Century Therapeutics, Inc.

Previous wording

statements, which represent our intent, belief, or current expectations, involve risks and uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. In some cases you can identify forward-looking statements by terms such as “may,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “predict,” “potential,” “believe,” “should” and similar expressions. Factors that could cause or contribute to differences in results include, but are not limited to, those set forth under “Risk Factors” in our Annual Report. Except as required by law, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes.

Current wording

The following discussion and analysis should be read in conjunction with our financial statements and accompanying notes included in this Quarterly Report on Form 10-Q and the financial statements and accompanying notes thereto for the fiscal year ended December 31, 2025 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 12, 2026 (the “Annual Report”). This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Such forward-looking statements, which represent our intent, belief, or current expectations, involve risks and uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. In some cases you can identify forward-looking statements by terms such as “may,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “predict,” “potential,” “believe,” “should” and similar expressions. Factors that could cause or contribute to differences in results include, but are not limited to, those set forth under “Risk Factors” in our Annual Report. Except as required by law, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes.

Previous wording

We are a biotechnology company harnessing the power of allogeneic pluripotent stem cell therapies to develop potentially curative cell therapy products for autoimmune diseases, including type 1 diabetes, or T1D, and cancer. Our islet, T cell and NK cell programs are allogeneic, meaning they are derived from healthy donors for use in any patient, rather than being sourced from an individual for their own specific use, as is the case with autologous T cells. As a result, we believe such “off-the-shelf" therapies have the potential to overcome the limitations of first-generation cell therapies by providing readily available treatments more quickly, reliably, at greater scale, and to a broader patient population. What we believe further sets us apart from other allogeneic approaches is our focus on induced pluripotent stem cells, or iPSCs, which possess the unique ability to self-renew indefinitely and differentiate into any cell type, enabling virtually unlimited genetic editing, consistent reproducibility, and scalable manufacturing. We have created a comprehensive, genetically engineered allogeneic cell therapy platform that includes:

Current wording

We are a biotechnology company harnessing the power of allogeneic pluripotent stem cell therapies to develop potentially curative cell therapy products for autoimmune diseases, including type 1 diabetes (“T1D”), and cancer. Our islet, T cell and NK cell programs are allogeneic, meaning they are derived from healthy donors for use in any patient, rather than being sourced from an individual for their own specific use, as is the case with autologous T cells. As a result, we believe such “off-the-shelf” therapies have the potential to overcome the limitations of first-generation cell therapies by providing readily available treatments more quickly, reliably, at greater scale, and to a broader patient population. What we believe further sets us apart from other allogeneic approaches is our focus on induced pluripotent stem cells (“iPSCs”), which possess the unique ability to self-renew indefinitely and differentiate into any cell type, enabling virtually unlimited genetic editing, consistent reproducibility, and scalable manufacturing. We have created a comprehensive, genetically engineered allogeneic cell therapy platform that includes:

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ab T cells,or ab iT cells, and iPSC- natural killer cells, or iNK cells. We believe this capability enables optimal matching of cell characteristics to disease indication, ensuring we target the right cell for the right indication.

Current wording

ab T cells, (“ab iT cells”), and iPSC-natural killer cells (“iNK cells”), among other cell types. We believe this capability enables optimal matching of cell characteristics to disease indication, ensuring we target the right cell for the right indication. Core to our unique approach is engineering a suite of precise gene edits into each product that are designed to safely avoid the patient’s own immune system to enable durable, potentially curative, effects.

Previous wording

We also continue to make progress with IND-enabling studies for CNTY-308, a CD19-targeted CD4+/CD8+ ab CAR-iT cell therapy functionally comparable to primary T cells and engineered with Allo-Evasion™ 5.0. CNTY-308 is being developed as a potential treatment for B-cell-mediated diseases. Following successful completion of these IND-enabling studies, and the receipt of requisite regulatory approval, we expect to initiate clinical studies in 2026.

Current wording

We also continue to advance IND-enabling studies for CNTY-308, a CD19-targeted CD4+/CD8+ ab CAR-iT cell therapy engineered with Allo-Evasion™ 5.0, being developed as a potential treatment for B-cell-mediated diseases. In previously presented preclinical studies, CNTY-308 demonstrated functional comparability to primary CAR-T cells, including target-mediated proliferation, cytokine secretion, and long-term persistence. Subject to completion of these IND-enabling studies and receipt of requisite regulatory clearance, we expect CNTY-308 to enter the clinic in 2026.

Previous wording

Based on our current business plans, we believe our cash, cash equivalents and investments as of March 31, 2026 of $217.0 million will be sufficient for us to fund our operating expenses and capital expenditures requirements into the first quarter of 2029. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. 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:

Current wording

Based on our current business plans, we believe our cash, cash equivalents and investments as of June 30, 2026 of $197.2 million will be sufficient for us to fund our operating expenses and capital expenditures requirements into the first quarter of 2029. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. 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:

Previous wording

We also have entered into a sublicense agreement with iCELL and a master services agreement with DBio. See “Note 7—Commitments and contingencies” to our consolidated financial statements.

Current wording

We also have entered into a sublicense agreement with iCELL and a master services agreement with Distributed Bio, Inc. (“DBio”). See “Note 7—Commitments and contingencies” to our consolidated financial statements.

Previous wording

Research and development activities account for a significant portion of our operating expenses. We anticipate that our research and development expenses will increase for the foreseeable future as we expand our research and development efforts including expanding the capabilities of our iPSC cell therapy platforms, identifying product candidates, progressing preclinical studies and clinical trials, including for our first clinical product candidate CNTY-101, seeking regulatory approval of our product candidates, and incurring costs to acquire and license technologies aligned with our goal of translating iPSCs to therapies. A change in the outcome of any of these variables could mean a significant change in the costs and timing associated with the development of our product candidates.

Current wording

Research and development activities account for a significant portion of our operating expenses. We anticipate that our research and development expenses will increase for the foreseeable future as we expand our research and development efforts including expanding the capabilities of our iPSC cell therapy platforms, identifying product candidates, progressing preclinical studies and clinical trials, seeking regulatory approval of our product candidates, and incurring costs to acquire and license technologies aligned with our goal of translating iPSCs to therapies. A change in the outcome of any of these variables could mean a significant change in the costs and timing associated with the development of our product candidates.

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We incurred no impairment expense during the three months ended March 31, 2026 and 2025.

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We incurred no impairment expense during the six months ended June 30, 2026 and 2025.

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Research and development expenses were $17.1 million and $26.6 million for the three months ended March 31, 2026 and 2025, respectively. The decrease of $9.5 million was primarily due to:

Current wording

Research and development expenses were $19.6 million and $26.9 million for the three months ended June 30, 2026 and 2025, respectively. The decrease of $7.3 million was primarily due to:

Previous wording

General and administrative expenses were $6.6 million and $8.4 million for the three months ended March 31, 2026 and 2025, respectively. This decrease was primarily due to a reduction in personnel, and remeasurement of the contingent consideration liability offset by an increase in facility and other allocated costs due to the portfolio prioritization announced in the third quarter of 2025.

Current wording

General and administrative expenses were $5.8 million and $7.8 million for the three months ended June 30, 2026 and 2025, respectively. This decrease was primarily due to a reduction in personnel, and remeasurement of the contingent consideration liability offset by an increase in facility and other allocated costs due to the portfolio prioritization.

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Interest income was $2.0 million and $2.4 million for the three months ended March 31, 2026 and 2025, respectively, which related to interest earned on our cash, cash equivalents, and investment balances.

Current wording

Interest income was $2.0 million and $2.0 million for the three months ended June 30, 2026 and 2025, respectively, which related to interest earned on our cash, cash equivalents, and investment balances.

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During the three months ended March 31, 2026 and 2025, we recognized revenue of $0 million and $109.2 million under our collaboration agreement with Bristol-Myers Squibb, respectively. See “Note 6—Bristol-Myers Squibb collaboration” to our consolidated financial statements for additional information. The Collaboration Agreement was terminated, effective as of March 12, 2025. As such, we recognized the remaining transaction price of $109.2 million as collaboration revenue during the three months ended March 31, 2025. There will be no future collaboration revenues recognized under this collaboration agreement.

Current wording

During the six months ended June 30, 2026 and 2025, we recognized revenue of $0 and $109.2 million under the BMS Collaboration Agreement, respectively. See Note 6, “Bristol-Myers Squibb Collaboration” to our consolidated financial statements for additional information. The BMS Collaboration Agreement was terminated, effective as of March 12, 2025. As such, we recognized the remaining transaction price of $109.2 million as collaboration revenue during the six months ended June 30, 2025. There will be no future collaboration revenues recognized under the BMS Collaboration Agreement.

Previous wording

To date, we have funded our operations from the issuance and sale of our equity securities, debt financing and collaboration revenues. Since our inception, we have raised approximately $792 million in net proceeds from the sales of our equity securities. As of March 31, 2026, we had cash, and cash equivalents of $51.0 million and investments of $165.9 million. Based on our research and development plans, we believe our existing cash, cash equivalents and investments, will be sufficient to fund our operating expenses and capital expenditures requirements into the first quarter of 2029. Since our inception, we have incurred significant operating losses. We have not yet commercialized any products and we do not expect to generate revenue from sales of any product candidates for a number of years, if ever. We had an accumulated deficit of $813.6 million as of March 31, 2026.

Current wording

To date, we have funded our operations from the issuance and sale of our equity securities, debt financing and collaboration revenues. Since our inception, we have raised approximately $792 million in net proceeds from the sales of our equity securities. As of June 30, 2026, we had cash, and cash equivalents of $49.6 million and investments of $147.5 million. Based on our research and development plans, we believe our existing cash, cash equivalents and investments, will be sufficient to fund our operating expenses and capital expenditures requirements into the first quarter of 2029. Since our inception, we have incurred significant operating losses. We have not yet commercialized any products and we do not expect to generate revenue from sales of any product candidates for a number of years, if ever. We had an accumulated deficit of $848.1 million as of June 30, 2026.

Previous wording

In July 2022, we entered into a Sales Agreement with Cowen under which we may offer and sell, from time to time in our sole discretion, shares of our common stock, having an aggregate offering price of up to $150 million through Cowen as sales agent. In February of 2024, 4,084,502 shares of common stock were issued and sold pursuant to the Sales Agreement at a weighted-average price of $4.50 per share, resulting in approximately $18.4 million in gross proceeds.

Current wording

In July 2022, we entered into the Sales Agreement with Cowen under which we may offer and sell, from time to time in our sole discretion, shares of our common stock, having an aggregate offering price of up to $150 million through Cowen as sales agent. In February of 2024, 4,084,502 shares of common stock were issued and sold pursuant to the Sales Agreement at a weighted-average price of $4.50 per share, resulting in approximately $18.4 million in gross proceeds.

Previous wording

In April 2024, we entered into a securities purchase agreement or, the Securities Purchase Agreement, with certain institutional accredited investors, or the Investors, pursuant to which we agreed to issue and sell to the Investors in a private placement an aggregate of 15,873,011 shares of common stock, or the Private Placement Shares, at a price of $3.78 per share, or the Private Placement. We received aggregate gross proceeds from the Private Placement of approximately $60 million, before deducting placement agent fees and offering expenses.

Current wording

In April 2024, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain institutional accredited investors, or the Investors, pursuant to which we agreed to issue and sell to the Investors in a private placement an aggregate of 15,873,011 shares of common stock (the “Private Placement Shares”) at a price of $3.78 per share (“the Private Placement”). We received aggregate gross proceeds from the Private Placement of approximately $60 million, before deducting placement agent fees and offering expenses.

Previous wording

In January 2026, we entered into a securities purchase agreement with certain institutional accredited investors (the “2026 Investors”), pursuant to which we issued and sold to the 2026 Investors in a private placement (the “2026 Private Placement”) (i) 92,030,595 shares of its common stock and accompanying warrants to purchase an aggregate of 58,695,648 shares of common stock (or pre-funded warrants in lieu thereof) and (ii) in lieu of common stock, to certain investors, pre-funded warrants to purchase an aggregate of up to 25,360,704 shares of its common stock and accompanying warrants to purchase 12,680,352 shares of common stock (or pre-funded warrants in lieu thereof), at an exercise price of $0.0001 per pre-funded warrant. The combined offering price of each share of common stock and accompanying common stock warrant was $1.15. The combined offering price of each pre-funded warrant and accompanying common stock warrant was $1.1499. The pre-funded warrants are exercisable immediately. Each common stock warrant has an exercise price per share of $2.60. The common stock warrants are exercisable from the date of issuance and will expire 30 days following the public announcement of initial Phase 1 clinical data for CNTY-813 or, if earlier, on the third anniversary of closing. Aggregate gross proceeds were $135.0 million before deducting placement agent fees and offering expenses.

Current wording

In January 2026, we entered into a securities purchase agreement with the 2026 Investors, pursuant to which we issued and sold to the 2026 Investors in the 2026 Private Placement (i) 92,030,595 shares of its common stock and accompanying warrants to purchase an aggregate of 58,695,648 shares of common stock (or pre-funded warrants in lieu thereof) and (ii) in lieu of common stock, to certain investors, pre-funded warrants to purchase an aggregate of up to 25,360,704 shares of its common stock and accompanying warrants to purchase 12,680,352 shares of common stock (or pre-funded warrants in lieu thereof), at an exercise price of $0.0001 per pre-funded warrant. The combined offering price of each share of common stock and accompanying common stock warrant was $1.15. The combined offering price of each pre-funded warrant and accompanying common stock warrant was $1.1499. The pre-funded warrants are exercisable immediately. Each common stock warrant has an exercise price per share of $2.60. The common stock warrants are exercisable from the date of issuance and will expire 30 days following the public announcement of initial Phase 1 clinical data for CNTY-813 or, if earlier, on the third anniversary of closing. Aggregate gross proceeds were $135.0 million before deducting placement agent fees and offering expenses.

Previous wording

Net cash used in operating activities was $25.3 million and $34.6 million for the three months ended March 31, 2026 and 2025, respectively. Net cash used in operating activities during the three months ended March 31, 2026 consisted primarily of our net loss of $21.6 million offset by non-cash charges of $2.8 million and a decrease of $6.4 million in our net operating assets and liabilities. The non-cash charges of $2.8 million consisted primarily of $3 million for depreciation expense, non-cash operating lease expense of $0.4 million, and stock-based compensation expense of $1.4 million, partially offset by gain on remeasurement of contingent consideration liability of $1.8 million, and amortization of marketable securities of $0.2 million. The change in operating assets and liabilities was primarily due to a $0.8 million decrease in operating lease liability, a $1.6 million decrease in accounts payable, and a $4 million decrease in accrued expenses.

Current wording

Net cash used in operating activities was $45.1 million and $62.2 million for the six months ended June 30, 2026 and 2025, respectively. Net cash used in operating activities during the six months ended June 30, 2026 consisted primarily of our net loss of $56.2 million and a decrease of $5.8 million in our net operating assets and liabilities, offset by non-cash charges of $16.9 million. The non-cash charges consisted primarily of the loss on the terminated lease component of $11.1 million, $5.6 million for depreciation expense, stock-based compensation expense of $3.4 million, and non-cash operating lease expense of $0.8 million, partially offset by the change in fair value of the contingent consideration of $3.8 million with the remaining change due to the accretion of investments. The change in operating assets and liabilities was primarily due to a $1.2 million increase in prepaid expenses and a $2.8 million decrease in accrued expenses and other liabilities.

Previous wording

Net cash used in operating activities during the three months ended March 31, 2025 consisted primarily of our net income of $76.5 million and a decrease of $116.2 million in our net operating assets and liabilities, partially offset by non-cash charges of $5.0 million. The non-cash charges of $5.0 million consisted primarily of $3.2 million for depreciation expense, non-cash operating lease benefit of $0.5 million, a decrease in lease liability due to a lease termination, and stock-based compensation expense of $2.4 million, partially offset by amortization of marketable securities of $0.9 million and gain on contingent consideration liability of $0.2 million. The change in operating assets and liabilities was primarily due to a $1.2 million decrease in operating lease liability, a $109.2 million decrease in deferred revenue due to the termination of the Collaboration Agreement with Bristol-Myers Squibb, and a $6.5 million decrease in accrued expenses.

Current wording

Net cash used in operating activities during the six months ended June 30, 2025 consisted primarily of our net income of $44.0 million and a non-cash charges of $10.7 million, offset by a decrease of $116.8 million in our net operating assets and liabilities. The non-cash charges of $10.7 million consisted primarily of $6.4 million for depreciation expense, non-cash operating lease benefit of $1.0 million, and stock-based compensation expense of $4.6 million, partially offset by amortization of marketable securities of $1.5 million and loss on contingent consideration liability of $0.1 million. The change in operating assets and liabilities was primarily due to a $2.3 million decrease in operating lease liability, a $109.2 million decrease in deferred revenue due to the termination of the BMS Collaboration Agreement, and a $5.8 million decrease in accrued expenses.

Previous wording

Net cash used in investing activities was $112.6 million for the three months ended March 31, 2026 and net cash provided by investing activities was $27.9 million for the three months ended March 31, 2025. Cash used in investing activities for the three months ended March 31, 2026 consisted primarily of the acquisition of property and equipment for $0.6 million, and acquisition of fixed maturity securities for $140.7 million which was partially offset by sale of fixed maturity securities of $28.7 million.

Current wording

Net cash used in investing activities was $94.9 million for the six months ended June 30, 2026 and net cash provided by investing activities was $60.5 million for the six months ended June 30, 2025. Cash used in investing activities for the six months ended June 30, 2026 consisted primarily of the purchase of fixed maturity securities for $156.7 million, which was partially offset by proceeds from the sale of fixed maturity securities of $63.0 million.

Previous wording

Net cash provided by investing activities was $27.9 million for the three months ended March 31, 2025. Cash provided by investing activities for the three months ended March 31, 2025 consisted primarily of the sale of fixed maturity securities of $43.3 million, which was partially offset by purchases of fixed maturity securities of $14.9 million

Current wording

Cash provided by investing activities for the six months ended June 30, 2025 consisted primarily of the sale of fixed maturity securities of $85.8 million, which was partially offset by purchases of fixed maturity securities of $24.6 million.

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Net cash provided by financing activities was $126.6 million and $0.1 million for the three months ended March 31, 2026 and 2025, respectively. Cash provided by financing activities consisted of $0.2 million from issuance of our common stock from equity incentive plans pursuant to the exercise of employee stock options, and $126.4 million of proceeds from the 2026 Private Placement.

Current wording

Net cash provided by financing activities was $126.9 million and $0.1 million for the six months ended June 30, 2026 and 2025, respectively. Cash provided by financing activities consisted primarily of $126.4 million in proceeds from the 2026 Private Placement.

Previous wording

Net cash provided by financing activities was $0.1 million for the three months ended March 31, 2025. Cash provided by financing activities consisted of $0.1 million from issuance of our common stock from equity incentive plans pursuant to the exercise of employee stock options.

Current wording

Net cash provided by financing activities was $0.1 million for the six months ended June 30, 2025. Cash provided by financing activities consisted of $0.1 million from issuance of our common stock from equity incentive plans pursuant to the exercise of employee stock options.

Previous wording

Payment obligations under our license, collaboration, and acquisition and merger agreements as of March 31, 2026 are contingent upon future events such as our achievement of pre-specified development, regulatory, and commercial milestones, or royalties on net product sales. As of March 31, 2026, the timing and likelihood of achieving the milestones and success payments and generating future product sales are uncertain and therefore, any related payments are not included in the table above. We also enter into agreements in the normal course of business for sponsored research, preclinical studies, contract manufacturing, and other services and products for operating purposes, which are generally cancelable upon written notice. These obligations and commitments are not included in the table above. See Note 7 “Commitments and contingencies” for additional information.

Current wording

Payment obligations under our license, collaboration, acquisition and merger agreements, and lease payment guaranty as of June 30, 2026 are contingent upon future events such as our achievement of pre-specified development, regulatory, and commercial milestones, royalties on net product sales, or the financial condition of an unrelated third party. As of June 30, 2026, the timing and likelihood of achieving the milestones and success payments and generating future product sales, or resuming payments on the terminated lease component, are uncertain and therefore, any related payments are not included in the table above. We also enter into agreements in the normal course of business for sponsored research, preclinical studies, contract manufacturing, and other services and products for operating purposes, which are generally cancelable upon written notice. These obligations and commitments are not included in the table above. See Note 7, “Commitments and contingencies” for additional information.

Previous wording

Refer to Note 2, Summary of Significant Accounting Policies, included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of our critical accounting policies.

Current wording

Refer to Note 2, “Summary of Significant Accounting Policies and Basis of Presentation,” included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of our critical accounting policies.

Previous wording

During the three months ended March 31, 2026, there were no material changes to our critical accounting policies from those described in our audited financial statements for the year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the SEC on March 12, 2026, except as noted above.

Current wording

During the six months ended June 30, 2026, there were no material changes to our critical accounting policies from those described in our audited financial statements for the year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the SEC on March 12, 2026, except as noted above.