Senti Biosciences Holdings, Inc.SNTI
Senti Biosciences Holdings, Inc. Fair Value Disclosure
Fair Value Measurements
Cash, Cash Equivalents, and Restricted Cash
The following tables summarize the estimated value of cash, cash equivalents, and restricted cash by category (in thousands):
| December 31, 2024 | |||||||||||||||||||||||
| Amortized Cost | Estimated Fair Value | Cash and cash equivalents | Restricted cash | ||||||||||||||||||||
| Cash | $ | 12,408 | $ | 12,408 | $ | 12,408 | $ | — | |||||||||||||||
| Level 1 | |||||||||||||||||||||||
| Money market funds | $ | 39,407 | $ | 39,407 | $ | 35,869 | $ | 3,538 | |||||||||||||||
| Subtotal | 39,407 | 39,407 | 35,869 | 3,538 | |||||||||||||||||||
| Total | $ | 51,815 | $ | 51,815 | $ | 48,277 | $ | 3,538 | |||||||||||||||
| December 31, 2023 | |||||||||||||||||||||||
| Amortized Cost | Estimated Fair Value | Cash and cash equivalents | Restricted cash | ||||||||||||||||||||
| Cash | $ | 4,205 | $ | 4,205 | $ | 4,205 | $ | — | |||||||||||||||
| Level 1 | |||||||||||||||||||||||
| Money market funds | $ | 35,243 | $ | 35,243 | $ | 31,721 | $ | 3,522 | |||||||||||||||
| Subtotal | 35,243 | 35,243 | 31,721 | 3,522 | |||||||||||||||||||
| Total | $ | 39,448 | $ | 39,448 | $ | 35,926 | $ | 3,522 | |||||||||||||||
No securities have contractual maturities of longer than one year. There were no transfers between Levels 1, 2, or 3 for any of the periods presented.
Contingent Earnout Liability
The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments (in thousands):
| Contingent Earnout Liability | ||||||||
Fair value as of December 31, 2023 | $ | (20) | ||||||
| Change in fair value included in other income (expense) | 20 | |||||||
Fair value as of December 31, 2024 | $ | — | ||||||
The fair value of the Contingent Earnout Liability is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.
In determining the fair value of the Contingent Earnout Liability, the Company used a Monte Carlo simulation value model using a distribution of potential outcomes. The assumptions utilized in the calculation were based on the achievement of certain stock price milestones, including the current Company common stock price, expected volatility, risk-free rate, expected term and expected dividend yield. Refer to Note 7. Stockholders’ Equity, for further details of the Contingent Earnout. Additionally, the Company determined that the fair value of the Contingent Earnout Liability was zero as of December 31, 2024, due to the low probability of the remaining tranche terms being met.
GeneFab Note Receivable
The following table presents a summary of the changes in the fair value of the GeneFab Note Receivable (in thousands):
| Note Receivable | ||||||||
Fair value as of December 31, 2023 | $ | 17,240 | ||||||
| Change in fair value included in other income (expense) | (17,240) | |||||||
Fair value as of December 31, 2024 | $ | — | ||||||
The fair value of the GeneFab Note Receivable as of December 31, 2023 is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.
The fair value of the GeneFab Note Receivable as of December 31, 2023 was determined by discounting future payments under multiple probability-weighted scenarios using the Company’s cost of borrowing, which was estimated at 12.53% based on published CCC-rated corporate bond yields. In connection with the private placement discussed in Note 7. Stockholders’ Equity, the Company waived the Note Receivable due from GeneFab. Thus, the value of the GeneFab Note Receivable as of December 31, 2024 was zero.
GeneFab Option
The following table presents a summary of the changes in the fair value of the GeneFab Option (in thousands):
| GeneFab Option | ||||||||
Fair value as of December 31, 2023 | $ | (6,331) | ||||||
| Change in fair value included in other income (expense) | 6,331 | |||||||
Fair value as of December 31, 2024 | $ | — | ||||||
The fair value of the GeneFab Option is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.
In determining the fair value of the GeneFab Option, the Company used a Black-Scholes option pricing model. Additionally, the Company determined that the fair value of the GeneFab Option was zero as of December 31, 2024, due to the probability that a suitable license agreement, which is a condition of GeneFab obtaining the Option, would not be signed.
The significant assumptions utilized in the valuation as of December 31, 2023 are described below:
December 31, | ||||||||
| 2023 | ||||||||
| Current stock price | $ | 6.60 | ||||||
| Expected volatility | 98.1 | % | ||||||
| Risk-free interest rate | 4.12 | % | ||||||
| Expected term (years) | 2.5 | |||||||
GeneFab Economic Share
The following table presents a summary of the changes in the fair value of the GeneFab Economic Share (in thousands):
GeneFab Economic Share | ||||||||
Fair value as of December 31, 2023 | $ | 1,816 | ||||||
| Change in fair value included in other income (expense) | (1,816) | |||||||
Fair value as of December 31, 2024 | $ | — | ||||||
The fair value of the GeneFab Economic Share is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.
The Company elected to account for the GeneFab Economic Share under the fair value option in ASC 825, with changes in fair value reported as a component of other income (expense) in the consolidated statements of operations and comprehensive loss. In determining the fair value of the GeneFab Economic Share, the Company used the option pricing method, which allocates total estimated enterprise value to various classes of equity using the Backsolve method. As of December 31, 2024, the Company determined that the fair value of the GeneFab Economic Share was zero due to the low probability of the events triggering the payment underlying the GeneFab Economic Share.
The significant assumptions utilized in the valuation as of December 31, 2023 are described below:
December 31, | ||||||||
2023 | ||||||||
GeneFab equity value (in thousands) | $ | 35,448 | ||||||
| Volatility | 65.8 | % | ||||||
| Risk free rate | 3.93 | % | ||||||
| Expected term | 4 | |||||||
Additional Closing Option
The following table presents a summary of the changes in the fair value of the additional closing option (“Preferred Stock Tranche Liability”) (in thousands):
Preferred Stock Tranche Liability | ||||||||
Initial recognition as of December 9, 2024 | $ | 19,003 | ||||||
| Change in fair value included in other income (expense) | (13,404) | |||||||
Fair value as of December 31, 2024 (prior to option exercise) | 5,599 | |||||||
Exercise of underlying option on December 31, 2024 | (5,599) | |||||||
Fair value as of December 31, 2024 | $ | — | ||||||
The fair value of the Preferred Stock Tranche Liability is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. The Company initially estimated the fair value of the preferred stock tranche liability using the Black-Scholes option pricing model with an expected term of 0.06 years, the fair value of the Series A redeemable convertible preferred stock of $5.74, expected volatility of 100.0%, a probability of exercise of the tranche at virtually 100% and risk-free interest rate of 4.42% as of December 9, 2024. On December 31, 2024, the option was exercised to acquire the additional shares per the private placement (refer to Note 7. Stockholders’ Equity for additional information); accordingly, the Company used the fair value of the Series A redeemable convertible preferred stock of $3.09 to remeasure the preferred stock tranche liability immediately prior to the exercise of the option.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 20, 2025 | Showing above |
| 2023 | Mar 21, 2024 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.