Senti Biosciences Holdings, Inc.SNTI
Senti Biosciences Holdings, Inc. Leases Disclosure
Operating Leases
Lessee Accounting
The Company’s operating leases are primarily for its corporate headquarters located in South San Francisco, California (“HQ lease”) and for additional office and laboratory space located in Alameda, California (“Alameda lease”). The HQ lease has an initial term of eight years expiring in 2027, with an option to renew for an additional eight years unless canceled by either party thereafter. The Alameda lease has an initial term of eleven years expiring in 2032, with an option to renew the lease for up to two additional terms of five years. The exercise of these renewal options is not recognized as part of the ROU assets and lease liabilities, as the Company did not conclude, at the commencement date of the leases, that the exercise of renewal options or termination options was reasonably certain. The Alameda lease provided for a tenant improvement allowance of up to $17.5 million for the costs relating to the design, permitting and construction of the improvements, and were fully disbursed by the landlord as of December 31, 2023. The Company was deemed to be the accounting owner of the tenant improvements primarily because the Company is the principal in the construction and design of the assets, is responsible for costs overruns and retains substantially all economic benefits from the leasehold improvements over their economic lives. Accordingly, the tenant improvement allowance was considered an incentive and was deducted from the initial measurement of the ROU asset and lease liability. The Company estimated the timing of tenant improvement
reimbursements at the lease commencement date and upon receipt of the cash incentives, the Company recognized the cash received as an increase in the lease liability.
A summary of total lease costs and other information for the period relating to the Company’s operating leases is as follows (in thousands):
| Years Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Operating lease cost | $ | 5,236 | $ | 5,277 | ||||||||||
| Short-term lease cost | 34 | 73 | ||||||||||||
| Variable lease cost | 1,040 | 1,138 | ||||||||||||
| Total lease cost | $ | 6,310 | $ | 6,488 | ||||||||||
Variable lease costs comprise primarily of common area maintenance charges for the operating leases, which is dependent upon usage. These costs are classified as operating lease expenses due to the election to not separate lease and non-lease components. These costs were not included within the measurement of the Company’s operating lease ROU assets and operating lease liabilities.
| Years Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Other information: | ||||||||||||||
| Operating cash flows net outflows from operating lease | $ | (7,252) | $ | (2,922) | ||||||||||
| ROU assets obtained in exchange for operating lease obligations (including remeasurement of ROU and lease liabilities due to changes in the timing of receipt of lease incentives) | $ | — | $ | (5) | ||||||||||
| Weighted-average remaining lease term | 6.7 years | 7.5 years | ||||||||||||
| Weighted-average discount rate | 9.2% | 9.2% | ||||||||||||
During the year ended December 31, 2023, the Company received the remaining $3.4 million, of the $17.5 million tenant improvement allowance.
Maturities of the Company’s lease liabilities as of December 31, 2024, were as follows (in thousands):
| 2025 | 7,478 | |||||||
| 2026 | 7,712 | |||||||
| 2027 | 5,769 | |||||||
2028 | 4,855 | |||||||
| 2029 | 5,000 | |||||||
| Thereafter | 14,529 | |||||||
| Total undiscounted lease payments | 45,343 | |||||||
| Less imputed interest | (11,805) | |||||||
| Total lease liabilities | $ | 33,538 | ||||||
Letters of Credit
As of December 31, 2024, the Company held a letter of credit held with JPMorgan Chase Bank in the amount of approximately $2.9 million related to the Alameda facility and a letter of credit with JPMorgan Chase Bank in the amount of approximately $0.5 million related to our HQ facility lease which are recorded as restricted cash in the consolidated balance sheets as of December 31, 2024 and December 31, 2023.
Lessor Accounting
GeneFab Sublease - Related Party
In connection with the GeneFab transaction, on August 7, 2023, the Company entered into a sublease with GeneFab to sublease the facility included in the Alameda lease, expiring in September 2032. Total sublease income to be earned from this operating lease, in aggregate, will be approximately $44.1 million over the term of the sublease agreement.
On June 12, 2024, the Company entered into a sublease with GeneFab for a portion of the Company’s corporate headquarter premises in South San Francisco. Total sublease income to be earned from this operating lease, in aggregate, will be approximately $1.3 million over the term of the sublease agreement.
Refer to Note 16. Related Parties for GeneFab related party considerations.
BKPBIOTECH and JLSA2 Therapeutics Sublease
On September 23, 2024, the Company entered into a sublease agreement with BKPBIOTECH, Inc. and JLSA2 Therapeutics, Inc., to sublease a portion of the Company’s corporate headquarter premises in South San Francisco. The sublease commenced on October 7, 2024, and will expire on April 30, 2027. Total sublease income to be earned from this operating lease, in aggregate, will be approximately $1.1 million over the term of the sublease agreement. The sublease contains customary events of default, representations, warranties and covenants.
Pursuant to ASC Topic 842, Leases, the Company concluded that the sublease is a separate lease and it qualifies as an operating lease.
As a result of sublease, the Company identified an impairment indicator related to the HQ Lease. The Company compared the estimated undiscounted cash flows to the carrying value of the asset group, which includes right-of use assets and leasehold improvements allocable to the sublease. The Company concluded that the carrying value of the asset group was not recoverable as it exceeded the estimated undiscounted cash flows. The Company calculated the amount of impairment using a discounted cash flow model to calculate the fair value of the asset group which incorporated the net identifiable cash flows for the term of sublease, including an estimate for cash flows in the residual period, and an estimated borrowing rate of a market participant subtenant. The impairment charge of $0.3 million was recorded as impairment of long-lived assets in the statement of operations and comprehensive loss for the year ended December 31, 2024.
Maturities of the Company’s sublease payments for the subleases of both Alameda facility and corporate headquarter premises as of December 31, 2024, were as follows (in thousands):
| 2025 | $ | 5,357 | ||||||
| 2026 | 5,492 | |||||||
| 2027 | 5,060 | |||||||
| 2028 | 4,891 | |||||||
| 2029 | 5,037 | |||||||
| Thereafter | 13,258 | |||||||
| Total undiscounted sublease payments | $ | 39,095 | ||||||
A summary of total sublease income for the period relating to the Company’s operating leases is as follows (in thousands):
| December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
Sublease income - base rent | $ | 5,170 | $ | 2,005 | ||||||||||
Sublease income - variable and other | $ | 1,438 | $ | 318 | ||||||||||
| $ | 6,608 | $ | 2,323 | |||||||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 20, 2025 | Showing above |
| 2023 | Mar 21, 2024 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.