What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-06 compared with 2024-11-14 · 177 added, 309 removed, 136 unchanged (78% of the section changed)

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A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements.

For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Annual Report and Part II, Item 1A of this Quarterly Report on Form 10-Q filed with the U.S.

Securities and Exchange Commission (the “SEC”).

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Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

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.

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

To accomplish this mission, Senti has built a synthetic biology platform that it believes may enable it to program next-generation cell and gene therapies with gene circuits.

These gene circuits, which Senti created from novel and proprietary combinations of DNA sequences, are designed to reprogram cells with biological logic to sense inputs, compute decisions and respond to their respective cellular environments.

Using gene circuits, Senti’s product candidates are designed to precisely kill cancer cells, spare healthy cells, increase specificity to target cells and control the expression of drugs even after administration.

Senti is applying its gene circuit technologies to develop a pipeline of medicines that use off-the-shelf chimeric antigen receptor natural killer (“CAR-NK”) cells with the goal of addressing major challenges and providing potentially lifesaving treatments for people living with cancer.

Senti’s lead product candidates utilize off-the-shelf healthy adult donor derived NK cells to create CAR-NK cells outfitted with its gene circuit technologies in several oncology indications with high unmet need.

We have incurred net losses of $28.9 million and $14.9 million for the three months ended September 30, 2024 and 2023, respectively, and net losses to $52.2 million and $52.3 million for the nine months ended September 30, 2024 and 2023.

As of September 30, 2024 and December 31, 2023, we had cash and cash equivalents of $10.5

million and $35.9 million, respectively, and an accumulated deficit of $296.5 million and $244.3 million, respectively.

Net cash flows used in operating activities were $27.9 million and $45.4 million during the nine months ended September 30, 2024 and 2023, respectively.

We are a clinical-stage biotechnology company developing next-generation cell and gene therapies engineered with our gene circuit platform technologies for patients living with incurable diseases.

Our mission is to create a new generation of smarter medicines that outsmart complex diseases using novel and unprecedented approaches.

To accomplish this mission, we have built a synthetic biology platform that we believe may enable us to program next-generation cell and gene therapies with gene circuits.

These gene circuits, which we created from novel and proprietary combinations of DNA sequences, are designed to reprogram cells with biological logic to sense inputs, compute decisions and respond to their respective cellular environments.

Using gene circuits, our product candidates are designed to precisely kill cancer cells, spare healthy cells, increase specificity to target cells and control the expression of drugs even after administration.

We are applying our gene circuit technologies to develop a pipeline of medicines that use chimeric antigen receptor (“CAR”) white blood cells with the goal of addressing major challenges and providing potentially lifesaving treatments for people living with cancer.

Our lead product candidates utilize off-the-shelf healthy adult donor derived natural killer (“NK”) cells to create CAR-NK cells outfitted with gene circuit technologies in several oncology indications with high unmet need.

In 2024, we initiated a clinical trial of SENTI-202 for blood cancers and

our partner, Celest Therapeutics, (Shanghai) Co.

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

We have incurred net losses of $14.1 million and $12.1 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025 and December 31, 2024, we had cash and cash equivalents of $33.8 million and $48.3 million, respectively, and an accumulated deficit of $311.2 million and $297.1 million, respectively.

Net cash flows used in operating activities were $14.1 million and $11.7 million during the three months ended March 31, 2025 and 2024, respectively.

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

We expect to continue to incur significant losses for the foreseeable future.

We anticipate that our expenses and operating losses will increase substantially over the foreseeable future to the extent we are able to secure additional financing.

We anticipate that our expenses and operating losses will increase substantially over the foreseeable future.

The expected increase in expenses will be driven in large part by our ongoing activities, if and as we:

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

• continue to expand our pipeline by exploring new partnerships and collaborations that align with our strategic goals;

• fund clinical development of our current product candidates;

• commence clinical studies of our current and future product candidates;

• commence clinical studies of our future product candidates;

• fund manufacturing of our current and future product candidates;

• seek regulatory approval of our current and future product candidates;

• expand our operational, financial, and management systems and increase personnel, including personnel to support our preclinical and clinical development, and commercialization efforts;

• expand our operational, financial, and management systems and increase personnel, including personnel to support our preclinical and clinical development, manufacturing and commercialization efforts;

• continue to develop, grow, maintain, enforce and defend our intellectual property portfolio;

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Recent Developments

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

We sold, assigned and transferred rights, title and interest in certain of our assets and contractual rights, including all of our equipment at our facilities in Alameda and certain of our intellectual property related to the schematics for and design of the Alameda facility.

We subleased our recently constructed 92,000 square foot current good manufacturing practice facility in Alameda, California to GeneFab which will support the clinical manufacturing of our CAR-NK programs, including SENTI-202.

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

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 owed by us for manufacturing and research activities to GeneFab.

The remaining $18.9 million consideration is subject to satisfaction of certain conditions.

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.

We also agreed to grant a license to GeneFab under certain of our intellectual property rights to conduct manufacturing services and to research, develop, manufacture and commercialize products outside of oncology.

As of September 30, 2024, we assessed that there is a probability that a suitable license agreement would not be signed.

Refer to Note 3.

GeneFab Transaction , in the footnotes to the condensed consolidated financial statements included in this Form 10-Q elsewhere for further details of the GeneFab transaction.

GeneFab was provided an option to purchase up to 1,963,344 shares (i.e., up to $20.0 million worth) of our common stock at a per share exercise price of $10.18670 (the “GeneFab Option”).

The GeneFab Option is exercisable for a period of 36 months following the execution of the license agreement.

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

As additional consideration for the transaction, we entered into a seller economic share agreement with GeneFab, pursuant to which we 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.

As the assets and contractual rights transferred to GeneFab were determined to constitute a business as defined in ASC 805, Business Combinations , we accounted for the disposal by applying the derecognition guidance in ASC 810, Consolidations , which requires that a gain or loss be recognized for the difference between the carrying value of the assets sold and the fair value of the consideration received (or receivable).

In connection with the sale, we recognized a gain on disposal in the amount of $21.9 million in net income from discontinued operations during the year ended December 31, 2023, representing the excess of the fair value of the consideration received and receivable (net of the portion allocated to the GeneFab Option) over the carrying value of the assets sold of $5.5 million.

The gain on disposal was primarily related to the grant of the non-oncology license to GeneFab which had no carrying value.

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

We have chosen not to segregate the cash flows of the disposed business in the condensed consolidated statements of cash flows.

Supplemental disclosures related to discontinued operations for the statements of cash flows have been provided in Note 3.

GeneFab Transaction to our condensed consolidated financial statements.

Unless otherwise specified, the results of operations refer to continuing operations only.

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

Subject to the terms and conditions of the Agreement, the Company and Celest will enter into a collaboration under which Celest will lead a pilot trial of a product candidate for our SENTI-301A program in mainland China, with certain technical support from the Company.

In addition, we agreed to grant an exclusive option to enter into a license agreement with Celest to research, develop, manufacture and commercialize SENTI-301A in mainland China, Hong Kong, Macau, and Taiwan.

Outside of these jurisdictions, the Company would retain its rights in the SENTI-301A program.

Pursuant to the Agreement, and beginning 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.

In January 2024, we announced a strategic plan to streamline business operations and focus our resource allocation to investment on clinical development of SENTI-202, for which an Investigational New Drug (“IND”) application was cleared by the U.S.

Food and Drug Administration (“FDA”) in December 2023, and on the partnership of our SENTI-301A program in China with Celest.

On July 17, 2024, we 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 our issued and outstanding common stock.

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

(Eastern Time) on July 17, 2024, and our 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, we 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, we regained compliance with the Bid Price Rule, and that the matter is now closed.

Refer to Note 1 .

Organization and Description of Business, in the footnotes to condensed consolidated financial statements included in this Form 10-Q elsewhere for further details.

On August 3, 2024, we executed an agreement with 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.

The award is payable to us upon achievement of milestones that are primarily based on patient enrollment in our related clinical trial.

Refer to Note 8.

CIRM Grant, in the footnotes to condensed consolidated financial statements included in this Form 10-Q elsewhere for further details of the CIRM agreement.

On September 23, 2024, we 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, the date when the subtenants gained access to the premises, and will expire on April 30, 2027.

Total sublease income to be earned from this operating lease, in aggregate, will be approximately $1.0 million over the term of the sublease agreement.

Refer to Note 6.

Operating Leases , in the footnotes to condensed consolidated financial statements included in this Form 10-Q elsewhere for further details of the sublease.

On October 21, 2024, we notified the Nasdaq Stock Market (“Nasdaq”) that we are not in compliance with the audit committee requirement under Nasdaq Listing Rule 5605(c)(2)(A) due having only two members on our audit committee solely due to a vacancy resulting from Susan Berland’s resignation from the Board effective June 11, 2024.

On October 22, 2024, we received a notice (the “Notice”) from Nasdaq indicating that we are no longer compliant with the audit committee requirements as set forth in Nasdaq Listing Rule 5605, we have until December 9, 2024 to regain compliance as provided in Nasdaq Listing Rule 5605(c)(4) which defines the cure period.

We are evaluating the membership of the audit committee and intends to regain compliance with the Nasdaq Listing Rule 5605 prior to the expiration of the applicable cure period.

The Notice has no immediate effect on the listing or trading of our common stock on the Nasdaq Capital Market.

On November 1, 2024, we received a $2.5 million payment from CIRM in relation to a milestone achieved in August 2024.

Refer to Note 8.

CIRM Grant, for additional details regarding the CIRM grant and related milestone payments.

Transition of Interim Chief Financial Officer

On January 31, 2025, Yvonne Li, the Consulting Agreement by and between 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 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 the Annual Report, when Mr.

Cross assumed 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 the Annual Report.

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 (“2022 EIP”)

On March 6, 2025, at the Special Meeting, our stockholders approved the Amended and Restated 2022 EIP, which (i) increased the number of shares of common stock available for issuance under the Company’s 2022 EIP 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 2022 EIP as of the date that stockholders approved the 2022 EIP and (iii) extended the term of the plan to the tenth anniversary of the date that stockholders approved the 2022 EIP.

The 2022 EIP was previously approved, subject to stockholder approval, by the Board.

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.

2025 ATM Agreement

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

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

Leerink Partners will use commercially reasonable efforts, consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of The Nasdaq Global Market, to sell shares from time to time based upon the our instructions, including any price, time or size limits specified by us.

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

For the three months ended March 31, 2025, no shares had been issued under the 2025 ATM Agreement.

Clinical Trial Data Update

On April 28, 2025, we announced certain corporate updates including preliminary data from a Phase 1 clinical trial of SENTI-202, a potential first-in-class off-the-shelf Logic Gated selective CD33 OR FLT3 NOT EMCN chimeric antigen receptor natural killer investigational cell therapy, for the treatment of relapsed/refractory hematologic malignancies including acute myeloid leukemia.

SN301A Update

We have collaborated with Celest Therapeutics (Shanghai) Co.

(Celest) to evaluate SN301A in a single center Investigator Sponsored Trial in China.

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

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

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

Components of Results of Operations

Total Revenue

Contract Revenue

We currently have no therapeutic products approved for sale, and we have never generated any revenue from the sale of any therapeutic products.

Total revenue consists of contract revenue related to research services provided to customers and grant income which is research funding received from grants.

Our ability to generate product revenues will depend on our partners’ ability to replicate our results and the successful development and eventual commercialization of our product candidates, which we do not expect for the foreseeable future, if ever.

We may also look to generate revenue from collaboration and license agreements in the future.

Operating Expenses

Our operating expenses consist of research and development expenses, general and administrative expenses, and impairment of long-lived assets.

Our operating expenses consist of research and development expenses, and general and administrative expenses.

Research and Development Expenses

Research and development costs consist primarily of costs incurred for the discovery and preclinical development of our product candidates, which include:

Research and development costs consist primarily of costs incurred for the discovery, preclinical and clinical development of our product candidates, which include:

• employee-related expenses, including salaries, related benefits, and stock-based compensation expenses for employees engaged in research and development functions;

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• the cost of consultants engaged in research and development, regulatory, and clinical related services

• the cost to develop our manufacturing process and manufacturing product candidates for use in our research, preclinical studies and clinical trials, including under agreements with third parties, such as consultants, contractors and contract manufacturing organizations (“CMOs”);

• facilities, depreciation and other expenses, which include allocated expenses for rent and maintenance of facilities, insurance and supplies;

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We have not historically tracked research and development expenses by program, with the exception of third-party research projects.

Our internal resources, employees and infrastructure are not directly tied to any one research or product candidate discovery project and are typically deployed across multiple projects.

Our internal resources, employees and infrastructure are not directly tied to any one research project or product candidate and are typically deployed across multiple projects.

As such, we do not maintain information regarding these costs incurred for these early-stage research and product candidate discovery programs on a project-specific basis.

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

Our research and development expenses related to the assets sold to GeneFab are included in discontinued operations.

Research and development expenses consisted of the following (in thousands):

Research and development expenses consisted of the following:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(unaudited) (unaudited) (unaudited) (unaudited)

Personnel-related expenses, including share-based compensation $ 1,685 $ 2,733 $ 6,306 $ 7,593

(in thousands) (unaudited) (unaudited)

External services and supplies $ 6,197 $ 4,776

Office and facilities 1,453 1,702 4,065 6,108

Other 233 273 694 810

Personnel-related expenses, including stock-based compensation 1,744 2,500

Facilities and other 1,340 1,503

Total $ 9,281 $ 8,779

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Other significant costs include legal fees relating to corporate matters, professional fees for accounting and consulting services, insurance and an allocation of facility-related costs.

Our general and administrative costs related to the assets sold to GeneFab are included in discontinued operations.

General and administrative expenses consisted of the following (in thousands):

General and administrative expenses consisted of the following:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(unaudited) (unaudited) (unaudited) (unaudited)

Personnel-related expenses, including share-based compensation $ 1,927 $ 5,127 $ 6,074 $ 18,243

(in thousands) (unaudited) (unaudited)

External services and supplies $ 2,194 $ 1,663

Office and facilities 1,328 829 3,438 1,547

Personnel-related expenses, including stock-based compensation 2,585 3,498

Facilities and other 1,636 1,637

Depreciation and amortization 701 724

Insurance 264 317 1,139 1,236

Other 340 139 689 453

Total $ 7,116 $ 7,522

Impairment of Long-lived assets

Impairment of long-lived assets relates to the impairment of our leasehold improvements for the Alameda facility subleased to GeneFab as a result of our asset group reassessment which triggered a need to perform an impairment analysis following the closing of the GeneFab transaction, as well as impairment of lease right-of-use assets as a result of subleasing a portion of our headquarter premises.

Other Income (Expense)

Interest Income, net

Interest income, net consists of interest earned on our cash and cash equivalents, restricted cash and short-term investments, if any, held during the year, net of interest expense.

Change in Fair Value of GeneFab Note Receivable - related party

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

Refer to Note 4.

Fair Value Measurements , in the footnotes to the condensed consolidated financial statements included in this Form 10-Q elsewhere related to the valuation methodology and assumptions used.

Change in Fair Value of GeneFab Economic Share - related party

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

Refer to Note 4.

Fair Value Measurements , in the footnotes to condensed consolidated financial statements included in this Form 10-Q elsewhere related to the valuation methodology and assumptions used.

Change in Fair Value of GeneFab Option - related party

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

Refer to Note 4.

Fair Value Measurements , in the footnotes to condensed consolidated financial statements included in this Form 10-Q elsewhere related to the valuation methodology and assumptions used.

Interest Income

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

GeneFab sublease Income - related party

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

Net Income (Loss) from Discontinued Operations

Net income (loss) from discontinued operations includes the results of our manufacturing and research activities related to the Alameda facility through the disposition date of August 7, 2023.

There was no comparative activity during the nine months ended September 30, 2024.

Net income (loss) from discontinued operations for the three and nine months ended September 30, 2023 is summarized below (in thousands):

Three Months Ended September 30, Nine months ended September 30,

Operating expenses:

Research and development $ 1,641 $ 9,975

General and administrative (1,478) (496)

Total operating expenses 163 9,479

Loss from discontinued operations (163) (9,479)

Net income from discontinued operations $ 21,692 $ 12,376

Change in Fair Value of GeneFab Option - related party

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

Refer to Part I, Item 1.

“Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) — Note 10 — Fair Value Measurements ” in this Report for details.

Change in Fair Value of GeneFab Economic Share - related party

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

As of March 31, 2025 and December 31, 2024, the Company determined that the fair value of the GeneFab Economic Share was zero.

Refer to Part I, Item 1.

“Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) — Note 10 — Fair Value Measurements ” in this Report for details.

Change in Fair Value of GeneFab Note Receivable - related party

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

Refer to Part I, Item 1.

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

Results of Operations

Comparison of the Three Months Ended September 30, 2024 and 2023

The following table summarizes our results of operations for the three months ended September 30, 2024 and 2023 (in thousands):

Comparison of the Three Months Ended March 31, 2025 and 2024

The following table summarizes our results of operations for the three months ended March 31, 2025 and 2024:

Three Months Ended

September 30,

2024 2023 Change

Contract revenue $ — $ 255 $ (255)

Grant income — 83 (83)

Total revenue — 338 (338)

(in thousands) 2025 2024 Change

Operating expenses:

Research and development (including related party cost of $3,790 and $1,186, respectively)

Research and development (including related party costs of $4,070 and $3,632 for the three months ended March 31, 2025 and March 31, 2024, respectively)

$ 9,281 $ 8,779 $ 502

General and administrative 7,116 7,522 (406)

Impairment of long-lived assets 313 25,691 (25,378)

Total operating expenses 16,397 16,301 96

Loss from operations (16,397) (16,301) (96)

Other income (expense)

Interest income, net 150 583 (433)

Change in fair value of GeneFab Note Receivable - related party (17,435) 287 (17,722)

Change in fair value of GeneFab Economic Share - related party (398) (123) (275)

Change in fair value of GeneFab Option - related party 2,386 5,629 (3,243)

Other income:

Interest income 394 331 63

GeneFab sublease income - related party 1,713 1,461 252

Other income (expense) (11) (14) 3

Total other income (expense), net (13,651) 7,261 (20,912)

Net loss from continuing operations (28,866) (36,615) 7,749

Net income from discontinued operations — 21,692 (21,692)

Net loss $ (28,866) $ (14,923) $ (13,943)

Contract revenue .

For the three months ended September 30, 2023, we generated revenue from contracts and license agreements of $0.3 million.

We earned no revenue in the three months ended September 30, 2024.

The decrease of $0.3 million was primarily due to completion of services provided under the Spark collaboration agreement in 2023.

Grant income .

For the three months ended September 30, 2023, we generated revenue from grants of $0.1 million, from the SBIR SENTI-202 grant funding.

We earned no revenue from grants in the three months ended September 30, 2024.

Research and development expenses .

Research and development expenses were $8.7 million and $9.1 million for the three months ended September 30, 2024 and 2023, respectively.

The decrease o f $0.4 million w as primarily due to a decrease of $1.0 million in personnel-related expenses and a decrease of $0.2 million in office and facilities cost, offset by an increase of $0.9 million in external services and supplies cost.

General and administrative expenses .

General and administrative expenses were $6.2 million and $9.4 million for the three months ended September 30, 2024 and 2023, respectively.

The decrease of $3.2 million was primarily

due to a decrease of $3.2 million in personnel-related expenses, a decrease of $0.4 million in professional services costs and a decrease of $0.3 million in depreciation and amortization costs, offset by an increase of $0.5 million in facilities costs and an increase of $0.2 million in other general and administrative expenses.

Impairment of long-lived assets:

Impairment of long-lived assets was $0.3 million and $25.7 million for the three months ended September 30, 2024 and 2023, respectively.

The impairment of $0.3 million was related to the impairment of the lease right-of-use assets as a result of subleasing a portion of our headquarter premises.

The impairment of $25.7 million recognized during the three months ended September 30, 2023, was due to the impairment of our leasehold improvements related to the Alameda facility subleased to GeneFab as a result of our asset group reassessment which triggered a need to perform an impairment analysis following the closing of the GeneFab transaction.

Interest income, net.

Interest income was $0.2 million and $0.6 million for the three months ended September 30, 2024 and 2023, respectively.

The decrease is attributed to lower average cash balances in the relevant periods.

Change in fair value of GeneFab Note Receivable - related party.

Change in fair value of the GeneFab Note Receivable - related party was a loss of $17.4 million for the three months ended September 30, 2024 due to the probability that a suitable license agreement, which is a condition of the Company realizing the GeneFab Note Receivable, would not be signed and a gain of $0.3 million for the three months ended September 30, 2023, due to a change in the discount rate.

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

Change in fair value of the GeneFab Economic Share - related party was a loss of $0.4 million and $0.1 million for the three months ended September 30, 2024 and 2023, respectively.

The decrease was primarily due to the low probability of the events triggering the payment underlying the GeneFab Economic Share.

Other income 178 — 178

Change in fair value of GeneFab Option - related party — 2,314 (2,314)

Change in fair value of the GeneFab Option - related party was a gain of $2.4 million for the three months ended September 30, 2024 due to the low probability that a suitable license agreement, which is a condition for exercise of the Option, would be signed and a gain of $5.6 million for the three months ended September 30, 2023, due to a decrease in the fair value of our common stock as well as an increase in volatility.

GeneFab sublease income - related party.

For the three months ended September 30, 2024 and 2023, sublease income was $1.7 million and $0.9 million, respectively, from the sublease of Alameda facility as well as a portion of our corporate headquarters leased to GeneFab.

Net income (loss) from discontinued operations.

For the three months ended September 30, 2023, net loss from discontinued operations was $21.7 million.

Discontinued operations relate to the transfer of in-house manufacturing activities in the Alameda facility, to GeneFab, and include the costs and depreciation of equipment and related deposits or liabilities, as well as manufacturing personnel-related costs.

There were no discontinued operations for the three months ended September 30, 2024.

Comparison of the Nine Months Ended September 30, 2024 and 2023

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023 (in thousands):

Nine Months Ended

September 30,

2024 2023 Change

Contract revenue $ — $ 1,978 $ (1,978)

Grant income — 583 (583)

Total revenue — 2,561 (2,561)

Operating expenses

Research and development (including related party cost of $11,059 and $1,186, respectively)

26,584 23,028 3,556

General and administrative 17,975 27,871 (9,896)

Impairment of long-lived assets 313 25,691 (25,378)

Total operating expenses 44,872 76,590 (31,718)

Loss from operations (44,872) (74,029) 29,157

Other income (expense)

Interest income, net 718 2,438 (1,720)

Change in fair value of contingent earnout liability — 207 (207)

Change in fair value of GeneFab Note Receivable - related party (17,240) 287 (17,527)

Change in fair value of GeneFab Economic Share - related party — 55 (55)

Change in fair value of GeneFab Option - related party 6,331 5,629 702

GeneFab sublease income - related party 4,705 899 3,806

Other income (expense) (6) (26) 20

Total other income (expense), net (7,308) 9,311 (16,619)

Net loss from continuing operations (52,180) (64,718) 12,538

Net income from discontinued operations — 12,376 (12,376)

Change in fair value of GeneFab Note Receivable - related party — 29 (29)

Total other income 2,285 4,190 (1,905)

Net loss $ (14,112) $ (12,111) $ (2,001)

Contract revenue .

For the nine months ended September 30, 2023, we generated revenue from contracts and license agreements of $2.0 million.

We earned no revenue in the nine months ended September 30, 2024.

The decrease of $2.0 million was primarily due to completion of services provided under the Spark collaboration agreement in 2023 that did not occur in 2024.

Grant income .

For the nine months ended September 30, 2023, we generated revenue from grants of $0.6 million, from the SBIR SENTI-202 grant funding.

We earned no revenue from grants in the nine months ended September 30, 2024.

Research and development expenses .

Research and development expenses were $26.6 million and $23.0 million for the nine months ended September 30, 2024 and 2023, respectively.

The increase of $3.6 million was primarily due to an increase of $7.0 million in professional services costs, partially offset by a decrease of $2.0 million in office and facility costs, as well as a decrease of $1.3 million in personnel-related expenses.

Research and development expenses were $9.3 million and $8.8 million for the three months ended March 31, 2025 and 2024, respectively.

The increase of $0.5 million was primarily due to an increase of $1.4 million in external services and supplies cost, partially offset by a decrease of $0.8 million in personnel-related expenses, including stock-based compensation and $0.2 million in facilities and other cost.

General and administrative expenses .

General and administrative expenses were $18.0 million and $27.9 million for the nine months ended September 30, 2024 and 2023, respectively.

The decrease of $9.9 million

was primarily due to a decrease of $12.2 million in personnel-related expenses, offset by an increase of $1.9 million in office and facility costs and an increase of $0.6 million in depreciation and amortization.

Impairment of long-lived assets.

Impairment of long-lived assets of $25.7 million for the nine months ended September 30, 2023 was due to the impairment of leasehold improvements related to our Alameda facility subleased to GeneFab as a result of our asset group reassessment which triggered a need to perform an impairment analysis following the closing of the GeneFab transaction.

Impairment of long-lived assets of $0.3 million for the nine months ended September 30, 2024 was due to the lease right-of-use asset impairment as a result of a portion of our corporate headquarter premises subleased to third parties.

Interest Income, net.

Interest income was $0.7 million and $2.4 million for the nine months ended September 30, 2024 and 2023, respectively.

The decrease was attributed to lower average cash balances in the relevant periods.

Change in fair value of contingent earnout liability .

For the nine months ended September 30, 2023 we recognized a non-cash gain of $0.2 million.

There was no comparative activity for nine months ended September 30, 2024.

Change in fair value of GeneFab Note Receivable - related party.

For the nine months ended September 30, 2024, the fair value of the GeneFab Note Receivable decreased by $17.2 million.

This decrease was due to the probability that a suitable license agreement, which is a condition of the Company realizing the GeneFab Note Receivable, would not be signed.

For the nine months ended September 30, 2023, the fair value of the GeneFab Note Receivable increased by $0.3 million due to a change in the discount rate.

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

Change in fair value of the GeneFab Economic Share - related party was a loss of $1.8 million and $0.1 million for the nine months ended September 30, 2024 and 2023, respectively.

The decrease was primarily due to the low probability of the events triggering the payment underlying the GeneFab Economic Share.

Change in fair value of GeneFab Option - related party.

C hange in fair value of the GeneFab Option - related party was a gain of $6.3 million for the nine months ended September 30, 2024 due to the low probability that a suitable license agreement, which is a condition for exercise of the Option, would be signed and a gain of $5.6 million for the nine months ended September 30, 2023, due to a decrease in the fair value of our common stock as well as an increase in volatility.

General and administrative expenses were $7.1 million and $7.5 million for the three months ended March 31, 2025 and 2024, respectively.

The increase of $0.4 million was primarily due to an increase of $0.5 million in external services and supplies cost, partially offset by a decrease of $0.9 million in personnel-related expenses.

Interest income.

Interest income was $0.4 million and $0.3 million for the three months ended March 31, 2025 and 2024, respectively.

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

GeneFab sublease income - related party.

For the nine months ended September 30, 2024 and 2023, sublease income was $4.7 million and $0.9 million, respectively, from the sublease of Alameda facility as well as a portion of our corporate headquarters leased to GeneFab.

Net income (loss) from discontinued operations.

For the nine months ended September 30, 2023 net loss from discontinued operations was $12.4 million.

There were no discontinued operations for the nine months ended September 30, 2024.

GeneFab sublease income - related party was $1.7 million and $1.5 million for the three months ended March 31, 2025 and 2024, respectively.

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

Change in fair value of GeneFab Option - related party.

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

For the three months ended March 31, 2025, there was no change in fair value for the GeneFab Option.

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

As of March 31, 2025 and 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.

For the three months ended March 31, 2025, there was no change in fair value for the GeneFab Economic Share.

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

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

Liquidity and Capital Resources

Sources of Liquidity

From inception to September 30, 2024, we raised aggregate gross proceeds of $302.5 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.

On August 31, 2022, we entered into the Purchase Agreement with Chardan, as amended and restated from time to time.

Pursuant to the Purchase Agreement, we have the right, in our sole discretion, to sell to Chardan up to the lesser of:

(i) $50.0 million of shares of our common stock;

and (ii) 872,704 shares of common stock at 97% of the volume weighted average price (“VWAP”) of the common stock calculated in accordance with the Purchase Agreement, over a period of 36 months subject to certain limitations and conditions contained in the Purchase Agreement.

Sales and timing of any sales of common stock are solely at our election, and we are under no obligation

to sell any securities to Chardan under the Purchase Agreement.

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

On July 16, 2024, we amended and restated this Purchase Agreement (hereinafter, the “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).

The Company has issued 143,593 shares of common stock to Chardan under the A&R Purchase Agreement, including 10,000 shares issued to Chardan as consideration for its execution and delivery of the A&R Purchase Agreement, with aggregate net proceeds of $1.2 million.

There were no shares issued under the Purchase Agreement during the three and nine months ended September 30, 2023.

The shares issued during the three and nine months ended September 30, 2024 were 3,593.

We do not have any products approved for sale and have not generated any revenue from product sales or otherwise.

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

As of September 30, 2024, we had $10.5 million in cash and cash equivalents, and an accumulated deficit of $296.5 million.

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

As of March 31, 2025 , we had $33.8 million in cash and cash equivalents, and an accumulated deficit of $311.2 million.

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

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Should we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back, or discontinue the development and commercialization of our product candidates or delay our efforts to expand our product pipeline.

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

The transaction with GeneFab, as described in “Recent Developments” above, provided us with additional capital in the form of a note receivable and rights to future manufacturing and research activities and reduced longer term operating expenses.

The remaining consideration of $18.9 million is subject to satisfaction of certain conditions.

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

As of September 30, 2024, the fair value of the GeneFab Note Receivable was zero due to the probability that a suitable license agreement, which is a condition of the Company realizing the GeneFab Note Receivable, would not be signed.

Refer to Note 4.

Fair Value Measurements, in the footnotes to condensed consolidated financial statements included in this Form 10-Q elsewhere for further details.

The agreement with CIRM, as described in “Recent Developments” above will provide us in total grant of $8.0 million subject to achievement of certain operational milestones.

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

From inception to March 31, 2025 , we raised aggregate gross proceeds of $355.9 million from the merger in 2022, the issuance of shares of common stock, the issuance of shares of redeemable convertible preferred stock, the issuance of convertible notes, and, to a lesser extent, through collaboration agreements and governmental grants and loans.

On August 31, 2022, we entered into the A&R Purchase Agreement with Chardan.

Pursuant to the A&R Purchase Agreement, we had the right, in our sole discretion, to sell to Chardan up to the lesser of:

(i) $50.0 million of shares of our common stock;

Sales and timing of any sales of common stock were solely at our election, and we were under no obligation to sell any securities to Chardan under the Purchase Agreement.

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

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

For the three months ended March 31, 2025, no shares had been issued under the 2025 ATM Agreement.

The transaction with GeneFab, as described in Part I, Item 1.

“Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) — Note 3 — GeneFab Transaction ” in this Report, provided us with additional capital in the form of a note receivable and rights to future manufacturing and research activities and reduced longer term operating expenses.

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 a prepayment owed by us for manufacturing and research activities to GeneFab.

The remaining consideration of $18.9 million was to be received in installments during 2024 and 2025, subject to satisfaction of certain conditions.

In December 2024, the remaining consideration of $18.9 million was waived in connection with the Private Placement of preferred stock described in Part I, Item 1.

“Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) — Note 6 — Stockholders’ Equity ” in this Report.

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

“Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) — Note 4 — Other Financial Statement information ” in this Report is expected to provide us in total a grant of $8.0 million, subject to achievement of certain operational milestones.

The CIRM Grant will help support the ongoing clinical development of SENTI-202.

Refer to Note 8.

CIRM Grant, in the footnotes to condensed consolidated financial statements included in this Form 10-Q elsewhere for further details of the CIRM agreement.

The following table sets forth a summary of our cash flows from continuing and discontinued operations for each of the periods indicated (in thousands):

Nine Months Ended

September 30,

Net cash from operating activities $ (27,893) $ (45,358)

Net cash from investing activities 45 29,976

Net cash from financing activities 2,440 223

In December 2024, we issued 21,157 shares of Series A redeemable convertible preferred stock and accompanying warrants to purchase up to 31,735,500 shares of common stock for an aggregate offering price of 47.6 million.

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.

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

Three Months Ended

(in thousands) 2025 2024

Net cash provided by (used in):

Operating activities $ (14,050) $ (11,682)

Investing activities — (15)

Financing activities (414) —

Net change in cash, cash equivalents and restricted cash $ (14,464) $ (11,697)

$ (25,408) $ (15,159)

Operating Activities

For the nine months ended September 30, 2024, net cash used in operating activities of $27.9 million was primarily due to our loss of $52.2 million with non-cash adjustments of $17.2 million loss from change in fair value of the GeneFab Note Receivable, $6.3 million gain from change in fair value of the GeneFab Option, $1.8 million loss from change in fair value of GeneFab Economic Share, $4.4 million for depreciation and amortization of operating lease right-of-use assets and $1.2 million for stock-based compensation expense.

Other material changes comprised of $10.9 million decrease in GeneFab prepaid expenses, $1.1 million decrease in prepaid expenses and other assets, $0.1 million increase in other liabilities, net of current portion, offset by $3.1 million decrease in accounts payable and accrued expenses and $3.0 million decrease in operating lease liabilities.

For the nine months ended September 30, 2023, net cash used in operating activities of $45.4 million was primarily due to our net loss of $52.3 million with non-cash adjustments of $25.7 million for impairment of long-lived assets, $21.9 million gain on disposal of business to GeneFab, $7.6 million for stock-based compensation expense, $5.6 million gain from change in fair value of the GeneFab Option, $4.0 million for depreciation and amortization of operating lease right-of-use assets and $1.1 million for accretion of discount on short-term investments, $0.3 million gain for the change in fair value of the GeneFab receivable, and $0.2 million for the change in fair value of contingent earnout liability, and $0.1 million loss for the change in fair value of the GeneFab Economic Share.

Other material changes comprised of $0.8 million decrease in deferred revenue, offset by $0.1 million increase in operating lease liabilities.

For the three months ended March 31, 2025, net cash used in operating activities of $14.1 million was primarily due to our loss of $14.1 million with non-cash adjustments $0.9 million for depreciation and $1.2 million for stock-based compensation expense.

Other material changes comprised of $1.1 million decrease in accrued expenses and other current liabilities and $1.1 million decrease in operating lease liabilities.

For the three months ended March 31, 2024, net cash used in operating activities of $11.7 million was primarily due to our loss of $12.1 million with non-cash adjustments of $2.3 million gain from change in fair value of the GeneFab Option, $1.5 million for depreciation and amortization of operating lease right-of-use-assets and $1.3 million for stock-based compensation expense.

Other material changes comprised of $3.5 million decrease in GeneFab prepaid expenses offset by $2.6 million decrease in accounts payable and accrues expenses and $0.9 million decrease in operating lease liabilities.

Investing Activities

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

For the nine months ended September 30, 2023, net cash provided by investing activities of $30.0 million was due to $60.0 million cash received upon maturity of the short-term investments offset by $18.0 million purchases of short-term investments and $12.0 million purchases of property and equipment.

For the three months ended March 31, 2025, there was no cash provided by or used in investing activities.

For the three months ended March 31, 2024, net cash used in investing activities was nominal.

Financing Activities

For the nine months ended September 30, 2024, there was $2.4 million cash provided by financing activities related to the CIRM Grant.

Refer to Note 8.

CIRM Grant, in the footnotes to condensed consolidated financial statements included in this Form 10-Q elsewhere for further details of the CIRM Grant.

For the nine months ended September 30, 2023, net cash of $0.2 million was provided by financing activities, primarily due to $0.3 million proceeds from the issuance of our common stock under the Employee Stock Purchase Plan (“ESPP”).

For the three months ended March 31, 2025, net cash used in financing activities was $0.4 million, primarily due to the payment of issuance costs of $1.9 million, offset by CIRM Grant received of $1.5 million.

For the three months ended March 31, 2024, there was no cash provided by financing activities.

Funding Requirements

Based upon our current operating plans, substantial doubt exists about whether our existing cash and cash equivalents will be sufficient to fund our operations, including clinical trial expenses and business operating expenses requirements, beyond twelve months from the date of this Quarterly Report.

We anticipate that we will continue to seek additional funding, though the precise timing of such may prove uncertain.

Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

Our assumptions may prove to be inaccurate, and we could deplete our capital resources sooner than we expect.

Additionally, the process of

testing and manufacturing product candidates in preclinical studies and clinical trials is costly and the timing and expenses in these trials are uncertain.

We concluded that substantial doubt continued to exist and that our cash and cash equivalents of $ 33.8 million as of March 31, 2025, were not sufficient for us to continue as a going concern for at least one year from the issuance date of the condensed consolidated financial statements.

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

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

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

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

Our future capital requirements will depend on many factors, including:

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Contractual Obligations and Commitments

We lease our corporate headquarters which is located in South San Francisco, California (“HQ lease”) and has an initial term of eight years expiring in 2027, with total undiscounted operating lease payments of $22.1 million for an initial lease term of eight years.

On June 3, 2021, we 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 with total undiscounted operating lease payments of $46.0 million over an initial lease period of eleven years.

Operating Leases, for details on our lease obligations.

Following the closing of the Merger, former holders of Legacy Senti common stock and preferred stock may receive up to 200,000 additional shares of our common stock in the aggregate, in two equal tranches of 100,000 shares of common stock per tranche.

The 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.

Refer to Note 7.

Stockholders’ Equity, in the footnotes to condensed consolidated financial statements included in this Form 10-Q elsewhere for further details of the contingent earnout.

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

Off-Balance Sheet Arrangements

During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under the rules and regulations of the SEC.

For the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under the rules and regulations of the SEC.

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S.

The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements and accompanying notes.

On an ongoing basis, we evaluate our estimates and judgments.

We base our estimates and assumptions on historical experience, known trends and events, and various other factors that are believed to be reasonable and appropriate under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, we believe the following accounting policies and estimates to be most critical to the preparation of our consolidated financial statements.

We define our critical accounting policies as those under U.S.

GAAP that require us to make subjective estimates and judgments about matters that are inherently uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles.

During the nine months ended September 30, 2024, there have not been any other significant changes to our critical accounting policies and estimates, from those presented in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, that are of significance, or potential significance, to us.

For the three months ended March 31, 2025, there have not been no material changes to our critical accounting policies and estimates compared to those disclosed in Part II, Item 7 of our Annual Report.

Emerging Growth Company Status

The Jumpstart Our Business Startups Act (“JOBS”) Act permits an emerging growth company to take advantage of an extended transition to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies.

The JOBS Act permits an emerging growth company to take advantage of an extended transition to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies.

The Company is an “emerging growth company” as defined in Section 2(a) of the Securities Act, and has elected to not take advantage of the benefits of this extended transition period.

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Segment Information

We have one business activity and operate in one reportable segment.

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance.

Our CODM (Chief Executive Officer) views our operations and manages the business as a single operating segment, which is the research and development of our gene circuit platform.

Refer to Part I, Item 1.

“Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) — Note 14 — Segment Reporting ” in this Report for additional information related to operating segment.

All long-lived assets are located in the United States.

We do not currently generate any revenue.

Quantitative and Qualitative Disclosures About Market Risk

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What changed 10-Q

Item 2. Management’s Discussion and Analysis