Senti Biosciences Holdings, Inc.SNTI
Senti Biosciences Holdings, Inc. Stock Compensation Disclosure
Stock-Based Compensation
2016 Stock Incentive Plan (as Amended and Restated)
The Company’s 2016 Stock Incentive Plan (the “2016 Plan”) provides for the grant of incentive stock options, non-qualified stock options and restricted stock awards to employees, directors, and consultants of the Company.
Stock options granted under the 2016 Plan generally vest over four years and expire no later than ten years after the grant date.
Following the Merger, the 2016 Plan was terminated. No additional stock awards will be granted under the 2016 Plan. All awards previously granted and outstanding as of the effective date of the Merger, were adjusted to reflect the impact of the Merger, but otherwise remain in effect pursuant to their original terms. The shares underlying any award granted under the 2016 Plan that are forfeited back to or repurchased or reacquired by the Company, will revert to and again become available for issuance under the 2022 Plan.
2022 Stock Incentive Plan
On June 8, 2022, upon the Merger, the Company adopted a 2022 Stock Incentive Plan (the “2022 Plan”). The 2022 Plan provides for the grant of incentive stock options to employees, and for the grant of non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to employees, directors and consultants.
The exercise price of an options granted under the 2022 Plan shall not be less than the fair market value of a common stock share on the date of grant. With respect to a 10% stockholder, the exercise price of an option granted shall not be less than 110% of the fair value of the common stock share on the date of grant.
Options granted under the 2022 Plan generally vest over four years and expire no later than ten years after the grant date.
The Company initially reserved 249,273 shares of common stock for issuance under the 2022 Plan. On the first day of each year commencing January 1, 2023, the 2022 Plan will automatically increase by 5% of the outstanding number of shares of common stock of the Company on the last day of the preceding calendar year or such lesser number of shares as approved by the Company’s Board of Directors prior to the effective date of the annual increase. In addition, the shares underlying any award granted under the 2016 Plan that are forfeited back to or repurchased or reacquired by the Company, will revert to and again become available for issuance under the 2022 Plan.
As of December 31, 2024, the total number of shares of common stock available for issuance under the 2022 Plan is 146,809.
2022 Inducement Plan
On August 5, 2022, the Company adopted a 2022 Inducement Plan (the “2022 Inducement Plan”). The 2022 Plan provides for the grant of non-statutory stock options, stock appreciation rights, restricted stock awards,
restricted stock unit awards, performance awards and other forms of awards to persons not previously an employee of the Company and its affiliates.
The exercise price of an options granted under the 2022 Inducement Plan shall not be less than the fair market value of a common stock share on the date of grant.
Stock options granted under the 2022 Inducement Plan generally vest over four years and expire no later than ten years after the grant date.
The Company initially reserved 200,000 shares of common stock for issuance under the 2022 Inducement Plan.
As of December 31, 2024, the total number of shares of common stock available for issuance under the 2022 Inducement Plan is 124,098.
2022 Employee Stock Purchase Plan
On June 8, 2022, upon the Merger, the Company adopted a 2022 Employee Stock Purchase Plan (the “ESPP”). The ESPP allows eligible employees to purchase shares of the Company's common stock at a price equal to 85% of the lower of the fair market values of the stock on the first day of an offering or on the date of purchase. The Company’s ESPP operates with rolling offering periods, which are generally 24 months. On November 15, 2023, upon termination of the then-current offering period in accordance with the terms of the ESPP, the Company suspended the ESPP and no new offering periods may commence under the ESPP until such time as later authorized by the Company.
The Company initially reserved 59,258 shares of common stock for issuance under the ESPP. On the first day of each year commencing January 1, 2023, the 2022 Plan will automatically increase by 1% of the outstanding number of shares of common stock of the Company on the last day of the preceding calendar year or such lesser number of shares as approved by the Company’s Board of Directors prior to the effective date of the annual increase.
As of December 31, 2024, the total number of shares of common stock available for issuance under the ESPP is 79,387.
Stock Options
The following table summarizes the Company’s stock option activity and related information under all equity plans, excluding performance and market awards:
| Number of Options | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||||||||||||
Outstanding at December 31, 2023 | 623,612 | $ | 24.20 | 7.2 | $ | 2 | ||||||||||||||||||||
| Granted | 620,943 | $ | 3.70 | |||||||||||||||||||||||
| Exercised | (92) | $ | 4.57 | |||||||||||||||||||||||
| Forfeited | (301,944) | $ | 25.42 | |||||||||||||||||||||||
Outstanding at December 31, 2024 | 942,519 | $ | 10.32 | 8.6 | $ | 89 | ||||||||||||||||||||
Vested and exercisable at December 31, 2024 | 279,759 | $ | 20.36 | 6.6 | $ | — | ||||||||||||||||||||
The weighted-average grant date fair value of options granted during the years ended December 31, 2024 and 2023 were $5.79 and $11.40, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2024 and 2023 were $1.2 million and zero, respectively.
As of December 31, 2024 and 2023, the unrecognized stock-based compensation expense related to stock options was approximately $2.7 million and $5.2 million respectively, expected to be recognized over a weighted-average period of 2.8 years and 2.16 years respectively.
Early Exercise of Stock Options into Restricted Stock
For the years ended December 31, 2024 and 2023, the Company issued zero shares of common stock upon exercise of unvested stock options. As of December 31, 2024 and December 31, 2023, 422 and 5,486 shares were held by employees subject to repurchase at a nominal aggregate price and an aggregate price of $0.1 million, respectively.
Performance Awards
In connection with the Merger, on December 19, 2021, Legacy Senti approved 840,089 performance awards to existing employees that vest contingent upon the satisfaction of both a four-year service condition and a performance condition tied to the consummation of the Merger. The awards and the associated recognition of stock-based compensation expense were contingent on the Merger being consummated. As of the approval date of the performance awards, Legacy Senti did not have sufficient common stock available for issuance. Upon the Merger, the Company increased the number of shares authorized and 679,607 awards were granted on June 8, 2022.
| Number of Options | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||||||||||||
Outstanding at December 31, 2023 | 503,114 | $ | 99.20 | 7.5 | $ | — | ||||||||||||||||||||
| Forfeited | (144,171) | $ | 99.20 | |||||||||||||||||||||||
Outstanding at December 31, 2024 | 358,943 | $ | 99.20 | 6.9 | $ | — | ||||||||||||||||||||
Vested and exercisable at December 31, 2024 | 229,051 | $ | 99.20 | 6.8 | $ | — | ||||||||||||||||||||
As of December 31, 2024, the unrecognized stock-based compensation expense related to performance awards was approximately $0.7 million, expected to be recognized over a weighted-average period of 0.94 years.
Market Awards
In connection with the Merger, on December 19, 2021, Legacy Senti approved 60,545 market award options to its co-founder and Chief Executive Officer, Dr. Timothy Lu, that vest contingent upon the satisfaction of all three of the following conditions: a service condition, a performance condition tied to the consummation of the Merger, and market conditions. The market condition is achieved in four tranches, where 25% of the options will vest when the trading price of the Company’s stock is above various thresholds of price per share. The award and the associated recognition of stock-based compensation were contingent on the Merger being consummated. The estimated fair value of the market awards at the grant date was based on a Monte Carlo simulation valuation model. As of the approval date, Legacy Senti did not have sufficient common stock available for issuance to allow for exercise of the stock options. Upon the Merger, the Company increased the number of shares authorized and 31,574 awards were granted on June 8, 2022. Through December 31, 2024, these market awards did not meet the vesting thresholds.
The were no market based options granted or exercised during the years ended December 31, 2024 and 2023.
As of December 31, 2024, the Company had recognized all stock-based compensation expense related to the market awards.
Restricted Stock Units
The following table summarizes the Company’s restricted stock units activity and related information under all equity plans:
| Number of Restricted Stock Units | Weighted-Average Grant Date Fair Value | |||||||||||||
Outstanding at December 31, 2023 | 22,509 | $ | 25.00 | |||||||||||
| Granted | 82,051 | $ | 1.80 | |||||||||||
| Vested | (9,666) | $ | 19.01 | |||||||||||
| Forfeited | (38,471) | $ | 7.52 | |||||||||||
Outstanding at December 31, 2024 | 56,423 | $ | 1.58 | |||||||||||
As of December 31, 2024, the unrecognized stock-based compensation expense related to restricted stock units was approximately $0.2 million, expected to be recognized over a weighted-average period of 2.09 years.
Stock-Based Compensation Expense
The Company estimates the fair value of stock options using a Black-Scholes option-pricing model. The fair value of restricted stock is based on the fair value of the Company’s common stock on the grant date.
The Company uses the assumptions below for the Black-Scholes option pricing model, which are subjective and generally require significant judgment.
Fair Value of Common Stock — The fair value of the shares of common stock has historically been determined by the Company’s Board of Directors as there was no public market for the common stock. The Board of Directors determined the fair value of the common stock by considering a number of objective and subjective factors, including: third-party valuations of the Company’s common stock, the valuation of comparable companies, the Company’s operating and financial performance, and general and industry-specific economic outlook, amongst other factors. As of the closing of the Merger and going forward, the fair value of common stock will be based on the publicly traded market value.
Expected Term — The expected term represents the period that the Company’s stock options are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term). The expected term for the ESPP purchase rights is the length of the purchase period.
Volatility — The expected volatility is based on the average historical volatility of comparable publicly-traded peer companies, over a period equal to the expected term of the stock option grants, as the Company was not publicly traded prior to the Merger and does not have a trading history for its common stock for a sufficient period of time subsequent to the Merger.
Risk-free Rate — The risk-free rate assumption is based on the U.S. Treasury zero-coupon issues in effect at the time of grant for periods corresponding with the expected term of the option.
Dividends — The Company has never paid dividends on its common stock and does not anticipate paying dividends on common stock. Therefore, the Company uses an expected dividend yield of zero.
The assumptions used to determine the grant date fair value of non-market based, stock options granted were as follows, presented on a weighted-average basis:
| Years Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Expected term (in years) | 5.8 | 5.9 | ||||||||||||
| Expected volatility | 86.6% | 82.6% | ||||||||||||
| Risk-free interest rate | 4.1% | 3.6% | ||||||||||||
| Dividend yield | — | — | ||||||||||||
Total stock-based compensation expense was as follows (in thousands):
| Years Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| General and administrative | $ | 1,602 | $ | 10,236 | ||||||||||
| Research and development | 153 | 1,456 | ||||||||||||
| Total stock-based compensation expense | $ | 1,755 | $ | 11,692 | ||||||||||
In August 2023, in connection with the GeneFab transaction, the Company’s Board of Directors approved the modification of equity awards as part of termination of employment for the Company's employees transferred to GeneFab, including the Company’s Chief Technology Officer. The award modifications included the acceleration of certain non-vested stock options and the extension of the post-termination exercise period of certain vested stock options. The Company accounted for the award modifications under ASC 718, Compensation – Stock Compensation. During year ended December 31, 2023, the Company recorded a one-time, noncash incremental compensation expense net of the required reversal of previously recognized compensation attributed to non-vested awards in the amount of $2.0 million related to the equity awards modifications of the employees that were extended offers of employment by GeneFab which was included in net income from discontinued operations in the consolidated statements of operations and comprehensive loss.
Total stock-based compensation expense from discontinued operations was $(2.0) million for the year ended December 31, 2023.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 20, 2025 | Showing above |
| 2023 | Mar 21, 2024 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.