Senti Biosciences Inc.
03/27/2026 | Press release | Distributed by Public on 03/27/2026 06:07
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Senti Biosciences, Inc. ("Senti") entered into a business combination agreement (the "Agreement") with Dynamics Special Purpose Corp. ("DYNS") on December 19, 2021. The transactions contemplated by the terms of the Agreement were completed on June 8, 2022 (the "Closing"), in conjunction with which DYNS changed its name to Senti Biosciences, Inc. (hereafter referred to, collectively with its subsidiaries, as "Senti", the "Company", "we", "us" or "our", unless the context otherwise requires). The transactions contemplated in the Agreement are collectively referred to as the "Merger". You should read the following discussion and analysis of our financial condition and results of operations together with our accompanying consolidated financial statements and the related notes contained in Part II, Item 8 of this Annual Report on Form 10-K. Unless the context indicates otherwise, references in this Annual Report on Form 10-K to the "Company," "Senti," "we," "us," "our" and similar terms refer to Senti Biosciences, Inc. (formerly known as Dynamics Special Purpose Corp.) and its consolidated subsidiaries following the Company's Merger.
Cautionary Statement Regarding Forward-Looking Statements
This Annual Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-K including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "explore," "intend," "estimate," "seek" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. 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 Part I, Item 1A of this Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the "SEC"). The Company's securities filings can be accessed on the EDGAR section of the SEC's website at www.sec.gov. 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.
Overview
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.
We have incurred net losses of $61.4 million and $52.8 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, we had cash and cash equivalents, of $16.4 million and
$48.3 million, respectively, and an accumulated deficit of $358.6 million and $297.1 million, respectively. Net cash flows used in operating activities were $43.4 million and $41.4 million for the years ended December 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. The expected increase in expenses will be driven in large part by our ongoing activities, if and as we:
•continue to advance our gene circuit platform technologies;
•continue preclinical development of our current and future product candidates and initiate additional preclinical studies;
•fund clinical development of our current 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, manufacturing and commercialization efforts;
•continue to develop, grow, maintain, enforce and defend our intellectual property portfolio; and
•incur additional legal, accounting, or other expenses in operating our business, including costs associated with operating as a public company.
As of March 27, 2026, the issuance date of the consolidated financial statements for the year ended December 31, 2025, we concluded that substantial doubt continued to exist about our ability to continue as a going concern beyond 12 months from the issuance date of the annual consolidated financial statements. In light of these concerns, our independent registered public accounting firm included in its opinion for the year ended December 31, 2025 an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern beyond 12 months from March 27, 2026.
Recent Developments
Board Composition
On July 18, 2025, the Board approved the appointment of Bryan Baum to the Board, pursuant to the terms of a letter agreement dated as of December 2, 2024, by and between us and Celadon. In connection with Mr. Baum's appointment, the Board approved an increase in the authorized number of members of the Board from seven to eight members. Mr. Baum was appointed to fill the vacancy created by the foregoing increase in the size of the Board, as a Class II director of the Company, to serve in such capacity until the annual meeting of the Company's stockholders in 2027 or until his earlier resignation, death, or removal.
Audit Committee Appointment
Effective July 31, 2025, Ed Mathers, who was previously appointed as a member of the Audit Committee of the Board, tendered his resignation as a member of that committee. Mr. Mathers continues to serve as a member of the Board and as a member of the Nominating and Corporate Governance Committee and the Compensation Committee of the Board.
Effective July 31, 2025, the Board unanimously appointed Bryan Baum to serve as a member of the Audit Committee. Following this appointment, the Audit Committee is now comprised of Fran Schulz (Chair), Feng Hsiung and Bryan Baum.
GeneFab Sublease Default
Our operating leases are for the corporate headquarters located in South San Francisco, California ("HQ lease") and for additional office and laboratory space located in Alameda, California ("Alameda lease"). On August 27, 2023, we entered into a sublease with GeneFab to sublease the facility included in the Alameda lease, expiring in September 2032 (the "Alameda Sublease"). On June 12, 2024, we entered into a sublease with GeneFab for a portion of the Company's HQ lease (the "GeneFab HQ Sublease"). The Alameda Sublease and the GeneFab HQ Sublease are collectively referred to as the "GeneFab Sublease". As of December 31, 2025, GeneFab was in default under the Alameda Sublease and GeneFab HQ Sublease ("Sublease Default").
Alameda Lease Default
In September 2025, the Company received a notice of default from the landlord of the Alameda lease, and the Company was in default (the "Default") for nonpayment of rent in the amount of approximately $0.4 million. As of December 31, 2025, the nonpayment of rent for the Alameda lease was $1.7 million. As of December 31, 2025, the Alameda lease had not been terminated, and the Company continues to recognize the right-of-use asset and lease liability associated with the Alameda lease.
Lease Amendment and Cure of Default
On March 17, 2026, we entered into a First Amendment to Lease (the "Lease Amendment") for the Alameda Facility with landlord, pursuant to which the Default was cured.
Pursuant to the Lease Amendment, we reduced the leased premises from approximately 92,000 rentable square feet to approximately 46,000 rentable square feet. The Lease Amendment also reduces our future base rent obligations for the remaining term of the lease and modifies certain cost-sharing arrangements with respect to operating expenses, taxes, and utilities.
In connection with the Lease Amendment, the Landlord is entitled to draw $2.0 million under our existing letter of credit, and the required letter of credit for the remainder of the lease term was reduced to approximately $0.8 million.
Sublease Amendments and cure of Sublease Default
On March 9, 2026, we signed an agreement to accelerate the end of the HQ sublease ("HQ Sublease Amendment"), effective March 31, 2026. As part of this agreement, GeneFab paid all past rent due to us for the HQ sublease.
Additionally, in connection with the Lease Amendment, on March 17, 2026, we entered into a First Amendment to Sublease (the "Alameda Sublease Amendment") related to the Alameda Facility with GeneFab and the landlord, pursuant to which GeneFab paid cash for certain outstanding, overdue rent amounts and agreed to provide prepaid manufacturing credits to Senti for the remaining outstanding, overdue rent payments.
Pursuant to the Alameda Sublease Amendment, the subleased premises were reduced to approximately 46,000 rentable square feet. The Alameda Sublease Amendment revised the base rent, operating expenses, taxes and utilities owed by GeneFab under the Alameda Sublease Amendment to equal the amounts owed by us under the Lease Amendment.
In addition, GeneFab agreed to pay a $1.0 million Reduction Fee (the "Reduction Fee") to the Landlord pursuant to the terms and conditions of the Consent Amendment. Pursuant to the HQ Sublease Amendment and the Alameda Sublease Amendment, the GeneFab Sublease Default was cured.
Landlord Consent Amendment
In connection with the Lease Amendment and Alameda Sublease Amendment, on March 17, 2026, we entered into a First Amendment to Landlord's Consent to Sublease (the "Consent Amendment"). Pursuant to the Consent Amendment, the Landlord consented to the Sublease Amendment in exchange for payment of the Reduction Fee by us or GeneFab.
GeneFab Letter Agreement
In connection with the Lease Amendment, Alameda Sublease Amendment and Consent Amendment, on March 17, 2026, we entered into the GeneFab Letter Agreement (the "GeneFab Letter Agreement").
The GeneFab Letter Agreement provides back rent payment of $1.4 million that may be satisfied, in whole or in part, through a cash prepayment credit to be applied toward work or services to be performed by GeneFab for us under the 2024 Amended and Restated DMSA, and that we may access such prepayment credit immediately and any unused portion of such amount must be paid in immediately available funds by GeneFab to us by September 1, 2026.
The GeneFab Letter Agreement further provides that we may access $2.0 million as a prepayment credit to be applied toward work or services to be performed by GeneFab for us under the 2024 Amended and Restated DMSA beginning September 1, 2026. This prepayment credit represents a portion of the agreed-upon settlement of past-due sublease rent. GeneFab's failure to perform its obligations with respect to the outstanding rent or the $2.0 million amount constitutes an immediate event of default under the Amended Sublease. The GeneFab Letter Agreement terminates automatically once the applicable prepayment credits have been fully applied.
Components of Results of Operations
Collaboration Revenue - Related Party
We currently have no products approved for sale, and we have never generated any revenue from the sale of any products. For the year ended December 31, 2025, collaboration revenue related to an option exercise period extension fee under our Collaboration and Option Agreement ("BlueRock Agreement") with BlueRock Therapeutics LP ("BlueRock") and was recognized ratably over the extension period. BlueRock is a related party to us. Refer to Item 8. "Consolidated Financial Statements -Notes to Consolidated Financial Statements - Note 12- Related Parties" in this Annual Report for details.
Operating Expenses
Our operating expenses consist of research and development expenses, general and administrative expenses, and impairment of long-lived assets.
Research and Development Expenses
Research and development costs consist primarily of costs incurred for the discovery, and 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;
•expenses incurred in connection with research, laboratory consumables, and clinical and preclinical studies;
•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 third-party contract manufacturing organizations, or CMOs;
•facilities, depreciation and other expenses, which include allocated expenses for rent and maintenance of facilities, insurance and supplies;
•costs related to regulatory compliance; and
•the cost of annual license fees.
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 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.
Our direct external development program expenses reflect external costs attributable to our preclinical development candidates selected for further development as well as INDs and clinical development activities. Such expenses include third-party contract costs relating to manufacturing, clinical trial activities, translational medicine and toxicology activities. We do not allocate internal research and development costs which include personnel, facility costs, laboratory consumables and discovery and research related activities associated with our pipeline because these costs are deployed across multiple programs and our platform, and, as such, are not separately classified.
Research and development expenses consisted of the following:
| Year Ended December 31, | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
| External services and supplies | $ | 23,836 | $ | 20,795 | |||||||
| Personnel-related expenses, including stock-based compensation | 8,214 | 7,694 | |||||||||
| Facilities and other | 5,536 | 5,867 | |||||||||
| Total | $ | 37,586 | $ | 34,356 | |||||||
Research and development activities are central to our business model. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. In addition, future regulatory factors beyond our control may impact our preclinical development programs. Product candidates in clinical development generally have higher development costs than those in preclinical stages of development, primarily due to the increased size and duration of clinical trials. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical development of any of our product candidates. However, we expect that our research and development expenses and manufacturing costs will increase in connection with our planned preclinical and clinical development activities in the near term and in the future.
The successful development of our current and future product candidates is highly uncertain. This is due to numerous risks and uncertainties, including the following:
•negative or inconclusive results from our preclinical studies or clinical trials or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical studies or clinical trials or abandon any or all of our programs;
•product-related side effects experienced by participants in our clinical trials or by individuals using therapeutics similar to our product candidates;
•delays in submitting IND applications or comparable foreign applications, or delays or failures to obtain the necessary approvals from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced;
•conditions imposed by the FDA or other regulatory authorities regarding the scope or design of our clinical trials;
•delays in enrolling research subjects in clinical trials;
•high drop-out rates of research subjects;
•inadequate supply or quality of product candidate components or materials or other supplies necessary for the conduct of our clinical trials;
•Chemistry, manufacturing and control ("CMC") challenges associated with manufacturing and scaling up biologic product candidates to ensure consistent quality, stability, purity and potency among different batches used in clinical trials;
•greater-than-anticipated clinical trial costs;
•poor potency or effectiveness of our product candidates during clinical trials;
•unfavorable FDA or other regulatory authority inspection and review of a clinical trial or manufacturing site;
•failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all;
•delays and changes in regulatory requirements, policies and guidelines; and
•the FDA or other regulatory authorities interpret our data differently than we do.
A change in the outcome of any of these variables may significantly impact the costs and timing associated with the development of our product candidates. We may never succeed in obtaining regulatory approval for any of our product candidates.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and employee-related costs, including stock-based compensation for personnel in executive, finance and other administrative functions. 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.
General and administrative expenses consisted of the following:
| Year Ended December 31, | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
| Personnel-related expenses, including stock-based compensation | $ | 11,513 | $ | 8,379 | |||||||
| Facilities and other | 6,452 | 7,507 | |||||||||
| External services and supplies | 5,463 | 7,624 | |||||||||
| Depreciation and amortization | 2,735 | 2,860 | |||||||||
| Total | $ | 26,163 | $ | 26,370 | |||||||
Impairment of Long-lived assets
For the year ended December 31, 2025, impairment of long-lived assets of $5.1 million relates to the impairment of the asset group associated with the Alameda Sublease. For the year ended December 31, 2024, impairment of long-lived assets of $0.3 million relates to the impairment of asset group associated with the GeneFab HQ Sublease. Refer to Item 8. "Consolidated Financial Statements -Notes to Consolidated Financial Statements - Note 5- Operating Leases" in this Annual Report for details.
Other Income (expense), net
Interest Income
Interest income consists of interest earned on our cash and cash equivalents, and restricted cash held during the year.
GeneFab sublease Income - related party
GeneFab sublease income - related party represents income from our sublease agreements with GeneFab. Amounts are recorded based on our determination of collectability, and the sublease income amounts were deemed probable as of December 31, 2025.
Other income, net - related party
Other income, net - related party primarily consists of late fees and interest charges assessed to GeneFab in connection with its failure to make timely payments under the GeneFab Sublease.
Other income, net
Other income, net primarily consists of income from the sublease of a portion of our headquarters space to BKPBIOTECH and JLSA2 Therapeutics, partially offset by miscellaneous tax and other expense items.
Change in Fair Value of GeneFab Option - related party
The change in fair value of the GeneFab Option consists of the remeasurement to fair value of the derivative liability related to the option provided to GeneFab to acquire up to $20.0 million in shares of our common stock at a purchase price of $10.18670 per share. The GeneFab Option is exercisable no later than August 7, 2026. As of December 31, 2025 and 2024, we determined that the fair value of the GeneFab Option was zero. Refer to Item 8. "Consolidated Financial Statements -Notes to Consolidated Financial Statements - Note 3- GeneFab Transaction" in this Annual Report for details.
Change in Fair Value of Preferred Stock Tranche Liability - related party
The change in fair value of the Preferred Stock Tranche Liability consists of the remeasurement to fair value at each reporting period of the additional closing option given to a certain investor as part of the private placement in December 2024, for which we had determined to be a liability and thus recorded at fair value. On December 31, 2024, we closed the Preferred Stock Tranche Liability of 4,444 shares of Series A redeemable convertible preferred stock and Warrants to purchase 6,666,000 shares of common stock for gross proceeds of $10.0 million. As a result, the Preferred Stock Tranche Liability was no longer subject to fair value measurement for the year ended December 31, 2025.
Change in Fair Value of GeneFab Economic Share - related party
The change in fair value of the GeneFab Economic Share is a result of the change in the equity value of GeneFab and the volatility at each reporting period. As of December 31, 2025 and 2024, we determined that the fair value of the GeneFab Economic Share was zero. Refer to Item 8. "Consolidated Financial Statements -Notes to Consolidated Financial Statements - Note 3- GeneFab Transaction" in this Annual Report for details.
Change in Fair Value of GeneFab Note Receivable - related party
The change in fair value of the GeneFab Note Receivable consists of the remeasurement to fair value at each reporting period of the deferred consideration due from GeneFab for which we elected the fair value option. As of December 31, 2024, the GeneFab Note Receivable was waived and we no longer remeasure its fair value. Refer to Item 8. "Consolidated Financial Statements -Notes to Consolidated Financial Statements - Note 3- GeneFab Transaction" in this Annual Report for details.
Results of Operations
Comparison of the Years Ended December 31, 2025 and 2024
The following table summarizes our results of operations for the years ended December 31, 2025 and 2024:
| Years Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | Change | ||||||||||||||
| Collaboration revenue - related party | $ | 22 | $ | - | $ | 22 | |||||||||||
| Operating expenses: | |||||||||||||||||
|
Research and development (including related party costs of $12,909 and $14,266 for the year ended December 31, 2025 and 2024, respectively)
|
37,586 | 34,356 | 3,230 | ||||||||||||||
| General and administrative | 26,163 | 26,370 | (207) | ||||||||||||||
| Impairment of long-lived assets | 5,052 | 313 | 4,739 | ||||||||||||||
| Total operating expenses | 68,801 | 61,039 | 7,762 | ||||||||||||||
| Loss from operations | (68,779) | (61,039) | (7,740) | ||||||||||||||
| Other income (expense): | |||||||||||||||||
| Interest income | 927 | 948 | (21) | ||||||||||||||
| GeneFab sublease income - related party | 5,423 | 6,449 | (1,026) | ||||||||||||||
| Other income, net - related party | 160 | - | 160 | ||||||||||||||
| Other income, net | 831 | 153 | 678 | ||||||||||||||
| Change in fair value of GeneFab Option - related party | - | 6,331 | (6,331) | ||||||||||||||
| Change in fair value of contingent earnout liability | - | 20 | (20) | ||||||||||||||
| Change in fair value of Preferred Stock Tranche Liability - related party | - | 13,404 | (13,404) | ||||||||||||||
| Change in fair value of GeneFab Economic Share - related party | - | (1,816) | 1,816 | ||||||||||||||
| Change in fair value of GeneFab Note Receivable - related party | - | (17,240) | 17,240 | ||||||||||||||
| Total other income, net | 7,341 | 8,249 | (908) | ||||||||||||||
| Net loss | $ | (61,438) | $ | (52,790) | $ | (8,648) | |||||||||||
Collaboration revenue - related party.For the year ended December 31, 2025, collaboration revenue related to an option exercise period extension fee under the BlueRock Agreement with a related party and was recognized ratably over the extension period. Refer to Item 8. "Consolidated Financial Statements -Notes to Consolidated Financial Statements - Note 12- Related Parties" in this Annual Report for details.
Research and development expenses. The increase of $3.2 million was primarily due to an increase of $0.5 million in personnel-related expenses and an increase of $3.0 million in external services and supplies, offset by a decrease of $0.3 million in facilities and other expense.
General and administrative expenses. The decrease of $0.2 million was primarily due to a decrease of $2.2 million external services and supplies, a decrease of $1.1 million in facilities and other, and a decrease of $0.1 million in depreciation and amortization expenses, offset by an increase of $3.1 million in personnel-related expenses.
Impairment of Long-lived assets.For the year ended December 31, 2025 and 2024, impairment of long-lived assets was $5.1 million and $0.3 million, respectively. Refer to Item 8. "Consolidated Financial Statements -Notes to Consolidated Financial Statements - Note 5- Operating Leases" in this Annual Report for details.
Interest income. The decrease of less than $0.1 million was due to average cash balances movement.
GeneFab sublease income - related party. The decrease of $1.0 million was primarily due to our assessment of collectability and the impact of the lease and sublease amendments described in Item 8. "Consolidated Financial Statements -Notes to Consolidated Financial Statements - Note 15- Subsequent Event" in this Annual Report.
Other income, net - related party.The increase in other income - related party of $0.2 million was due to late fees and interest charges assessed to GeneFab in connection with its failure to make timely payments under the GeneFab Sublease.
Other income, net.The increase in other income of $0.7 million was primarily due to income from the sublease of a portion of our headquarters space to BKPBIOTECH and JLSA2 Therapeutics which commenced in October 2024.
Change in fair value of GeneFab Option - related party. As of December 31, 2025 and 2024, we determined that the fair value of the GeneFab Option was zero due to the probability that a suitable license agreement, which is a condition of GeneFab obtaining the Option, would not be signed. Refer to Item 8. "Consolidated Financial Statements -Notes to Consolidated Financial Statements - Note 5- Operating Leases" in this Annual Report for details.
Change in fair value of contingent earnout liability. We no longer have contingent earnout liability as of December 31, 2025.
Change in fair value of Preferred Stock Tranche liability. For the year ended December 31, 2024, the change in fair value of the Preferred Stock Tranche liability was $13.4 million due to the option for a certain shareholder to purchase additional shares at a later date in connection with the private placement of convertible preferred stock. The gain was a result of the remeasurement of the option before the option was exercised on December 31, 2024. As a result, the Preferred Stock Tranche Liability was no longer subject to fair value measurement for the year ended December 31, 2025.
Change in fair value of GeneFab Economic Share - related party. As of December 31, 2025 and 2024, we determined that the fair value of the GeneFab Economic Share was zero due to the low probability of the events triggering the payment underlying the GeneFab Economic Share. Refer to Item 8. "Consolidated Financial Statements -Notes to Consolidated Financial Statements - Note 5- Operating Leases" in this Annual 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 we no longer remeasure the fair value. Refer to Item 8. "Consolidated Financial Statements -Notes to Consolidated Financial Statements - Note 5- Operating Leases" in this Annual Report for details.
Liquidity and Capital Resources
Sources of Liquidity
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 operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. As of December 31, 2025, we had $16.4 million in cash and cash equivalents, and an accumulated deficit of $358.6 million.
We will need substantial additional funding to support our continuing operations and pursue our development strategy. Until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions. Adequate funding may not be available to us on acceptable terms, if at all. 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 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 December 31, 2025, we raised aggregate gross proceeds of $368.6 million from the merger in 2022, the issuance of shares of common stock, the issuance of shares of redeemable convertible preferred stock, the issuance of convertible notes, and, to a lesser extent, through collaboration agreements and governmental grants and loans.
On August 31, 2022, we entered into an Amended & Restated Purchase Agreement with Chardan (the "A&R Purchase Agreement"). 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; 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 A&R Purchase Agreement, over a period of 36 months subject to certain limitations and conditions contained in the A&R Purchase Agreement. 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 A&R 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 A&R Purchase Agreement, upon execution of the A&R Purchase Agreement, we issued 10,000 shares of our common stock to Chardan and paid a $0.4 million document preparation fee. On March 17, 2025, we terminated the A&R Purchase Agreement. Prior to termination, we issued 384,313 shares of common stock to Chardan under the A&R Purchase Agreement, for aggregate net proceeds of $3.0 million.
On March 20, 2025, we entered into the 2025 ATM Agreement with Leerink Partners with respect to an at-the-market offering program under which we may offer and sell, from time to time at our sole discretion, up to a maximum aggregate offering price of $17.5 million of our common stock through Leerink Partners as our sales agent. Under 2025 ATM Agreement, we are not obligated to sell any shares, and either party may suspend or terminate the offering of common stock upon notice to the other party and subject to certain conditions. 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 Capital Market, to sell shares from time to time based upon our instructions, including any price, time or size limits specified by us. We pay Leerink Partners a commission equal to 3.0% of the gross proceeds of any common shares sold, reimburse certain fees and disbursements and provide Leerink Partners with customary indemnification and contribution rights. For the year ended December 31, 2025, we sold 4,833,477 shares of common stock under the 2025 ATM Agreement at a weighted average price of $2.38 per share, resulting in gross proceeds of $11.5 million and net proceeds of $10.6 million after sales agent commissions and offering costs.
The agreement with CIRM, as described in Item 8. "Consolidated Financial Statements -Notes to Consolidated Financial Statements -Note 4-Other Financial Statement information" in this Annual Report is expected to provide us in total a grant of $8.0 million, subject to achievement of certain operational milestones. We received an aggregate of $8.0 million and $4.9 million from the CIRM Grant as of December 31, 2025 and 2024, respectively. The CIRM Grant supports the ongoing clinical development of SENTI-202.
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 an aggregate of 21,157,000 shares of common stock, at the conversion price of $2.25 per share.
Cash Flows
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 Annual Report:
| Years Ended December 31, | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
| Net cash provided by (used in): | |||||||||||
| Operating activities | $ | (43,444) | $ | (41,397) | |||||||
| Investing activities | (184) | 34 | |||||||||
| Financing activities | 11,761 | 53,730 | |||||||||
| Net change in cash, cash equivalents and restricted cash | $ | (31,867) | $ | 12,367 | |||||||
Operating Activities
For the year ended December 31, 2025, net cash used in operating activities of $43.4 million was primarily due to our loss of $61.4 million with non-cash expense adjustments of $5.7 million for stock-based compensation expense, $3.6 million for depreciation, and $5.1 million for impairment of long-lived assets. Other material changes included a $3.0 million decrease in GeneFab prepaid expenses - related party, a $2.3 million decrease in operating lease right-of-use assets, and a $4.6 million decrease in operating lease liabilities.
For the year ended December 31, 2024, net cash used in operating activities of $41.4 million was primarily due to our loss of $52.8 million with non-cash expense adjustments of $1.8 million for stock-based compensation expense, $5.9 million for depreciation and amortization of operating lease right-of-use-assets, a $6.3 million gain from change in fair value of the GeneFab Option, and a $13.4 million change in fair value of the Preferred Stock Tranche liability, offset by non-cash expense adjustment of $17.2 million for the change in fair value of the GeneFab Note Receivable. Other material changes were comprised of a $4.0 million decrease in operating lease liabilities and a $8.1 million increase in related party prepaid expenses.
Investing Activities
For the year ended December 31, 2025, net cash used in investing activities of $0.2 million was primarily due to purchases of property and equipment.
For the year ended December 31, 2024, net cash provided by investing activities was nominal from proceeds from the sale of property, plant and equipment which were offset by an immaterial amount of capital expenditures.
Financing Activities
For the year ended December 31, 2025, net cash provided by financing activities of $11.8 million was primarily due to net proceeds of $11.2 million from the issuance of common stock related to the ATM Agreement, and $3.1 million received under the CIRM Grant, offset by the payment of issuance costs of $2.5 million
For the year ended December 31, 2024, net cash provided by financing activities of $53.7 million was primarily due to net proceeds of $47.3 million of a private placement offering and $4.9 million in proceeds from the CIRM Grant.
Funding Requirements
We concluded that substantial doubt about our ability to continue as a going concern continues to exist and that our cash and cash equivalents of $16.4 million as of December 31, 2025, are not sufficient for us to continue as a
going concern for at least one year from the issuance date of the condensed consolidated financial statements. Based on the Company's current operating plan and existing unrestricted cash and cash equivalents, the Company has determined that it may not be able to maintain current operations starting as early as the second quarter of 2026. 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, collect amounts owed to us under existing agreements and ultimately develop profitable operations. While management is devoting substantially all of its efforts to developing our business, raising capital and collecting amounts owed to us under existing agreements, there can be no assurance that our efforts will be successful. Moreover, no assurance can be given that management's actions will result in raising additional financing or profitable operations.
Our future capital requirements will depend on many factors, including:
•the scope, rate of progress, results and costs of drug discovery, clinical and preclinical development, laboratory testing and clinical trials for our product candidates;
•the number and development requirements of product candidates that we may pursue, and other indications for our current product candidates that we may pursue;
•the costs, timing and outcome of regulatory review of our product candidates;
•our ability to collect amounts owed to us by our sublessee, GeneFab;
•the scope and costs of any commercial manufacturing activities;
•the cost associated with commercializing any approved product candidates;
•the cost and timing of developing our ability to establish sales and marketing capabilities, if any;
•the costs of preparing, filing and prosecuting patent applications, maintaining, enforcing and protecting our intellectual property rights, defending intellectual property-related claims and obtaining licenses to third-party intellectual property;
•the timing and amount of any milestone and royalty payments we are required to make under our present or future license agreements;
•our ability to establish and maintain collaborations on favorable terms, if at all; and
•the extent to which we acquire or in-license other product candidates and technologies and associated intellectual property.
In order to improve our liquidity, management is actively pursuing additional financing. We will need to obtain substantial additional funding for continuing operations. If we are unable to raise capital when needed, or on attractive terms, we could be forced to delay, reduce or eliminate our research or drug development programs or any future commercialization efforts. Although management continues to pursue these plans, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, if at all.
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 generally accepted accounting principles in the United States of America ("U.S. GAAP"). 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 2to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, 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.
Impairment of Long-Lived Assets
An impairment test for long-lived assets (or an asset group) is required when circumstances indicate that such assets may be impaired. If it is determined that a triggering event has occurred, we perform a recoverability test based upon estimated undiscounted cash flow projections expected to be realized over the remaining useful life of the long-lived asset. If the undiscounted cash flows used in the recoverability test are less than the long-lived asset's carrying amount, we determine its fair value. If the fair value is determined to be less than its carrying amount, the long-lived asset is reduced to its estimated fair value and an impairment loss is recognized in an amount equal to such shortfall. When determining whether a long-lived asset has been impaired, management groups assets at the lowest level that has identifiable cash flows that are independent of other assets. Performing an impairment test on long-lived assets involves judgment in areas such as identifying when a triggering event requiring evaluation occurs; identifying and grouping assets; and, if the undiscounted cash flows used in the recoverability test are less than the long-lived asset's carrying amount, determining the fair value of the long-lived asset. Although cash flow estimates are based upon relevant information at the time the estimates are made, estimates of future cash flows are by nature highly uncertain and contemplate factors that change over time. Key assumptions include the timing and amount of expected sublease payments and the probability of collecting such payments.
During the year ended December 31, 2025, we identified impairment indicators related to the asset group associated with the GeneFab Sublease. GeneFab did not remit sublease payments in accordance with the contractual terms, resulting in an outstanding receivable balance. This nonpayment constituted a triggering event under ASC 360, requiring an evaluation of recoverability. Following the identification of the triggering event, we continued to monitor GeneFab's payment status and financial condition throughout the remainder of 2025, including ongoing communications with GeneFab and assessment of its ability and intent to cure outstanding amounts. We also evaluated updated information obtained during the year, including subsequent payments received, revised expectations regarding future sublease income, and other relevant developments impacting collectibility and cash flow projections.
During the year ended December 31, 2025, we identified impairment indicators related to the asset group associated with the GeneFab Sublease. GeneFab did not remit sublease payments in accordance with the contractual terms, resulting in an outstanding receivable balance. Accordingly, we performed a recoverability test under ASC 360, Property, Plant, and Equipment, comparing the estimated undiscounted future cash flows expected to be generated by the asset group, which includes the right-of-use asset and related leasehold improvements allocable to the subleased spaces, to the carrying amount of those assets. As part of this analysis, we were required to use updated assumptions regarding cash flows from the Lease Amendment entered on March 17, 2026 described in Item 8. "Consolidated Financial Statements -Notes to Consolidated Financial Statements - Note 15- Subsequent Event" in this Annual Report. As a result, the analysis indicated that the carrying amount was not recoverable as of December 31, 2025.
Accordingly, we performed a recoverability test under ASC 360, Property, Plant, and Equipment, comparing the estimated undiscounted future cash flows expected to be generated by the asset group, which includes the right-of-use asset and related leasehold improvements allocable to the subleased spaces, to the carrying amount of those
assets. The analysis indicated that the carrying amount was not recoverable as of December 31, 2025. The fair value of the asset group was then estimated using a discounted cash flow model, which incorporated expected future cash flows associated with the subleased spaces, reflecting assumptions regarding the timing and collectibility of sublease payments. The cash flows were discounted using a market participant discount rate commensurate with the risks inherent in those cash flows. As a result, the Company recognized an impairment charge of $5.1 million for the year ended December 31, 2025. The Company will continue to monitor GeneFab's payment status, collectibility of sublease payments, and other relevant factors that could affect the recoverability of the underlying assets in future periods.
Emerging Growth Company Status
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.
We expect to remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of the Dynamics Initial Public Offering ("IPO") (which occurred on May 25, 2021), (b) in which we have total annual revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of that fiscal year's second fiscal quarter and our net sales for the year exceed $100 million; and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the preceding, rolling three-year period.
Smaller Reporting Company Status
We are a "smaller reporting company" as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company if (1) the market value of our common stock held by non-affiliates is less than $250 million as of the last business day of the second fiscal quarter, or (2) our annual revenues in our most recent fiscal year completed before the last business day of our second fiscal quarter are less than $100 million and the market value of our common stock held by non-affiliates is less than $700 million as of the last business day of the second fiscal quarter.
Segment Information
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. We and our chief operating decision maker ("CODM"), our Chief Executive Officer, view our operations and manage the business as a single operating segment, which is the research and development of our gene circuit platform.Refer to Item 8. "Consolidated Financial Statements -Notes to Consolidated Financial Statements -Note 14-Segment Reporting" in this Annual Report for additional information related to operating segment. All long-lived assets are located in the United States. We currently have no products approved for sale, and we have never generated any revenue from the sale of any products.
Contractual Obligations and Commitments
Operating Lease Obligations
As of December 31, 2025, we had operating lease obligations for real estate totaling $37.9 million, of which $7.7 million was attributable to short-term obligations, and the remainder was attributed to long-term obligations. Refer to Item 8. "Financial Statements and Supplementary Data -Notes to Consolidated Financial Statements - Note 5- Operating Leases" in this Annual Report on Form 10-K for details on our lease and sublease obligations.
Subsequent to December 31, 2025, we entered into an amendment to our lease agreement for our Alameda facility, which reduced the leased premises and corresponding future lease payments. As a result, our future lease obligations are expected to be lower than the amounts presented above. Refer to Item 8. "Financial Statements and Supplementary Data -Notes to Consolidated Financial Statements - Note 15- Subsequent Events" in this Annual Report on Form 10-K for details on our lease and sublease obligations.
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.
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