SNTI 10-K & 10-Q changes, risk factors and insider trading

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

•continue to advance our gene circuit platform technologies;

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

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

•acquire and in-license technologies aligned with our gene circuit platform technologies;

•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;

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

•incur additional legal, accounting, or other expenses in operating our business, including the additional costs associated with operating as a public company.

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

•the timing and progress of preclinical and clinical development of our current and potential future product candidates;

•the timing and progress of our development of our gene circuit platforms;

•the number and scope of preclinical and clinical programs we decide to pursue;

•the terms of any current third-party manufacturing contract or biomanufacturing partnership or future manufacturing contract or biomanufacturing partnership we may enter into;

•our ability to collect rent and other payments under various agreements with GeneFab and other parties who occupy portions of the properties we currently lease from third parties;

•our ability to maintain our current licenses and collaborations, conduct our research and development programs and establish new strategic partnerships and collaborations;

•the progress of the development efforts of our existing strategic partners and third parties with whom we may in the future enter into collaboration and research and development agreements;

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

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

•GeneFab’s ability to continue operating as a going concern and to satisfy its obligations under various manufacturing agreements between us and GeneFab;

•the cost and timing of regulatory approvals; and

•our efforts to enhance operational systems and to hire and retain personnel, including personnel to support development of our product candidates and to satisfy our obligations as a public company.

•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;

•adverse events experienced by participants in our clinical trials or by individuals using therapeutics similar to our product candidates;

•delays in submitting INDs or comparable foreign applications, or delays or failures to obtain the necessary approvals from regulatory authorities 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;

•conditioning patients with fludarabine in advance of administering our product candidates, which may be difficult to source, costly, or increase the risk of infections and other adverse side effects;

•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;

•delays as a result of a pandemic or other public health emergency, or events associated with a pandemic or other health emergency;

•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; or

•the FDA or other regulatory authorities interpreting our data differently than we do.

•the research methodology used may not be successful in identifying potential investigational therapies;

•competitors may develop alternatives that render our investigational therapies obsolete;

•investigational therapies we develop may be covered by third parties’ patents or other exclusive rights;

Overview

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.

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.

Our indebtedness under the Notes may:

Risks Related to the Proposed Merger Transaction

The announcement and pendency of the proposed Merger and related transactions, whether or not consummated, may adversely affect our business.

On July 14, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Celadon Partners SPV 35 Limited, an exempted company incorporated under the laws of the Cayman Islands (“Parent”), Senti Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), Senti Holdings, Inc., a Delaware corporation and wholly owned subsidiary of ours (“Midco”) and Senti Biosciences, Inc., a Delaware corporation and wholly owned subsidiary of Midco (“Opco”). Subject to the terms and conditions of the Merger Agreement, Merger Sub will be merged with and into Midco (the “Merger”), with Midco continuing as the surviving corporation and a wholly owned subsidiary of Parent.

Parent is an entity affiliated with Celadon Partners SPV 24 (“Celadon”), which is our largest stockholder and a holder of more than five percent of our outstanding capital stock.

Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each outstanding share of Midco common stock (other than shares owned by Midco or a subsidiary of Midco, which shares will be cancelled) will automatically be cancelled and converted into the right to receive the Milestone Payment Amount (as defined and described below) (the “Merger Consideration”). The right to receive the Merger Consideration shall be distributed by Midco to our stockholders and holders of RSUs and, upon exercise, holders of stock options and warrants (including certain entities and individuals affiliated with Celadon who hold any such securities) in the form of contractual contingent value rights (as described below, “CVRs”). Pursuant to the Merger Agreement, our Board of Directors or the Special Committee thereof shall approve, and Midco shall effect, the issuance and distribution of one CVR with respect to each share of the Company’s common stock that is issued and outstanding as of the CVR record date, which shall be a date no less than five days and no more than ten days following the date that the Merger closes.

At or prior to the Effective Time, Midco will execute and deliver the Contingent Value Rights Agreement in the form attached as Exhibit A to the Merger Agreement (the “CVR Agreement”).

The announcement and pendency of the proposed Merger and the other transactions contemplated by the Merger Agreement (the “Subject Transactions”), whether or not consummated, may adversely affect the trading price of our common stock, our business or our relationships with third parties, such as contract manufacturing organizations, suppliers and employees. In addition, pending the completion of the Subject Transactions, we may be unable to attract and retain key personnel and the focus and attention of our management and employee resources may be diverted from operational matters during the pendency of the Subject Transactions.

We cannot be sure if or when the Subject Transactions will be completed.

The closing of the Subject Transactions is subject to the satisfaction or waiver of various conditions, including the adoption of the Merger Agreement at a duly called meeting by (a) the holders of a majority of the outstanding shares of our common stock entitled to vote on the Merger Agreement at the Company stockholders meeting (the “Stockholder Approval”) and (b) holders of a majority of the votes cast by holders of shares of our common stock, other than shares beneficially owned, directly or indirectly, by Parent, Merger Sub or any of their respective affiliates, or with respect to which any of the foregoing has, directly or indirectly, the right to direct the voting thereof, that are present in person or represented by proxy and entitled to vote on the adoption of the Merger Agreement at the Company stockholders meeting, which we refer to as the Majority of the Minority Approval. The closing conditions set forth in the Merger Agreement may not be satisfied. For example, we entered into a Voting Agreement with all of our executive officers, certain of our directors and Celadon, our largest stockholder, in each case, whereby the parties agreed to vote in favor of the adoption and approval of the Merger and other transactions contemplated by the Merger Agreement. However, the vote by the parties to the Voting Agreement is not expected to satisfy the Majority of the Minority Approval requirement and we can provide no assurance that the Majority of the Minority Approval will be obtained. If we are unable to satisfy the closing conditions in Parent’s favor or if other mutual closing conditions are not satisfied, Parent will not be obligated to consummate the Subject Transactions. In the event that the Subject Transactions are not completed, the announcement of the termination of the Merger Agreement may adversely affect the trading price of our common stock, our business and operations or our relationships with third parties, such as contract manufacturing organizations, suppliers and employees. Any delay in completing the Subject Transactions may significantly reduce the benefits that the Company expects to achieve if it successfully completes the Subject Transactions within the expected timeframe.

In addition, if the Subject Transactions are not completed, our Board of Directors, or the Board (or the Special Committee thereof, or the Special Committee), in discharging its fiduciary obligations to our stockholders, may evaluate other strategic alternatives that may be available, which alternatives may not be as favorable to the Company and our stockholders as the Subject Transactions. Moreover, we may be unable to find another potential buyer or to raise capital from another source on a timely basis, which could result in our inability to continue our business and the liquidation and winding down of the Company and its business.

The Merger Agreement limits our ability to pursue alternatives to the Subject Transactions.

The Merger Agreement restricts our ability to solicit, initiate or engage in discussions or negotiations with a third party (including by furnishing non-public information) regarding competing transactions and our ability to change or withdraw our recommendation, which means the following recommendation: our Board (i) determining that the Merger Agreement, the CVR Agreement and the transactions contemplated thereby are fair to, and in the best interests of, the Company and its stockholders, (ii) approving and declaring advisable the Merger Agreement and the transactions contemplated thereby, in each case on the terms and subject to the conditions set forth in the Merger Agreement, (iii) authorizing and approving the execution, delivery and performance by the Company of the Merger Agreement and the consummation by us of the transactions contemplated by the Merger Agreement, and (iv) recommending that the holders of shares of our common stock adopt the Merger Agreement and directing that the Merger Agreement be submitted to our stockholders at the meeting of stockholders for adoption. As a result of these provisions, it is more difficult for us to engage in another type of acquisition transaction with a party other than Parent, even if that party were prepared to pay consideration with a higher value than the consideration to be paid by Parent. These provisions could also discourage a third party that might have an interest in acquiring all of, or substantially all of, our assets or our common stock from considering or proposing such an acquisition.

Our stockholders cannot be assured that they will receive any cash proceeds as a result of the Subject Transactions.

The Merger Consideration consists solely of the right to receive the cash payments contemplated by the CVR, each of which are contingent upon achievement of specified milestones (the “Milestones” and each such cash payment, the “Milestone Payment Amounts”), which right shall be subsequently distributed to our stockholders in the form of CVRs. Pursuant to the CVR Agreement, cash will be paid with respect to these CVRs only to the extent that the milestones specified by the CVR Agreement are achieved before the relevant milestone expiration date. The CVRs may not be sold, assigned, transferred, pledged, encumbered or in any other manner disposed of except under certain limited circumstances. Pursuant to the Merger Agreement, Parent has agreed to use, and cause its affiliates and licensees to use, diligent efforts (as defined in the Merger Agreement) to achieve each milestone, and neither Parent nor any of its affiliates or its (or their) licensees shall take any action, or fail to take any action, whose primary purpose is to avoid the achievement of any milestone or the payment of any Milestone Payment Amount. Even assuming Parent’s compliance with this obligation, we cannot guarantee that any Milestone will be achieved before the Milestone Expiration Date because the achievement of each Milestone is not solely within the control of either us or Parent. As a result, our stockholders may not receive any cash as a result of the Subject Transactions.

We have incurred and expect to continue to incur significant expenses in connection with the Subject Transactions, regardless of whether the Subject Transactions are consummated.

We have incurred and expect to continue to incur significant expenses related to the Subject Transactions. These expenses include, but are not limited to, financial advisory and opinion fees and expenses, legal fees, accounting fees and expenses, certain employee expenses, filing fees, printing expenses and other related fees and expenses. Many of these expenses will be payable by us regardless of whether the Subject Transactions are consummated.

The opinion obtained by the Special Committee from its financial advisor does not and will not reflect changes in circumstances subsequent to the date of such opinion.

On June 16, 2026, Lincoln International LLC, or Lincoln, rendered its oral opinion to the Special Committee (which was subsequently confirmed in writing by delivery of Lincoln’s written opinion addressed to the Special Committee dated the same date) as to, as of June 16, 2026, the fairness, from a financial point of view, to our stockholders (other than Parent and its affiliates as well as Merger Sub) of the Merger Consideration to be received by our stockholders pursuant to the Merger Agreement.

Although we believe there have been no material changes in the matters and conditions considered by Lincoln in rendering its fairness opinion and no material changes are anticipated to occur prior to the Annual Meeting, changes in the operations and prospects of the Company, general market and economic conditions and other factors that may be beyond our control, and on which the opinion was based, may alter the value of assets by the time the Subject Transactions are completed, if ever. The opinion rendered by Lincoln does not speak to the time when the Subject Transactions will be completed, if ever.

Our directors and executive officers have certain interests in the Merger that may be different from, or in addition to, the interests of our stockholders generally.

Our directors and executive officers have certain interests in the Merger that may be different from, or in addition to, the interests of our stockholders generally. Our directors and executive officers collectively hold stock options and restricted stock unit awards, and pursuant to the Merger Agreement, the vesting of such equity awards will be accelerated. In addition, pursuant to existing agreements and plans, our executive officers may continue to be employed by Opco and are eligible for certain severance benefits. Our executive officers and directors are also entitled to certain indemnification benefits pursuant to the Merger Agreement. The Company intends to include more information regarding such interests in the preliminary proxy statement and the definitive proxy statement, in each case, to be filed with the SEC on Schedule 14A.

Under certain circumstances we may be required to settle the value of the common stock warrants issued in connection with our December 2024 financing in cash.

If, at any time while the common stock warrants issued in connection with our December 2024 financing are outstanding, we consummate a “Fundamental Transaction” (as defined in the warrants), which includes, but is not limited to, the Subject Transactions, a sale of substantially all of our assets, a merger, purchase offer, tender offer or exchange offer, a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or other scheme of arrangement), then each registered holder of an outstanding common stock warrant as at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction, may elect and require us to purchase the common stock warrants held by such person immediately prior to the consummation of such Fundamental Transaction by making a cash payment in an amount equal to the Black Scholes Value of the remaining unexercised portion of such registered holder’s common stock warrants as of the closing of such Fundamental Transaction. If this right is exercised, our cash resources may be exhausted more quickly than we expect, and we may run out of cash before we are able to secure additional financing.

Risks Related to Ownership of Our Common Stock

If we fail to comply with the continued listing requirements of The Nasdaq Capital Market, our common stock may be delisted, and the price of our common stock and our ability to access the capital markets could be negatively impacted.

Our common stock is currently listed on The Nasdaq Capital Market. We must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price of $1.00 per share and satisfaction of one of the following standards under Nasdaq Listing Rule 5550(b): (i) a minimum stockholders’ equity of $2,500,000; (ii) a minimum market value of listed securities of at least $35,000,000; or (iii) net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years.

In addition, effective January 2026, Nasdaq amended its minimum bid requirements to provide that if a company’s common stock trades at or below $0.10 for ten consecutive trading days, Nasdaq will immediately issue a delisting determination and the company’s common stock will be suspended from trading immediately. Unlike typical delisting determinations, a company’s request for a hearings panel review will not automatically stay the trading suspension.

Nasdaq listing rules also provide that if a company conducts a reverse split and then falls below the $1.00 minimum bid within one year, it may no longer receive a new compliance period and can be subject to immediate delisting.

In 2024, we experienced a bid price deficiency and regained compliance by way of a reverse stock split. Although we have not received a bid price deficiency notice from Nasdaq since, the closing bid price of our common stock has been below $1.00 since July 13, 2026 through the date of the filing of this Quarterly Report on Form 10-Q.

Failure to satisfy any of these standards could result in delisting, which would have a material adverse effect on our business. There are many factors that may adversely affect our ability to comply with the requirements for continued listing on The Nasdaq Capital Market, including those described throughout this “Risk Factors” section. Many of these factors are outside of our control. As a result, we cannot assure you that we will continue to comply with the requirements for continued listing on The Nasdaq Capital Market, including the minimum stockholders’ equity requirement.

A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors and employees and fewer business development opportunities. In addition, any potential delisting of our common stock from Nasdaq would also make it more difficult for our stockholders to sell their shares in the public market.

As of the date of the filing of this Quarterly Report on Form 10-Q, our stockholders’ equity has fallen below $2.5 million. In addition, as of the date of the filing of this Quarterly Report on Form 10-Q, the market value of our listed securities has been below Nasdaq’s requirement of $35 million for a period of 30 consecutive business days. As a result, we expect to receive a deficiency letter from Nasdaq notifying us that we are not in compliance with Nasdaq Listing Rule 5550(b). Upon receipt of such notice, we may have 45 calendar days to submit a plan of compliance to Nasdaq. If our plan of compliance is approved, we would have up to 180 calendar days to regain compliance with the applicable listing standards. If we do not regain compliance within such 180-day period, we may be eligible for an additional 180-day compliance period, subject to certain conditions, or we may request a hearing before a Nasdaq Hearings Panel. There can be no assurance that we will be able to regain compliance with Nasdaq’s continued listing requirements within the applicable compliance period, or at all. If we are unable to regain compliance in a timely manner, our common stock may be delisted from The Nasdaq Capital Market, which could negatively impact the price of our common stock and our ability to access the capital markets.

Celadon Partners, LLC, together with its affiliates, would become our controlling stockholder upon exchange of the Initial Notes for shares of our common stock, and this stockholder’s interests may not be the same as those of our other stockholders.

Based on the Schedule 13D/A filed by Celadon Partners, LLC, Celadon Partners SPV 24, CPIF II-7 Limited and Parent (whom we collectively refer to as Celadon) with the SEC on July 16, 2026, or the Celadon 13D/A, assuming the Issuance Approval and the immediate exchange of the Initial Notes held by Celadon for our common stock, Celadon would beneficially own approximately 54.6% of our common stock and would become our controlling stockholder.

In addition, pursuant to the Securities Purchase Agreement, although we are not obligated to issue or sell any additional Notes beyond the Initial Notes other than the Additional Notes that Parent is required to purchase pursuant to the Merger Agreement, we may choose to sell up to a total of $30.0 million in aggregate principal amount of additional Notes, including the Additional Notes, pursuant to the Securities Purchase Agreement. Assuming that we sell the full $6.0 million of Additional Notes or $30.0 million in aggregate principal amount of such additional Notes to Celadon, the Issuance Approval is obtained and Celadon immediately exchanges all of its Notes for shares of our common stock, Celadon would beneficially own 62.3% or 77.5% of the Company’s common stock, respectively. In addition, pursuant to the terms of the Notes, if the Merger closes, we have the right to force the exchange of all outstanding Notes for shares of our common stock.

As a result, if the Issuance Approval is approved and Celadon exchanges its Notes for our common stock, Celadon would strongly influence or control the vote of all matters submitted to our stockholders, including any future transaction requiring approval of our stockholders, including mergers, consolidations, dissolutions or sales of assets. These transactions may benefit Celadon at the expense of our other stockholders or may disproportionately benefit Celadon compared to our other stockholders.

The exchange of the Notes for our common stock could result in substantial dilution to our existing shareholders and could cause our stock price to decline.

If the Notes are exchanged for our common stock, such shares of our common stock will be significantly dilutive and may cause a decline in the market price of our common stock.

As of June 30, 2026, the net tangible book value of our Common Stock was approximately $(16.6) million, or $(0.53) per share of common stock based on 31,144,754 shares of our common stock issued and outstanding. Net tangible book value per share as of a particular date represents our total tangible assets less total liabilities, divided by the number of shares of outstanding Common Stock.

After giving effect to the issuance of 15,971,890 shares of our common stock upon the potential exchange of the Initial Notes (which amount assumes the Issuance Approval is approved and Celadon exchanges its full amount of Initial Notes for our common stock) at an assumed price of $0.6261 per share, the pro forma net tangible book value as of June 30, 2026 would have been approximately $(7.2) million or $(0.15) per share. This represents an immediate increase in the net tangible book value of $0.38 per share to existing stockholders.

Assuming Celadon purchases all the additional Notes having an aggregate principal amount of $30.0 million, and exchanges its Notes for 47,916,669 shares of our common stock (which amount assumes the Issuance Approval is approved and Celadon exchanges its full amount of its Notes for our common stock) at an assumed price of $0.6261 per share, the pro forma net tangible book value as of June 30, 2026 would have been approximately $21.7 million or $0.23 per share. This represents an immediate increase in the net tangible book value of $0.38 per share to existing stockholders.

Risks Related to Our Future Operations

Following the Merger, we will not have any clinical product candidates and will instead have only two early-stage programs, which may negatively impact the value of our common stock.

If the Merger is completed, we will no longer be developing SENTI-202 or any of our other programs, other than (i) our program seeking a treatment for Rett Syndrome, or the Rett Syndrome program utilizing the Company’s Regulator Dial technology and (ii) our platform of Regulator Dial-enabled armored tumor-infiltrating lymphocyte, or TIL, therapies designed to address key limitations associated with current TIL approaches, or the TIL program. Following closing, we plan to continue advancing our Rett Syndrome and TIL programs with the goal of returning additional value to our stockholders. Notwithstanding this present expectation, our Board may use our resources for other purposes for the benefit of the Company and our stockholders, and in connection therewith may find it necessary or advisable to use our resources for different or presently non-contemplated purposes.

Our Rett Syndrome and TIL programs are each in an early stage of development, and there can be no assurance that either program will yield a clinical product candidate that will receive FDA approval in the future or that it will attract interest from third-party collaborators. Therefore, the value of our common stock after the Merger may be materially and adversely affected by the fact that our Rett Syndrome and TIL programs are expected to be our only programs following the Merger.

Our ability to successfully operate our business following the Merger will depend on our ability to obtain substantial capital, and such capital may not be available on acceptable terms, or at all.

The successful operation of our business following the Merger will require substantial capital. Our cash resources following the Merger will not be sufficient to fund our strategy, operations or liquidity needs beyond several months without raising additional debt or equity financing during the initial period after the Merger is consummated. We expect to continue to incur significant cash needs, including for personnel costs, public company costs, professional fees, transaction expenses, working capital, debt service and the costs of advancing our Rett Syndrome and TIL programs. Our cash resources may be exhausted more quickly than we expect, and we may run out of cash before we are able to secure additional financing.

Capital markets conditions, trading volatility in our common stock, our financial condition, investor sentiment regarding our Rett Syndrome and TIL programs and other factors may make it difficult or impossible for us to obtain additional capital on terms that are acceptable to us, or at all. If financing is unavailable or available only on unfavorable terms, we may be forced to curtail operations, issue additional equity that is highly dilutive, incur restrictive indebtedness, drastically reduce expenses, cease operations, declare bankruptcy, or pursue other strategic alternatives, which could include acquisition alternatives. If we are unable to raise capital when needed, we may run out of cash. Any of these outcomes could materially adversely affect our business and stockholders.

Our ability to maintain the listing of our common stock on Nasdaq following the Merger is highly uncertain, and if we are unable to satisfy Nasdaq’s continued listing requirements, our common stock could be delisted.

Following the Merger, our business, operations, financial condition, market capitalization, stockholders’ equity and trading characteristics will change materially. As a result, we may have difficulty continuing to satisfy Nasdaq’s continued listing standards, including standards relating to minimum stockholders’ equity, market value, bid price, publicly held shares, round-lot holders, corporate governance and other qualitative and quantitative requirements. In addition, after the Merger, investors may view us as an operating company with limited assets or operations pending implementation of our new business plan, which could adversely affect trading in our common stock and our ability to satisfy applicable listing standards. This risk may be heightened because, after the Merger, we will be viewed as a company with limited operating history, extremely limited capital and uncertain prospects. If Nasdaq determines that we no longer meet one or more of its continued listing requirements, our common stock could be delisted. A delisting would likely adversely affect the liquidity and market price of our common stock, reduce our access to the capital markets, impair our ability to raise additional financing, decrease analyst coverage and investor interest, and make it more difficult for stockholders to sell their common stock. Any such consequences could materially and adversely affect the value of an investment in our common stock.

Public company costs may consume a disproportionate amount of our remaining resources.

Following the Merger, we expect to continue to incur substantial costs associated with being a public company, including costs relating to SEC reporting, Nasdaq compliance, legal and accounting services, audit requirements, internal controls, investor relations, directors’ and officers’ insurance, corporate governance, stockholder communications and other administrative and compliance functions. If our continuing operating business remains limited, these costs may represent a disproportionate burden on our liquidity and financial resources. As a result, a significant portion of our available capital may be consumed by public company obligations rather than by investment in the advancement of our Rett Syndrome and TIL programs. If public company costs are greater than expected, or if our remaining resources are less than expected, our ability to execute our strategy, remain listed on Nasdaq, maintain operations and create stockholder value could be materially adversely affected.

Merger Agreement

On July 14, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Celadon Partners SPV 35 Limited (“Parent”), Senti Merger Sub, Inc., a wholly owned subsidiary of Parent (“Merger Sub”), Senti Holdings, Inc., a wholly owned subsidiary of the Company (“Midco”), and Senti Biosciences, Inc., a wholly owned subsidiary of Midco (“Opco”). Parent is an affiliate of Celadon Partners, the Company’s largest stockholder and a related party.

Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will merge with and into Midco, with Midco continuing as the surviving corporation and becoming a wholly owned subsidiary of Parent (the “Merger”). Upon completion of the Merger, Parent will acquire substantially all of the Company’s existing business and pipeline held through Midco and Opco. The Company is expected to remain a publicly traded company and retain certain intellectual property, contracts and early-stage development programs, including the Rett Syndrome program and the TIL program. Opco will license or assign to the Company all intellectual property and contracts needed for the Company to advance the Rett Syndrome and TIL programs. The Company is also expected to retain a modest amount of cash to fund initial development activities and ongoing public company costs.

The completion of the Merger is subject to (i) the affirmative vote of holders of a majority of the outstanding shares of the Company’s common stock and (ii) the Majority of the Minority Approval, and the satisfaction or waiver of other customary closing conditions. The Merger Agreement contains customary termination provisions and provides that, under certain specified circumstances, the Company may be required to pay Parent a termination fee of $2.5 million.

Contingent Value Rights

In connection with the Merger, the Company’s stockholders and certain holders of the Company’s equity awards and warrants will be entitled to receive contingent value rights (“CVRs”). No cash will be paid to the Company or the holders of our common stock at the closing of the Merger as consideration for the Merger. The Merger Consideration will consist exclusively of the right to receive the Milestone Payment Amounts, which right will be distributed to our stockholders in the form of CVRs. The CVRs will provide their holders with the right to receive a pro rata portion of contingent cash payments of up to $60.0 million in the aggregate (the “Aggregate Payment Cap”) upon the achievement of the following specified milestones relating to SENTI-202, each of which must be achieved on or before the seventh anniversary of the closing of the Merger (the “Milestone Expiration Date”): (i) $10.0 million upon the filing and acceptance (or the passing of the 60-day review period without rejection) of a Biologics License Application (“BLA”) with the U.S. Food and Drug Administration (“FDA”) for SENTI-202; (ii) $20.0 million upon receipt of FDA approval of such BLA; and (iii) $30.0 million upon the achievement of cumulative worldwide net sales of SENTI-202 in excess of $200.0 million. There can be no assurance that any of the milestones will be achieved or that any payments will be made under the CVRs. The CVRs will not be evidenced by a certificate, will not have voting or dividend rights and may not be transferred except in limited circumstances.

Additional Financing

Under the Securities Purchase Agreement, Senti Holdings is not obligated to issue any additional Notes unless the parties executed, within 30 days of the closing of the Initial Notes, definitive documents for a potential transaction pursuant to which, if consummated, an entity affiliated with Celadon Partners would merge with and into Senti Holdings and Senti Holdings would issue a contingent value right to the Company’s stockholders, which may pay out up to an aggregate of $60.0 million in cash subject to the achievement of certain regulatory and sales milestones with respect to the Company’s product candidate, SENTI-202. The Merger Agreement, which constitutes such definitive document, was executed on July 14, 2026, more than 30 days after the closing of the Initial Notes on May 20, 2026. Notwithstanding the foregoing, pursuant to the Merger Agreement, no later than 21 days from the date of the Merger Agreement (unless Parent and the Company mutually agree in writing to a later date), Parent or an affiliate of Parent was required to fund and purchase additional Notes in accordance with the terms of the Securities Purchase Agreement, in an amount equal to $6.0 million (the “Additional Funding Amount” and the Notes purchased in connection therewith, the “Additional Notes”), minus the aggregate amount of net proceeds actually received by the Company from sales of common stock pursuant to the Company’s existing at-the-market offering facility with Leerink Partners LLC following the date of the Merger Agreement (“Offset ATM Sales”). As of the date of the filing of this Quarterly Report on Form 10-Q, there have been no Offset ATM Sales.

On August 14, 2026, Senti Holdings received net cash proceeds of $3.9 million of the Additional Funding Amount from CPIF II-7 Limited and issued $4.0 million of Additional Notes pursuant to the terms of the Securities Purchase Agreement. As of the date of the filing of this Quarterly Report on Form 10-Q, Parent or an affiliate of Parent is obligated to fund and purchase an additional $2.0 million of Additional Notes in accordance with the terms of the Merger Agreement.

Change in fair value of convertible notes - related party

The Company elected the fair value option under ASC 825 for the Initial Notes. Accordingly, the Initial Notes were initially recognized at fair value on May 20, 2026 and are subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in the condensed consolidated statements of operations and comprehensive loss. Refer to Part I, Item 1. “Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) —Note 11—Fair Value Measurements” in this Report for details.

Change in fair value of convertible notes - related party. Change in fair value of convertible notes - related party was a gain of $0.3 million for the three months ended June 30, 2026, compared to no gain or loss for the corresponding period in 2025, as no convertible notes were outstanding during that period. Refer to Part I, Item 1. “Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) —Note 11—Fair Value Measurements” in this Report for details.

Other income, net. Other income, net was $0.4 million and $0.2 million for the three months ended June 30, 2026 and 2025, respectively. The increase is attributed to higher income from the sublease of a portion of our headquarters space to BKPBIOTECH and JLSA2 Therapeutics in 2026.

Comparison of the Six Months Ended June 30, 2026 and 2025

The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025:

Collaboration revenue - related party. For the six months ended June 30, 2026, 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 Part I, Item 1. “Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) —Note 13—Related Parties” in this Report for details.

Research and development expenses. Research and development expenses were $13.0 million and $19.3 million for the six months ended June 30, 2026 and 2025 , respectively. The decrease of $6.3 million was primarily due to a decrease of $5.4 million in external services and supplies cost directly related to Senti-202, a decrease of $0.5 million in facilities and other cost, and a decrease of $0.4 million in personnel-related expenses, including stock-based compensation.

General and administrative expenses. General and administrative expenses were $13.0 million and $13.9 million for the six months ended June 30, 2026 and 2025, respectively. The decrease of $0.9 million was primarily due to a decrease of $0.7 million in personnel-related expenses, including stock-based compensation, a decrease of $0.5 million in depreciation and amortization, a decrease of $0.7 million in facilities and other cost, partially offset by an increase of $0.9 million in external services and supplies cost.

Gain on lease modification. Gain on lease modification was $6.9 million for the six months ended June 30, 2026. The gain is a one-time income due to the Alameda Lease Amendment. Refer to Part I, Item 1. “Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) —Note 5—Operating Leases” in this Report for details.

Interest income. Interest income was $0.2 million and $0.7 million for the six months ended June 30, 2026 and 2025, respectively. The decrease is attributed to lower average cash balances in the relevant periods.

GeneFab sublease income - related party. GeneFab sublease income - related party was $1.1 million and $3.3 million for the six months ended June 30, 2026 and 2025, respectively. The decrease was due to the Alameda Lease Amendment. Refer to Part I, Item 1. “Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited) —Note 5—Operating Leases” in this Report for details.

Change in fair value of convertible notes - related party. Change in fair value of convertible notes, related party was a gain of $0.3 million for the six months ended June 30, 2026, compared to no gain or loss for the corresponding period in 2025, as no convertible notes were outstanding during that period.

Other income, net. Other income, net was $0.6 million and $0.4 million for the six months ended June 30, 2026, and 2025 respectively. The increase is attributed to higher income from the sublease of a portion of our headquarters space to BKPBIOTECH and JLSA2 Therapeutics in 2026.

For the three and six months ended June 30, 2026, no shares were sold under the 2025 ATM Agreement. Through June 30, 2026, 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.

On April 27, 2026, we entered into a Securities Purchase Agreement with an investor affiliated with Celadon Partners, pursuant to which Senti Holdings may issue and sell up to $40.0 million in aggregate principal amount of senior secured convertible notes, subject to specified conditions. On May 20, 2026, Senti Holdings issued the Initial Notes with an aggregate principal amount of $10.0 million and received gross cash proceeds of $10.0 million. In connection with the issuance, we paid a $0.3 million fee to the Holder and incurred $0.4 million of third-party issuance costs. The Initial Notes are senior secured obligations of Senti Holdings, are guaranteed by us and all of our direct and indirect subsidiaries, other than Senti Holdings, and are secured by all of our assets, subject to customary exceptions. The Initial Notes do not bear interest unless an event of default occurs and mature on November 23, 2026. If the Initial Notes have not previously been converted or exchanged, Senti Holdings is required at maturity to pay an amount in cash equal to 200% of the outstanding principal amount and any accrued and unpaid interest. The Initial Notes are convertible or exchangeable at an initial price of $0.6261 per share, subject to specified adjustments. See Part I, Item 1, “Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited)—Note 6—Securities Purchase Agreement and the Notes” in this Report for additional information. As of the date of the filing of this Quarterly Report on Form 10-Q, there have been no Offset ATM Sales. On August 14, 2026, Senti Holdings received net cash proceeds of $3.9 million of the Additional Funding Amount from CPIF II-7 Limited and issued $4.0 million of Additional Notes pursuant to the terms of the Securities Purchase Agreement. As of the date of the filing of this Quarterly Report on Form 10-Q, Parent or an affiliate of Parent is obligated to fund and purchase an additional $2.0 million of Additional Notes in accordance with the terms of the Merger Agreement. See Part I, Item 1, “Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited)—Note 16—Subsequent Events” in this Report for additional information.

On May 20, 2026, Senti Holdings issued $10.0 million in aggregate principal amount of senior secured convertible notes. Unless previously converted, exchanged or otherwise redeemed, the notes mature on November 23, 2026, at which time Senti Holdings is required to pay an amount in cash equal to 200% of the outstanding principal amount and any accrued and unpaid interest. Accordingly, as of June 30, 2026, the contractual cash payment due at maturity was $20.0 million, excluding any interest or other amounts that may become payable upon an event of default. Refer to Part I, Item 1, “Condensed Consolidated Financial Statements (Unaudited)—Notes to Condensed Consolidated Financial Statements (Unaudited)—Note 6—Securities Purchase Agreement and the Notes” in this Report for additional information.

Pursuant to the Merger Agreement, no later than 21 days from the date of the Merger Agreement (unless Parent and the Company mutually agree in writing to a later date), Parent or an affiliate of Parent was required to fund and purchase additional Notes in accordance with the terms of the Securities Purchase Agreement, in an amount equal to $6.0 million (the “Additional Funding Amount” and the Notes purchased in connection therewith, the “Additional Notes”), minus the aggregate amount of net proceeds actually received by the Company from sales of common stock pursuant to the Company’s existing at-the-market offering facility with Leerink Partners LLC following the date of the Merger Agreement (“Offset ATM Sales”). As of the date of the filing of this Quarterly Report on Form 10-Q, there have been no Offset ATM Sales. On August 14, 2026, Senti Holdings received net cash proceeds of $3.9 million of the Additional Funding Amount from CPIF II-7 Limited and issued $4.0 million of Additional Notes pursuant to the terms of the Securities Purchase Agreement. As of the date of the filing of this Quarterly Report on Form 10-Q, Parent or an affiliate of Parent is obligated to fund and purchase an additional $2.0 million of Additional Notes in accordance with the terms of the Merger Agreement. Unless previously converted, exchanged or otherwise redeemed, the Additional Notes are subject to the same maturity and repayment provisions as the Initial Note, including the requirement to repay an amount in cash equal to 200% of the outstanding principal amount of the Additional Notes and any accrued and unpaid interest at maturity.