of contingent earnout liability 20 207

Change in fair value of Preferred Stock Tranche Liability - related party

Change in fair value of GeneFab Note Receivable - related party ( 17,240 ) 626

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Change in fair value of GeneFab Option - related party 6,331 3,318

Gain on extinguishment of convertible notes — 1,289

GeneFab sublease income - related party 6,449 2,323

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Net loss from continuing operations ( 52,790 ) ( 83,406 )

Net income (loss) from discontinued operations 12,348 ( 8,545 )

Net income from discontinued operations

Net loss ( 52,790 ) ( 71,058 )

Other comprehensive gain (loss)

Unrealized gain (loss) on investments ( 1 ) 1

Other comprehensive loss

Unrealized loss on investments

Comprehensive loss $ ( 52,790 ) $ ( 71,059 )

1 unchanged sentence

Net loss per share from continuing operations, basic and diluted $ ( 12.03 ) $ ( 18.80 )

Net income (loss) per share from discontinued operations, basic and diluted $ 0.28 $ ( 0.33 )

Net income per share from discontinued operations, basic and diluted

Net loss per share, basic and diluted $ ( 12.03 ) $ ( 16.01 )

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SENTI BIOSCIENCES, INC.

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity

(in thousands, except share and per share data)

Redeemable Convertible

Preferred Stock Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss)

Deficit Total

Preferred Stock Common Stock Additional Paid-in Capital Accumulated

Deficit Accumulated Other Comprehensive Loss

Stockholders’

Equity (Deficit)

Shares Amount Shares Amount

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— $ — 4,406,137 $ — $ 300,548 $ ( 173,286 ) $ 1 $ 127,263

Conversion of redeemable convertible preferred stock into common stock in connection with the Reverse Recapitalization, net of transaction cost ( 19,517,988 ) ( 171,833 ) 19,517,988 2 171,833 — — 171,835

Issuance of common stock upon Reverse Recapitalization, net of transaction costs — — 19,975,963 2 111,957 — — 111,959

Contingent earnout liability recognized upon closing of the Reverse Recapitalization — — — — ( 9,688 ) — — ( 9,688 )

Cancellation and exchange of convertible note in connection with PIPE financing — — 517,500 — 5,184 — — 5,184

Gain recognized on fair value of embedded derivative on SPAC merger date — — — — ( 1,289 ) — — ( 1,289 )

Common Stock Purchase Agreement settled in common stock, net of fees — — 100,000 1 527 — — 528

Exercise of common stock options — — 199,839 — 496 — — 496

Vesting of early exercise of common stock options — — 5,064 — 136 — — 136

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— $ — 4,569,900 $ 1 $ 311,256 $ ( 244,344 ) $ — $ 66,913

Common Stock Purchase Agreement settled in common stock, net of fees — — 1,000,000 1 527 — — 528

Vesting of early exercise of common stock options — — 50,640 — 136 — — 136

Issuance of common stock under Employee Stock Purchase Plan (ESPP) — — 586,987 — 375 — — 375

Funds received from Chardan ChEF Instrument

— — 244,313 — 1,806 — — 1,806

Issuance of common stock for RSU Release — — 9,666 — — — — —

Issuance of Series A redeemable convertible preferred stock (net of issuance costs)

21,157 22,584 — — — — — —

Series A redeemable convertible preferred stock accretion

— 2,522 — — ( 2,522 ) — — ( 2,522 )

Shares issued upon exercise of options — — 92 — — — — —

Stock-based compensation expense — — — — 1,755 — — 1,755

Unrealized gain (loss) on investments — — — — — ( 1 ) — ( 1 )

Vesting of early exercise of common stock options — — 5,064 — 135 — — 135

Warrants to purchase common stock issued in connection with Series A redeemable convertible preferred stock (net of issuance costs)

— — — — 10,352 — — 10,352

Net loss — — — — — ( 52,790 ) — ( 52,790 )

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Accretion of discount on short-term investments — ( 1,069 )

Gain on extinguishment of convertible notes — ( 1,289 )

Gain on disposal of business — ( 21,862 )

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Change in fair value of GeneFab Option - related party ( 6,331 ) ( 3,318 )

Change in fair value of Preferred Stock Tranche liability - related party ( 13,404 ) —

Impairment of long-lived assets 313 25,962

Stock-based compensation expense 1,755 9,670

Issuance of common stock for Common Stock Purchase Agreement fee — 196

Other non-cash charges 130 35

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Operating lease liabilities ( 4,031 ) 484

Net cash from operating activities ( 52,395 ) ( 34,896 )

Other liabilities, net of current portion 149 —

Net cash used in operating activities $ ( 41,397 ) $ ( 52,395 )

Cash flows from investing activities

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Net cash from investing activities $ 34 $ 30,077

Years Ended December 31,

Cash flows from financing activities

Proceeds from Merger and related PIPE financing, net of transaction costs — 111,976

Proceeds from issuance of common stock upon exercise of stock options — 521

Proceeds from private placement, net of fees paid to investor $ 47,253 $ —

Payment of issuance costs ( 229 ) —

Proceeds from CIRM award 4,900 —

Years Ended December 31,

Proceeds from issuance of common stock under Common Stock Purchase Agreement 1,806 512

Proceeds from issuance of common stock under Employee Stock Purchase Plan (ESPP) — 375

Proceeds from issuance of convertible notes — 5,175

Principal finance lease payments — ( 108 )

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Supplemental disclosures of noncash financing and investing items

Purchases of property and equipment in accounts payable and accrued expenses and other current liabilities $ 15 $ 8,153

Refer to Note 4.

GeneFab Transaction for details of non-cash items

Purchase of property and equipment in accounts payable and accrued expenses and other current liabilities $ — $ 15

Unpaid Issuance Costs

The accompanying notes are an integral part of these consolidated financial statements.

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Senti Biosciences, Inc.

and its subsidiaries (the “Company” or “Senti”), is an early clinical stage biotechnology company developing next-generation cell and gene therapies engineered with its gene circuit platform technologies for patients living with incurable diseases.

and its subsidiaries (the “Company” or “Senti”), is a clinical stage biotechnology company developing next-generation cell and gene therapies engineered with its gene circuit platform technologies for patients living with incurable diseases.

Senti’s mission is to create a new generation of smarter therapies that can outsmart complex diseases using novel and unprecedented approaches.

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(“Merger Sub”), a Delaware corporation and wholly owned subsidiary of Dynamics, merged with and into Senti Sub I, Inc., formerly named Senti Biosciences, Inc.

(“Legacy Senti”), with Legacy Senti surviving as a wholly-owned subsidiary of Dynamics (such transactions, the “Merger,” and, collectively with the other transactions described in the merger agreement (as defined below, the “Reverse Recapitalization”)).

As a result of the Merger, Dynamics was renamed Senti Biosciences, Inc.

Refer to Note 3.

Reverse Recapitalization, for further details of the Merger.

On August 7, 2023, the Company completed a transaction with GeneFab, LLC (“GeneFab”), a contract manufacturing and synthetic biology biofoundry focused on next-generation cell and gene therapies.

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The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.

The Company has devoted substantially all of its efforts to organizing and staffing, business planning, raising capital, and conducting preclinical studies and has not realized substantial revenues from its planned principal operations.

To date , the Company raised aggregate gross proceeds of $ 300.1 million from the Merger and PIPE Financing, the issuance of shares of our common stock, the issuance of shares of our redeemable convertible preferred stock, the issuance of convertible notes and, to a lesser extent, through collaboration agreements and governmental grants.

The Company has devoted substantially all of its efforts to organizing and staffing, business planning, raising capital, and conducting preclinical and clinical studies and has not realized substantial revenues from its planned principal operations.

To date , the Company raised aggregate gross proceeds of $ 354.3 million from the Merger and a private placement completed concurrently with the Merger, the issuance of shares of common stock, the issuance of shares of redeemable convertible preferred stock, the issuance of convertible notes and, to a lesser extent, through collaboration agreements and governmental grants and loans.

On August 3, 2024 , the Company executed an agreement with California Institute of Regenerative Medicine (the “CIRM Grant Agreement”) for a total grant award of $ 8.0 million .

Under the CIRM Grant Agreement, the Company must achieve certain operational milestones to receive the grant tranches.

Refer to Note 8.

CIRM Grant, for further details of the CIRM Grant Agreement.

At December 31, 2024 and December 31, 2023, the Company had an accumulated deficit of $ 297.1 million and $ 244.3 million, respectively.

The Company’s net losses were $ 52.8 million and $ 71.1 million for the years ended December 31, 2024 and 2023, respectively.

Substantially all of the Company’s net losses resulted from costs incurred in connection with the Company’s research and development programs, from general and administrative costs associated with the Company’s operations, and impairment of the Company’s long-lived assets.

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

The Company expects to incur substantial operating losses and negative cash flows from operations for the foreseeable future as the Company advances its preclinical activities and clinical trials for its product candidates in development .

As of December 31, 2023 and 2022, the Company had cash, cash equivalents, and short-term investments of $ 35.9 million and $ 98.6 million.

As of March 21, 2024 , the issuance date of the consolidated financial statements as of and for the year ended December 31, 2023, there is uncertainty about whether the Company’s combined cash,

The Company has concluded that substantial doubt exists that the Company’s cash and cash equivalents of $ 48.3 million as of December 31, 2024, are sufficient for the Company to continue as a going concern for at least

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

cash equivalents, and short-term investments will be sufficient to fund operations, including clinical trial expenses and capital expenditure requirements, beyond twelve months from the issuance date of these financial statements and therefore the Company concluded that substantial doubt existed about the Company’s ability to continue as a going concern.

The transaction with GeneFab provided the Company with additional capital in the form of a note receivable and rights to future manufacturing and research activities and reduced longer-term operating expenses.

Refer to Note 4.

GeneFab Transaction , for further details of the GeneFab transaction.

The Company’s continued existence is dependent upon management’s ability to raise capital and develop profitable op erations.

Management is devoting substantially all of its efforts to developing its business and raising capital and there can be no assurance that the Company’s efforts will be successful.

No assurance can be given that management’s actions will result in profitable operations or the meeting of ongoing liquidity needs.

one year from the issuance date of these consolidated financial statements.

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

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

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

Moreover, no assurance can be given that management’s actions will result in profitable operations or the meeting of ongoing liquidity needs.

NASDAQ Bid Price Compliance Notice

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However, based upon the Company’s compliance with the various criteria required under Nasdaq Listing Rule 5810(c)(3)(A)(ii) to obtain a second 180-day grace period applicable to issuers listed on The Nasdaq Capital Market, the Company applied to transfer the listing of its common stock to The Nasdaq Capital Market.

Refer to Note 17.

Subsequent Events, for additional information on NASDAQ bid price compliance.

On January 23, 2024, the Company received written notice from the Listing Qualifications Department granting the Company its request to transfer the listing of its common stock from the Nasdaq Global Market tier to the Nasdaq Capital Market tier.

The transfer of the listing of the Company’s 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, the Listing Qualifications Department granted the Company’s request for a second 180- calendar day period, or until August 5, 2024, to regain compliance with the $1.00 bid price requirement.

On July 17, 2024, the Company filed a Certificate of Amendment to Second Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware, pursuant to which the Company effected a 1-for-10 reverse stock split (the “Reverse Stock Split”) of Company’s issued and outstanding common stock.

The Reverse Stock Split became effective as of 5:00 p.m.

(Eastern Time) on July 17, 2024, and the Company’s common stock began trading on a split-adjusted basis on the Nasdaq Capital Market at the market open on July 18, 2024.

On August 2, 2024, the Company received notification from Nasdaq that for ten consecutive business days, the closing bid price of the Company’s common stock was at least $1.00 per share, and accordingly, the Company regained compliance with the Bid Price Rule, and that the matter is now closed.

NASDAQ Audit Committee Requirement Notice

On October 21, 2024, we notified the Nasdaq Stock Market (“Nasdaq”) that we were not in compliance with the Audit Committee requirement under Nasdaq Listing Rule 5605(c)(2)(A) due to having only two members on our Audit Committee which was the result of Susan Berland’s resignation from the Board effective June 11, 2024.

On October 22, 2024, the Company received a notice (the “Notice”) from Nasdaq indicating that the Company was no longer compliant with the Audit Committee requirements as set forth in Nasdaq Listing Rule 5605, the Company had until December 9, 2024 to regain compliance as provided in Nasdaq Listing Rule 5605(c)(4) which defined the cure period.

On December 9, 2024, Frances Schulz was appointed to the Board of Directors and the Company’s Audit Committee.

On December 19, 2024, the Company received notice from Nasdaq that the Company had regained compliance with Rule 5605 and the matter was closed.

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S.

GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”).

Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S.

The accompanying consolidated financial statements have been prepared in conformity with GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”).

Any reference in these notes to

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

applicable guidance is meant to refer to the authoritative U.S.

GAAP as found in the Accounting Standards Codification (“ASC”) and as amended by Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

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The Company has one business activity and operates in one reportable segment within continuing operations.

Unless otherwise noted, the Company has retroactively adjusted all common and preferred share and related price information to give effect to the exchange ratio established in the Merger Agreement.

All long-lived assets of the Company are maintained in the United States.

The Company determined that the assets sold to GeneFab met the criteria for presentation as a discontinued operation.

As a result, the Company has retrospectively restated its consolidated balance sheet at December 31, 2022 and consolidated statements of operations and comprehensive loss for the year ended December 31, 2022 to reflect the assets and liabilities and operating results, respectively, related to the disposed business in discontinued operations.

The Company has chosen not to segregate the cash flows of the disposed business in the consolidated statements of cash flows.

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Unless otherwise specified, the disclosures in these consolidated financial statements refer to continuing operations only.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Reverse Stock Split

On July 17, 2024, the Company effected a 1 for 10 reverse stock split of its common stock (the “Reverse Stock Split”).

The par value per share and the number of authorized shares were not adjusted as a result of the Reverse Stock Split.

The shares of common stock underlying outstanding stock options and other equity instruments were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities.

In addition, the shares available for grants under the Company’s incentive plans were adjusted as a result of the Reverse Stock Split.

All references to common stock, options to purchase common stock, outstanding common stock warrants, common stock share data, per share data, and related information contained in the consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented.

No fractional shares were issued as a result of the reverse stock split, as fractional shares of common stock were rounded down to the nearest whole share.

Refer to Note 7.

Stockholders’ Equity , for additional information related to the reverse stock split.

California Institute for Regenerative Medicine Grant

On August 3, 2024, the Company executed an agreement with the California Institute for Regenerative Medicine (“CIRM”) for a total grant award of $ 8.0 million (“CIRM Grant”) in support of the research project related to the ongoing clinical development of SENTI-202.

As the Company has the option to convert the CIRM Grant to a loan and thus may be required to repay some or all of the amounts awarded by CIRM, the Company accounted for this award as a liability.

Given the uncertainty in amounts due upon repayment, the Company has recorded amounts received without any discount or interest recorded, and upon determination of amounts that would become due, the Company will adjust accordingly.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the valuation of stock-based awards, the accrual for research and development expenses, the valuation of contingent earnout, the valuation of GeneFab Option, the valuation of GeneFab Economic Share, the valuation of the GeneFab Note Receivable, the discount rate used to discount future cash flows for the impairment of long-lived assets, and the determination of the incremental borrowing rate.

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the valuation of stock-based awards, the accrual for research and development expenses, the valuation of GeneFab Option, the valuation of GeneFab Economic Share, the valuation of the GeneFab Note Receivable, redeemable convertible preferred stock, preferred stock tranche liability, the discount rate used to discount future cash flows for the impairment of long-lived assets, and the determination of the incremental borrowing rate.

The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate.

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Concentration of Credit Risk

Financial instruments that potentially subject the Company to a significant concentration of credit risk consist of cash, cash equivalents, and short-term investments that are maintained in checking and money market accounts at one financial institution, which at times, may exceed federally insured limits.

The Company’s short-term investments, if any, are limited to certain types of debt securities issued by the U.S.

government, its agencies, and institutions with investment-grade credit ratings, and places restrictions on maturities and concentration by type and issuer.

Financial instruments that potentially subject the Company to a significant concentration of credit risk consist of cash, cash equivalents, and restricted cash are maintained in checking and money market accounts at multiple

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

financial institutions, which at times, may exceed federally insured limits.

As of December 31, 2024 and 2023 , the Company has not experienced any credit losses in such accounts or investments.

As of December 31, 2023, t he Company has prepaid future manufacturing and research services of $ 14.8 million under the development and manufacturing services agreement entered into with GeneFab, a related party.

The Company also has a receivable from GeneFab under the framework agreement with a fair value of $ 17.2 million, subject to satisfaction of certain conditions.

As of December 31, 2024, t he Company has prepaid future manufacturing and research services of $ 6.6 million under an agreement with GeneFab for certain development and manufacturing services agreement which are recorded in GeneFab prepaid expenses - related party in the consolidated balance sheet and $ 1.6 million receivable related to services provided under the transition services agreement as well as sublease rent payments which are recorded in GeneFab receivable - related party in the balance sheets.

The prepaid expense and receivable balances from GeneFab potentially subject the Company to a significant concentration of credit risk if the Company is unable to realize these balances.

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Investments in marketable securities with original maturities less than 12 months from the balance sheet date, if any, are classified as short-term investments.

Investments with original maturities of greater than 12 months from

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

the balance sheet date, if any, are classified as long-term.

Investments with original maturities of greater than 12 months from the balance sheet date, if any, are classified as long-term.

The Company classifies all of its investments as available-for-sale and records such assets at estimated fair value in the consolidated balance sheets, with unrealized gains and losses, if any, reported as a component of other comprehensive loss within the consolidated statement of operations and comprehensive loss, and as a separate component of stockholders’ equity.

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• Level 1 – Quoted prices in active markets for identical assets or liabilities.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

• Level 2 – Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

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The fair value of the GeneFab Option was determined using an option pricing method.

In December 2024, the GeneFab Note Receivable was waived by the parties in an amendment to the Framework Agreement in connection with Celadon’s investment in the PIPE.

Refer to Note 3.

GeneFab Transaction , for further details of the GeneFab transaction.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Property and Equipment, Net

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Recoverability of these assets is measured by comparing their carrying value to the future net undiscounted cash flows the assets are expected to generate over their remaining economic life.

If such assets are considered to be impaired, the amount of any impairment is measured as the difference between their carrying value and their fair value.

If such assets are

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

considered to be impaired, the amount of any impairment is measured as the difference between their carrying value and their fair value.

If the useful life is shorter than originally estimated, the Company amortizes the remaining carrying value over the revised shorter useful life.

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Variable lease payments are recorded as an expense in the period incurred.

The Company entered into subleases for its Alameda manufacturing facility as well as for portions of the Company’s headquarters, which are being accounted for under lessor accounting.

The nature of these subleases did not relieve the Company of its obligations under the original leases.

Each of these respective leases were classified as operating leases and, as such, the Company continues to account for the original leases as it did prior to entering into the sublease agreements.

If the total remaining lease cost on the original lease for the term of the sublease is greater than the anticipated sublease income, the long-lived asset is assessed for impairment.

Income from the subleases are recorded in other income (expense) within the consolidated statement of operations and comprehensive loss.

The Company has elected to not separate lease and non-lease components for any leases within its existing classes of assets and, as a result, accounts for any lease and non-lease components as a single lease component.

The Company has also elected not to apply the recognition requirement for leases with a term of 12 months or less.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Revenue Recognition

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The identification of material rights requires judgments related to the determination of the value of the underlying license relative to the option exercise price, including assumptions about technical feasibility and the probability of developing a candidate that would be subject to the option rights.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

The transaction price is the amount of consideration the Company is entitled to receive in exchange for the transfer of control of a product or a service to a customer.

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Grant payments received in excess of grant revenue earned are recognized as deferred revenue on the balance sheets, and grant income earned in excess of grant payments received is recognized as trade and other receivables on the consolidated balance sheets.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Research and Development

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The derivative liability is recorded at its fair value on issuance and subsequently remeasured each reporting period with changes in fair value recorded in other income (expense) in the consolidated statements of operations and comprehensive loss until settlement.

The fair value of the derivative liability was determined using a Black-Scholes

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

option pricing model incorporating assumptions such as the fair value of our common stock, the risk-free rate, volatility, expected term and dividend yield.

Additional Closing Option

The option granted to a certain investor to purchase additional convertible preferred stock at a later date as part of the private placement transaction in December 2024 (“Preferred Stock Tranche Liability”) was determined to be a freestanding financial instrument that meets the definition of a liability under ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and does not meet the criteria for equity classification.

The liability was recorded at its fair value on issuance and subsequently remeasured each reporting period with changes in fair value recorded in other income (expense) in the consolidated statements of operations and comprehensive loss until settlement.

The fair value of the derivative liability was determined using a Black-Scholes option pricing model.

The Black-Scholes option-pricing model requires the use of subjective assumptions, including the expected volatility of our common stock, the assumed dividend yield, the risk-free interest rate and the fair value of the redeemable convertible preferred stock on the initial valuation date and subsequent remeasurement at period end.

Upon exercise of the option on December 31, 2024, the Company remeasured the liability and reclassified the final value associated with the preferred stock tranche liability to the carrying value of the Series A redeemable convertible preferred stock.

Commitments and Contingencies

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Contingent Earnout Equity

In connection with the Reverse Recapitalization and pursuant to the Merger dated as of June 8, 2022 by and among the Merger Sub and Legacy Senti, former holder of the Legacy Senti common stock and Legacy Senti preferred stock are entitled to receive as additional consideration of up to 2,000,000 shares of the Company’s Common Stock (the “Contingent Earnout Shares”), comprised of two separate tranches of 1,000,000 shares per tranche, for no consideration upon the achievement of certain share price milestones within a period of two and three years .

In connection with the Reverse Recapitalization and pursuant to the Merger dated as of June 8, 2022 by and among the Merger Sub and Legacy Senti, former holder of the Legacy Senti common stock and Legacy Senti preferred stock are entitled to receive as additional consideration of up to 200,000 shares of the Company’s common stock (the “Contingent Earnout Shares”), comprised of two separate tranches of 100,000 shares per tranche, for no consideration upon the achievement of certain share price milestones within a period of two years from the closing date of the Merger for the first tranche term and the second tranche term is three years from the closing date of the Merger.

The Contingent Earnout Shares are a form of dividend for holders of Legacy Senti common stock and Legacy Senti preferred stock.

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The estimated fair value of the Contingent Earnout Shares was determined using a Monte Carlo simulation using a distribution of potential outcomes on a monthly basis over a three-year period prioritizing the most reliable information available.

The assumptions utilized in the calculation were based on the achievement of certain stock

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

price milestones, including the current Company common stock price, expected volatility, risk-free rate, expected term and expected dividend yield.

The assumptions utilized in the calculation were based on the achievement of certain stock price milestones, including the current Company common stock price, expected volatility, risk-free rate, expected term and expected dividend yield.

Stock-Based Compensation Expense

The Company recognizes stock-based compensation expense related to employees and non-employees based on the grant date fair value of the awards.

For awards that vest solely based on continued service, stock-based compensation expense is recognized in the consolidated statements of operations and comprehensive loss using the straight-line method.

For awards that vest solely based on continued service, stock-based

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

compensation expense is recognized in the consolidated statements of operations and comprehensive loss using the straight-line method.

For performance and market awards, stock-based compensation expense is recognized over the requisite service period using the accelerated attribution method.

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When the Company is reporting discontinued operations, it uses net loss from continuing operations as the control number in determining whether those potential dilutive securities are dilutive or anti-dilutive.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements.

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The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the consolidated statement of operations and comprehensive loss in the period that includes the enactment date.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized.

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Recently Adopted Accounting Standards

In November 2021, the FASB issued Accounting Standards Update (ASU) No.

2021-10, Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance, which requires business entities to provide certain disclosures when they have received government assistance and use a grant or contribution accounting model by analogy to other accounting guidance.

The ASU was effective January 1, 2022, and had no material impact on the Company’s consolidated financial statements and related disclosures.

In May 2021, the FASB issued ASU 2021-04 Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 370-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40);

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force), which clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange.

The ASU was effective January 1, 2022, and had no material impact on the Company’s consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU No.

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP.

The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas.

The ASU was effective January 1, 2022, and had no material impact on the Company’s consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU No.

2019-12, Simplifying the Accounting for Income Taxes (Topic 740), which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

The ASU was effective January 1, 2022, and had no material impact on the Company’s consolidated financial statements and related disclosures.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Recent Accounting Standards

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date.

Unless otherwise discussed, the impact of recently issued standards that are not yet effective are not expected to have a material impact on the Company’s financial position, results of operations, or cash flows upon adoption.

In November 2023, the FASB issued ASU No.

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Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements.

The Company adopted the guidance in the fiscal year ended December 31, 2024.

There was no impact on the Company’s reportable segments identified.

Required disclosures have been included in Note 10.

Segment Reporting .

Recent Accounting Standards

In December 2023, the FASB issued ASU No.

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Upon adoption, the guidance can be applied prospectively or retrospectively.

The Company believes that the impact of recently issued accounting standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Reverse Recapitalization

On June 8, 2022, Merger Sub, a wholly-owned subsidiary of Dynamics, merged with Legacy Senti, with Legacy Senti surviving as a wholly-owned subsidiary of Dynamics.

At the effective time of the Merger:

• each outstanding share of Legacy Senti common stock was converted into approximately 0.1957 shares of the Company’s common stock;

• each outstanding share of preferred stock of Legacy Senti was cancelled and converted into the aggregate number of shares of the Company’s common stock that would be issued upon conversion of the shares of Legacy Senti preferred stock based on the applicable conversion ratio immediately prior to the effective time, multiplied by approximately 0.1957 ;

• each outstanding option to purchase Legacy Senti common stock was converted into an option to purchase a number of shares of the Company’s common stock equal to the number of shares of Legacy Senti common stock subject to such option multiplied by approximately 0.1957 , rounded down to the nearest whole share, at an exercise price per share equal to the current exercise price per share for such option divided by approximately 0.1957 , rounded up to the nearest whole cent;

• all shares of Dynamics Class A common stock were redesignated as common stock, par value $ 0.0001 per share, of the Company.

Former holders of the Legacy Senti common stock and preferred stock are eligible to receive up to an aggregate of 2,000,000 additional shares of the Company’s common stock in the aggregate in two equal tranches of 1,000,000 shares if the volume-weighted average closing sale price of the common stock is greater than or equal to $ 15.00 and $ 20.00 , respectively, for any 20 trading days within any 30 consecutive trading day period.

The first and second tranche term is two and three years , respectively, from the closing of the Merger.

If there is a change of control within the three-year period following the closing of the Merger that results in a per share price equal to or in excess of the $ 15.00 and $ 20.00 share price milestones not previously met, then the Company shall issue the earnout shares to the holders of Legacy Senti common stock and preferred stock.

Refer to Note 9, Stockholders’ Equity (Deficit) , for further details of the contingent earnout liability.

In association with the Merger, Dynamics entered into subscription agreements (the “Subscription Agreements”) with certain investors (the “PIPE Investors”).

Pursuant to the Subscription Agreements, the PIPE Investors purchased an aggregate of 5,060,000 shares of the Company’s common stock (the “PIPE Shares”) in a private placement at a price of $ 10.00 per share for an aggregate purchase price of $ 50.6 million (the “PIPE Financing”).

The PIPE Financing was consummated in connection with the Merger.

Concurrently with the closing of the Merger, the unsecured convertible promissory note (the “May 2022 Note”) in the principal amount of $ 5.2 million that was previously issued by Legacy Senti to Bayer Healthcare LLC

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Notes to Consolidated Financial Statements

(“Bayer”) on May 19, 2022 was automatically cancelled and exchanged for 517,500 shares of Class A Common Stock (the “Note Exchange”) at a price of $ 10.00 per share.

The shares of Class A Common Stock issued in the Note Exchange are entitled to the same registration rights granted to the PIPE Investors with respect to the PIPE Shares.

Refer to Note 8.

Convertible Note , for further details of the convertible note.

The number of shares of the Company’s common stock outstanding immediately following the consummation of the Merger was:

Owned by Dynamics’ stockholders 14,915,963

Issued to PIPE Investors 5,060,000

Issued to Bayer in connection with convertible note cancellation and exchange 517,500

Issued to Legacy Senti stockholders 23,163,614 (1)

Early exercised shares subject to repurchase ( 288,807 )

Total shares of common stock immediately after Merger 43,368,270

________________

(1) Includes 19,517,988 shares of common stock issued upon conversion of Legacy Senti’s redeemable convertible preferred stock.

The Merger was accounted for as a reverse recapitalization in accordance with U.S.

Under this method of accounting, Dynamics was treated as the acquired company for financial reporting purposes and Legacy Senti was treated as the acquiror.

This determination was primarily based on the fact that subsequent to the Merger, the Legacy Senti stockholders hold a majority of the voting rights of the combined company, Legacy Senti comprises all of the ongoing operations of the combined company, Legacy Senti comprises a majority of the carryover governing body of the combined company, and Legacy Senti’s senior management comprises all of the senior management of the combined company.

Accordingly, for accounting purposes, the Merger was treated as the equivalent of Legacy Senti issuing shares for the net assets of Dynamics, accompanied by a recapitalization.

The net assets of Dynamics were stated at historical costs.

No goodwill or other intangible assets were recorded.

Operations prior to the Merger are those of Legacy Senti.

In connection with the Merger, the Company raised $ 140.7 million in proceeds from the Merger and related PIPE Financing, including the Bayer convertible note cancellation and exchange.

Transaction costs totaling $ 23.5 million consisting of banking, legal, and other professional fees were deducted from the funds raised, of which $ 4.8 million was incurred by the Company and the remainder by Dynamics.

In addition, there were no unpaid transaction costs included in accounts payable and accrued expenses as of December 31, 2022.

The Company believes that the impact of recently issued accounting standard that is not yet effective are not expected to have a material impact on its financial position or results of operations upon adoption.

GeneFab Transaction

On August 7, 2023, the Company entered into a framework agreement with GeneFab and Valere Bio, Inc., a Delaware corporation and the parent company of GeneFab, which is wholly owned by Celadon Partners, LLC, pursuant to which the Company, subject to the terms and conditions therein, sold, assigned and transferred its rights, title and interest in certain of the assets and contractual rights, including all of the Company’s equipment at the Company’s facilities in Alameda and certain of the Company’s non-oncology license, intellectual property related to the schematics for and design of the Alameda facility, and subleased to GeneFab its premises under the lease for the Alameda facility.

The transaction will provide the Company with additional capital in the form of a note receivable and rights to future manufacturing and research activities performed by GeneFab at market rates and reduced longer term operating expenses.

Concurrently with the transaction, the Company and GeneFab entered into a development and manufacturing services agreement (the “Services Agreement”), pursuant to which GeneFab will provide certain services to the Company using the subleased Alameda facility and acquired equipment.

As part of this transaction, the Company entered into a transition services agreement (“Transition Services Agreement”) with GeneFab whereby certain

On August 7, 2023, the Company entered into a framework agreement (“the GeneFab Framework Agreement”) with GeneFab and Valere Bio, Inc., a Delaware corporation and the parent company of GeneFab, which is wholly owned by Celadon Partners, LLC, pursuant to which the Company, subject to the terms and conditions therein, sold, assigned and transferred its rights, title and interest in certain of the assets and contractual rights, including all of the Company’s equipment at the Company’s facilities in Alameda and certain of the Company’s non-oncology license rights, intellectual property related to the schematics for and design of the Alameda facility, and subleased to GeneFab its premises under a lease for the Alameda facility.

The transaction provided the Company with additional

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Notes to Consolidated Financial Statements

services are to be provided by each party to the other party during a transition period beginning on the closing of the transaction.

Under the terms of the transaction, the Company is entitled to receive total consideration of $ 37.8 million before the end of 2025, of which $ 18.9 million was due at closing and was netted against prepayment due to GeneFab for future manufacturing and research activities.

The remaining $ 18.9 million will be paid to the Company in installments in 2024 and 2025 (the “GeneFab Note Receivable”), subject to satisfaction of certain conditions.

capital in the form of a note receivable and rights to future manufacturing and research activities performed by GeneFab at market rates and reduced longer-term operating expenses.

Concurrently with the transaction, the Company and GeneFab entered into a development and manufacturing services agreement (“DMSA”), pursuant to which GeneFab will provide certain services to the Company using the subleased Alameda facility and acquired equipment.

As part of this transaction, the Company entered into a transition services agreement with GeneFab whereby certain services are to be provided by each party to the other party during a transition period beginning on the closing of the transaction.

The total consideration in connection with the transaction was $ 37.8 million, of which $ 18.9 million was due at closing and was netted against prepayment due to GeneFab for future manufacturing and research activities.

The remaining $ 18.9 million was to be paid to the Company in installments in 2024 and 2025 (the “GeneFab Note Receivable”), subject to satisfaction of certain conditions.

The Company elected to account for the GeneFab Note Receivable under the fair value option and recorded the GeneFab Note Receivable at its fair value of $ 16.6 million at the closing date of the transaction.

The GeneFab Note Receivable will be remeasured each reporting period with changes from remeasurement included in other income (expense) in the consolidated statements of operations and comprehensive loss.

Refer to Note 5.

Fair Value Measurements .

The Company is entitled to $ 18.9 million in future manufacturing and research activities to be rendered under the services agreement, which are recorded in GeneFab prepaid expenses on the consolidated balance sheet.

The Company determined that the $ 18.9 million for future manufacturing and research activities, inclusive of the volume discount provided, was executed at market terms and does not result in any impact to the total consideration received from GeneFab for the disposal of the business.

The GeneFab Note Receivable was remeasured each reporting period with changes from remeasurement included in other income (expense) in the consolidated statements of operations and comprehensive loss.

The Company was entitled to $ 18.9 million in future manufacturing and research activities to be rendered by GeneFab under the services agreement, which are recorded in GeneFab prepaid expenses on the consolidated balance sheets.

As of December 31, 2024, $ 0.6 million of this initial prepaid amount is remaining for future manufacturing and research activities.

As part of the transaction, the Company subleased the facility in Alameda, California to GeneFab which will support the clinical manufacturing of the Company’s chimeric antigen receptor natural killer (CAR-NK) programs, including SENTI-202.

As a result of this sublease event, the Company recognized an impairment of long-lived assets of $ 25.7 million for the year ended December 31, 2023 due to the impairment of the Company’s leasehold improvements.

Refer to Note 6.

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GeneFab was granted an option to purchase up to 1,963,344 shares (i.e.

up to $ 20.0 million worth) of the Company’s common stock at a purchase price of $ 1.01867 (the “GeneFab Option”).

up to $ 20.0 million worth) of the Company’s common stock at a per share purchase price of $ 10.18670 (the “GeneFab Option”).

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

The GeneFab Option may be exercised in installments of common stock equal to no more than 19.9 % of the Company’s outstanding shares of common stock as of the closing date of the transaction.

The purchase of the remaining shares under the GeneFab Option require stockholder approval.

The purchase of the remaining shares under the GeneFab Option requires approval by the Company’s stockholders.

The Company determined that the GeneFab Option was a derivative as the terms of the instrument contain certain provisions that preclude equity classification in accordance with ASC 815.

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Fair Value Measurements .

As additional consideration for the transaction, the Company and GeneFab entered into a seller economic share agreement (the “GeneFab Economic Share”), pursuant to which the Company will be entitled to receive ten percent of the realized gains of GeneFab’s parent company arising and resulting from any cash or in-kind distributions from GeneFab in connection with a dividend or sale event, subject to the terms and conditions of the GeneFab Economic Share.

The Company elected to account for the GeneFab Economic Share under the fair value option and recorded the GeneFab Economic Share at its fair value of $ 1.8 million at the date of the transaction.

As additional consideration for the transaction, the Company and GeneFab entered into a seller economic share agreement (the “GeneFab Economic Share”), pursuant to which the Company will be entitled to receive 10 % of the realized gains of GeneFab’s parent company arising and resulting from any cash or in-kind distributions from GeneFab in connection with a dividend or sale event, subject to the terms and conditions of the GeneFab Economic Share.

The Company elected to account for the GeneFab Economic Share under the fair value option and recorded

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Notes to Consolidated Financial Statements

the GeneFab Economic Share at its fair value of $ 1.8 million at the date of the transaction.

The GeneFab Economic Share is remeasured each reporting period with changes from remeasurement included in other income (expense) in the consolidated statements of operations and comprehensive loss.

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The Company determined that GeneFab is a variable interest entity (VIE) since its total equity at risk is not sufficient to finance its activities without additional subordinated financial support.

The Company performed a qualitative analysis to determine if it is the primary beneficiary of GeneFab and determined it does not have the

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

power to direct the significant activities of GeneFab.

The Company performed a qualitative analysis to determine if it is the primary beneficiary of GeneFab and determined it does not have the power to direct the significant activities of GeneFab.

As a result, the Company determined it is not the primary beneficiary and therefore does not consolidate GeneFab.

On December 10, 2024, in connection with the private placement described in further detail in Note 7.

Stockholders’ Equity , the Company entered into an amendment of the GeneFab Framework Agreement with GeneFab and Valere Bio, Inc.

As part of the agreement, the GeneFab Note Receivable was waived by the parties.

Additionally, the Company entered into an amended and restated DMSA with GeneFab.

As part of this agreement, the Company agreed to make an additional advance payment of $ 10.0 million.

As of December 31, 2024, the Company had made $ 6.0 million of the $ 10.0 million payment, with the remaining amount paid in January 2025.

This amount is recorded in GeneFab prepaid expenses - related party.

Refer to Note 16.

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Discontinued Operations

In accordance with ASC 205, Presentation of Financial Statements , the Company determined that the sale of the non-oncology business, including the equipment and transfer of in-house manufacturing activities in the Alameda facility, to GeneFab represented a strategic shift that will have a major effect on the Company’s operations and financial results, thus meeting the criteria to be reported as discontinued operations.

In accordance with ASC 205, Presentation of Financial Statements (“ASC 205”), the Company determined that the sale of the non-oncology business, including the equipment and transfer of in-house manufacturing activities in the Alameda facility, to GeneFab represented a strategic shift that will have a major effect on the Company’s operations and financial results, thus meeting the criteria to be reported as discontinued operations.

Discontinued operations include the cost and depreciation of equipment and related deposits or liabilities, manufacturing personnel-related costs including costs arising as a result of the disposal such as equity award modifications and severance, and the gain from the disposal of the business.

Refer to Note 7.

Stockholders’ Equity (Deficit), for further details of the award modifications.

Stockholders’ Equity, for further details of the award modifications.

There were no material operating expenses related to the discontinued operations since August 2023, when the transaction with GeneFab closed.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

The following table summarizes the major classes of assets and liabilities of the discontinued operations (in thousands):

Prepaid expenses and other current assets $ — $ 209

Total current assets of discontinued operations $ — $ 209

Property and equipment, net $ — $ 4,775

Other long-term assets — 10

Total non-current assets of discontinued operations $ — $ 4,785

Accounts payable $ — $ 897

Accrued expenses and other current liabilities — 243

Total current liabilities of discontinued operations $ — $ 243

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

The following table summarizes the operating results of the discontinued operations (in thousands):

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General and administrative expenses were negative for the year ended December 31, 2023 due to the reversal of compensation expense for unvested awards that were cancelled due to the termination of employees subsequently hired by GeneFab.

Stockholders’ Equity (Deficit).

Stockholders’ Equity.

The following table summarizes the cash flow information of the discontinued operations (in thousands):

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Purchases of property and equipment — ( 4,079 )

Supplemental disclosures of noncash investing items:

Purchases of property and equipment in accounts payable and accrued expenses — 3,135

________________

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Fair Value Measurements

Cash Equivalents, Restricted Cash and Short-term Investments

The following tables summarize the estimated value of cash equivalents, restricted cash and short-term investments by category (in thousands):

Cash, Cash Equivalents, and Restricted Cash

The following tables summarize the estimated value of cash, cash equivalents, and restricted cash by category (in thousands):

December 31, 2024

Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Cash and cash equivalents Restricted cash Short-term investments

Amortized Cost Estimated Fair Value Cash and cash equivalents Restricted cash

Cash $ 12,408 $ 12,408 $ 12,408 $ —

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December 31, 2023

Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Cash and cash equivalents Restricted cash Short-term investments

Amortized Cost Estimated Fair Value Cash and cash equivalents Restricted cash

Cash $ 4,205 $ 4,205 $ 4,205 $ —

Money market funds $ 35,243 $ 35,243 $ 31,721 $ 3,522

Subtotal 35,243 35,243 31,721 3,522

Treasury securities $ 14,866 $ 4 $ ( 3 ) $ 14,867 $ — $ — $ 14,867

agency securities $ 5,938 $ — $ — $ 5,938 $ 3,983 $ — $ 1,955

Commercial paper $ 28,122 $ — $ — $ 28,122 $ 5,994 $ — $ 22,128

Corporate debt securities $ 7,590 $ 1 $ ( 1 ) $ 7,590 $ 5,598 $ — $ 1,992

Subtotal $ 56,516 $ 5 $ ( 4 ) $ 56,517 $ 15,575 $ — $ 40,942

Total $ 39,448 $ 39,448 $ 35,926 $ 3,522

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Refer to Note 7.

Stockholders’ Equity (Deficit) , for further details of the Contingent Earnout.

Stockholders’ Equity , for further details of the Contingent Earnout.

Additionally, the Company determined that the fair value of the Contingent Earnout Liability was zero as of December 31, 2024, due to the low probability of the remaining tranche terms being met.

GeneFab Note Receivable

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Note Receivable

Initial recognition as of August 7, 2023

Fair value as of December 31, 2023

Change in fair value included in other income (expense) ( 17,240 )

Fair value as of December 31, 2024

The fair value of the GeneFab Note Receivable is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.

The GeneFab Note Receivable is presented within GeneFab receivable on the consolidated balance sheet.

The Company has elected to account for the GeneFab Note Receivable under the fair value option in ASC 825, with changes in fair value reported as a component of other income (expense) in the consolidated statements of operations and comprehensive loss.

The fair value of the GeneFab Note Receivable was determined by discounting future payments under multiple probability-weighted scenarios using the GeneFab’s cost of borrowing, which was estimated at 13.72 % as of the initial recognition date, to 12.53 % as of December 31, 2023 based on published CCC-rated corporate bond yields.

The fair value of the GeneFab Note Receivable as of December 31, 2023 is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.

The fair value of the GeneFab Note Receivable as of December 31, 2023 was determined by discounting future payments under multiple probability-weighted scenarios using the Company’s cost of borrowing, which was estimated at 12.53 % based on published CCC-rated corporate bond yields.

In connection with the private placement discussed in Note 7.

S tockholders’ Equity , the Company waived the Note Receivable due from GeneFab.

Thus, the value of the GeneFab Note Receivable as of December 31, 2024 was zero .

GeneFab Option

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GeneFab Option

Initial recognition as of August 7, 2023 $ ( 9,649 )

Fair value as of December 31, 2023

Change in fair value included in other income (expense) 6,331

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In determining the fair value of the GeneFab Option, the Company used a Black-Scholes option pricing model.

The significant assumptions utilized in the valuation are described below:

December 31, August 7

Additionally, the Company determined that the fair value of the GeneFab Option was zero as of December 31, 2024, due to the probability that a suitable license agreement, which is a condition of GeneFab obtaining the Option, would not be signed.

The significant assumptions utilized in the valuation as of December 31, 2023 are described below:

Current stock price $ 6.60

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GeneFab Economic Share

Initial recognition as of August 7, 2023

Fair value as of December 31, 2023

Change in fair value included in other income (expense) ( 1,816 )

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The fair value of the GeneFab Economic Share is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.

The Company has elected to account for the GeneFab Economic Share under the fair value option in ASC 825, with changes in fair value reported as a component of other income (expense) in the consolidated statements of operations and comprehensive loss.

The Company elected to account for the GeneFab Economic Share under the fair value option in ASC 825, with changes in fair value reported as a component of other income (expense) in the consolidated statements of operations and comprehensive loss.

In determining the fair value of the GeneFab Economic Share, the Company used the option pricing method, which allocates total estimated enterprise value to various classes of equity using the Backsolve method.

The significant assumptions utilized in the valuation are described below:

December 31, August 7

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

The significant assumptions utilized in the valuation as of December 31, 2023 are described below:

GeneFab equity value (in thousands)

$ 35,448 $ 37,314

Volatility 65.8 %

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Notes to Consolidated Financial Statements

Additional Closing Option

The following table presents a summary of the changes in the fair value of the additional closing option (“Preferred Stock Tranche Liability”) (in thousands):

Preferred Stock Tranche Liability

Initial recognition as of December 9, 2024

Change in fair value included in other income (expense) ( 13,404 )

Fair value as of December 31, 2024 (prior to option exercise)

Exercise of underlying option on December 31, 2024

Fair value as of December 31, 2024

The fair value of the Preferred Stock Tranche Liability is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.

The Company initially estimated the fair value of the preferred stock tranche liability using the Black-Scholes option pricing model with an expected term of 0.06 years, the fair value of the Series A redeemable convertible preferred stock of $ 5.74 , expected volatility of 100.0 %, a probability of exercise of the tranche at virtually 100 % and risk-free interest rate of 4.42 % as of December 9, 2024.

On December 31, 2024, the option was exercised to acquire the additional shares per the private placement (refer to Note 7.

Stockholders’ Equity for additional information);

accordingly, the Company used the fair value of the Series A redeemable convertible preferred stock of $ 3.09 to remeasure the preferred stock tranche liability immediately prior to the exercise of the option.

Other Financial Statement information

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Furniture and fixtures 331 326

Construction in progress — 43,892

Property and equipment at cost 30,840 31,520

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Buildout of the current good manufacturing practice (cGMP) facility in Alameda was completed in June 2023 and the assets were placed in service.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

As a result of the change in the manner in which the Company expects to recover the assets associated with the lease on the Alameda facility (refer to Note 3.

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Depreciation totaled $ 3.8 million and $ 3.4 million for the years ended December 31, 2024 and 2023, respectively.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

Accrued professional and service fees related to facility construction $ — $ 7,342

Accrued professional and service fees other $ 3,410 $ 3,555

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The Company’s operating leases are primarily for its corporate headquarters located in South San Francisco, California (“HQ lease”) and for additional office and laboratory space located in Alameda, California (“Alameda lease”).

The corporate headquarters lease has an initial term of eight years expiring in 2027, with an option to renew for an additional eight years unless canceled by either party thereafter.

The HQ lease has an initial term of eight years expiring in 2027, with an option to renew for an additional eight years unless canceled by either party thereafter.

The Alameda lease has an initial term of eleven years expiring in 2032, with an option to renew the lease for up to two additional terms of five years .

The exercise of these renewal options is not recognized as part of the ROU assets and lease liabilities, as the Company did not conclude, at the commencement date of the leases, that the exercise of renewal options or termination options was reasonably certain.

The Alameda lease provided for a tenant improvement allowance of up to $ 17.5 million for the costs relating to the design, permitting and construction of the improvements, to be disbursed by the landlord no later than December 31, 2023.

The Alameda lease provided for a tenant improvement allowance of up to $ 17.5 million for the costs relating to the design, permitting and construction of the improvements, and were fully disbursed by the landlord as of December 31, 2023.

The Company was deemed to be the accounting owner of the tenant improvements primarily because the Company is the principal in the construction and design of the assets, is responsible for costs overruns and retains substantially all economic benefits from the leasehold improvements over their economic lives .

Accordingly, the tenant improvement allowance was considered an incentive and was deducted from the initial measurement of the ROU asset and lease liability.

The Company estimated the timing of tenant improvement reimbursements at the lease commencement date and upon receipt of the cash incentives, the Company recognized the cash received as an increase in the lease liability.

The Company estimated the timing of tenant improvement

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

reimbursements at the lease commencement date and upon receipt of the cash incentives, the Company recognized the cash received as an increase in the lease liability.

A summary of total lease costs and other information for the period relating to the Company’s operating leases is as follows (in thousands):

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Total lease cost $ 6,310 $ 6,488

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Variable lease costs comprise primarily of common area maintenance charges for the operating leases, which is dependent upon usage.

These costs are classified as operating lease expenses due to the election to not separate lease and non-lease components.

These costs were not included within the measurement of the Company’s operating lease ROU assets and operating lease liabilities.

Years Ended December 31,

Other information:

Operating cash flows net inflows and (outflows) from operating lease $ ( 2,922 ) $ 11,363

Operating cash flows net outflows from operating lease $ ( 7,252 ) $ ( 2,922 )

ROU assets obtained in exchange for operating lease obligations (including remeasurement of ROU and lease liabilities due to changes in the timing of receipt of lease incentives) $ — $ ( 5 )

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Weighted-average discount rate 9.2 % 9.2 %

For the years ended December 31, 2023 and 2022, the Company received $ 3.4 million and $ 14.1 million, respectively, of the $ 17.5 million tenant improvement allowance.

Through December 31, 2023, the Company has received the full $ 17.5 million tenant improvement allowance inception-to-date.

As of December 31, 2023 and 2022, amounts disclosed for ROU assets obtained in exchange for lease obligations include amounts added to the carrying amount of ROU assets resulting from lease modifications and reassessments.

During the year ended December 31, 2023, the Company received the remaining $ 3.4 million, of the $ 17.5 million tenant improvement allowance.

Maturities of the Company’s lease liabilities as of December 31, 2024, were as follows (in thousands):

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Total lease liabilities $ 33,538

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.

Letters of Credit

As of December 31, 2024, the Company held a letter of credit held 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 HQ facility lease which are recorded as restricted cash in the consolidated balance sheets as of December 31, 2024 and December 31, 2023.

Lessor Accounting

GeneFab Sublease - Related Party

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

In connection with the GeneFab transaction, on August 7, 2023, the Company entered into a sublease with GeneFab to sublease the facility included in the Alameda lease, expiring in September 2032.

Total sublease income to be earned from this operating lease, in aggregate, will be approximately $ 44.1 million over the term of the sublease agreement.

Sublease income was $ 2.0 million for the year ended December 31, 2023.

Variable sublease income was $ 0.3 million for the year ended December 31, 2023.

The Company records sublease income in other income (expense) in the consolidated statements of operations and comprehensive loss.

On June 12, 2024, the Company entered into a sublease with GeneFab for a portion of the Company’s corporate headquarter premises in South San Francisco.

Total sublease income to be earned from this operating lease, in aggregate, will be approximately $ 1.3 million over the term of the sublease agreement.

Refer to Note 16.

Related Parties for GeneFab related party considerations.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Maturities of the Company’s sublease payments from GeneFab as of December 31, 2023, were as follows (in thousands):

BKPBIOTECH and JLSA2 Therapeutics Sublease

On September 23, 2024, the Company entered into a sublease agreement with BKPBIOTECH, Inc.

and JLSA2 Therapeutics, Inc., to sublease a portion of the Company’s corporate headquarter premises in South San Francisco.

The sublease commenced on October 7, 2024, and will expire on April 30, 2027.

Total sublease income to be earned from this operating lease, in aggregate, will be approximately $ 1.1 million over the term of the sublease agreement.

The sublease contains customary events of default, representations, warranties and covenants.

Pursuant to ASC Topic 842, Leases , the Company concluded that the sublease is a separate lease and it qualifies as an operating lease.

As a result of sublease, the Company identified an impairment indicator related to the HQ Lease.

The Company compared the estimated undiscounted cash flows to the carrying value of the asset group, which includes right-of use assets and leasehold improvements allocable to the sublease.

The Company concluded that the carrying value of the asset group was not recoverable as it exceeded the estimated undiscounted cash flows.

The Company calculated the amount of impairment using a discounted cash flow model to calculate the fair value of the asset group which incorporated the net identifiable cash flows for the term of sublease, including an estimate for cash flows in the residual period, and an estimated borrowing rate of a market participant subtenant.

The impairment charge of $ 0.3 million was recorded as impairment of long-lived assets in the statement of operations and comprehensive loss for the year ended December 31, 2024.

Maturities of the Company’s sublease payments for the subleases of both Alameda facility and corporate headquarter premises as of December 31, 2024, were as follows (in thousands):

Thereafter 13,258

Total undiscounted sublease payments $ 39,095

Convertible Note

On May 19, 2022, in connection with the Merger, Legacy Senti issued $ 5.2 million in unsecured convertible promissory notes for the purchase price of $ 5.2 million.

The May 2022 Note was due May 2024 and interest accrued at an annual rate of 3.0 %.

The May 2022 Note was cancellable and exchangeable or convertible under any of the following circumstances:

• Automatic conversion upon the closing of the Merger with Dynamics.

The outstanding principal under this note shall be cancelled and exchanged automatically into that number of shares of Dynamics common stock as is equal to (a) the entire principal amount under this note divided by (b) $ 10.00 .

Upon conversion of this note, any and all accrued interest under this note shall immediately and automatically be cancelled and forgiven.

The shares issued upon conversion of this note shall have the same rights and entitlements as the shares issued in connection with the PIPE by Dynamics.

• Automatic conversion upon closing of a qualified IPO.

The note and any accrued unpaid interest shall be automatically converted into shares of the equity securities issued in the qualified IPO at a conversion price equal to the product of (a) 80 %, and (b) the price per share of the Company’s common stock issued to the public in the qualified IPO.

• Automatic conversion upon closing of non-qualified financing.

The note and any accrued unpaid interest shall be automatically converted into shares of the Company’s equity securities issued in such non-qualified financing at a conversion price per share equal to the product of (a) 80 %, and (b) the lowest per-share selling price of the equity securities issued to other investors in the non-qualified financing.

• If the note has not been repaid or previously converted, on or after the maturity date, at the election of the holder, the outstanding balance shall either (a) be repaid in cash in an amount equal to the outstanding principal, or (b) be converted into that number of shares of Legacy Senti’s Series B Preferred Stock equal to the outstanding balance divided by the original issuance price of the Series B Preferred Stock.

On June 8, 2022, concurrently with the closing of the Merger, the May 2022 Note was automatically cancelled and exchanged for 517,500 shares of Class A Common Stock at a price of $ 10.00 per share.

In accordance with the accounting guidance for an extinguishment of convertible debt instruments with a conversion feature that is separately accounted for as a derivative, the Company determined that the cancellation and exchange should be accounted for as an extinguishment of the May 2022 Note and a gain on extinguishment of $ 1.3 million was recorded at the closing of the Merger and all accrued interest at the time of the Merger was reversed and recorded to additional paid in capital.

A summary of total sublease income for the period relating to the Company’s operating leases is as follows (in thousands):

Sublease income - base rent

$ 5,170 $ 2,005

Sublease income - variable and other

$ 1,438 $ 318

Total Sublease Income

$ 6,608 $ 2,323

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Stockholders’ Equity (Deficit)

Redeemable Convertible Preferred Stock

The Company’s redeemable convertible preferred stock consisted of the following as of December 31, 2021 (in thousands, except share and per share amounts):

December 31, 2021

Per Share Shares Authorized Shares Issued and Outstanding

Net Carrying Value

Aggregate Liquidation Preference

Series A $ 1.6427 6,888,563 6,888,563 $ 57,408 $ 57,822

Series B $ 1.6427 12,629,427 12,629,425 114,425 106,012

Total 19,517,990 19,517,988 $ 171,833 $ 163,834

In connection with the Merger, all previously issued and outstanding redeemable convertible preferred stock was converted on June 8, 2022 into an equivalent number of shares of common stock of the Company on a one -to-one basis, then multiplied by the Exchange Ratio pursuant to the Merger Agreement.

Refer to Note 3, Reverse Recapitalization, for further details of the Merger.

Stockholders’ Equity

Holders of common stock are entitled to one vote per share, and to receive dividends and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to stockholders.

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Through December 31, 2024, no cash dividends have been declared or paid.

At December 31, 2023 and December 31, 2022, the Company was authorized to issue 500,000,000 shares of common stock, all at a par value of $ 0.0001 per share, and had reserved the following shares for future issuance:

Series A and B redeemable convertible preferred stock — —

As of December 31, 2024 and December 31, 2023, the Company’s certificate of incorporation authorized the Company to issue 500,000,000 shares of common stock at a par value of $ 0.0001 per share.

Each share of common stock is entitled to one vote.

The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Company’s Board of Directors.

As of December 31, 2024 and December 31, 2023, no dividends have been declared.

On July 10, 2024, the Board approved a reverse stock split of the common stock at a ratio of 1-for-10, $ 0.0001 par value.

Effective as of 5:00 p.m.

Eastern Time on July 17, 2024, the Company filed the Reverse Stock Split Amendment and effected a 1-for-10 reverse stock split of its shares of common stock (the “Reverse Stock Split”).

All common stock amounts and references have been retroactively adjusted for all figures presented to reflect this split unless specifically stated otherwise.

No fractional shares were issued in connection with the Reverse Stock Split.

Stockholders who would have otherwise been entitled to receive fractional shares as a result of the Reverse Stock Split were entitled to a cash payment in lieu thereof at a price equal to the fraction to which the stockholder would have otherwise been entitled multiplied by the closing sales price per share of the common stock (as adjusted for the Reverse Stock Split) on the Nasdaq Capital Market on July 17, 2024, the last trading day immediately preceding the effective time of the Reverse Stock Split.

Trading of the Company’s common stock on the Nasdaq Capital Market commenced on a split-adjusted basis as of market open on July 18, 2024, under the existing trading symbol “SNTI.”

At December 31, 2024 and December 31, 2023, the Company has reserved shares of its common stock for future issuance as follows:

Series A redeemable convertible preferred stock 21,157,000 —

Common Stock Purchase Agreement 484,944 732,704

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Restricted stock units outstanding 56,423 22,528

Performance stock units outstanding 106,806 —

Common stock shares available for future issuance under equity plans 270,907 367,228

2 unchanged sentences

GeneFab Option 1,963,344 1,963,344

Warrants to purchase common stock issued in connection with Series A redeemable convertible preferred stock 31,735,500 —

Unvested early exercised common stock 422 5,486

Total 57,287,763 4,483,216

On June 8, 2022, upon the Closing, all of the outstanding redeemable convertible preferred stock was converted to Common Stock pursuant to the conversion rate effective immediately prior to the Merger and the Exchange Ratio and the remaining amount was reclassified to additional paid-in capital.

Refer to Note 3.

Reverse Recapitalization, for further details of the Merger.

Common Stock Purchase Agreement

On August 31, 2022, the Company entered into a Common Stock Purchase Agreement and a Registration Rights Agreement, which was amended and restated on July 16, 2024 (collectively referred to as the “A&R

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Preferred Stock

In connection with the close of the Merger, the Company’s Amended and Restated Certificate of Incorporation provides the Company’s board of directors with the authority to issue $ 0.0001 par value preferred stock in one or more series and to establish from time to time the number of shares to be included in each such series, by adopting a resolution and filing a certification of designations.

Voting powers, designations, powers, preferences and relative, participating, optional, special and other rights shall be stated and expressed in such resolutions.

There were 10,000,000 shares designated as preferred stock and none were outstanding as of December 31, 2023 and December 31, 2022.

Common Stock Purchase Agreement

On August 31, 2022, the Company entered into a Common Stock Purchase Agreement and a Registration Rights Agreement (collectively referred to as the “Purchase Agreement”) with Chardan Capital Markets LLC (“Chardan”).

Pursuant to the Purchase Agreement, the Company has the right, in its sole discretion, to sell to Chardan up to the lesser of (i) $ 50.0 million of newly issued shares of the Company’s common stock, and (ii) the Exchange Cap (as defined below) (subject to certain conditions and limitations), from time to time during the 36 -month term of the Purchase Agreement.

Under the applicable NASDAQ rules, the Company may not issue to Chardan under the Purchase Agreement more than 8,727,049 shares of common stock, which number of shares is equal to 19.99 % of the common shares outstanding immediately prior to the execution of the Purchase Agreement unless certain exceptions are met (the “Exchange Cap”).

Purchase Agreement”) with Chardan Capital Markets LLC (“Chardan”).

Pursuant to the Purchase Agreement, the Company had the right, in its sole discretion, to sell to Chardan up to the lesser of (i) $ 50.0 million of newly issued shares of the Company’s common stock, and (ii) the Exchange Cap (as defined below) (subject to certain conditions and limitations), from time to time during the 36 -month term of the Purchase Agreement.

Under the applicable NASDAQ rules, the Company was prohibited from issuing to Chardan under the Purchase Agreement more than 872,704 shares of common stock, which number of shares is equal to 19.99 % of the common shares outstanding immediately prior to the execution of the Purchase Agreement unless certain exceptions are met (the “Exchange Cap”).

The purchase price of the shares of common stock will be determined by reference to the Volume Weighted Average Price (“VWAP”) of the common stock during the applicable purchase date, less a fixed 3 % discount to such VWAP.

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

The Company recognized an expense of $ 0.7 million within general and administrative expenses in the Company’s consolidated statements of operations and comprehensive loss for the Chardan related costs and legal fees incurred in connection with the execution of the agreement.

Other than the issuance of the commitment shares of the Company’s common stock to Chardan, the Company issued 1,300,000 Class A common stock through December 31, 2023 aggregating to net proceeds of $ 1.2 million under the Common Stock Purchase Agreement.

On July 16, 2024, the Company amended and restated the Purchase Agreement (“A&R Purchase Agreement”) with Chardan to update the volume weighted average price purchase mechanics of the equity facility to permit Intraday VWAP Purchases (as defined in the A&R Purchase Agreement).

We sent a termination notice pursuant to the A&R Purchase Agreement on March 17, 2025.

The Company has issued 384,313 shares of common stock to Chardan under the agreement, with aggregate net proceeds of $ 3.0 million.

The shares issued during the years ended December 31, 2024 and December 31, 2023 were 244,313 and 100,000 , respectively.

Contingent Earnout Equity

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The first and second tranches are issuable if the closing volume weighted average price (“VWAP”) per share of common stock quoted on the Nasdaq (or the exchange on which the shares of common stock are then listed) is greater or equal to $ 15.00 and $ 20.00 , respectively over any twenty trading days within any thirty-day trading period.

The first and second tranche term is two and three years , respectively, from the closing of the Merger.

If there is a change of control within the three-year following the closing of the Merger that results in a per share price equal to or in excess of the $ 15.00 and $ 20.00 share price milestones not previously met, then Company shall issue the earnout shares to the holders of Legacy Senti common stock and preferred stock.

The estimated fair value of the total Contingent Earnout Shares at the Closing on June 8, 2022, was $ 9.8 million based on a Monte Carlo simulation valuation model.

Of this amount, $ 9.7 million was accounted for as a Contingent Earnout Liability because the triggering events that determine the number of Contingent Earnout Shares required to be issued include events that are not solely indexed to the common stock of the Company.

The remaining balance of $ 0.1 million relates to holders of Legacy Senti common stock that are subject to repurchase were accounted for as stock-based compensation expense and recorded as an expense, as there was no remaining service period.

The Contingent Earnout Liability was remeasured to fair value, resulting in the recording of a non-cash gain of

The first tranche term is two years from the closing of the Merger (the “First Tranche Term”) and the second tranche term is three years from the closing of the Merger (the “Second Tranche Term”) and together with the First Tranche Term, the “Tranche Terms”).

If there is a change of control within the applicable Tranche Term-following the closing of the Merger that results in a per share price equal to or in excess of the $ 15.00 and $ 20.00 share price milestones not previously met, then the Company shall issue the earnout shares to the holders of Legacy Senti common stock and preferred stock.

The $ 15.00 share price milestone for the first tranche was not satisfied during the First Tranche Term and any such rights to receive the first tranche of additional shares of the Company’s common stock have been cancelled and extinguished.

Contingent earnout was accounted at fair value and classified as a liability in the Company’s consolidated financial statements.

The Company recognized a $ 0.2 million gain for the change in fair value of contingent earnout liability for the year ended December 31, 2023.

The Company determined that the fair value of the Contingent Earnout Liability was zero as of December 31, 2024, due to the low probability of the remaining tranche terms being met, as such the Company recognized a nominal gain for the change in fair value of the Contingent Earnout Liability for the year ended December 31, 2024.

Redeemable Convertible Preferred Stock

As of December 31, 2024 and December 31, 2023, the Company’s certificate of incorporation authorized the Company to issue 10,000,000 shares of undesignated preferred stock at a par value of $ 0.0001 per share.

In connection with the close of the Merger, the Company’s Amended and Restated Certificate of Incorporation provides the Company’s Board of Directors with the authority to issue $ 0.0001 par value preferred stock in one or more series and to establish from time to time the number of shares to be included in each such series, by adopting a

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

$ 0.2 million for the year ended December 31, 2023 and non-cash gain of $ 9.5 million for the year ended December 31, 2022, classified within change in fair value of contingent earnout liability in the consolidated statements of operations and comprehensive loss.

Assumptions used in the valuation are described below:

Current stock price $ 0.66 $ 1.41

Expected share price volatility 113.5 % 85.0 %

Risk-free interest rate 4.51 % 4.32 %

Estimated dividend yield 0.0 % 0.0 %

Expected term (years) 1.5 2.4

The Company’s revenue consists of amounts received related to research services provided to customers.

resolution and filing a certification of designations.

Voting powers, designations, powers, preferences and relative, participating, optional, special and other rights shall be stated and expressed in such resolutions.

As of December 31, 2024 and December 31, 2023, the Company had convertible preferred stock as follows (in thousands except shares):

December 31, 2024

Shares Authorized Shares Issued and Outstanding

Net Carrying Value

Aggregate Liquidation Preference

Series A 21,200 21,157 $ 25,106 $ 147,647

Total 21,200 21,157 $ 25,106 $ 147,647

Private Placement

On December 2, 2024, the Company entered into a securities purchase agreement with certain investors in which the Company agreed to sell, in a private placement (the “Offering”), (i) up to 21,157 shares of Series A redeemable convertible preferred stock, par value $ 0.0001 per share, for an aggregate offering price of $ 47.6 million and (ii) accompanying warrants to purchase up to 31,735,500 shares of common stock, par value $ 0.0001 per share.

Each share of Series A redeemable convertible preferred stock will be issued at $ 2,250.00 per share and, subject to Stockholder Approval (defined below), is convertible into 1,000 shares of common stock.

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

The Warrants are exercisable at any time on or after the Stockholder Approval and on or prior to the five year anniversary of the original issuance date.

A holder of a Warrant may not exercise the Warrant if the holder, together with its affiliates, would beneficially own more than 4.99 % (or, at the election of the holder, 9.99 %) of the number of shares of the common stock outstanding immediately after giving effect to such exercise.

A holder of a Warrant may increase or decrease this percentage not in excess of 45.00 % by providing at least 61 days’ prior notice to the Company.

The Company intends to use the net proceeds from the Offering for working capital purposes, general corporate purposes, other research and development activities and to advance its SENTI-202 program.

Subject to the terms and limitations contained in the Certificate of Designation, the Series A redeemable convertible preferred stock issued in the Offering will not become convertible until the Company’s stockholders approve (i) the issuance of all common stock issuable upon conversion of the Series A redeemable convertible preferred stock and (ii) the issuance of the Warrant Shares upon exercise of the Warrants (collectively, the “Stockholder Approval”).

On the first trading day following the announcement of the Stockholder Approval, the Company may, at its option, cause each share of Series A redeemable convertible preferred stock to convert into such number of shares of common stock, at the conversion price of $ 2.25 per share (the “Conversion Price”), subject to the terms and limitations contained in the Certificate of Designation.

Additionally, subject to the terms and limitations in the Certificate of Designation, if the Company has not elected to convert the Series A redeemable convertible preferred stock, then at the option of each individual holder of Series A redeemable convertible preferred stock, each share of the Series A redeemable convertible preferred stock held by such holder, not otherwise converted, shall be convertible into the applicable number of shares of common stock at the Conversion Price.

On December 9, 2024, the Company closed the initial tranche of the Offering, in which the Company issued 16,713 shares of Series A redeemable convertible preferred stock and Warrants to purchase 25,069,500 shares of common stock for $ 35.2 million, net of issuance costs of $ 2.4 million.

Additionally, pursuant to the terms of the securities purchase agreement, a certain investor had the option to purchase up to an additional 4,444 shares of Series A redeemable convertible preferred stock and Warrants to purchase 6,666,000 shares of common stock at a subsequent closing (“Additional Closing Option”).

This Additional Closing Option was determined to be a liability under ASC 480 and was recorded as the Preferred Stock Tranche Liability at fair value of $ 19.0 million upon issuance.

Refer to Note 4.

Fair Value Measurements .

On December 31, 2024, the Company closed the second tranche of the Offering, in which the Company issued 4,444 shares of Series A redeemable convertible preferred stock and Warrants to purchase 6,666,000 shares of

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

common stock for $ 9.9 million, net of issuance costs of $ 0.1 million.

As a result of the exercise of the Additional Closing Option, the Preferred Stock Tranche Liability was remeasured to its fair value of $ 5.6 million immediately prior to the closing of the second tranche and the carrying value of the Preferred Stock Tranche Liability was reclassified to Series A redeemable convertible preferred stock subsequent to the closing.

On March 10, 2025, we converted the outstanding shares of Series A redeemable convertible preferred stock into 21,157,000 shares of common stock, at the conversion price of $ 2.25 per share (the “Conversion Price”), subject to the terms and limitations contained in the Certificate of Designation.

Dividend Rights

Dividends shall accrue at the rate per annum of 18 % (“Accruing Dividends”), compounded annually from June 30, 2025 on any unpaid dividends.

Accruing Dividends shall accrue on a quarterly basis whether or not declared, and such Accruing Dividends shall be payable only when, as, and if declared by the Board of Directors.

Accruing Dividends shall be payable at the option of the Company in cash, additional shares of Series A redeemable convertible preferred stock, or any combination thereof, and shall be paid on June 30 and December 31 of each calendar year with respect to any shares of Series A redeemable convertible preferred stock then outstanding.

The first dividend payment date shall be June 30, 2025, but shall not be payable on any shares of Series A redeemable convertible preferred stock that prior to such date have been converted into common stock.

In the event all the shares of Series A redeemable convertible preferred stock have been converted into common stock on or before June 30, 2025, no Accruing Dividends shall be payable pursuant to this Certificate of Designation.

The Company shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock unless the holders of the Series A redeemable convertible preferred stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A redeemable convertible preferred stock in an amount at least equal to the sum of the amount of the aggregate Accruing Dividends then accrued on such share of Series A redeemable convertible preferred stock and not previously paid.

Voting Rights

The holders of the Series A redeemable convertible preferred stock have no voting rights, however, so long as at least 6,347 shares of the Series A redeemable convertible preferred stock remain outstanding, the Company shall not, either directly or indirectly by amendment, merger, consolidation, domestication, transfer, continuance, recapitalization, reclassification, waiver, statutory conversion, or otherwise, effect certain acts or transactions, as provided in the Certificate of Designation, without the written consent or affirmative vote of at least a majority of the then outstanding shares of Series A redeemable convertible preferred stock, voting together as a single class.

Conversion Rights

Each share of Series A redeemable convertible preferred stock shall be convertible into a number of shares of common stock equal to original per share price, plus all declared and unpaid dividends, divided by the Conversion Price, rounded down to the nearest whole share of common stock (“Conversion Ratio”).

Notwithstanding the foregoing, no share of Series A redeemable convertible preferred stock shall be convertible at any time until on or after the first trading day following the public announcement of Stockholder Approval.

After this approval, the Company may, at its option, cause each share of Series A redeemable convertible preferred stock to convert into such number of shares of common stock equal to the product of the Conversion Ratio and the number of shares of Series A redeemable convertible preferred stock to be converted.

Additionally, at the option of the Holder of the Series A redeemable convertible preferred stock, each share of Series A redeemable convertible preferred stock shall be convertible into such number of shares of Common Stock equal to the product of the Conversion Ratio and the number of shares of Series A redeemable convertible preferred stock to be converted.

Liquidation Rights

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, including a change of control transaction, or deemed liquidation event (any such event, a “Liquidation”) the holders of shares of Series A redeemable convertible preferred stock then outstanding shall be entitled to be paid out of the assets of the

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Company available for distribution to its stockholders, before any payment shall be made to the holders of common stock of the Company, an amount in cash equal to the three times the original per share price.

On August 3, 2024, the Company executed an agreement with CIRM for a total grant award of $ 8.0 million in support of the research project related to the ongoing clinical development of SENTI-202.

The award is payable to the Company upon achievement of milestones that are primarily based on patient enrollment in the Company’s SENTI-202 clinical trial.

Under the terms of the CIRM Grant, the Company has certain obligations of co-funding up to $ 4.8 million and is required to provide CIRM timely progress and financial update reports.

Under the terms of the CIRM Grant, the Company is obligated to pay royalties and licensing fees based on 0.1 % of net commercial revenue of CIRM-funded product candidates or CIRM-funded technology for every $ 1.0 million of CIRM funding received.

This payment continues for either 10 years from the first commercial sale of the drug product or until the total royalties paid equal nine times the original CIRM Grant.

As an alternative to revenue sharing, the Company has the option to convert the CIRM Grant to a loan.

In the event the Company exercises its right to convert the CIRM Grant to a loan, the Company would be obligated to repay the loan within 10 business days of making such election.

Repayment amounts vary dependent upon the phase of clinical development of SENTI-202 at the time of the Company’s election, ranging from 80 % to 100 % plus interest at 10 % plus the 90-day Secured Overnight Financing Rate (“SOFR”).

As of December 31, 2024, the Company has received an aggregate of $ 4.9 million which was recorded as other liabilities, net of current portion in the consolidated balance sheets.

The Company’s revenue earned in the year ended December 31, 2023 consists of amounts received related to research services provided.

The Company earned no revenue in the year ended December 31, 2024.

Contract Revenue

In April 2021, the Company entered into a research collaboration and license agreement with Spark Therapeutics, Inc.

Under the agreement, the Company will be responsible for a research program, which includes designing, building and testing five cell type specific-synthetic promoters for use in developing certain gene therapies using the Company’s proprietary technology.

The Company received an upfront payment from Spark of $ 3.0 million and Spark is obligated to reimburse the Company for costs and expenses incurred for the research program.

Under the agreement, the Company was responsible for a research program, which includes designing, building and testing five cell type specific-synthetic promoters for use in developing certain gene therapies using the Company’s proprietary technology.

The Company received an upfront payment from Spark of $ 3.0 million and Spark was obligated to reimburse the Company for costs and expenses incurred for the research program.

The Company expected to complete the research program over a two-year period.

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As a result, determining the SSP for the optional rights is subject to significant judgment.

Given the subjectivity associated with determining the SSP for the right to a future license related to unproven technology at contract inception, the Company also evaluated whether the contract consideration associated with the research services represents the SSP for those services.

The Company determined the transaction price, inclusive of the upfront payment and reimbursement of costs and expenses incurred for the research program, is commensurate with SSP for the research being conducted given the specialized nature and reliance on proprietary technology.

Based on the Company’s assessment of the optional consideration and the qualitative factors of feasibility and probability of

Given the subjectivity

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

development combined with the quantitative assessment that research services are priced at their SSP, the Company concluded that the license option does not provide Spark with an incremental discount and therefore does not constitute a material right.

associated with determining the SSP for the right to a future license related to unproven technology at contract inception, the Company also evaluated whether the contract consideration associated with the research services represents the SSP for those services.

Based on the Company’s assessment of the optional consideration and the qualitative factors of feasibility and probability of development combined with the quantitative assessment that research services are priced at their SSP, the Company concluded that the license option does not provide Spark with an incremental discount and therefore does not constitute a material right.

The transaction price associated with the research services in this agreement consists of the fixed upfront amount of $ 3.0 million and variable consideration.

For the Spark collaboration agreement, the Company will recognize the transaction price as research and development services are provided, using a cost-based input method to measure the progress toward completion of its performance obligation and to calculate the corresponding amount of revenue to recognize each period.

For Spark collaboration agreement, the Company recognized the transaction price as research and development services were provided, using a cost-based input method to measure the progress toward completion of its performance obligation and to calculate the corresponding amount of revenue to recognize each period.

The Company believes that the cost-based input method is the best measure of progress because other measurements would not reflect how the Company transfers the control related to the performance obligation to our customers.

In December 2022, the Company amended the research collaboration and license agreement to allow for an increase in budget and a two-month extension of the research program.

As there were no changes to performance obligations and the services to be provided are not distinct from those already transferred, the transactions was accounted for as a contract modification and a cumulative catch-up of $( 0.7 ) million was recognized in December 2022.

In May 2023, the Company amended the research collaboration and license agreement with Spark to allow for an increase in budget and additional two-month extension of the research program.

As there were no changes to performance obligations and the services to be provided are not distinct from those already transferred, the transaction was accounted for as a contract modification with no cumulative catch-up necessary.

In December 2022 and May 2023, the Company amended the research collaboration and license agreement with Spark to allow for an increase in budget and an extension of the research program.

As there were no changes to performance obligations and the services to be provided are not distinct from those already transferred, the transactions were accounted for as a contract modifications

In July 2023, the Company completed the research program under the research collaboration and license agreement with Spark and the remaining upfront payment was recognized.

As of December 31, 2023 there was no remaining upfront payment and as of December 31, 2022 there was $ 0.8 million remaining of the upfront payment to be recognized over the remaining period of the research program.

In November 2023, the Company entered into a Collaboration and Option Agreement with Celest Therapeutics (Shanghai) Co.

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Pursuant to the Agreement, with the exercise of the option and entering into a license agreement, the Company may become eligible to receive certain option exercise fee and milestone payments, in an aggregate amount of $ 156.0 million, as well as certain tiered royalty payments.

For the years ended December 31, 2023 and 2022, the Company recorded revenue, which was previously included in the deferred revenue at the beginning of each period, of $ 0.8 million and $ 1.0 million, respectively.

For the year ended December 31, 2023, the Company recorded revenue, which was previously included in the deferred revenue at the beginning of each period, of $ 0.8 million.

No revenue was recorded for the year ended December 31, 2024.

In 2021, the Small Business Innovation Research (“SBIR”) awarded the Company a grant in the amount of $ 2.0 million over two years subject to meeting certain terms and conditions.

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In August 2023, the Company completed the research and development project which was the subject of the SBIR grant.

For the year ended December 31, 2023, the Company recorded $ 0.6 million grant income.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Entity-wide information

During both years ended December 31, 2023 and 2022, Customers A and B accounted for 77 % and 23 %, respectively, of revenue.

For the year ended December 31, 2023, Customers A and B accounted for 77 % and 23 %, of revenue respectively.

All revenues were generated in the United States.

No revenue was recorded for the year ended December 31, 2024.

Segment Reporting

The Company views operations and manages the business as one operating and reportable segment, which is the research and development of the Company’s gene circuit platform.

The Company’s Chief Operating Decision Maker (the “CODM”), its Chief Executive Officer, manages and allocates resources on a consolidated basis.

This decision making process reflects the way in which financial information is regularly reviewed and used by the CODM to review budgets and trial related data, decides how to allocate resources and evaluate performance.

The CODM assesses financial performance based on consolidated net loss.

The CODM utilizes consolidated net loss by comparing actual results against budgeted amount on a quarterly basis.

As part of this process, consolidated net loss is used as a measure of profit or loss in allocating resources and assessing segment performance.

The CODM reviews cash and cash equivalents as a measure of segment assets.

As of December 31, 2024 and 2023, the Company’s cash and cash equivalents were $ 48.3 million and $ 35.9 million, respectively.

A summary of the segment loss, including significant expenses, is as noted in the table below (in thousands).

Contract revenue $ — $ 1,978

Grant income — 583

Total revenue $ — $ 2,561

Operating expenses

Research and development:

External services and supplies $ 20,795 $ 13,247

Personnel related expenses 7,694 10,508

Facilities and other 4,889 7,303

General and administrative:

Personnel related expenses 8,379 23,117

External services and supplies 7,624 6,930

Facilities and other 7,507 4,821

Depreciation and amortization 3,838 3,400

Impairment of long-lived assets 313 25,962

Total operating expenses 61,039 95,288

Loss from operations ( 61,039 ) ( 92,727 )

Interest income 948 2,864

Sublease income 6,449 2,323

Other income, net 852 4,134

Segment net loss from continuing operations $ ( 52,790 ) $ ( 83,406 )

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

All revenues were generated in the United States for the years ended December 31, 2023 and 2022.

Net income from discontinued operations $ — $ 12,348

Consolidated net loss $ ( 52,790 ) $ ( 71,058 )

Stock-Based Compensation

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As of December 31, 2024, the total number of shares of common stock available for issuance under the 2022 Plan is 146,809 .

2022 Inducement Equity Plan

On August 5, 2022, the Company adopted a 2022 Inducement Equity Plan (the “2022 Inducement Plan”).

The 2022 Plan provides for the grant of non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to persons not previously an employee of the Company and its affiliates.

2022 Inducement Plan

On August 5, 2022, the Company adopted a 2022 Inducement Plan (the “2022 Inducement Plan”).

The 2022 Plan provides for the grant of non-statutory stock options, stock appreciation rights, restricted stock awards,

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

restricted stock unit awards, performance awards and other forms of awards to persons not previously an employee of the Company and its affiliates.

The exercise price of an options granted under the 2022 Inducement Plan shall not be less than the fair market value of a common stock share on the date of grant.

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The Company initially reserved 200,000 shares of common stock for issuance under the 2022 Inducement Plan.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

As of December 31, 2024, the total number of shares of common stock available for issuance under the 2022 Inducement Plan is 124,098 .

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Granted 620,943 $ 3.70

Exercised ( 92 ) $ 4.57

Forfeited ( 301,944 ) $ 25.42

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The weighted-average grant date fair value of options granted during the years ended December 31, 2024 and 2023 were $ 5.79 and $ 11.40 , respectively.

The aggregate intrinsic value of options exercised during the years ended December 31, 2023 and 2022 were $ 0.0 million and $ 0.3 million, respectively.

The aggregate intrinsic value of options exercised during the years ended December 31, 2024 and 2023 were $ 1.2 million and zero , respectively.

As of December 31, 2024 and 2023, the unrecognized stock-based compensation expense related to stock options was approximately $ 2.7 million and $ 5.2 million respectively, expected to be recognized over a weighted-average period of 2.8 years and 2.16 years respectively.

Early Exercise of Stock Options into Restricted Stock

For the years ended December 31, 2023 and 2022, the Company issued zero shares of common stock upon exercise of unvested stock options.

As of December 31, 2023 and December 31, 2022, 54,860 and 105,500 shares were held by employees subject to repurchase at an aggregate price of $ 0.1 million and $ 0.3 million, respectively.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Early Exercise of Stock Options into Restricted Stock

For the years ended December 31, 2024 and 2023, the Company issued zero shares of common stock upon exercise of unvested stock options.

As of December 31, 2024 and December 31, 2023, 422 and 5,486 shares were held by employees subject to repurchase at a nominal aggregate price and an aggregate price of $ 0.1 million, respectively.

Performance Awards

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503,114 $ 99.20 7.5 $ —

Granted — $ —

Forfeited ( 144,171 ) $ 99.20

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229,051 $ 99.20 6.8 $ —

There were no performance based options granted or exercised during the year ended December 31, 2023, and there were 6,796,074 performance based options granted and no performance based options exercised during the year ended December 31, 2022.

As of December 31, 2024, the unrecognized stock-based compensation expense related to performance awards was approximately $ 0.7 million, expected to be recognized over a weighted-average period of 0.94 years.

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Through December 31, 2024 , these market awards did not meet the vesting thresholds.

The were no market based options granted or exercised during the year ended December 31, 2023, and there were 315,748 market based options granted and no market based options exercised during the year ended December 31, 2022.

As of December 31, 2023, the unrecognized stock-based compensation expense related to market awards was approximately $ 0.2 million, expected to be recognized over a weighted-average period of 0.63 years.

The were no market based options granted or exercised during the years ended December 31, 2024 and 2023.

As of December 31, 2024, the Company had recognized all stock-based compensation expense related to the market awards.

SENTI BIOSCIENCES, INC.

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22,509 $ 25.00

Granted 82,051 $ 1.80

Vested ( 9,666 ) $ 19.01

Forfeited ( 38,471 ) $ 7.52

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During year ended December 31, 2023, the Company recorded a one-time, noncash incremental compensation expense net of the required reversal of previously recognized compensation attributed to non-vested awards in the amount of $ 2.0 million related to the equity awards modifications of the employees that were extended offers of employment by GeneFab which was included in net income from discontinued operations in the consolidated statements of operations and comprehensive loss.

Total stock-based compensation expense from discontinued operations was $( 2.0 ) million and $ 0.8 million for the years ended December 31, 2023 and 2022, respectively.

The Company did not record any income tax expense or benefit during the years ended December 31, 2023 and 2022.

The Company has a net operating loss and has provided a valuation allowance against net deferred tax assets due to uncertainties regarding the Company’s ability to realize these assets.

Total stock-based compensation expense from discontinued operations was $( 2.0 ) million for the year ended December 31, 2023.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

The Company did not record any income tax expense or benefit during the years ended December 31, 2024 and 2023.

The Company has a net operating loss and has provided a valuation allowance against net deferred tax assets due to uncertainties regarding the Company’s ability to realize these assets.

For the calendar years ended December 31, 2024 and 2023, the tax effects of significant items comprising the Company's deferred taxes are as follows (in thousands):

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For the years ended December 31, 2024 and 2023, the Company did not record an income tax provision.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Net operating losses and tax credit carryforwards as of December 31, 2024 are as follows (in thousands):

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The Company has not performed an analysis to determine the limitation of our net operating loss carryforwards.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

The effective tax rate of the Company's provision (benefit) for income taxes differs from the federal statutory rate as follows:

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Tax credits 1.43 % 3.37 %

Fair value of series B preferred stock tranche obligation — % — %

Fair value of contingent earnout liability 2.53 % 1.04 %

Fair value of preferred stock tranche liability

Stock Based Compensation

( 3.49 )% — %

Valuation allowance ( 38.75 )% ( 27.84 )%

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A reconciliation of the Company’s unrecognized tax benefits for the years ended December 31, 2024 and 2023 is as follows (in thousands):

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Years Ended December 31,

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Balance at end of the year $ 2,376 $ 2,076

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Net Loss Per Share

A reconciliation of net loss available to common stockholders and the number of shares in the calculation of basic and diluted loss per share is as follows (in thousands, except share and per share amounts):

A reconciliation of net loss available to common stockholders and the number of shares in the calculation of basic and diluted net loss per share is as follows (in thousands, except share and per share amounts):

Years Ended December 31,

Net loss from continuing operations $ ( 52,790 ) $ ( 83,406 )

Net income (loss) from discontinued operations 12,348 ( 8,545 )

Net income from discontinued operations — 12,348

Accretion for Series A redeemable convertible preferred stock $ ( 2,522 ) $ —

Net loss $ ( 55,312 ) $ ( 71,058 )

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Net loss per share attributable to common stockholders, basic and diluted $ ( 12.03 ) $ ( 16.01 )

As the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods presented.

The following potential common stock securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive (on an as-converted basis):

Years Ended December 31,

Series A redeemable convertible preferred stock 21,157,000 —

Stock options to purchase common stock 1,333,030 1,158,294

1 unchanged sentence

Restricted stock units outstanding 56,423 22,528

Performance stock units outstanding 106,806 —

Contingent earnout common stock 100,000 200,000

GeneFab Option 19,633,444 0

Warrants to purchase common stock issued in connection with Series A redeemable convertible preferred stock 31,735,500 —

GeneFab Option (Note 3) 1,963,344 1,963,344

Total 56,452,525 3,349,652

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The plan permit employees to contribute, on a pre-tax basis, a portion of their salary up to the Federally mandated limits.

The Company matches an employee’s contribution up to 4 % of the employee’s compensation.

The Company matches an employee’s contribution up to 4 % of

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

the employee’s compensation.

Contributions to the plans by the Company totaled $ 0.3 million and $ 0.7 million, respectively, for the years ended December 31, 2024 and 2023.

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On June 3, 2021, the Company entered into a lease agreement for a new cGMP facility in Alameda, California to support planned initial clinical trials for our product candidates.

The lease will expire in 2032.

Refer to Note 6.

Operating Leases , for further details of the leases.

The lease will expire in 2032 with future undiscounted operating lease payments of $ 46.0 million over an initial lease period of eleven years .

In 2021, the Company entered into a three-year collaboration and option agreement with BlueRock Therapeutics LP (“BlueRock”) under which the Company granted BlueRock an option to acquire an exclusive or non-exclusive license to develop, manufacture and commercialize cell therapy products.

Refer to Note 16.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Parties , for further details of the related parties.

Related Parties , for further details of the related parties.

In consideration for the option, the Company is responsible for up to $ 10.0 million in costs and expenses incurred over the three-year term.

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As of December 31, 2024, the Company is unable to estimate the timing or likelihood of achieving these milestones or generating future product sales.

In connection with the Merger, former holders of Legacy Senti common stock and preferred stock may receive up to 2,000,000 additional shares of the Company’s common stock in the aggregate, in two equal tranches of 1,000,000 shares of common stock per tranche.

In connection with the Merger, former holders of Legacy Senti common stock and preferred stock may receive up to 100,000 additional shares of the Company’s common stock in one remaining tranche.

Refer to Note 7.

Stockholders’ Equity (Deficit), for further details of the contingent earnout liability.

Stockholders’ Equity, for further details of the contingent earnout liability.

As part of the amendment to the Framework Agreement with Valere Bio and GeneFab, we agreed to make an additional advance payment of $ 10.0 million.

As of December 31, 2024, the Company had made $ 6.0 million of the $ 10.0 million payment, with the remaining $ 4.0 million paid in January 2025.

This amount is recorded in GeneFab prepaid expenses - related party.

Legal Proceedings

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The Company currently has directors’ and officers’ insurance.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

Related Parties

New Enterprise Associates, Inc.

(“NEA”) held 9.2 % shares of common stock as of December 31, 2024 and 2023.

NEA held one of the six seats and one of the seven seats on the Company’s board of directors as of December 31, 2023 and 2022, respectively.

NEA held one of the six seats on the Company’s Board of Directors as of December 31, 2024 and 2023.

As part of the private placement in December 2024, NEA is also entitled to designate one additional director to the Company’s Board of Directors.

Bayer Healthcare LLC

On May 19, 2022, Legacy Senti issued to Bayer a $ 5.2 million unsecured convertible promissory note.

On June 8, 2022, the May 2022 Note was automatically cancelled and exchanged for 517,500 shares of Class A Common Stock at a price of $ 10.00 per share.

Refer to Note 8.

Convertible Note , for further details of the convertible note.

On May 21, 2021, the Company entered into a collaboration and option agreement (“BlueRock Agreement”) with BlueRock, a wholly-owned subsidiary of Bayer, pursuant to which the Company granted to BlueRock an option (“BlueRock Option”), on a collaboration program-by-collaboration program basis, to obtain an exclusive or non-exclusive license to develop, manufacture and commercialize cell therapy products that contain cells of specified types and which incorporate an option gene circuit from such collaboration program or a closely related derivative gene circuit.

The Company is responsible for up to $ 10 million in costs and expenses incurred in

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

connection with the research plan and related activities to be conducted over a term of three years as specified in the collaboration and option agreement.

If the Company and BlueRock agree to add new research activities to the research plan, then BlueRock will be obligated to reimburse the Company for the costs and expenses incurred that, together with costs and expenses incurred under the initial research plan, exceed $ 10 million.

The Company concluded that the Agreement is not within the scope of ASC 808, Collaborative Arrangements , because the Company did not receive any consideration and therefore, is not exposed to both significant risks and rewards for the arrangement.

The Company was responsible for up to $ 10 million in costs and expenses incurred in connection with the research plan and related activities to be conducted over a three-year research term as specified in the collaboration and option agreement.

The Company completed the initial research plan and related activities in May 2024.

If the Company and BlueRock agree to add new research activities to the research plan, then BlueRock will be obligated to reimburse the Company for the costs and expenses incurred.

The Company concluded that the BlueRock Agreement is not within the scope of ASC 808, Collaborative Arrangements , because the Company did not receive any consideration and therefore, is not exposed to both significant risks and rewards for the arrangement.

The Company also determined that the agreement is also not currently within the scope of ASC 606 because the BlueRock Agreement does not currently meet the criteria of a contract with a customer, and will not be within the scope of ASC 606 until any consideration is paid.

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Under the BlueRock Agreement, the specific financial terms for milestone payments and royalties will be negotiated and agreed to only after the option is exercised.

As of December 31, 2024, Bayer has not exercised its option for a license.

Bayer held 12.2 % shares of the Company’s common stock as of December 31, 2024 and 2023.

Accordingly, Bayer is considered a related party.

In January 2023, the Company acquired lab automation equipment purchased from Seer, Inc.

(“Seer”) (NASDAQ:

Omid Farokhzad, a member of the Company’s board of directors is the Chief Executive Officer for Seer.

The consideration of $ 0.2 million, plus interest, will be paid over a two-year period, and title will transfer to the Company upon final payment.

The transaction was classified as a finance lease in accordance with ASC 842.

GeneFab, LLC.

As a result of the transaction with GeneFab (refer to Note 3.

GeneFab Transaction ), the Company received the GeneFab Note Receivable and the GeneFab Economic Share and provided GeneFab with the GeneFab Option.

GeneFab Transaction ), whereby Philip Lee, Ph.D., the former Co-Founder and Chief Technology Officer of the Company, assumed the role of Chief Executive Officer of GeneFab, GeneFab is a related party.

In connection with the disposal of the business, the Company received the GeneFab Note Receivable and the GeneFab Economic Share and provided GeneFab with the GeneFab Option.

Refer to Note 4.

Fair Value Measurements.

The Company also subleased its manufacturing facility in Alameda to GeneFab and recorded sublease income of $ 2.3 million including variable costs charged for the year ended December 31, 2023.

As of December 31, 2023, the Company had $ 1.5 million of charges related to the Transition Services Agreement, sublease rent and other charges due from GeneFab which are included in GeneFab receivable on the consolidated balance sheet.

In connection with the services agreement entered into with GeneFab, the Company is entitled to $ 18.9 million for future services under the agreement, of which $ 14.8 million remained in GeneFab prepaid expenses as of December 31, 2023.

Additionally, amounts due from GeneFab related to costs incurred by the Company on its behalf were $ 1.4 million as of December 31, 2023 and were recorded in GeneFab receivable on the consolidated balance sheet.

The Company incurred $ 3.1 million of research and development expenses under the services agreement during the year ended December 31, 2023.

Based on the intricacies of the GeneFab Transaction noted above and in Note 4.

GeneFab Transaction , we have determined that GeneFab is a related party.

On June 12, 2024, the Company entered into a sublease agreement with GeneFab for a portion of the Company’s corporate headquarters in South San Francisco.

The Company has also subleased its manufacturing facility in Alameda to GeneFab and recorded total sublease income of $ 6.4 million including variable costs charged for the year ended December 31, 2024.

In connection with the agreement entered into with GeneFab on August 7, 2023, the Company was entitled to $ 18.9 million for future services under the agreement.

On December 10, 2024, in connection with the private placement described in further detail in Note 7.

Stockholders’ Equity , the Company entered into an amendment of the GeneFab Framework Agreement.

As part of this agreement, the Company agreed to make an additional advance payment of $ 10.0 million.

As of December 31, 2024, the Company had made $ 6.0 million of the $ 10.0 million payment.

This amount, along with the remaining amount from the original prepaid, is recorded in GeneFab prepaid expenses - related party.

Additionally, amounts due from GeneFab related to costs incurred by the Company on its behalf were $ 0.7 million as of December 31, 2024 and were recorded in GeneFab receivable - related party on the

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

consolidated balance sheet.

The Company incurred $ 14.1 million and $ 4.1 million of research and development expenses under the services agreement during the years ended December 31, 2024 and 2023, respectively.

Celadon Partners, LLC

As part of the private placement in December 2024, Donald Tang, a founder and manager of Celadon, the parent company of Valere Bio, of which GeneFab is a wholly-owned subsidiary, was appointed to the Company’s Board of Directors.

Celadon was also assigned the GeneFab Option in 2024.

As of December 31, 2024, Celadon held one of the six seats on the Company’s Board of Directors.

Additionally, in connection with the private placement, Celadon is entitled to designate two additional directors to the Company’s Board of Directors.

As announced in March 2025 and described in more detail in Note 17.

Subsequent Events , Feng Hsiung was appointed to the Board of Directors as one of these two additional directors.

Subsequent Events

Reduction in Force

On January 5, 2024, the Company announced a reduction of approximately 37 % of its workforce in connection with the Company’s plans to streamline its business operations to enable increased focus on SENTI-202 and to

Transition of Interim Chief Financial Officer

On January 31, 2025, Yvonne Li, the Consulting Agreement by and between Senti Biosciences, Inc.

(the “Company”) and Yvonne Li, the Company’s Interim Chief Financial Officer, expired in accordance with its terms.

As such, effective January 31, 2025, Ms.

Li will no longer serve as the Company’s principal financial officer and principal accounting officer.

On February 5, 2025, the Company and Ms.

Li entered into a new consulting agreement (the “New Consulting Agreement”) pursuant to which Ms.

Li will serve as a consultant to the Company and will cooperate with the Company’s executive management team and other functional teams on an orderly transition of her responsibilities until March 31, 2025.

Appointment of Principal Financial Officer and Principal Accounting Officer

Following approval by our Board of Directors, Timothy Lu, M.D., Ph.D., our Chief Executive Officer, was appointed to serve as our interim principal financial officer and principal accounting officer, effective as of January 31, 2025, until immediately following the Company’s filing of this Annual Report on Form 10-K for the fiscal year ended December 31, 2024, when Mr.

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

Appointment of Chief Financial Officer

On February 23, 2025, following the approval by our Board of Directors, Jay Cross was appointed as our Chief Financial Officer, effective as of March 3, 2025.

The Board also appointed Mr.

Cross to serve as our principal financial officer and principal accounting officer, effective immediately following the filing of this Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Conversion of Series A Redeemable Convertible Preferred Stock

On March 6, 2025, at our special meeting of stockholders (the “Special Meeting”), our stockholders approved the issuance of common stock in accordance with Nasdaq Listing Rule 5635 upon (i) conversion of Series A redeemable convertible preferred stock and (ii) the exercise of warrants to purchase shares of common stock.

Subsequently, on March 10, 2025, we sent notices to our stockholders relating to the conversion of 21,157 shares of Series A redeemable convertible preferred stock into 21,157,000 shares of common stock, effective as of March 10, 2025.

Amended and Restated 2022 Equity Incentive Plan

On March 6, 2025, at the Special Meeting, our stockholders approved the A&R Plan, which (i) increased the number of shares of common stock available for issuance under the Company’s 2022 Equity Incentive Plan by an additional 4,300,000 shares, (ii) increased the number of shares that may be issued pursuant to incentive stock options to an aggregate number of shares reserved for issuance under the A&R Plan as of the date that stockholders approved the A&R Plan and (iii) extended the term of the plan to the tenth anniversary of the date that stockholders approved the A&R Plan.

The A&R Plan was previously approved, subject to stockholder approval, by the Board.

SENTI BIOSCIENCES, INC.

Notes to Consolidated Financial Statements

continue with the clinical development of its SENTI-301A program through a partnership in China.

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

NASDAQ Bid Price Compliance Notice

On January 23, 2024, the Company received written notice from the Listing Qualifications Department granting the Company its request to transfer the listing of its common stock from The Nasdaq Global Market tier to The Nasdaq Capital Market tier, effective January 25, 2024.

On February 6, 2024, the Listing Qualifications Department granted the Company’s request for a second 180-calendar day period, or until August 5, 2024, to regain compliance with the $1.00 bid price requirement.

Board Composition

On March 7, 2025, our Board of Directors approved the appointment of Feng Hsiung, pursuant to the terms of a letter agreement dated as of December 2, 2024, by and between us and Celadon Partners.

In connection with Mr.

Hsiung’s appointment, our Board of Directors approved an increase in the authorized number of members of our Board of Directors from six ( 6 ) to seven ( 7 ) members.

Hsiung was appointed to fill the vacancy created by the foregoing increase in the size of the Board, as a Class III director, to serve in such capacity until the annual meeting of stockholders in 2028 (if elected by stockholders at the annual meeting of stockholders in 2025) or until his earlier resignation, death or removal.

Audit Committee Appointment

Effective March 7, 2025, Brenda Cooperstone, who was previously appointed as a member of the Audit Committee of our Board of Directors (the “Audit Committee”), tendered her resignation as a member of the Audit Committee.

Cooperstone continues to serve as a member of the Board and the Compensation Committee of the Board.

On March 7, 2025, upon the recommendation of its Nominating and Corporate Governance Committee, our Board of Directors unanimously appointed Feng Hsiung to serve as a member of the Audit Committee in addition to serving as a member of the Board, effectively immediately.

In addition to the annual stock option grant and the annual cash retainers for serving as a member of the Board, Mr.

Hsiung will be eligible to receive $ 7,500 annually for serving as a member of the Audit Committee.

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

ChEF Termination

On March 17, 2025, the Company provided notice to Chardan that it was terminating the A&R Purchase Agreement.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data