Senti Biosciences Inc

Previous wording

We have incurred net losses of $11.2 million and $18.7 million for the three months ended June 30, 2024 and 2023, respectively, and net losses to $23.3 million and $37.4 million for the six months ended June 30, 2024 and 2023. As of June 30, 2024 and December 31, 2023, we had cash and cash equivalents of $15.9 million and $35.9 million, respectively, and an accumulated deficit of $267.7 million and $244.3 million, respectively. Net cash flows used in operating activities were $20.0 million and $30.0 million during the six months ended June 30, 2024 and 2023, 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.

Current wording

We have incurred net losses of $28.9 million and $14.9 million for the three months ended September 30, 2024 and 2023, respectively, and net losses to $52.2 million and $52.3 million for the nine months ended September 30, 2024 and 2023. As of September 30, 2024 and December 31, 2023, we had cash and cash equivalents of $10.5 million and $35.9 million, respectively, and an accumulated deficit of $296.5 million and $244.3 million, respectively. Net cash flows used in operating activities were $27.9 million and $45.4 million during the nine months ended September 30, 2024 and 2023, respectively. 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.

Previous wording

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

We anticipate that our expenses and operating losses will increase substantially over the foreseeable future to the extent we are able to secure additional financing. The expected increase in expenses will be driven in large part by our ongoing activities, if and as we:

Previous wording

On August 7, 2023, we completed a transaction with GeneFab, LLC (“GeneFab”), a new independent contract manufacturing and synthetic biology biofoundry focused on next-generation cell and gene therapies. We sold, assigned and transferred rights, title and interest in certain of our assets and contractual rights, including all of our equipment at our facilities in Alameda and certain of our intellectual property related to the schematics for and design of the Alameda facility. We subleased our recently constructed 92,000 square foot current good manufacturing practice facility in Alameda, California to GeneFab which will support the clinical manufacturing of our CAR-NK programs, including SENTI-202. The transaction provided us with additional capital in the form of a note receivable and rights to future manufacturing and research activities and reduced longer term operating expenses. In connection with the transaction, we are entitled to receive total consideration of $37.8 million before the end of 2025, of which $18.9 million was due at closing and was netted against prepayment owed by us for manufacturing and research activities to GeneFab. The remaining $18.9 million is anticipated to be paid to us in the first half of 2025, subject to satisfaction of certain conditions. The Company determined that the $18.9 million for future manufacturing and research activities, inclusive of the volume discount provided, was executed at market terms and does not result in any impact to the total consideration received from GeneFab for the disposal of the business.

Current wording

On August 7, 2023, we completed a transaction with GeneFab, LLC (“GeneFab”), a new contract manufacturing and synthetic biology biofoundry focused on next-generation cell and gene therapies. We sold, assigned and transferred rights, title and interest in certain of our assets and contractual rights, including all of our equipment at our facilities in Alameda and certain of our intellectual property related to the schematics for and design of the Alameda facility. We subleased our recently constructed 92,000 square foot current good manufacturing practice facility in Alameda, California to GeneFab which will support the clinical manufacturing of our CAR-NK programs, including SENTI-202. The transaction provided us with additional capital in the form of a note receivable and rights to future manufacturing and research activities and reduced longer term operating expenses. The total consideration in connection with the transaction was $37.8 million, of which $18.9 million was due at closing and was netted against prepayment owed by us for manufacturing and research activities to GeneFab. The remaining $18.9 million consideration is subject to satisfaction of certain conditions. The Company determined that the $18.9 million for future manufacturing and research activities, inclusive of the volume discount provided, was executed at market terms and does not result in any impact to the total consideration received from GeneFab for the disposal of the business. We also agreed to grant a license to GeneFab under certain of our intellectual property rights to conduct manufacturing services and to research, develop, manufacture and commercialize products outside of oncology. As of September 30, 2024, we assessed that there is a probability that a suitable license agreement would not be signed. Refer to Note 3. GeneFab Transaction, in the footnotes to the condensed consolidated financial statements included in this Form 10-Q elsewhere for further details of the GeneFab transaction.

Previous wording

In accordance with ASC 205, Presentation of Financial Statements, we determined that the disposal of the non-oncology business, including the equipment and transfer of in-house manufacturing services in the Alameda facility, represented a strategic shift that will have a major effect on our operations and financial results, thus meeting the criteria to be reported as discontinued operations. As a result, we have retrospectively restated our condensed consolidated statements of operations for the three and six months ended June 30, 2023 to reflect the operating results related to the disposed business in discontinued operations. We have chosen not to segregate the cash flows of the disposed business in the condensed consolidated statements of cash flows. Supplemental disclosures related to discontinued operations for the statements of cash flows have been provided in Note 3. GeneFab Transactionto our condensed consolidated financial statements. Unless otherwise specified, the results of operations refer to continuing operations only.

Current wording

In accordance with ASC 205, Presentation of Financial Statements, we determined that the disposal of the non-oncology business, including the equipment and transfer of in-house manufacturing services in the Alameda facility, represented a strategic shift that will have a major effect on our operations and financial results, thus meeting the criteria to be reported as discontinued operations. We have chosen not to segregate the cash flows of the disposed business in the condensed consolidated statements of cash flows. Supplemental disclosures related to discontinued operations for the statements of cash flows have been provided in Note 3. GeneFab Transactionto our condensed consolidated financial statements. Unless otherwise specified, the results of operations refer to continuing operations only.

Previous wording

In November 2023, the Company entered into a Collaboration and Option Agreement with Celest Therapeutics (Shanghai) Co. Ltd. (“Celest”). Subject to the terms and conditions of the Agreement, the Company and Celest will enter into a collaboration under which Celest will lead a pilot trial of a product candidate for our SENTI-301A program in mainland China, with certain technical support from the Company. In addition, the Company agreed to grant an exclusive option to enter a license agreement with Celest to research, develop, manufacture and commercialize SENTI-301A in mainland China, Hong Kong, Macau, and Taiwan. Outside of these jurisdictions, the Company would retain its rights in the SENTI-301A program. Pursuant to the Agreement, and beginning with the exercise of the option and entering into a license agreement, the Company may become eligible to receive certain option exercise fee and milestone payments, in an aggregate amount of $156.0 million, as well as certain tiered royalty payments.

Current wording

In November 2023, we entered into a Collaboration and Option Agreement with Celest Therapeutics (Shanghai) Co. Ltd. (“Celest”). Subject to the terms and conditions of the Agreement, the Company and Celest will enter into a collaboration under which Celest will lead a pilot trial of a product candidate for our SENTI-301A program in mainland China, with certain technical support from the Company. In addition, we agreed to grant an exclusive option to enter into a license agreement with Celest to research, develop, manufacture and commercialize SENTI-301A in mainland China, Hong Kong, Macau, and Taiwan. Outside of these jurisdictions, the Company would retain its rights in the SENTI-301A program. Pursuant to the Agreement, and beginning with the exercise of the option and entering into a license agreement, the Company may become eligible to receive certain option exercise fee and milestone payments, in an aggregate amount of $156.0 million, as well as certain tiered royalty payments.

Previous wording

In January 2023, we announced a strategic plan to focus internal resources on SENTI-202 and SENTI-401, to develop gene circuits for other programs with potential partners, and to suspend research and development efforts for SENTI-301A. In January 2024, we announced a strategic plan to streamline business operations and focus our resource allocation to investment on clinical development of SENTI-202, for which an Investigational New Drug (“IND”) application was cleared by the U.S. Food and Drug Administration (“FDA”) in December 2023, and on the partnership of our SENTI-301A program in China with Celest.

Current wording

In January 2024, we announced a strategic plan to streamline business operations and focus our resource allocation to investment on clinical development of SENTI-202, for which an Investigational New Drug (“IND”) application was cleared by the U.S. Food and Drug Administration (“FDA”) in December 2023, and on the partnership of our SENTI-301A program in China with Celest.

Previous wording

On July 17, 2024, the Company filed a Certificate of Amendment to Second Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware, pursuant to which we effected a 1-for-10 reverse stock split (the “Reverse Stock Split”) of Company’s issued and outstanding common stock. The Reverse Stock Split became effective as of 5:00 p.m. (Eastern Time) on July 17, 2024, and the Company’s common stock began trading on a split-adjusted basis on the Nasdaq Capital Market at the market open on July 18, 2024. All references in this Report to number of common shares, price per share and weighted average number of shares outstanding have been adjusted to reflect the Reverse Split on a retroactive basis.

Current wording

On July 17, 2024, we filed a Certificate of Amendment to Second Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware, pursuant to which the Company effected a 1-for-10 reverse stock split (the “Reverse Stock Split”) of our issued and outstanding common stock. The Reverse Stock Split became effective as of 5:00 p.m. (Eastern Time) on July 17, 2024, and our common stock began trading on a split-adjusted basis on the Nasdaq Capital Market at the market open on July 18, 2024.

Previous wording

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

Current wording

On August 2, 2024, we received notification from Nasdaq that for ten consecutive business days, the closing bid price of the Company’s common stock was at least $1.00 per share, and accordingly, we regained compliance with the Bid Price Rule, and that the matter is now closed. Refer to Note 1. Organization and Description of Business, in the footnotes to condensed consolidated financial statements included in this Form 10-Q elsewhere for further details.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

The change in fair value of GeneFab Note Receivable consists of the remeasurement to fair value at each reporting period of the deferred consideration due from GeneFab for which we have elected the fair value option. Refer to Note 4. Fair Value Measurements, in the footnotes to the condensed consolidated financial statements included in this Form 10-Q elsewhere related to the valuation methodology and assumptions used.

Previous wording

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

Current wording

The change in fair value of GeneFab Economic Share is a result of the change in the equity value of GeneFab and the volatility at each reporting period. Refer to Note 4. Fair Value Measurements, in the footnotes to condensed consolidated financial statements included in this Form 10-Q elsewhere related to the valuation methodology and assumptions used.

Previous wording

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.

Current wording

The change in fair value of the GeneFab Option consists of the remeasurement to fair value of the derivative liability related to the option provided to GeneFab to acquire up to $20.0 million in shares of our common stock at a purchase price of $10.18670 per share. Refer to Note 4. Fair Value Measurements, in the footnotes to condensed consolidated financial statements included in this Form 10-Q elsewhere related to the valuation methodology and assumptions used.

Previous wording

Net income (loss) from discontinued operations is summarized below (in thousands):

Current wording

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

Previous wording

Contract revenue. For the six months ended June 30, 2023, we generated revenue from contracts and license agreements of $1.7 million. We earned no revenue in the six months ended June 30, 2024. The decrease of $1.7 million was primarily due to completion of services provided under the Spark collaboration agreement in 2023 that did not occur in 2024.

Current wording

Contract revenue. For the three months ended September 30, 2023, we generated revenue from contracts and license agreements of $0.3 million. We earned no revenue in the three months ended September 30, 2024. The decrease of $0.3 million was primarily due to completion of services provided under the Spark collaboration agreement in 2023.

Previous wording

Grant income. For the three months ended June 30, 2023, we generated revenue from grants of $0.3 million, from the SBIR SENTI-202 grant funding. We earned no revenue from grants in the three months ended June 30, 2024.

Current wording

Grant income. For the three months ended September 30, 2023, we generated revenue from grants of $0.1 million, from the SBIR SENTI-202 grant funding. We earned no revenue from grants in the three months ended September 30, 2024.

Previous wording

Research and development expenses. Research and development expenses were $9.2 million and $6.9 million for the three months ended June 30, 2024 and 2023, respectively. The increase of $2.3 million was primarily due to an increase of $3.5 million in external services and supplies cost offset by a decrease of$0.9 millionin office and facilities cost and a decrease of$0.3 million inpersonnel-related expenses.

Current wording

Research and development expenses. Research and development expenses were $8.7 million and $9.1 million for the three months ended September 30, 2024 and 2023, respectively. The decrease of $0.4 million was primarily due to a decrease of$1.0 million inpersonnel-related expenses and a decrease of$0.2 million in office and facilities cost, offset by an increase of $0.9 million in external services and supplies cost.

Previous wording

General and administrative expenses. General and administrative expenses were $4.2 million and $9.2 million for the three months ended June 30, 2024 and 2023, respectively. The decrease of $5.0 million was primarily due to a decrease of $5.7 million in personnel-related expenses and a decrease of $0.4 million in professional services costs offset by an increase of $0.7 million in facilities costs, an increase of $0.3 million in depreciation and amortization costs.

Current wording

General and administrative expenses. General and administrative expenses were $6.2 million and $9.4 million for the three months ended September 30, 2024 and 2023, respectively. The decrease of $3.2 million was primarily due to a decrease of $3.2 million in personnel-related expenses, a decrease of $0.4 million in professional services costs and a decrease of $0.3 million in depreciation and amortization costs, offset by an increase of $0.5 million in facilities costs and an increase of $0.2 million in other general and administrative expenses.

Previous wording

Interest income, net. Interest income was $0.2 million and $0.8 million for the three months ended June 30, 2024 and 2023, respectively. The decrease is attributed to lower average cash balances in the relevant periods.

Current wording

Interest income, net. Interest income was $0.2 million and $0.6 million for the three months ended September 30, 2024 and 2023, respectively. The decrease is attributed to lower average cash balances in the relevant periods.

Previous wording

Change in fair value of GeneFab Option - related party. For the three months ended June 30, 2024, the change in fair value of GeneFab Option was a gain of $1.6 million primarily due to the decrease in the fair value of our common stock, which is a significant input in the measurement of the GeneFab Option. There was no comparative activity for three months ended June 30, 2023.

Current wording

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

Previous wording

GeneFab sublease income - related party. For the three months ended June 30, 2024, sublease income was $1.6 million from the sublease of Alameda facility as well as a portion of our corporate headquarter premises to GeneFab. There was no comparative activity for three months ended June 30, 2023.

Current wording

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

Previous wording

Net income (loss) from discontinued operations. For the three months ended June 30, 2023, net loss from discontinued operations was $4.4 million. Discontinued operations relate to the transfer of in-house manufacturing activities in the Alameda facility, to GeneFab, and include the costs and depreciation of equipment and related deposits or liabilities, as well as manufacturing personnel-related costs. There were no discontinued operations for three months ended June 30, 2024.

Current wording

Net income (loss) from discontinued operations. For the three months ended September 30, 2023, net loss from discontinued operations was $21.7 million. Discontinued operations relate to the transfer of in-house manufacturing activities in the Alameda facility, to GeneFab, and include the costs and depreciation of equipment and related deposits or liabilities, as well as manufacturing personnel-related costs. There were no discontinued operations for the three months ended September 30, 2024.

Previous wording

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

Current wording

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

Previous wording

Contract revenue. For the three months ended June 30, 2023, we generated revenue from contracts and license agreements of $0.7 million. We earned no revenue in the three months ended June 30, 2024. The decrease of $0.7 million was primarily due to completion of services provided under the Spark collaboration agreement in 2023 that did not occur in 2024.

Current wording

Contract revenue. For the nine months ended September 30, 2023, we generated revenue from contracts and license agreements of $2.0 million. We earned no revenue in the nine months ended September 30, 2024. The decrease of $2.0 million was primarily due to completion of services provided under the Spark collaboration agreement in 2023 that did not occur in 2024.

Previous wording

Grant income. For the six months ended June 30, 2023, we generated revenue from grants of $0.5 million, from the SBIR SENTI-202 grant funding. We earned no revenue from grants in the six months ended June 30, 2024.

Current wording

Grant income. For the nine months ended September 30, 2023, we generated revenue from grants of $0.6 million, from the SBIR SENTI-202 grant funding. We earned no revenue from grants in the nine months ended September 30, 2024.

Previous wording

Research and development expenses. Research and development expenses were $17.9 million and $13.9 million for the six months ended June 30, 2024 and 2023, respectively. The increase of $4.0 million was primarily due to an increase of $6.1 million in professional services costs, partially offset by a decrease of $1.8 million in office and facility costs, as well as a decrease of $0.2 million in personnel-related expenses.

Current wording

Research and development expenses. Research and development expenses were $26.6 million and $23.0 million for the nine months ended September 30, 2024 and 2023, respectively. The increase of $3.6 million was primarily due to an increase of $7.0 million in professional services costs, partially offset by a decrease of $2.0 million in office and facility costs, as well as a decrease of $1.3 million in personnel-related expenses.

Previous wording

General and administrative expenses. General and administrative expenses were $11.7 million and $18.4 million for the six months ended June 30, 2024 and 2023, respectively. The decrease of $6.7 million was primarily due to a decrease of $9.0 million in personnel-related expenses, offset by an increase of $1.4 million in office and facility costs and an increase of $0.9 million in depreciation and amortization.

Current wording

General and administrative expenses. General and administrative expenses were $18.0 million and $27.9 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease of $9.9 million was primarily due to a decrease of $12.2 million in personnel-related expenses, offset by an increase of $1.9 million in office and facility costs and an increase of $0.6 million in depreciation and amortization.

Previous wording

Interest Income, net. Interest income was $0.6 million and $1.9 million for the six months ended June 30, 2024 and 2023, respectively. The decrease is attributed to lower average cash balances in the relevant periods.

Current wording

Interest Income, net. Interest income was $0.7 million and $2.4 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease was attributed to lower average cash balances in the relevant periods.

Previous wording

Change in fair value of GeneFab Option. For the six months ended June 30, 2024, the change in fair value of GeneFab Option was a gain of $3.9 million primarily due to the decrease in the fair value of our common stock as well as an increase in volatility, which are significant inputs in the measurement of the GeneFab Option. There was no comparative activity for six months ended June 30, 2023.

Current wording

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

Previous wording

GeneFab sublease income - related party. For the six months ended June 30, 2023, sublease income was $3.0 million from the sublease of Alameda facility as well as a portion of our corporate headquarter premises to GeneFab. There was no comparative activity for six months ended June 30, 2023.

Current wording

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

Previous wording

Net income (loss) from discontinued operations. For the six months ended June 30, 2023 net loss from discontinued operations was $9.3 million. Discontinued operations relate to the transfer of in-house manufacturing activities in the Alameda facility, to GeneFab, and include the costs and depreciation of equipment and related deposits or liabilities, as well as manufacturing personnel-related costs. There were no discontinued operations for six months ended June 30, 2024.

Current wording

Net income (loss) from discontinued operations. For the nine months ended September 30, 2023 net loss from discontinued operations was $12.4 million. Discontinued operations relate to the transfer of in-house manufacturing activities in the Alameda facility, to GeneFab, and include the costs and depreciation of equipment and related deposits or liabilities, as well as manufacturing personnel-related costs. There were no discontinued operations for the nine months ended September 30, 2024.

Previous wording

From inception to June 30, 2024, we raised aggregate gross proceeds of $300.1 million from the Merger and PIPE Financing, the issuance of shares of our common stock, the issuance of shares of our redeemable convertible preferred stock, the issuance of convertible notes and, to a lesser extent, through collaboration agreements and governmental grants.

Current wording

From inception to September 30, 2024, we raised aggregate gross proceeds of $302.5 million from the Merger and PIPE Financing, the issuance of shares of our common stock, the issuance of shares of our redeemable convertible preferred stock, the issuance of convertible notes and, to a lesser extent, through collaboration agreements and governmental grants.

Previous wording

On August 31, 2022, we entered into the Purchase Agreement with Chardan, as amended and restated from time to time. Pursuant to the Purchase Agreement, we have the right, in our sole discretion, to sell to Chardan up to the lesser of: (i) $50.0 million of shares of our common stock; and (ii) 872,704 shares of common stock at 97% of the volume weighted average price (“VWAP”) of the common stock calculated in accordance with the Purchase Agreement, over a period of 36 months subject to certain limitations and conditions contained in the Purchase Agreement. Sales and timing of any sales of common stock are solely at our election, and we are under no obligation to sell any securities to Chardan under the Purchase Agreement. As consideration for Chardan’s commitment to purchase shares of our common stock at our direction upon the terms and subject to the conditions set forth in the Purchase Agreement, upon execution of the Purchase Agreement, we issued 10,000 shares of our common stock to Chardan and paid a $0.4 million document preparation fee.

Current wording

On August 31, 2022, we entered into the Purchase Agreement with Chardan, as amended and restated from time to time. Pursuant to the Purchase Agreement, we have the right, in our sole discretion, to sell to Chardan up to the lesser of: (i) $50.0 million of shares of our common stock; and (ii) 872,704 shares of common stock at 97% of the volume weighted average price (“VWAP”) of the common stock calculated in accordance with the Purchase Agreement, over a period of 36 months subject to certain limitations and conditions contained in the Purchase Agreement. Sales and timing of any sales of common stock are solely at our election, and we are under no obligation to sell any securities to Chardan under the Purchase Agreement. As consideration for Chardan’s commitment to purchase shares of our common stock at our direction upon the terms and subject to the conditions set forth in the Purchase Agreement, upon execution of the Purchase Agreement, we issued 10,000 shares of our common stock to Chardan and paid a $0.4 million document preparation fee. On July 16, 2024, we amended and restated this Purchase Agreement (hereinafter, the “A&R Purchase Agreement”) with Chardan to update the volume weighted average price purchase mechanics of the equity facility to permit Intraday VWAP Purchases (as defined in the A&R Purchase Agreement).

Previous wording

We do not have any products approved for sale and have not generated any revenue from product sales or otherwise. We have incurred net losses and negative cash flows from continuing operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. As of June 30, 2024, we had $15.9 million in cash and cash equivalents, and an accumulated deficit of $267.7 million.

Current wording

We do not have any products approved for sale and have not generated any revenue from product sales or otherwise. We have incurred net losses and negative cash flows from continuing operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. As of September 30, 2024, we had $10.5 million in cash and cash equivalents, and an accumulated deficit of $296.5 million.

Previous wording

The transaction with GeneFab, as described in “Recent Developments” above, provided us with additional capital in the form of a note receivable and rights to future manufacturing and research activities and reduced longer term operating expenses. In connection with the transaction, we are entitled to receive total consideration of $37.8 million before the end of 2025, of which $18.9 million was due at closing and was netted against prepayment owed by us for manufacturing and research activities to GeneFab. The remaining consideration of $18.9 million is anticipated to be received in the first half of 2025, subject to satisfaction of certain conditions. The Company determined that the $18.9 million for future manufacturing and research activities, inclusive of the volume discount provided, was executed at market terms and does not result in any impact to the total consideration received from GeneFab for the disposal of the business.

Current wording

The transaction with GeneFab, as described in “Recent Developments” above, provided us with additional capital in the form of a note receivable and rights to future manufacturing and research activities and reduced longer term operating expenses. The total consideration in connection with the transaction was $37.8 million, of which $18.9 million was due at closing and was netted against prepayment owed by us for manufacturing and research activities to GeneFab. The remaining consideration of $18.9 million is subject to satisfaction of certain conditions. We elected to account for the GeneFab Note Receivable under the fair value option and recorded the GeneFab Note Receivable at its fair value of $16.6 million at the closing date of the transaction. The GeneFab Note Receivable is remeasured each reporting period with changes from remeasurement included in other income (expense) in the condensed consolidated statements of operations and comprehensive loss. As of September 30, 2024, the fair value of the GeneFab Note Receivable was zero due to the probability that a suitable license agreement, which is a condition of the Company realizing the GeneFab Note Receivable, would not be signed. Refer to Note 4. Fair Value Measurements, in the footnotes to condensed consolidated financial statements included in this Form 10-Q elsewhere for further details.

Previous wording

For the six months ended June 30, 2024, net cash used in operating activities of $20.0 million was primarily due to our loss of $23.3 million with non-cash adjustments of $3.9 million gain from change in fair value of the GeneFab Option, $1.4 million loss from change in fair value of GeneFab Economic Share, $2.9 million for depreciation and amortization of operating lease right-of-use-assets and $0.5 million for stock-based compensation expense. Other material changes comprised of $7.1 million decrease in GeneFab prepaid expenses, and $0.8 million decrease in prepaid expenses and other assets offset by $3.2 million decrease in accounts payable and accrued expenses and $1.9 million decrease in operating lease liabilities.

Current wording

For the nine months ended September 30, 2024, net cash used in operating activities of $27.9 million was primarily due to our loss of $52.2 million with non-cash adjustments of $17.2 million loss from change in fair value of the GeneFab Note Receivable, $6.3 million gain from change in fair value of the GeneFab Option, $1.8 million loss from change in fair value of GeneFab Economic Share, $4.4 million for depreciation and amortization of operating lease right-of-use assets and $1.2 million for stock-based compensation expense. Other material changes comprised of $10.9 million decrease in GeneFab prepaid expenses, $1.1 million decrease in prepaid expenses and other assets, $0.1 million increase in other liabilities, net of current portion, offset by $3.1 million decrease in accounts payable and accrued expenses and $3.0 million decrease in operating lease liabilities.

Previous wording

For the six months ended June 30, 2023, net cash used in operating activities of $30.0 million was primarily due to our net loss of $37.4 million with non-cash adjustments of $7.2 million for stock-based compensation expense, $2.1 million for depreciation and amortization of operating lease right-of-use assets and $1.0 million for accretion of discount on short-term investments and $0.2 million for the change in fair value of contingent earnout liability. Other material changes comprised of $1.2 million decrease in accounts payable and accrued expenses and other current liabilities, $0.6 million decrease in deferred revenue, offset by $1.0 million increase in operating lease liabilities.

Current wording

For the nine months ended September 30, 2023, net cash used in operating activities of $45.4 million was primarily due to our net loss of $52.3 million with non-cash adjustments of $25.7 million for impairment of long-lived assets, $21.9 million gain on disposal of business to GeneFab, $7.6 million for stock-based compensation expense, $5.6 million gain from change in fair value of the GeneFab Option, $4.0 million for depreciation and amortization of operating lease right-of-use assets and $1.1 million for accretion of discount on short-term investments, $0.3 million gain for the change in fair value of the GeneFab receivable, and $0.2 million for the change in fair value of contingent earnout liability, and $0.1 million loss for the change in fair value of the GeneFab Economic Share. Other material changes comprised of $0.8 million decrease in deferred revenue, offset by $0.1 million increase in operating lease liabilities.

Previous wording

For the six months ended June 30, 2024, net cash used in investing activities was nominal.

Current wording

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

Previous wording

For the six months ended June 30, 2023, net cash provided by investing activities of $8.8 million was due to $37.0 million cash received upon maturity of the short-term investments offset by $18.0 million purchases of short-term investments and $10.2 million purchases of property and equipment.

Current wording

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

Previous wording

For the six months ended June 30, 2024, there was no cash provided by financing activities.

Current wording

For the nine months ended September 30, 2024, there was $2.4 million cash provided by financing activities related to the CIRM Grant. Refer to Note 8. CIRM Grant, in the footnotes to condensed consolidated financial statements included in this Form 10-Q elsewhere for further details of the CIRM Grant.

Previous wording

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

Current wording

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