10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______                      

Commission File Number: 001-40498

Century Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	84-2040295
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
25 N 38th Street, 11th Floor Philadelphia, Pennsylvania (Address of principal executive offices)	19104 (Zip Code)

(267) 817-5790

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	IPSC	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer           ☐	Accelerated filer                  ☐
Non-accelerated filer             ☒	Smaller reporting company ☒
Emerging growth company   ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

As of May 1, 2024 the registrant had 82,847,375 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	6
Item 1.	Unaudited Consolidated Financial Statements:	6
	Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023	6
	Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2024 and 2023 (unaudited)	7
	Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2024 and 2023 (unaudited)	8
	Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (unaudited)	9
	Notes to Unaudited Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42
PART II.	OTHER INFORMATION	43
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	44
Item 6.	Exhibits	45
Signatures		46

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and the documents incorporated by reference herein contain forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this Quarterly Report on Form 10-Q or the documents incorporated by reference herein regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “would,” “could,” “should,” “potential,” “seek,” “evaluate,” “pursue,” “continue,” “design,” “impact,” “affect,” “forecast,” “target,” “outlook,” “initiative,” “objective,” “designed,” “priorities,” “goal,” or the negative of such terms and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated.

The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:

● our ability to raise additional capital to fund our operations and continue the development of our current and future product candidates;

● the preclinical and early clinical nature of our business and our ability to successfully advance our current and future product candidates through development activities, preclinical studies, and clinical trials;

● our ability to generate revenue from future product sales and our ability to achieve and maintain profitability;

● the accuracy of our projections and estimates regarding our expenses, capital requirements, cash utilization, and need for additional financing;

● our dependence on the success of our lead product candidate, CNTY-101;

● the novelty of our approach to immuno-oncology and autoimmune treatment of cancer, utilizing iPSC-derived natural killer cells, (“iNK cells”) and iPSC-derived T cells, (“iT cells”) and the challenges we will face due to the novel nature of such technology;

● the success of competing therapies that are or may become available;

● our reliance on the maintenance of our collaborative relationship with FUJIFILM Cellular Dynamics Inc., (“FCDI”) for access to key differentiation and reprogramming technology for the manufacturing and development of our product candidates;

● the initiation, progress, success, cost, and timing of our development activities, preclinical studies and clinical trials;

● the timing of future investigational new drug, (“IND”) applications and the likelihood of, and our ability to obtain and maintain, regulatory clearance of IND applications for our product candidates;

● the timing, scope and likelihood of regulatory filings and approvals, including final regulatory approval of our product candidates;

● our reliance on FCDI to be the exclusive manufacturer of certain product candidates, and our ability to manufacture our own product candidates in the future, and the timing and costs of such manufacturing activities;

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● our reliance on the maintenance of our collaborative relationship with Bristol-Myers Squibb Company (“Bristol-Myers Squibb”) in connection with the furtherance of our collaboration programs;

● our ability to successfully integrate with the operations of Clade Therapeutics, Inc. (“Clade”) following the acquisition and achieve the anticipated benefits of the acquisition;

● the performance of third parties in connection with the development of our product candidates, including third parties conducting our current and future clinical trials as well as third-party suppliers and manufacturers;

● our ability to attract and retain strategic collaborators with development, regulatory, and commercialization expertise;

● the public opinion and scrutiny of cell-based therapies and its potential impact on public perception of our company and product candidates;

● our ability to successfully commercialize our product candidates and develop sales and marketing capabilities, if our product candidates are approved;

● the size and growth of the potential markets for our product candidates and our ability to serve those markets;

● regulatory developments and approval pathways in the United States and foreign countries for our product candidates;

● the potential scope and value of our intellectual property and proprietary rights;

● our ability, and the ability of our licensors, to obtain, maintain, defend, and enforce intellectual property and proprietary rights protecting our product candidates, and our ability to develop and commercialize our product candidates without infringing, misappropriating, or otherwise violating the intellectual property or proprietary rights of third parties;

● our ability to recruit and retain key members of management and other clinical and scientific personnel;

● the volatility of capital markets and other macroeconomic factors, including due to inflationary pressures, banking instability geopolitical tensions or the outbreak of hostilities or war;

● the extent to which pandemics, such as the COVID-19 pandemic, or any other global health crises may impact our business, including development activities, preclinical studies, clinical trials, supply chain and labor force; and

● developments relating to our competitors and our industry;

We have based these forward-looking statements largely on our current expectations, estimates, forecasts, and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, and financial needs. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur at all. You should refer to the section titled “Risk Factors” set forth in Part II, Item 1A of this quarterly Report on Form 10-Q, and in the section titled “Risk Factors” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements.

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Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We intend the forward-looking statements contained in this Quarterly Report on Form 10-Q to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”).

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PART I—FINANCIAL INFORMATION

Item 1. Unaudited Consolidated Financial Statements.

CENTURY THERAPEUTICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

	March 31, 2024		December 31, 2023
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	46,812	$	47,324
Short-term investments		145,204		125,414
Prepaid expenses and other current assets		7,797		4,256
Total current assets		199,813		176,994
Property and equipment, net		69,005		71,705
Operating lease right-of-use assets		19,314		20,376
Restricted cash		1,979		1,979
Long-term investments		57,852		89,096
Security deposits and non-current assets		544		541
Total assets	$	348,507	$	360,691
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	3,432	$	2,741
Accrued expenses and other liabilities		7,532		10,149
Deposit liability		491		584
Deferred revenue, current		4,610		4,372
Total current liabilities		16,065		17,846
Operating lease liability, long term		44,251		46,658
Security deposit, non-current		20
Deposit liability, non-current		—		56
Deferred revenue, non-current		110,288		111,381
Total liabilities		170,624		175,941
Commitments and contingencies (Note 9)
Stockholders' equity:
Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized and 0 shares issued and outstanding at March 31, 2024 and December 31, 2023		—		—
Common stock, $0.0001 par value, 300,000,000 shares authorized; 64,809,592 and 60,335,701 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		6		6
Additional paid-in capital		861,951		840,407
Accumulated deficit		(683,833)		(655,771)
Accumulated other comprehensive (loss) Income		(241)		108
Total stockholders’ equity		177,883		184,750
Total liabilities and stockholders’ equity	$	348,507	$	360,691

See accompanying notes to the consolidated financial statements.

6

CENTURY THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except share and per share amounts)

	For the Three Months Ended		For the Three Months Ended
	March 31, 2024		March 31, 2023
Collaboration revenue	$	855	$	1,720
Operating expenses
Research and development		23,421		24,899
General and administrative		8,743		8,902
Total operating expenses		32,164		33,801
Loss from operations		(31,309)		(32,081)
Interest expense		-		(404)
Interest income		3,237		2,623
Other income (expense)		11		(194)
Total other income		3,248		2,025
Loss before provision for income taxes		(28,061)		(30,056)
Provision for income taxes		(1)		(1,208)
Net loss	$	(28,062)	$	(31,264)
Net loss per common share Basic and Diluted		(0.45)		(0.53)
Weighted average common shares outstanding Basic and Diluted		62,296,637		58,610,375
Other comprehensive loss
Net loss	$	(28,062)	$	(31,264)
Unrealized (loss) gain on investments		(351)		1,196
Foreign currency translation gain (loss)		2		(9)
Comprehensive loss	$	(28,411)	$	(30,077)

See accompanying notes to the consolidated financial statements.

7

CENTURY THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

(In thousands, except share amounts)

								Accumulated
				Additional				Other		Total
	Common Stock			Paid-in		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Loss		Equity
Balance, December 31, 2023	60,335,701	$	6	$	840,407	$	(655,771)	$	108	$	184,750
Issuance of common stock upon the exercise of stock options and 2021 ESPP	220,647		—		366		—		—		366
Vesting of restricted stock	24,734		—		—		—		—		—
Vesting of early exercise stock options	34,900		—		142		—		—		142
Vesting of restricted stock units	109,108		—		—		—		—		—
Issuance of common stock upon the exercise of ATM, net of underwriting discounts and commissions and other issuance costs	4,084,502		—		17,829						17,829
Unrealized loss on investments	—		—		—		—		(351)		(351)
Foreign currency translation	—		—		—		—		2		2
Stock based compensation	—		—		3,207		—		—		3,207
Net loss	—		—		—		(28,062)		—		(28,062)
Balance, March 31, 2024	64,809,592	$	6	$	861,951	$	(683,833)	$	(241)	$	177,883

								Accumulated
				Additional				Other		Total
	Common Stock			Paid-in		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Loss		Equity
Balance, December 31, 2022	58,473,660	$	6	$	824,292	$	(519,098)	$	(2,462)	$	302,738
Issuance of common stock upon the exercise of stock options	452,102		—		448		—		—		448
Vesting of restricted stock	95,877		—		—		—		—		—
Vesting of early exercise stock options	85,145		—		269		—		—		269
Unrealized gain on investments	—		—		—		—		1,196		1,196
Foreign currency translation	—		—		—		—		(9)		(9)
Stock based compensation	—		—		3,797		—		—		3,797
Net loss	—		—		—		(31,264)		—		(31,264)
Balance, March 31, 2023	59,106,784	$	6	$	828,806	$	(550,362)	$	(1,275)	$	277,175

See accompanying notes to the consolidated financial statements.

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CENTURY THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	Three Months Ended		Three Months Ended
	March 31, 2024		March 31, 2023
Cash flows from operating activities
Net loss	$	(28,062)	$	(31,264)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		3,226		2,908
Amortization of deferred financing cost		—		56
Non-cash operating lease expense (benefit)		1,542		(738)
Stock based compensation		3,207		3,797
Amortization/accretion of investments		(1,115)		—
Change in operating assets and liabilities:
Escrow deposit		—		220
Prepaid expenses and other assets		(3,395)		(160)
Operating lease liability		(2,186)		3,842
Deferred revenue		(855)		(1,720)
Accounts payable		689		(2,954)
Accrued expenses and other liabilities		(3,319)		(3,206)
Non-current security deposit		20		—
Net cash used in operating activities		(30,248)		(29,219)
Cash flows from investing activities
Acquisition of property and equipment		(539)		(4,991)
Acquisition of fixed maturity securities, available for sale		(35,087)		(42,829)
Sale of fixed maturity securities, available for sale		47,167		79,158
Net cash provided by investing activities		11,541		31,338
Cash flows from financing activities
Proceeds from issuance of common stock and ESPP		366		448
Proceeds from ATM, net of issuance costs		17,829		—
Proceeds from issuance of shares to collaboration partner		—		—
Net cash provided by financing activities		18,195		448
Net (decrease) increase in cash, cash equivalents, and restricted cash		(512)		2,567
Cash, cash equivalents and restricted cash, beginning of period		49,303		86,244
Cash, cash equivalents and restricted cash, end of period	$	48,791	$	88,811
Supplemental disclosure of cash and non-cash operating activities:
Cash paid for interest	$	—	$	345
Cash paid for income tax	$	—	$	—
Supplemental disclosure of non-cash investing and financing activities:
Purchase of property and equipment, accrued and unpaid	$	—	$	975

See accompanying notes to the consolidated financial statements.

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CENTURY THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

(in thousands, except share and per share amounts)

Note 1—Organization and description of the business

Century Therapeutics, Inc. (the “Company”) is an innovative biotechnology company developing transformative allogeneic cell therapies to create products for the treatment of both solid tumor and hematological malignancies and autoimmune diseases with significant unmet medical need. Since inception, the Company has devoted substantially all of its time and efforts to performing research and development activities, building infrastructure and raising capital. The Company is incorporated in the state of Delaware.

Principles of Consolidation

The consolidated financial statements include the consolidated financial position and consolidated results of operations of the Company and the Company’s subsidiary, Century Therapeutics Canada ULC (“Century Canada”). All intercompany balances and transactions have been eliminated in consolidation.

Liquidity

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has limited operating history and its prospects are subject to risks, expenses, and uncertainties frequently encountered by companies in the biotechnology and pharmaceutical industries. These risks include, but are not limited to, the uncertainty of availability of additional financing and the uncertainty of achieving future profitability.

Since inception, the Company has incurred net losses and negative cash flows from operations. During the three months ended March 31, 2024, the Company incurred a net loss of $28,062. During the three months ended March 31, 2024, the Company used $30,248 of cash in operations. Cash and cash equivalents and investments were $249,868 at March 31, 2024. Management expects to incur additional losses in the future to fund its operations and conduct product research and preclinical and clinical development and recognizes the need to raise additional capital to fully implement its business plan. The Company believes it has adequate cash and financial resources to operate for at least the next 12 months from the date of issuance of these consolidated financial statements.

Note 2—Summary of significant accounting policies and basis of presentation

Basis of presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the interim period reporting requirements of Form 10-Q and Article 10 of Regulation S-X. The consolidated balance sheet as of March 31, 2024, and the consolidated statements of operations and comprehensive loss, consolidated statements of changes in stockholders’ equity, and the consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 are unaudited, but, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.  The results for any interim period are not necessarily indicative of results for the year ending December 31, 2024 or for any other subsequent interim period.  The consolidated balance sheet at December 31, 2023 has been derived from the Company’s audited consolidated financial statements.

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Certain prior year information has been reclassified to conform to the fiscal year 2024 presentation.

Segment information

Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions on how to allocate resources and assess performance. The Company views its operations and manages the business as one operating segment.

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuations supporting stock compensation, the estimation of the incremental borrowing rate for operating leases and standalone selling prices of performance obligations in collaboration agreements. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s results of operations could either benefit from, or be adversely affected by, any such change in estimate.

Concentration of credit risk and other risks and uncertainties

Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist of cash, cash equivalents, U.S. Treasury bills and bonds, as well as corporate bonds. Cash and cash equivalents, as well as short and long-term investments include a checking account and asset management accounts held by a limited number of financial institutions. At times, such deposits may be in excess of insured limits. As of March 31, 2024 and December 31, 2023, the Company has not experienced any losses on its deposits of cash and cash equivalents.

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, uncertainty of market acceptance of its products, competition from substitute products and larger companies, protection of proprietary technology, strategic relationships, and dependence on key individuals.

Products developed by the Company require clearances from the U.S. Food and Drug Administration (the “FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance the Company’s future products will receive the necessary clearances. If the Company was denied clearance, clearance was delayed, or if the Company was unable to maintain clearance, it could have a material adverse impact on the Company.

Fair value of financial instruments

The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows:

Level 1 Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

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Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active;

Level 3 Inputs are unobservable in which there is little or no market data available, which require the reporting entity to develop its own assumptions that are unobservable.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

Cash and cash equivalents

Management considers all highly liquid investments with an insignificant interest rate risk and original maturities of three months or less to be cash equivalents.

Restricted cash

As of March 31, 2024 and December 31, 2023, the Company had $1,979 in cash on deposit to secure certain lease commitments. Restricted cash is recorded separately in the Company’s consolidated balance sheets.

The following provides a reconciliation of the Company’s cash, cash equivalents, and restricted cash as reported in the consolidated balance sheets to the amounts reported in the consolidated statements of cash flows:

	March 31, 2024		December 31, 2023
Cash and cash equivalents	$	46,812	$	47,324
Restricted cash		1,979		1,979
Cash, cash equivalents, and restricted cash	$	48,791	$	49,303

Investments

The Company invests in fixed maturity securities including U.S. Treasury bills and bonds as well as corporate bonds. The investments are classified as available-for-sale and reported at fair value. Unrealized gains or losses are determined by comparing the fair market value of the securities with their cost or amortized cost. Realized gains and losses on investments are recorded on the trade date and are included in the statement of operations. Unrealized gains and losses on investments are recorded in other comprehensive loss on the consolidated statements of operations and comprehensive loss. The cost of securities sold is based on the specified identification method. Investment income is recognized as earned and discounts or premiums arising from the purchase of debt securities are recognized in investment income using the interest method over the remaining term of the security. Securities with an original maturity date greater than three months that mature within one year of the balance sheet date are classified as short-term, while investments with a maturity date greater than one year are classified as long-term.

Property and equipment, net

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is generally five years. Leasehold improvements are amortized over the shorter of the asset’s useful life or the remaining term of the lease. Construction in progress includes direct cost related to the construction of leasehold improvements and is stated at original cost. Such costs are not depreciated until the asset is completed and placed into service. Once the asset is placed into service, these capitalized costs will be allocated to leasehold improvements and will be depreciated over the shorter of the asset’s useful life or the remaining term of the lease. Computer software and equipment includes implementation costs for cloud-based software and network equipment.

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Expenditures for major additions and improvements are capitalized, while minor replacements, maintenance, and repairs are charged to expense as incurred. When property is retired or otherwise disposed of, the costs and accumulated depreciation are removed from the respective accounts, with any resulting gain or loss recognized concurrently.

Research and development expenses

Research and development expenses include costs directly attributable to the conduct of research and development programs, including the cost of salaries, payroll taxes, employee benefits, stock compensation, materials, supplies, rent, depreciation on and maintenance of research equipment with alternative future use, and the cost of services provided by outside contractors. All costs associated with research and development are expensed as incurred.

Clinical trial costs are a component of research and development expenses. The Company expenses costs for its clinical trial activities performed by third parties, including clinical research organizations and other service providers, as they are incurred, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company uses information it receives from internal personnel and outside service providers to estimate the clinical trial costs incurred.

Stock-based compensation

Employees, consultants and members of the Board of Directors of the Company have received stock options and restricted stock of the Company. The Company recognizes the cost of the stock-based compensation incurred as its employees and board members vest in the awards. The Company accounts for stock-based compensation arrangements in accordance with provisions of Accounting Standards Codification (“ASC”) 718, Compensation—Stock Compensation. ASC 718 requires the recognition of compensation expense, using a fair-value based method, for costs related to all share-based payments including stock options. ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model (“Black Scholes”) to determine the fair value of options granted. The Company’s stock-based awards are subject to service-based vesting conditions and performance-based vesting conditions. Compensation expense related to awards to employees and directors with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. For performance-based awards, the Company reassesses at each reporting date whether achievement of the performance condition is probable and accrues compensation expense if and when achievement of the performance condition is probable.

Black Scholes requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. The historical volatility is calculated based on a period of time commensurate with expected term assumption. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. Forfeitures are recognized as they occur.

Foreign currency translation

The reporting currency of the Company is the U.S. dollar. The functional currency of Century Canada is the Canadian dollar. Assets and liabilities of Century Canada are translated into U.S. dollars based on exchange rates at the end of each reporting period. Expenses are translated at average exchange rates during the reporting period. Gains and losses arising from the translation of assets and liabilities are included as a component of accumulated other comprehensive loss or income on the Company’s consolidated balance sheets. Gains and losses resulting from foreign currency transactions are reflected within the Company’s

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consolidated statements of operations and comprehensive loss. The Company has not utilized any foreign currency hedging strategies to mitigate the effect of its foreign currency exposure.

Intercompany payables and receivables are considered to be long-term in nature and any change in balance due to foreign currency fluctuation is included as a component of the Company’s consolidated comprehensive loss and accumulated other comprehensive loss within the Company’s consolidated balance sheets.

Basic and diluted net loss per common shares

Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted-average number of common shares outstanding during the period. The Company computes diluted net loss per common share by dividing the net loss applicable to common shareholders by the sum of the weighted-average number of common shares outstanding during the period plus the potential dilutive effects of its warrants, restricted stock and stock options to purchase common shares, but such items are excluded if their effect is anti-dilutive. Because the impact of these items is anti-dilutive during periods of net loss, there were no differences between the Company’s basic and diluted net loss per common share for the three months ended March 31, 2024 and 2023.

Collaboration revenue

The Company may enter into collaboration and licensing agreements with strategic partners for research and development, manufacturing, and commercialization of its product candidates. Payments under these arrangements may include non-refundable, upfront fees; reimbursement of certain costs; customer option fees for additional goods or services; payments upon the achievement of development, regulatory, and commercial milestones; sales of product at certain agreed-upon amounts; and royalties on product sales.

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, (“ASC 606”). This standard applies to all contracts with customers. When an agreement falls under the scope of other standards, such as ASC Topic 808, Collaborative Arrangements, or (“ASC 808”), the Company will apply the recognition, measurement, presentation, and disclosure guidance in ASC 606 to the performance obligations in the agreements if those performance obligations are with a customer. Revenue recognized by analogizing to ASC 606 is recorded as collaboration revenue on the statements of operations.

Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under a collaboration agreement, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations on a relative stand-alone selling price basis; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

As part of the accounting for these arrangements, the Company must use its judgment to determine the stand-alone selling price for each performance obligation identified in the contract for the allocation of transaction price. The estimation of the stand-alone selling price may include such estimates as forecasted revenues and costs, development timelines, discount rates, and probabilities of regulatory and commercial success. The Company also applies significant judgment when evaluating whether contractual obligations represent distinct performance obligations, allocating transaction price to performance obligations within a contract, determining when performance obligations have been met, assessing the recognition and future reversal of variable consideration and determining and applying appropriate methods of measuring progress for performance obligations satisfied over time. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, current. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, non-current.

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If an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and services underlying the customer options are not considered to be performance obligations at the outset of the arrangement, as they are contingent upon option exercise. The Company evaluates the customer options for material rights or options to acquire additional goods or services for free or at a discount. If the customer options are not determined to represent a material right, no transaction price is allocated to these options and the Company will account for these options at that time they are exercised. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement.

The obligations under the Company’s collaboration agreements may include research and development services to be performed by the Company for or on behalf of the customer. Amounts allocated to these performance obligations are recognized as the Company performs these obligations, and revenue is measured based on an inputs method of costs incurred to date of budgeted costs. Under certain circumstances, the Company may be reimbursed for certain expenses incurred under the research and development services.

At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The Company evaluates factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the statements of operations in the period of adjustment.

Recent accounting pronouncements

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 requires entities to provide additional information in their tax rate reconciliation and additional disclosures about income taxes paid by jurisdiction. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The guidance should be applied prospectively, but entities have the option to apply it retrospectively for each period presented. The Company is currently evaluating the impact of adopting this new accounting guidance.

Note 3—Reduction in force

In January 2023, the Company's Board of Directors approved, and management implemented, a new portfolio prioritization and capital allocation strategy. The resulting changes included pausing investments in CNTY-103 for glioblastoma as well as a discovery program in hematologic malignancies. The Company has shifted focus to CNTY-101 and will accelerate key programs, including one follow-on candidate for lymphoma, CNTY-102, CNTY-107 for Nectin-4+ solid tumors, and CNTY-101 in moderate to severe Systemic Lupus Eythematosus (“SLE”). In addition, the Company continues its partnered programs with Bristol Myers Squibb. The restructuring plan resulted in a reduction in the Company's workforce of approximately 25%. In connection with the restructuring plan, lab operations in Seattle and Hamilton, Ontario were closed and research activities were consolidated in Philadelphia.

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During the three months ended March 31, 2023, the Company incurred $2,032 of cash-based expenses related to employee severances, benefits and related costs. Of these amounts, $292 related to general and administrative expense, while $1,740 related to R&D expense. In addition, the Company recorded non-cash stock-based compensation charge of $581 related to modification of equity awards for employees impacted by the restructuring during the year ended December 31, 2023. Of these amounts, $171 related to G&A expense, while $410 related to R&D expense. There were no remaining outstanding liabilities related to the reduction in force at March 31, 2024.

Note 4—Financial instruments and fair value measurements

The following table sets forth the Company’s assets that were measured at fair value as of March 31, 2024 by level within the fair value hierarchy:

	Level 1		Level 2		Level 3		Total
Cash equivalents	$	41,492		—		—	$	41,492
U.S. Treasury		—		17,838		—		17,838
Corporate bonds		—		185,218		—		185,218
Total	$	41,492	$	203,056	$	—	$	244,548

The following table sets forth the Company’s assets that were measured at fair value as of December 31, 2023, by level within the fair value hierarchy:

	Level 1		Level 2		Level 3		Total
Cash equivalents	$	42,263		—		—	$	42,263
U.S. Treasury		—		26,114		—		26,114
Corporate bonds		—		188,396		—		188,396
Total	$	42,263	$	214,510	$	—	$	256,773

There were no transfers between levels during the period ended March 31, 2024. The Company uses the services of its investment manager, which uses widely accepted models for assumptions in valuing securities with inputs from major third-party data providers.

The Company classifies all of its investments in fixed maturity debt securities as available-for-sale and, accordingly, are carried at estimated fair value.

The amortized cost, gross unrealized gains and losses, and fair value of investments in fixed maturity securities are as follows as of March 31, 2024:

			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
U.S. Treasury	$	17,855	$	—	$	(17)	$	17,838
Corporate bonds		185,329		128		(239)		185,218
Total	$	203,184	$	128	$	(256)	$	203,056

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The amortized cost, gross unrealized gains and losses, and fair value of investments in fixed maturity securities are as follows as of December 31, 2023:

			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
U.S. Treasury	$	26,070	$	44	$	—	$	26,114
Corporate bonds		188,219		399		(222)		188,396
Total	$	214,289	$	443	$	(222)	$	214,510

The following table provides the maturities of our fixed maturity available-for-sale securities:

	March 31, 2024		December 31, 2023
Less than one year	$	145,204	$	125,414
One to five years		57,852		89,096
	$	203,056	$	214,510

The Company has evaluated the unrealized losses on the fixed maturity securities and determined that they are not attributable to credit risk factors. For fixed maturity securities, losses in fair value are viewed as temporary if the fixed maturity security can be held to maturity and it is reasonable to assume that the issuer will be able to service the debt, both as to principal and interest.

At March 31, 2024 and December 31, 2023, the Company had 52 and 25 available-for-sale investment debt securities in an unrealized loss position without an allowance for credit losses, respectively. Unrealized losses on corporate debt securities have not been recognized into income because the issuers’ bonds are of high credit quality (rated BBB+ or higher) and the decline in fair value is largely due to market conditions and or changes in interest rates. Management does not intend to sell and it is likely that management will not be required to sell the securities prior to the anticipated recovery of their amortized cost basis. The issuers continue to make timely payments on the bonds. The fair value is expected to recover as the bonds approach maturity.

As of March 31, 2024 and December 31, 2023, accrued interest receivable on available-for-sale investment debt securities totaling $1,583 and $1,570, respectively, is excluded from the estimate of credit losses and is included in prepaid expenses and other current assets.

Note 5—Property and equipment, net

The following is a summary of property and equipment, net:

	March 31, 2024		December 31, 2023
Lab equipment	$	29,928	$	29,597
Leasehold improvements		61,136		60,862
Construction in progress		—		124
Computer software and equipment		2,899		2,899
Furniture and fixtures		1,061		1,061
Total		95,024		94,543
Less: Accumulated depreciation		(26,019)		(22,838)
Property and equipment, net	$	69,005	$	71,705

Depreciation expense was $3,226 and $2,908 for the three months ended March 31, 2024 and 2023, respectively.

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Note 6—Accrued expenses and other liabilities

The following is a summary of accrued expenses:

	March 31, 2024		December 31, 2023
Payroll and bonuses	$	2,868	$	6,496
Accrued clinical trial related costs		356		470
Professional and legal fees		2,043		1,642
Operating lease liability, current		2,215		1,513
Other		50		28
Total accrued expenses and other liabilities	$	7,532	$	10,149

Note 7—Long-term debt

On September 14, 2020, the Company entered into a $10,000 Term Loan Agreement (as amended, the “Loan Agreement”) with Hercules Capital, Inc. (“Hercules”). Pursuant to the terms of the Loan Agreement, the Company borrowed $10,000 (the “Tranche 1 Advance”) from the lenders at closing. The Company granted Hercules a lien on substantially all of the Company’s assets, excluding intellectual property.

On May 1, 2023, the Company prepaid the Loan Agreement in full. The total amount paid to Hercules in connection with the prepayment was $10,617, which included all outstanding principal, accrued and unpaid interest and end of term and prepayment charges (“the Payoff Amount”). The Payoff Amount included a prepayment charge of $100 (equal to 1.0% of the outstanding principal), and an end of term fee of $395, which is being recognized as interest expense and accreted over the term of the Loan Agreement using the effective interest method. Upon receipt by Hercules of the Payoff Amount on May 1, 2023, all obligations, covenants, debts and liabilities of the Company under the Loan Agreement were satisfied and discharged in full, and the Loan Agreement was terminated.

The Company issued to Hercules warrants to purchase up to an aggregate of 16,112 shares of common stock. The warrants are exercisable for a period of ten years from the date of the issuance of each warrant at a per share exercise price equal to $13.96, subject to certain adjustments as specified in the warrants. The fair value of the warrants at issuance was $46. The Company accounted for the warrants as equity, and the fair value is recorded in additional paid-in capital. The warrant value is also recorded as a debt discount and classified as a contra-liability on the consolidated balance sheet and amortized to interest expense.

Interest expense attributable to the Loan Agreement is as follows:

	For the Three Months Ended		For the Three Months Ended
	March 31, 2024		March 31, 2023
Interest expense	$	—	$	348
Amortization of debt issuance costs, including end of term fee accretion		—		56
	$	—	$	404

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Note 8 – Bristol-Myers Squibb Collaboration

On January 7, 2022, the Company entered into the Collaboration Agreement with Bristol-Myers Squibb to collaborate on the research, development and commercialization of iNK and iT cell programs for hematologic malignancies and solid tumors (“Collaboration Program,” and each product candidate a “Development Candidate”). The Collaboration Agreement is within the scope of ASC 808, Collaborative Arrangements as both parties are active participants in the arrangement and are exposed to significant risks and rewards. While this arrangement is in the scope of ASC 808, the Company analogizes to ASC 606 for the accounting for the Collaboration Agreement, including for the delivery of goods and services (i.e., units of account). Revenue recognized by analogizing to ASC 606 is recorded as collaboration revenue in the statements of operations.

Pursuant to the Collaboration Agreement, the Company and Bristol-Myers Squibb will initially collaborate on two Collaboration Programs focused on acute myeloid leukemia (“AML”) and multiple myeloma (“MM”), and Bristol-Myers Squibb has the option to add up to two additional Collaboration Programs for an additional fee. The Company is responsible for generating Development Candidates for each Collaboration Program, and Bristol-Myers Squibb has the option to elect to exclusively license the Development Candidates for pre-clinical development, clinical development and commercialization on a worldwide basis (“License Option”). Following Bristol-Myers Squibb’s exercise of the License Option, the Company will be responsible for performing IND-enabling studies, supporting Bristol-Myers Squibb’s preparation and submission of an IND, and manufacturing of clinical supplies until completion of a proof of concept clinical trial. Bristol-Myers Squibb will be responsible for all regulatory, clinical, manufacturing (after the proof of concept clinical trial) and commercialization activities for such Development Candidates worldwide. The Company has the option to co-promote Development Candidates generated from certain specified Collaboration Programs.

Under the terms of the Collaboration Agreement, Bristol-Myers Squibb made a non-refundable, upfront cash payment of $100,000 and will pay an exercise fee upon the exercise of the License Option (“Licensed Program” and product candidates developed under a Licensed Program, “Licensed Products”). For each Licensed Program, Bristol-Myers Squibb will pay up to $235,000 in milestone payments upon the first achievement of certain development and regulatory milestones and will pay up to $500,000 per Licensed Product in net sales-based milestone payments. Bristol-Myers Squibb will also pay the Company tiered royalties per Licensed Product as a percentage of net sales in the high-single digits to low-teens, subject to reduction for biosimilar competition, compulsory licensing and certain third party license costs. If Century exercises its co-promote option, such royalty percentage will be increased to low-teens to high-teens in respect of the sales of the co-promoted Licensed Products in the United States. The royalty term shall terminate on a Licensed Product-by-Licensed Product and country-by-country basis on the latest of (i) the 12-year anniversary of the first commercial sale of such Licensed Product in such country, (ii) the expiration of any regulatory exclusivity period that covers such Licensed Product in such country, and (iii) the expiration of the last-to-expire licensed patent of the Company or a jointly owned patent that covers such the Licensed Product in such country. After expiration of the applicable royalty term for a Licensed Product in a country, all licenses granted by the Company to Bristol-Myers Squibb for such Licensed Product in such country will be fully paid-up, royalty-free, perpetual and irrevocable.

In connection with the Collaboration Agreement, Bristol-Myers Squibb purchased 2,160,760 shares of the Company’s common stock at a price per share of $23.14, for an aggregate purchase price of $50,000. In determining the fair value of the common stock issued to Bristol-Myers Squibb, the Company considered the closing price of the common stock on the date of the transaction and included a lack of marketability discount because the shares are subject to certain restrictions. The Company determined the common stock purchase represented a premium of $7.82 per share, or $23,187 in the aggregate (“Equity Premium”), and the remaining $26,813 was recorded as issuance of common stock in stockholders’ equity.

The Company identified the following commitments under the arrangement: (i) research and development services (“R&D Services”) under each of the two initial Collaboration Programs and (ii) Bristol-Myers Squibb’s License Option to elect to exclusively license the Development Candidates for each of the two initial Collaboration Programs. The Company determined that these four commitments represent distinct

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performance obligations for purposes of recognizing revenue and will recognize revenue as the Company fulfills each performance obligation.

The Company determined that the upfront payment and Equity Premium constitute the transaction price at the inception of the Collaboration Agreement. The future potential development and regulatory milestone payments were fully constrained at contract inception as the risk of significant revenue reversal related to these amounts has not yet been resolved. The achievement of the future potential milestones is not within the Company’s control and is subject to certain research and development success and therefore carries significant uncertainty. The Company will reevaluate the likelihood of achieving these milestones at the end of each reporting period and adjust the transaction price in the period the risk is resolved. In addition, the Company will recognize any consideration related to sales-based milestones and royalties when the subsequent sales occur.

The total transaction price of $123,187 was allocated to the performance obligations based on their estimated standalone selling price on January 7, 2022. The stand-alone selling price of the research and development services was estimated using the expected cost-plus margin approach, and the stand-alone selling price of the License Options was based on a discounted cash flow approach and considered several factors including, but not limited to, discount rate, development timeline, regulatory risks, estimated market demand, and future revenue potential using an adjusted market approach. The allocated transaction price is recognized as revenue in one of two ways:

● Research and development services: The Company recognizes the portion of the transaction price allocated to each of the research and development performance obligations as the research and development services are provided, using an inputs method, in proportion to costs incurred to date for each research development target as compared to total costs incurred and expected to be incurred in the future to satisfy the underlying obligation related to each research and development target. The transfer of control occurs over this period and, in management’s judgment, is the best measure of progress towards satisfying the performance obligation.

● License option rights: The transaction price allocated to the license options rights, which are considered material rights to license and commercialize the underlying research and development target, are deferred until the period that Bristol-Myers Squibb elects to exercise or elects to not exercise its option or when the option to exercise expires.

The following table summarizes the allocation of the total transaction price to the identified performance obligations under the arrangement, and the amount of the transaction price unsatisfied as of March 31, 2024:

			Cumulative collaboration		Deferred
Performance obligations:	Transaction price		revenue recognized		collaboration revenue
Option rights	$	109,164	$	-	$	109,164
Research and development services		14,023		(8,289)		5,734
Total		123,187		(8,289)		114,898
Less current portion of deferred revenue		-		-		(4,610)
Total long-term deferred revenue	$	123,187	$	(8,289)	$	110,288

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The following table summarizes the allocation of the total transaction price to the identified performance obligations under the arrangement, and the amount of the transaction price unsatisfied as of December 31, 2023:

			Cumulative collaboration		Deferred
Performance obligations:	Transaction price		revenue recognized		collaboration revenue
Option rights	$	109,164	$	-	$	109,164
Research and development services		14,023		(7,434)		6,589
Total		123,187		(7,434)		115,753
Less current portion of deferred revenue		-		-		(4,372)
Total long-term deferred revenue	$	123,187	$	(7,434)	$	111,381

Note 9—Commitments and contingencies

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when future expenditures are probable and such expenditures can be reasonably estimated.

Distributed Bio Master Service Agreement

On July 24, 2019, the Company entered into a Master Service Agreement with Distributed Bio, Inc (“DBio”), whereby DBio will screen for protein binders that bind to specific therapeutic targets (the “Master Service Agreement”). The Company pays for such services according to a payment schedule, and if the Company brings the protein binders into the clinic for further development, DBio will receive milestone payments of up to $16,100 in total for each product as the products move through the clinical development and regulatory approval processes. No milestone payments were due since the inception of the agreement.

The Company had $58 within accounts payable as of March 31, 2024 and $106 as of December 31, 2023, in its consolidated balance sheets related to the Master Service Agreement.

iCELL Inc. Sublicense Agreement

In March 2020, the Company entered into a Sublicense Agreement with iCELL Inc (“iCELL”) whereby iCELL granted the Company a license of certain patents and technology. The Company will pay iCELL royalties in the low single digits on net sales of the licensed product. In addition to the earned royalties, the Company will pay sales milestones, not to exceed $70,000, for the sales of the licensed product. iCELL is also eligible to receive payments of up to $4,250 in development and regulatory approval milestone payments. No milestones or royalties were due in 2024 or 2023.

Note 10—Leases

The Company has commitments under operating leases for certain facilities used in its operations. The Company maintains security deposits on certain leases in the amounts of $410 and $1,260 within security deposits and non-current assets in its consolidated balance sheets at March 31, 2024 and December 31, 2023, respectively. The Company’s leases have initial lease terms ranging from 5 to 16 years. Certain lease agreements contain provisions for future rent increases.

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The following table reflects the components of lease expense:

	For the		For the
	Three Months Ended		Three Months Ended
	March 31, 2024		March 31, 2023
Operating lease expense:
Fixed lease cost	$	1,085	$	1,395
Variable lease cost		450		125
Short term lease expense		—		594
Total operating lease expense	$	1,535	$	2,114

The following table reflects supplemental balance sheet information related to leases:

		As of		As of
		March 31,		December 31,
	Location in Balance Sheet	2024		2023
Operating lease right-of-use asset, net	Operating lease right-of-use assets	$	19,314	$	20,376
Operating lease liability, current	Accrued expenses and other liabilities	$	2,215	$	1,513
Operating lease liability, long-term	Operating lease liability, long-term		44,251		46,658
Total operating lease liability		$	46,466	$	48,171

The following table reflects supplement lease term and discount rate information related to leases:

	As of March 31, 2024		As of December 31, 2023
Weighted-average remaining lease terms - operating leases	7.3 years		7.6 years
Weighted-average discount rate - operating leases	9.9	%	9.9	%

The following table reflects supplemental cash flow information related to leases as of the periods indicated:

	For the Three Months Ended		For the Three Months Ended
	March 31, 2024		March 31, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(2,186)	$	(31)
Right-of-use assets obtained in exchange for lease obligations:	$	—	$	—

The following table reflects future minimum lease payments under noncancelable leases as of March 31, 2024:

	Operating Leases
2024	$	5,900
2025		8,421
2026		7,931
2027		8,125
2028		8,325
Thereafter		43,163
Total lease payments		81,865
Less: Imputed interest		(27,423)
Less: Tenant incentive receivable		(7,976)
Total	$	46,466

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Note 11—Income taxes

During the three months ended March 31, 2024, the Company recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits generated in the U.S. due to its uncertainty of realizing a benefit from those items. During the three months ended March 31, 2023, the Company recorded a tax provision of $1.2 million, due primarily to revenue recognition for tax purposes from the Company's Research Collaboration and Collaboration Agreement entered into with Bristol-Myers Squibb Company in 2022.

Note 12—Basic and diluted net loss per common share

The Company’s potentially dilutive securities, which include RSUs (“Restricted Stock Units”), restricted stock, warrants, early exercised stock options and stock options to purchase shares of the Company’s common stock, have been excluded from the computation of dilutive net loss per share as the effect would be antidilutive. Therefore, the weighted-average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share is the same. The Company excluded the following potential shares of common stock presented based on amounts outstanding at each stated period end, from the computation of diluted net loss per share for the three months ended March 31, 2024 and 2023 because including them would have had an anti-dilutive effect.

	Three Months Ended	Three Months Ended
	March 31,	March 31,
	2024	2023
Stock options to purchase common stock	4,739,854	10,370,402
Early exercised stock options subject to future vesting	84,380	385,655
Restricted stock awards subject to future vesting	24,731	49,465
Unvested restricted stock units	3,941,432	544,650
Warrants	32,009	32,009
Total	8,822,406	11,382,181

Note 13—Stock-based compensation

On June 17, 2021, the Company adopted the Century Therapeutics, Inc. 2021 Equity Incentive Plan (the “2021 Incentive Plan”) which superseded the 2018 Incentive Plan and from that date forward all issuances of incentive awards will be governed by the 2021 Incentive Plan.

The 2021 Incentive Plan provides for the Company to sell or issue common stock or restricted common stock, RSUs, or to grant incentive stock options or nonqualified stock options for the purchase of common stock, to employees, members of the Board of Directors, and consultants of the Company under terms and provisions established by the Board of Directors. Under the terms of the 2021 Incentive Plan, options may be granted at an exercise price not less than fair market value.

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Upon adoption of the 2021 Incentive Plan, the Company was authorized to issue 5,481,735 shares of Common Stock under the 2021 Incentive Plan (which represents 5,640,711 shares of Common Stock initially available for grant under the 2021 Incentive Plan less 158,976 shares of Common Stock reserved for issuance upon the exercise of previously granted stock options that remain outstanding under the 2018 Incentive Plan). The number of shares of common stock initially reserved for issuance under the 2021 Incentive Plan shall be increased, upon approval by the Board of Directors, on January 1, 2022 and each January 1 thereafter, in an amount equal to the least of, (i) five percent (5%) of the outstanding common stock on the immediately preceding December 31, or (ii) such number of common stock determined by the Board of Directors no later than the immediately preceding December 31. For 2023, the 2021 Incentive Plan reserved shares were increased under clause (i) by 2,954,788 shares, effective as of January 1, 2023. For 2024, the 2021 Incentive Plan reserved shares were increased under clause (i) by 3,025,220 shares, effective as of January 1, 2024. As of March 31, 2024, there were 4,905,295 shares available for issuance under the 2021 Incentive Plan.

The Company’s stock-based awards are subject to service-based vesting conditions. Compensation expense related to awards to employees and directors with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Stock awards granted typically vest over a four-year period but may be granted with different vesting terms. The Company may also issue awards with performance-based vesting conditions. For performance-based awards, the Company would reassess at each reporting date whether achievement of the performance condition is probable and accrue compensation expense if and when the achievement of the performance condition is probable. During the quarter ended June 30, 2023, the Company issued performance based RSUs that represent a contingent right to receive one share of the Company’s common stock. The RSUs shall vest 50% on November 1, 2023, with the remaining 50% vesting upon the earlier of: (i) November 1, 2024; and (ii) satisfaction of certain performance criteria. The Company is currently recording expense for these RSUs on the straight-line basis.

The Company recognizes the costs of the stock-based payments as the employees vest in the awards.

As of March 31, 2024, the Company had reserved shares of common stock for issuance as follows:

	Shares
Options and RSUs issued and outstanding	8,681,286
Shares available for future stock option and RSU grants	4,905,295
Shares available for employee stock purchase plan	954,522
Total	14,541,103

The shares of Common Stock available under the 2021 Incentive Plan as of March 31, 2024 are as follows:

	Shares
Balance December 31, 2023	3,128,244
Shares reserved for issuance	2,954,788
Options granted	(1,433,838)
RSU’s granted	(350,379)
Options and RSUs forfeited / cancelled	606,480
Balance March 31, 2024	4,905,295

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Stock Options

The following table summarizes stock option activity for the three month period ended March 31, 2024:

		Weighted Average
				Remaining		Aggregate
				Contractual		Intrinsic
				Term		Value
	Shares	Exercise Price		(years)		(in thousands)
Outstanding January 1, 2024	3,938,006	$	7.11	5.66	$	2,923
Granted	1,433,838		5.29	—		—
Exercised	(155,928)		1.25	—		—
Forfeited	(380,899)		6.46	—		—
Cancelled	(95,163)		12.76	—		—
Outstanding, March 31, 2024	4,739,854	$	5.60	4.53	$	6,066
Exercisable at March 31, 2024	4,441,321	$	7.07	5.52	$	3,619

The weighted average grant date fair value of awards for options granted during the three months ended March 31, 2024 was $3.73. As of March 31, 2024, there was $18,525 of total unrecognized compensation expense related to unvested stock options with time-based vesting terms, which is expected to be recognized over a weighted average period of 3.02 years. The aggregate intrinsic value of options vested and exercisable as of March 31, 2024 and 2023 is calculated based on the difference between the exercise price and the fair value of our common stock. The intrinsic value of options exercised in 2024 and 2023 was $3,619 and $3,262, respectively.

The Company estimates the fair value of its option awards to employees and directors using Black-Scholes, which requires inputs and subjective assumptions, including (i) the expected stock price volatility, (ii) the calculation of the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. Due to the lack of substantial company-specific historical and implied volatility data of its common stock, the Company has based its estimate of expected volatility on the historical volatility of a group of similar public companies. Starting in June of 2023 the Company had sufficient historical information regarding stock trading history, and started to use the Company’s own stock volatility. The Company has never paid dividends and does not expect to in the foreseeable future. The expected term of the options granted to employees is derived from the “simplified” method as described in Staff Accounting Bulletin 107 relating to stock-based compensation. The risk-free interest rates for periods within expected term of the option are based on the U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The Company will account for actual forfeitures as they occur.

The weighted-average assumptions used to calculate the fair value of stock options granted are as follows:

	March 31, 2024		December 31, 2023
Expected dividend rate	—		—
Expected option term (years)	6.08		6.04
Expected volatility	77.86	%	77.87	%
Risk-free interest rate	4.38	%	3.68	%

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Stock-based compensation expense recorded under ASC 718 related to stock options granted and common stock issued under the 2021 Employee Stock Purchase Plan (the “ESPP”) were allocated to research and development and general and administrative expense as follows:

	Three Months Ended		Three Months Ended
	March 31,		March 31,
	2024		2023
Research and development	$	1,748	$	2,112
General and administrative		1,459		1,685
Total stock-based compensation	$	3,207	$	3,797

Stock-based compensation expense by award type included within the condensed consolidated statements of operations is as follows:

	Three Months Ended		Three Months Ended
	March 31,		March 31,
	2024		2023
Stock options	$	2,091	$	3,546
Restricted stock units		1,014		97
Restricted stock awards		45		93
Employee stock purchase plan		57		61
Total stock-based compensation	$	3,207	$	3,797

Restricted Stock Units

The following table summarizes RSU activity for the three months ended March 31, 2024:

		Weighted Average
	Shares	Grant Date Fair Value
Total Unvested December 31, 2023	3,721,471	$	2.69
Granted	350,379		5.31
Forfeited	(130,418)		3.65
Total Unvested March 31, 2024	3,941,432	$	2.84

As of March 31, 2024, there was $6,774 of total unrecognized compensation expense related to the unvested restricted stock with time-based vesting terms, which is expected to be recognized over a weighted average period of 2.84 years.

Restricted Stock Awards

The following table summarizes restricted stock activity as of March 31, 2024 and December 31, 2023:

		Weighted Average
	Shares	Grant Date Fair Value
Total Unvested December 31, 2023	49,416	$	7.27
Granted	—		—
Forfeited	—		—
Vested	(24,685)		7.27
Total Unvested March 31, 2024	24,731	$	7.27

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As of March 31, 2024, there was $311 of total unrecognized compensation expense related to the unvested restricted stock with time-based vesting terms, which is expected to be recognized over a weighted average period of 0.98 years. All restricted stock vests over a four-year period.

Early-Exercise of Unvested Equity Awards

Certain equity award holders early exercised unvested equity awards. The cash received upon early exercise of options of $491 was recorded as a deposit liability on the Company’s balance sheet as of March 31, 2024.

Employee Stock Purchase Plan

The Employee Stock Purchase Plan (“ESPP”) was adopted by the Board of Directors in May 2021. A total of 564,071 shares of common stock were initially reserved for issuance under this plan, which shall be increased, upon approval by the Board of Directors, on January 1, 2022 and each January 1 thereafter, to the lesser of (i) one percent (1%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year, or (ii) an amount determined by the Board of Directors no later than the last day of the immediately preceding fiscal year. For 2022, the ESPP reserved shares were increased under clause (i) by 550,055 shares, effective as of January 1, 2022. For 2023 and 2024, the board waived the annual increase to the shares reserved under the ESPP. As of March 31, 2024, there were 954,522 shares available for issuance, under the ESPP.

Note 14—Related party transactions

License Agreements and Collaborative Agreements with Shareholder

The Company owns licenses and other contracts with FUJIFILM Cellular Dynamics, Inc. (“FCDI”). FCDI is a shareholder of Century. The acquired licenses and other contracts with FCDI are as follows:

FCDI Agreements

The Company owns a non-exclusive license agreement with FCDI. The license provides the Company with certain patents and know-how related to the reprogramming of human somatic cells to induce pluripotent stem cells (“iPSCs”) (“Reprogramming License Agreement”). Under this agreement, the Company is required to make certain developmental and regulatory milestone payments as well as royalty payments upon commercialization. Royalties are in the low single digits on the sale of all licensed products.

The Company also owns an exclusive license agreement with FCDI (“Differentiation Licenses Agreement”). The Differentiation Licenses Agreement provides the Company with patents and know-how related to human iPSC exclusively manufactured by FCDI.

In October 2019, the Company entered into the Master Collaboration Agreement with FCDI (“Collaboration Agreement”), whereby FCDI provides certain services to the Company to develop and manufacture iPSCs and immune cells derived therefrom. FCDI provides services in accordance with the approved research plan and related research budget. The initial research plan covered the period from October 2019 through March 31, 2022. In July, 2022 the Company amended the Collaboration Agreement to extend the term through September 30, 2025, and in September 2023, the Company amended the Collaboration Agreement in connection with the Autoimmune License (as defined below).

In March, 2021, the Company entered into a Manufacturing Agreement with FCDI, (“Manufacturing Agreement”), pursuant to which FCDI will provide certain agreed upon technology transfer, process development, analytical testing and cGMP manufacturing services to the Company.

In January, 2022, the Company and FCDI entered into a letter agreement (the “Letter Agreement”), which amended the Reprogramming License Agreement, Differentiation License Agreement and Manufacturing Agreement (the “FCDI Agreements”) pursuant to the Company’s Research Collaboration and License Agreement with Bristol-Myers Squibb. Pursuant to the Letter Agreement, and in consideration for amending

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the FCDI Agreements, the Company paid to FCDI an upfront payment of $10,000, and will pay FCDI (i) a percentage of any milestone payments received by the Company under the FCDI Collaboration Agreement in respect of achievement of development or regulatory milestones specific to Japan, and (ii) a percentage of all royalties received by the Company under the FCDI Collaboration Agreement in respect of sales of products in Japan.

In September, 2023 the Company and FCDI entered into a worldwide license agreement whereby FCDI will grant non-exclusive licenses to the Company for certain patent rights and know-how related to cell differentiation and reprogramming for the development and commercialization of iPSC-derived therapies for the treatment of inflammatory and autoimmune diseases (the “Autoimmune License”).  In addition, the Company and FCDI entered into an amendment to each of the Reprogramming License and the Differentiation License to expand the licenses related to the development and commercialization of iPSC-derived cancer immunotherapeutic to also include inflammatory and autoimmune diseases.  Under the terms of these agreements, FCDI will be eligible to receive certain development and regulatory milestone payments as well as low single-digit royalties related to products developed in connection with such agreements. 

During the three months ended March 31, 2024 and 2023, the Company made payments of $2,707 and $12 and incurred research and development expenses of $2,666 and $32, and legal fees of $35 and $33, in each case related to these agreements, and recorded within general and administrative expenses in its consolidated statements of operations and comprehensive loss, respectively.

Bayer Option Agreement

Bayer Health, LLC (“Bayer”) has the right of first refusal to acquire certain products researched and developed by the Company. Subject to certain exceptions, Bayer’s right of first refusal is exercisable with respect to up to four products and may only exercise these option rights in a non-sequential and alternating manner, and such rights are subject to additional limitations.

Note 15 – Common Stock

The Company has a Sales Agreement (“Sales Agreement”), with Cowen and Company, LLC, or (“Cowen”) to provide for the offering, issuance and sale of up to an aggregate amount of $150,000 of common stock from time to time in “at-the-market” offerings (the “ATM Program”) pursuant to its shelf registration statement on Form S-3 (File No. 333-265975) and subject to the limitations thereof. During the three months ended March 31, 2024, the Company sold 4,084,502 shares pursuant to the ATM Program for net proceeds of $17,829, after deducting commissions of $551. Subsequent to March 31, 2024 through the date of the filing of these financial statements, the Company did not have any sales in the ATM Program.

Note 16—Subsequent Events

Private Placement Offering

In April, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain institutional accredited investors (the “Investors”), pursuant to which the Company agreed to issue and sell to the Investors in a private placement an aggregate of 15,873,011 shares of the Company’s common stock (the “Private Placement Shares”), at a price of $3.78 per share (the “Private Placement”).

The Private Placement closed on April 15, 2024. The Company received aggregate net proceeds from the Private Placement of approximately $56,700, after deducting placement agent fees and offering expenses. The Company intends to use the net proceeds from the private placement to support the expansion of CNTY-101 in autoimmune indications and for working capital and general corporate purposes.

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Clade Therapeutics, Inc. Acquisition

In April 2024, the Company acquired Clade, a privately-held biotechnology company focused on discovering and delivering engineerable, off-the-shelf, scalable, and consistent stem cell-based medicines, with a focus on iPSC-derived αβ T cells.  The aggregate upfront consideration consists of (i) approximately $15,000 in cash and (ii) 4,535,333 shares of the Company’s common stock, par value $0.0001 per share. The cash portion of the upfront consideration is subject to customary adjustments for indebtedness, cash, and transaction expenses.

Following the closing, one potential clinical development milestone payment of $10,000 (which may be paid by the Company in cash, shares of its common stock or a combination thereof) will be made to Clade securityholders upon the achievement of the milestone.

In connection with the closing, the Company entered into customary lock-up agreements with certain of Clade’s stockholders providing that such holders will not transfer, subject to limited exceptions, any of the shares of the Company’s common stock received for 180 days after the closing.

The Company is currently in process of completing its accounting analysis of the acquisition, including assessing whether or not the acquisition qualifies as either an asset acquisition or a business combination for US GAAP reporting purposes.

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Item 2. Management’s discussion and analysis of financial condition and results of operations

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, 2023 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 14, 2024, (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.

Overview

We are an innovative biotechnology company harnessing the power of adult stem cells to develop curative cell therapy products for cancer and autoimmune diseases that we believe will allow us to overcome the limitations of first-generation cell therapies. We have created a comprehensive, genetically engineered allogeneic cell therapy platform that includes:

• Industry-leading induced pluripotent stem cells, (“iPSCs”) and differentiated know-how to generate immune effector cells from iPSCs, (“iPSC- derived cells”);

• Clustered regularly interspaced short palindromic repeats, (“CRISPR”), mediated precision gene editing that allows us to incorporate multiple transgenes and remove target genes intended to optimize cell product performance;

• Sophisticated protein engineering capabilities to develop proprietary next generation chimeric antigen receptors, (“CARs”);

• Our proprietary Allo-Evasion^TM technology intended to prevent rejection of our cell products by the host immune system; and

• Cutting edge manufacturing capabilities intended to minimize product development and supply risk.

We are leveraging our expertise in cellular reprogramming, genetic engineering, and manufacturing to develop therapies with the potential to overcome many of the challenges inherent to cell therapy and provide a significant advantage over existing cell therapy technologies. We believe that these vertically integrated capabilities will allow us to further expand our existing pipeline and develop therapeutics from iPSC-derived natural killer cells, (“iNK cells”) and iPSC-derived T cells, (“iT cells”) that may provide enhanced clinical outcomes compared to available therapeutic options. We believe our commitment to developing off-the-shelf cell therapies will expand patient access and provide an unparalleled opportunity to advance the course of treatment. Our vision is to become a premier fully integrated biotechnology company by developing and ultimately commercializing off-the-shelf allogeneic cell therapies that dramatically and positively transform the lives of patients suffering from life-threatening cancers, as well as autoimmune diseases. To achieve our vision, we have assembled a world-class team whose members collectively have decades of experience in cell therapy and drug development, manufacturing, and commercialization.

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Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, conducting discovery and research activities, filing patent applications, identifying potential product candidates, conducting our ELiPSE-1 clinical trial, initiating our CALiPSO-1 clinical trial, undertaking preclinical studies and in-licensing intellectual property. All of our programs are currently in the development stage, and we do not have any products approved for sale. Since our inception, we have incurred net losses each year. We had an accumulated deficit of $683.8 million as of March 31, 2024. Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs, the acquisition of in-process research and development and from general and administrative costs associated with our operations.

In June 2021, we completed our initial public offering, (the “IPO”), in which we issued and sold 12,132,500 shares of our common stock, at a public offering price of $20.00 per share. We received net proceeds of $221.4 million after deducting underwriting discounts, commissions, and other offering costs of $21.2 million in the aggregate. To date, we have funded our operations from the issuance and sale of our equity securities and the receipt of payments from Bristol-Myers Squibb, in connection with our collaborations as described below, and have not generated any revenues. Since our inception, through March 31, 2024, we have raised approximately $609 million in net proceeds from sales of our equity securities. As of March 31, 2024, we had cash and cash equivalents of $46.8 million and investments of $203.1 million.

In August 2022, the U.S. Food and Drug Administration notified us that our ELiPSE-1 clinical trial may proceed to assess CNTY-101 in patients with relapsed or refractory CD19 positive B-cell malignancies. The phase 1 trial, ELiPSE-1, is ongoing in patients with relapsed or refractory CD19-positive B-cell malignancies. In December 2023, we announced preliminary clinical data from seven patients treated at the two lowest dose levels in the trial.

On December 6, 2023 that we were notified by the FDA that the Phase 1 clinical trial may proceed to assess CNTY-101 in patients with moderate to severe systemic lupus erythematosus who have failed at least two standard immunosuppressive therapies. We plan to initiate the CNTY-101 CALiPSO-1 trial in SLE in the first half of 2024, with initial data expected by the end of 2024.

In January 2023, we announced a strategic internal portfolio prioritization (the “January 2023 Strategic Reprioritization”) through which, among other discovery efforts, CNTY-103, a CAR-iNK product targeting CD133 and a discovery program for hematological malignancies, was de-prioritized, allowing us to further prioritize our CNTY-102 and CNTY-107 product candidates, which we believe have a higher probability of technical success and greater market potential. As a result of the operational restructuring, lab operations in Seattle and Hamilton, Ontario, have been closed and research activities have been consolidated in Philadelphia.

In the second quarter of 2024, we announced plans to expand clinical development for CNTY-101 into additional autoimmune disease indications with the pursuit of additional regulatory filings in prioritized indications expected in the second half of 2024. To support these increased research and development activities in autoimmune diseases, in April 2024 we completed a private placement offering of our common stock to certain institutional investors and received $60 million in gross proceeds before deducting placement agent fees and other offering related expenses. Concurrently, we announced pipeline and platform enhancements through the acquisition of Clade Therapeutics, Inc., a privately-held biotechnology company focused on discovering and delivering engineerable, off-the-shelf, scalable, and consistent stem cell-based medicines, with a focus on iPSC-derived αβ T cells. The acquisition brings us novel technology enhancing Century’s efforts on Allo-Evasion^TM – and a newly expanded pipeline incorporating three additional preclinical-stage programs from Clade’s αβ iT platform spanning across cancer and autoimmune diseases.

Based on our current business plans, we believe, our cash, cash equivalents and investments as of the date of this quarterly report will be sufficient for us to fund our operating expenses and capital expenditures requirements into 2026. 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

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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:

● continue to advance our iPSC cell therapy platforms;

● progress clinical development of CNTY-101 and continue preclinical development of our other product candidates;

● seek to discover and develop additional product candidates;

● continue to integrate Clade’s operations into our business;

● expand and validate our own clinical-scale current good manufacturing practices, (“cGMP”), facilities;

● seek regulatory approvals for any of our product candidates that successfully complete clinical trials;

● maintain, expand, protect, and enforce our intellectual property portfolio;

● continue to incur costs associated with operating as a public company;

● acquire or in-license other product candidates and technologies;

● incur additional costs associated with operating as a public company, which will require us to add operational, financial and management information systems and personnel, including personnel to support our drug development and any future commercialization efforts; and

● increase our employee headcount and related expenses to support these activities.

We are also investing early in building our capabilities in key areas of manufacturing sciences and operations, including development of our iPSC cell therapy platforms, product characterization, and process analytics from the time product candidates are in early research phases. Our investments also include scaled research solutions, scaled infrastructure, and novel technologies intended to improve efficiency, characterization, and scalability of manufacturing.

We anticipate that we will need to raise additional financing in the future to fund our operations, including funding for preclinical studies, clinical trials and the commercialization of any approved product candidates. We intend to use the proceeds from such financings to, among other uses, fund research and development of our product candidates and development programs, including our pre-clinical and clinical development of CNTY-101, CNTY-102, and CNTY-107, CLDE-308, CLDE-361, as well as CNTY-104 and CNTY-106 in collaboration with Bristol-Myers Squibb. Until such time, if ever, as we can generate significant product revenue, we expect to finance our operations with our existing cash and cash equivalents, investments, any future equity or debt financings, and upfront and milestone and royalties payments, if any, received under future licenses or collaborations. We may not be able to raise additional capital on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition would be adversely affected. Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability.

License and collaboration agreements

Bristol-Myers Squibb

On January 7, 2022, we entered into the Research, Collaboration and License Agreement, with Bristol-Myers Squibb (the “Collaboration Agreement”), to collaborate on the research, development and commercialization of iNK and iT cell programs for hematologic malignancies and solid tumors, (the “Collaboration Program”),

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and each product candidate, (each, a “Development Candidate”). We and Bristol-Myers Squibb will initially collaborate on two Collaboration Programs focused on acute myeloid leukemia, and multiple myeloma, and Bristol-Myers Squibb has the option to add up to two additional Collaboration Programs for an additional fee. We are responsible for generating Development Candidates for each Collaboration Program, and Bristol-Myers Squibb has the option to elect to exclusively license the Development Candidates for pre-clinical development, clinical development and commercialization on a worldwide basis. Following Bristol-Myers Squibb’s exercise of the License Option, we will be responsible for performing IND-enabling studies, supporting Bristol-Myers Squibb’s preparation and submission of an IND, and manufacturing of clinical supplies until completion of a proof of concept clinical trial. Bristol-Myers Squibb will be responsible for all regulatory, clinical, manufacturing (after the proof of concept clinical trial) and commercialization activities for such Development Candidates worldwide. We have the option to co-promote Development Candidates generated from certain specified Collaboration Programs.

Under the terms of the Collaboration Agreement, Bristol-Myers Squibb made a non-refundable, upfront cash payment of $100 million and will pay an exercise fee upon the exercise of the License Option, and product candidates developed under a Licensed Program (the “Licensed Products”). For each Licensed Program, Bristol-Myers Squibb will pay up to $235 million in milestone payments upon the first achievement of certain development and regulatory milestones and will pay up to $500 million per Licensed Product in net sales-based milestone payments. Bristol-Myers Squibb will also pay us tiered royalties per Licensed Product as a percentage of net sales in the high-single digits to low-teens, subject to certain adjustments.

In connection with the Collaboration Agreement, Bristol-Myers Squibb purchased 2,160,760 shares of our common stock at a price per share of $23.14, for an aggregate purchase price of $50 million. We determined the common stock purchase represented a premium of $7.82 per share, or $23.2 million in the aggregate, and the remaining $26.8 million was recorded as issuance of common stock in stockholders’ equity.

We identified the following commitments under the arrangement: (i) research and development services under each of the two initial Collaboration Programs and (ii) License Option to elect to exclusively license the Development Candidates for each of the two initial Collaboration Programs. We determined that these four commitments represent distinct performance obligations for purposes of recognizing revenue and will recognize revenue as we fulfill each performance obligation.

Fujifilm Cellular Dynamics, Inc. (FCDI)

On September 18, 2018, we entered into a license agreement, (the “Differentiation License”), with FCDI. The Differentiation License, as amended, provides us with an exclusive license under certain patents and know-how related to human iPSC consisting of cells that are or are modifications of NK cells, T cells, dendritic cells and macrophages derived from human iPSC. In consideration for the Differentiation License, FCDI received 2,980,803 shares of common stock in connection with the January 2023 Strategic Reprioritization.

Also on September 18, 2018, we entered into the non-exclusive license, (the “Reprogramming License”), with FCDI. The Reprogramming License, as amended, provides us with a non-exclusive license under certain patents and know-how related to the reprogramming of human somatic cells to iPSCs and provide us access to iPSC lines for clinical use. Under the Reprogramming License, we are required to make certain developmental and regulatory milestone payments as well as royalty payments upon commercialization in the low single digits. In connection with the Reprogramming License, we entered into a collaboration agreement, (the” FCDI Collaboration Agreement”), with FCDI pursuant to which we agreed to fund research and development work at FCDI pursuant to a research plan.

On October 21, 2019, we entered into the FCDI Collaboration Agreement with FCDI, whereby FCDI provides certain services to us to develop and manufacture iPSCs and immune cells derived therefrom. Under the terms of the FCDI Collaboration Agreement, as amended, FCDI will provide services in accordance with the approved research plan and related research budget. The initial research plan covers the period from the date of execution of the FCDI Collaboration Agreement through March 31, 2022. On July 29, 2022, we amended the FCDI Collaboration Agreement to extend the term through September 30, 2025.

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On January 7, 2022, we and FCDI entered into a letter agreement, which amends each of the FCDI agreements as further discussed in Note 14 to our consolidated financial statements. Pursuant to the Letter Agreement, and in consideration for amending the FCDI Agreements, we agreed to pay to FCDI (i) an upfront payment of $10 million, (ii) a percentage of any milestone payments received by us under the Collaboration Agreement, in respect of achievement of development or regulatory milestones specific to Japan, and (iii) a percentage of all royalties received by us under the Collaboration Agreement in respect of sales of products in Japan.

On September 22, 2023, we and FCDI entered into a worldwide license agreement whereby FCDI will grant non-exclusive licenses to us for certain patent rights and know-how related to cell differentiation and reprogramming for the development and commercialization of iPSC-derived therapies for the treatment of inflammatory and autoimmune diseases, (the “Autoimmune License”).  Under the terms of the Autoimmune License, FCDI will be eligible to receive certain development and regulatory milestone payments as well as low single-digit royalties related to products developed in connection with the Autoimmune License. In addition, on September 22, 2023, we and FCDI amended the Reprogramming License, Differentiation License and the Collaboration Agreement to expand our existing license related to the development and commercialization of iPSC-derived cancer immunotherapeutic to also include inflammatory and autoimmune diseases.

During the three months ended March 31, 2024 and 2023, we made payments of $2.7 million and $12 thousand and incurred research and development expenses of $2.7 million and $33 thousand and legal fees of $35 thousand and $31 thousand, recorded within general and administrative expenses in its consolidated statements of operations and comprehensive loss.

From inception of the FCDI Collaboration Agreement through March 31, 2024, we incurred $39.0 million of expenses under the FCDI Collaboration Agreement.

iCell and Distributed Bio

We also have entered into a sublicense agreement with iCELL Inc. and a master services agreement with Distributed Bio, Inc. Refer to note 9 to our consolidated financial statements for additional information.

Components of operating results

Collaboration Revenue

We have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products for the foreseeable future. Our revenues to date have been generated through our collaboration, option and license agreement with Bristol-Myers Squibb. We recognize revenue over the expected performance period under this agreement. We expect that our revenue for the next several years will be derived primarily from this agreement and any additional collaborations that we may enter into in the future. To date, we have not received any royalties under any of our existing collaboration agreements.

Operating expenses

Research and development

To date, research and development expenses have related primarily to discovery and development of our iPSC cell therapy platform technology and product candidates and acquired in-process research and development. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are recorded as prepaid expenses until the goods or services are received.

Research and development expenses consist of personnel-related costs, including salaries, and benefits, stock compensation expense, external research and development expenses incurred under arrangements with third parties, laboratory supplies, costs to acquire and license technologies facility and other allocated

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expenses, including rent, depreciation, and allocated overhead costs, and other research and development expenses.

We deploy our employee and infrastructure resources across multiple research and development programs for developing our iPSC cell therapy platforms, identifying and developing product candidates, and establishing manufacturing capabilities. Due to the number of ongoing projects and our ability to use resources across several projects, the vast majority of our research and development costs are not recorded on a program-specific basis. These include costs for personnel, laboratory, and other indirect facility and operating costs.

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.

General and administrative

General and administrative expenses consist of personnel-related costs, including salaries, benefits, and non-cash stock-based compensation, for our employees in executive, legal, finance, human resources, information technology, and other administrative functions, legal fees, consulting fees, recruiting costs, and facility costs not otherwise included in research and development expenses. Legal fees include those related to corporate and patent matters.

Interest expense

Interest expense relates to interest incurred on the September 14, 2020. $10,000 Term Loan Agreement (the “Loan Agreement”) we entered into with Hercules Capital, Inc., as well as amortization of the related deferred financing cost. The loan was repaid in full in May 2023. See Note 7 to our consolidated financial statements for additional information.

Interest income

Interest income consists of interest earned on our cash, cash equivalents and investment balances.

Income taxes

We have incurred losses and recorded a full valuation allowance on all of our net deferred tax assets. For the three months ended March 31, 2024, the Company recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits generated in the U.S. due to its uncertainty of realizing a benefit from those items. For the three months ended March 31, 2023, we recorded $1.2 million in provisions for income taxes in the accompanying consolidated financial statements. The main drivers of the tax provision during the 2023 interim period are taxable revenue to the Collaboration Agreement with Bristol-Myers Squibb and the limitation of deductions for research and development under Section 174 of the Internal Revenue Code.

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Results of operations

Comparison of the three months ended March 31, 2024 and 2023.

The following table summarizes our results of operations for the periods presented:

	Three Months Ended		Three Months Ended
	March 31, 2024		March 31, 2023		Change
		(in thousands)
Collaboration revenue	$	855	$	1,720	$	(865)
Operating expenses:
Research and development		23,421		24,899		(1,478)
General and administrative		8,743		8,902		(159)
Total operating expenses		32,164		33,801		(1,637)
Loss from operations		(31,309)		(32,081)		772
Other income (expense):
Interest expense		—		(404)		404
Interest income		3,237		2,623		614
Other income, net		11		(194)		205
Total other income (expense)		3,248		2,025		1,223
Provision for income taxes		(1)		(1,208)		1,207
Net loss	$	(28,062)	$	(31,264)	$	3,202

Collaboration revenue

During the three months ended March 31, 2024 and 2023, we recognized revenue of $0.9 and $1.7 million under our collaboration agreement with Bristol-Myers Squibb, respectively. Revenue recognized under the collaboration agreement fluctuates based on the amount and timing of expenses incurred under the agreement.

Research and development expenses

The following table summarizes the components of our research and development expenses for the periods presented:

	Three Months Ended		Three Months Ended
	March 31, 2024		March 31, 2023		Change
		(in thousands)
Personnel and related costs	$	9,761	$	12,469	$	(2,708)
Facility and other allocated costs		4,692		5,814		(1,122)
Research and laboratory		8,042		6,124		1,918
Collaborations		60		254		(194)
Consulting		395		238		157
Other		471		—		471
Total research and development expense	$	23,421	$	24,899	$	(1,478)

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Research and development expenses were $23.4 million and $24.9 million for the three months ended March 31, 2024 and 2023, respectively. The decrease of $1.5 million was primarily due to:

● a decrease in personnel-related expenses of $2.7 million, including a decrease in salary and benefit expense of $2.4 million, and a decrease in stock compensation expense of $0.3 million. This is a result of the reduction in force that occurred in January of 2023.

● a decrease of $1.1 million of facility and other allocated costs, which consists of a decrease in rent of $1.4 million, which is a result of consolidating leased facilities during 2023. This was offset by an increase in depreciation of $0.3 million.

● An increase of $1.9 million in research and laboratory due to increased manufacturing activity at our Branchburg facility.

General and administrative expenses

General and administrative expenses were $8.7 million for the three months ended March 31, 2024 and $8.9 million for three months ended March 31, 2023.

Interest expense

Interest expense was $0.0 million and $0.4 million for the three months ended March 31, 2024 and 2023, respectively, which related to our Loan Agreement with Hercules. On May 1, 2023, we repaid the loan in its entirety and thus expect our interest expenses to decrease accordingly in subsequent periods.

Interest income

Interest income was $3.2 million and $2.6 million for the three months ended March 31, 2024 and 2023, respectively, which related to interest earned on our cash, cash equivalents, and investment balances. The increase in our interest income was due to higher interest rates earned on average balances of cash, cash equivalents and investments.

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Liquidity, capital resources, and capital requirements

Sources of liquidity

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 $666 million in net proceeds from the sales of our equity securities. As of March 31, 2024, we had cash, and cash equivalents of $46.8 million and investments of $203.1 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 2026. 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 $682.7 million as of March 31, 2024.

In July 2022, we entered into a Sales Agreement, with Cowen and Company, LLC, 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 the first quarter of 2024, 4,084,502 shares of common stock have been 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.

In April 2024, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain institutional accredited investors (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.

Future funding requirements

We expect to incur additional losses in the foreseeable future as we conduct and expand our research and development efforts, including conducting preclinical studies and clinical trials, developing new product candidates, establishing internal and external manufacturing capabilities, and funding our operations generally. We anticipate that we will need to raise additional financing in the future to fund our operations, including the commercialization of any approved product candidates. We are subject to the risks typically related to the development of new products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business.

Our future capital requirements will depend on many factors, including:

● the scope, timing, progress, costs, and results of discovery, preclinical development, and clinical trials for our current and future product candidates;

● the number of clinical trials required for regulatory approval of our current and future product candidates;

● the costs, timing, and outcome of regulatory review of any of our current and future product candidates;

● the cost of manufacturing clinical and commercial supplies of our current and future product candidates;

● the costs and timing of future commercialization activities, including manufacturing, marketing, sales, and distribution, for any of our product candidates for which we receive marketing approval;

● the costs and timing of preparing, filing, and prosecuting patent applications, obtaining, maintaining, protecting, and enforcing our intellectual property rights, and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon, misappropriating, or violating their intellectual property rights;

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● our ability to maintain existing, and establish new, strategic collaborations, licensing, or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty, or other payments due under any such agreement;

● the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;

● expenses to attract, hire and retain, skilled personnel;

● costs of operating as a public company;

● our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payors;

● the effect of competing technological and market developments; and

● the extent to which we acquire or invest in businesses, products, and technologies.

Until and unless we can generate substantial product revenue, we expect to finance our cash needs through the proceeds from a combination of equity offerings and debt financings, and potentially through additional license and development agreements or strategic partnerships or collaborations with third parties. Financing may not be available in sufficient amounts or on reasonable terms. In addition, market volatility resulting from the effects of pandemics, such as the COVID-19 pandemic, inflationary pressures, disruptions of financial institutions, political unrest and hostilities, war or other factors could adversely impact our ability to access capital as and when needed. We have no commitments for any additional financing and will likely be required to raise such financing through the sale of additional securities, which, in the case of equity securities, may occur at prices lower than the offering price of our common stock. If we sell equity or equity-linked securities, our current stockholders, may be diluted, and the terms may include liquidation or other preferences that are senior to or otherwise adversely affect the rights of our stockholders. Moreover, if we issue debt, we may need to dedicate a substantial portion of our operating cash flow to paying principal and interest on such debt and we may need to comply with operating restrictions, such as limitations on incurring additional debt, which could impair our ability to acquire, sell or license intellectual property rights which could impede our ability to conduct our business.

Cash flows

The following table summarizes our cash flows for the periods indicated:

	Three Months Ended		Three months ended
	March 31, 2024		March 31, 2023
	(in thousands)
Net cash (used in) provided by:
Operating activities	$	(30,248)	$	(29,219)
Investing activities		11,541		31,338
Financing activities		18,195		448
Net (decrease) increase in cash, cash equivalents, and restricted cash	$	(512)	$	2,567

Operating activities

Net cash used in operating activities was $30.2 million and $29.2 million for the three months ended March 31, 2024 and 2023, respectively. Net cash used in operating activities during the three months ended March 31, 2024 consisted primarily of our net loss of $28.0 million. The non-cash charges of $6.8 million consisted primarily of $3.2 million for depreciation expense, non-cash operating lease of $1.5 million, and non-cash stock-based compensation expense of $3.2 million. This was partially offset by amortization of marketable securities of $1.1 million.

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Net cash used in operating activities was $29.2 million during the three months ended March 31, 2023. Net cash used in operating activities during the three months ended March 31, 2023 consisted primarily of our net loss of $31.3 million. The non-cash charges of $6.0 million consisted primarily of $2.9 million for depreciation expense, non-cash stock-based compensation expense of $3.8 million, and non-cash operating lease expense of $0.7 million, and net cash outflows from decreases in our accounts payable of $3.0 million and accrued expenses and other liabilities of $3.2 million.

Investing activities

Net cash provided by investing activities was $11.6 million and $31.3 million for the three months ended March 31, 2024 and 2023, respectively. Cash provided by investing activities for the three months ended March 31, 2024 consisted primarily of the sale of fixed maturity securities, available for sale of $47.2 million, which was partially offset by purchases of fixed maturity securities of $35.0 million and acquisition of property and equipment of $0.5 million.

Cash provided by investing activities was $31.3 for the three months ended March 31, 2023 and consisted primarily of the sale of fixed maturity securities, available for sale of $79.2 million, which was partially offset by purchases of fixed maturity securities of $42.8 million and acquisition of property and equipment of $5.0 million.

Financing activities

Net cash provided by financing activities was $18.2 million and $0.4 million for the three months ended March 31, 2024 and 2023, respectively. Cash provided by financing activities consisted of $17.8 million from proceeds from our At-the-Market capital raise and $0.4 million from issuance of our common stock from equity incentive plans pursuant to the exercise of employee stock options.

Net cash provided by financing activities was $0.4 million for the three months ended March 31, 2023. Cash provided by financing activities consisted of $0.4 million from issuance of our common stock from equity incentive plans pursuant to the exercise of employee stock options.

Contractual obligations and commitments

The following table summarizes our significant contractual obligations and commitments as of March 31, 2024:

	Payments Due by Period
	1 Year		1 to 3 Years		3 to 5 Years		More than 5 Years		Total
	(in thousands)
Operating leases	$	7,990	$	16,277	$	16,551	$	41,047	$	81,865

Other than as disclosed in the table above, the payment obligations under our license, collaboration, and acquisition agreements as of March 31, 2024 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, 2024, 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 have commitments under operating leases for certain facilities used in our operations.

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. Refer to Note 10 to our unaudited consolidated financial statements for additional information.

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JOBS Act accounting election

As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of specified reduced reporting requirements that are otherwise generally applicable to public companies. As such, we may take advantage of reduced disclosure and other requirements otherwise generally applicable to public companies, including:

● not being required to have our registered independent public accounting firm attest to management’s assessment of our internal control over financial reporting;

● presenting reduced disclosure about our executive compensation arrangements;

● an exemption from compliance with any requirement that the Public Company Accounting Oversight Board may adopt regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

● not being required to hold non-binding advisory votes on executive compensation or golden parachute arrangements; and

● extended transition periods for complying with new or revised accounting standards.

The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period to enable us to comply with new or revised accounting standards and, therefore, we will adopt new or revised accounting standards at the time private companies adopt the new or revised accounting standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.

We will remain an emerging growth company until the earliest of (i) December 31, 2026, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates is less than $700.0 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million as of the last business day of the second fiscal quarter of such year. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Critical accounting policies and significant judgments and estimates

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.

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During the three months ended March 31, 2024, there were no material changes to our critical accounting policies from those described in our audited financial statements for the year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the SEC on March 14, 2024, except as noted above.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. We do not currently have any material exposure to foreign currency fluctuations and do not engage in any hedging activities as part of our normal course of business.

Interest rate risk

We had cash, cash equivalents, and restricted cash of $46.8 million as of March 31, 2024, which consisted of bank deposits and money market funds. We also had investments of $203.1 million as of March 31, 2024. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates. However, because of the low risk profile of the instruments in our portfolio, a change in market interest rates would not have a material impact on our financial condition and/or results of operations.

Banking Instability

Future disruptions of financial institutions where we bank or have credit arrangements, or disruptions of the financial services industry in general, could adversely affect our ability to access our cash and cash equivalents.

Effects of Inflation

Inflation generally affects us by increasing our cost of labor and laboratory consumables. We believe that inflation has not had a material effect on our financial statements.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosures controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of March 31, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2024, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

Management determined that, as of March 31, 2024, there were no changes in our internal control over financial reporting that occurred during the three months then ended that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. Our management believes that there are currently no claims or actions pending against us, the ultimate disposition of which would have a material adverse effect on our results of operations, financial condition or cash flows.

Item 1A. Risk Factors

Other than what is set forth below, there have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

We may fail to realize the anticipated benefits of the acquisition of Clade.

The success of the acquisition of Clade will depend on, among other things, our ability to combine our business with Clade in a manner that allows us to achieve developmental and operational synergies. The integration process could result in the loss of key employees, the disruption of our ongoing business or the ongoing business of Clade, or inconsistencies in standards, controls, procedures, or policies, in each case, that could adversely affect our ability to achieve the anticipated benefits of the acquisition. Integration efforts between the two companies will also divert management’s attention from our core business and other opportunities that could have been beneficial to our stockholders. An inability to realize the full extent of, or any of, the anticipated benefits of the acquisition, as well as any delays encountered in the integration process, could have an adverse effect on our business and results of operations, which may affect the value of our common stock. If we are unable to achieve these objectives, the anticipated benefits of the acquisition may not be realized fully or at all or may take longer or cost more to realize than expected. In addition, the acquisition of Clade may impact the market price for shares of our common stock, which would result in substantial losses for our stockholders.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Use of Proceeds

On June 22, 2021, we completed our IPO. Our registration statement on Form S-1 (File No. 333- 256648) relating to the IPO was declared effective by the SEC on June 17, 2021. We issued an aggregate of 12,132,500 shares of our common stock at a price of $20.00 per share for aggregate net cash proceeds of $221.4 million, after deducting approximately $17.0 million in underwriting discounts and commissions and approximately $4.0 million in other offering costs. None of the expenses associated with the IPO were paid to directors, officers, persons owning 10% or more of any class of equity securities, or to their associates, or to our affiliates.

Repurchase of Shares of Company Equity Securities

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

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Item 5. Other Information.

Rule 10b-1 Trading Plans

During the quarter ended March 31, 2024, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" (as those terms are defined in Item 408 of Regulation S-K), except as follows:

On January 9, 2024, Gregory Russotti, Ph.D., our Chief Technology and Manufacturing Officer, adopted a Rule 10b5-1 trading arrangement providing for the sale of up to 160,000 shares of our Series A common stock, subject to certain conditions. The arrangement's expiration date is February 14, 2025.

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Item 6. Exhibits.

Exhibit Number
31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
104	The cover page from Century Therapeutics, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL and contained in Exhibit 101

* This certification is being furnished solely to accompany this Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing of the registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

45

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

	Century Therapeutics, Inc.
Date: May 9, 2024	By:	/s/ Brent Pfeiffenberger, PharmD, MBA
		Brent Pfeiffenberger, PharmD, MBA
		Chief Executive Officer
		(Principal Executive Officer)
Date: May 9, 2024	By:	/s/ Douglas Carr
		Douglas Carr
		Senior Vice President, Finance & Operations
		(principal financial officer and principal accounting officer)

46

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Brent Pfeiffenberger, certify that:

1. I have reviewed this Quarterly Report of Century Therapeutics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2024

/s/ Brent Pfeiffenberger, PharmD, MBA

Brent Pfeiffenberger, PharmD, MBA

Chief Executive Officer

(Principal Executive Officer)

ACTIVE/123125527.3

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Douglas Carr, certify that:

1. I have reviewed this Quarterly Report of Century Therapeutics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2024

/s/ Douglas Carr

Douglas Carr

Senior Vice President, Finance & Operations

(principal financial officer and principal accounting officer)

ACTIVE/123125576.3

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Century Therapeutics, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to such officer’s knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2024

/s/ Brent Pfeiffenberger, PharmD, MBA

Brent Pfeiffenberger, PharmD, MBA

Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Century Therapeutics, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to such officer’s knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2024

/s/ Douglas Carr

Douglas Carr

Senior Vice President, Finance & Operations

(principal financial officer and principal accounting officer)

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2024	May 01, 2024
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-40498
Entity Registrant Name	Century Therapeutics, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-2040295
Entity Address State Or Province	PA
Entity Address, Address Line One	25 N 38th Street, 11th Floor
Entity Address, City or Town	Philadelphia
Entity Address, Postal Zip Code	19104
City Area Code	267
Local Phone Number	817-5790
Title of 12(b) Security	Common Stock, $0.0001 par value per share
Trading Symbol	IPSC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		82,847,375
Entity Central Index Key	0001850119
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 46,812	$ 47,324
Short-term investments	145,204	125,414
Prepaid expenses and other current assets	7,797	4,256
Total current assets	199,813	176,994
Property and equipment, net	69,005	71,705
Operating lease right-of-use assets	19,314	20,376
Restricted cash	1,979	1,979
Long-term investments	57,852	89,096
Security deposits and non-current assets	544	541
Total assets	348,507	360,691
Current liabilities
Accounts payable	3,432	2,741
Accrued expenses and other liabilities	7,532	10,149
Deposit liability	491	584
Deferred revenue, current	4,610	4,372
Total current liabilities	16,065	17,846
Operating lease liability, long term	44,251	46,658
Security deposit, non-current	20
Deposit liability, non-current		56
Deferred revenue, non-current	110,288	111,381
Total liabilities	170,624	175,941
Commitments and contingencies (Note 10)
Stockholders' equity:
Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized and 0 shares issued and outstanding at December 31, 2023 and December 31, 2022
Common stock, $0.0001 par value, 125,236,190 shares authorized; 60,335,701 and 58,473,660 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively	6	6
Additional paid-in capital	861,951	840,407
Accumulated deficit	(683,833)	(655,771)
Accumulated other comprehensive loss	(241)	108
Total stockholders' equity	177,883	184,750
Total liabilities and stockholders' equity	$ 348,507	$ 360,691

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CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
CONSOLIDATED BALANCE SHEETS
Preferred Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	300,000,000	300,000,000
Common Stock, Shares, Issued	64,809,592	60,335,701
Common Stock, Shares, Outstanding	60,335,701	60,335,701

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Collaboration revenue	$ 855	$ 1,720
Operating expenses
Research and development	23,421	24,899
General and administrative	8,743	8,902
Total operating expenses	32,164	33,801
Loss from operations	(31,309)	(32,081)
Interest expense		(404)
Interest income	3,237	2,623
Other income (expense)	11	(194)
Total other income (expense)	3,248	2,025
Loss before provision for income taxes	(28,061)	(30,056)
Provision for income taxes	(1)	(1,208)
Net Income (Loss)	$ (28,062)	$ (31,264)
Net loss per common share Basic (in dollars per share)	$ (0.45)	$ (0.53)
Weighted average common shares outstanding Basic (in shares)	62,296,637	58,610,375
Other comprehensive loss
Net Income (Loss)	$ (28,062)	$ (31,264)
Unrealized (loss) gain on investments	(351)	1,196
Foreign currency translation gain (loss)	(2)	9
Comprehensive loss	$ (28,411)	$ (30,077)

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Total
Beginning balance at Dec. 31, 2022	$ 6	$ 824,292	$ (519,098)	$ (2,462)	$ 302,738
Beginning Balance (in shares) at Dec. 31, 2022	58,473,660
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock to collaboration partner		448			448
Issuance of stock to collaboration partner (in shares)	452,102
Issuance of common stock upon the exercise of stock options (in shares)	95,877
Vesting of restricted stock		269			269
Vesting of restricted stock (in shares)	85,145
Vesting of early exercise stock options				1,196	1,196
Unrealized loss on investments		3,797			3,797
Foreign currency translation					(9)
Stock based compensation				(9)	(9)
Net Income (Loss)			(31,264)		(31,264)
Ending balance at Mar. 31, 2023	$ 6	828,806	(550,362)	(1,275)	277,175
Ending Balance (in shares) at Mar. 31, 2023	59,106,784
Beginning balance at Dec. 31, 2023	$ 6	840,407	(655,771)	108	184,750
Beginning Balance (in shares) at Dec. 31, 2023	60,335,701
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of sommon stock upon the exercise of ATM, net of underwriting discounts and commissions and other issuance costs		17,829			17,829
Issuance of sommon stock upon the exercise of ATM, net of underwriting discounts and commissions and other issuance costs (in shares)	4,084,502
Issuance of common stock upon the exercise of stock options		366			366
Issuance of common stock upon the exercise of stock options (in shares)	220,647
Vesting of restricted stock (in shares)	24,734
Vesting of early exercise stock options		142			142
Vesting of early exercise stock options (in shares)	34,900
Vesting of restricted stock units (in shares)	109,108
Unrealized loss on investments				(351)	(351)
Foreign currency translation				2	2
Stock based compensation		3,207			3,207
Net Income (Loss)			(28,062)		(28,062)
Ending balance at Mar. 31, 2024	$ 6	$ 861,951	$ (683,833)	$ (241)	$ 177,883
Ending Balance (in shares) at Mar. 31, 2024	64,809,592

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities
Net loss	$ (28,062)	$ (31,264)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	3,226	2,908
Amortization of deferred financing cost		56
Non-cash operating lease expense (benefit)	1,542	(738)
Stock based compensation	3,207	3,797
Amortization/accretion of investments	(1,115)
Change in operating assets and liabilities:
Escrow deposit		220
Prepaid expenses and other assets	(3,395)	(160)
Operating lease liability	(2,186)	3,842
Deferred revenue	(855)	(1,720)
Accounts payable	689	(2,954)
Accrued expenses and other liabilities	(3,319)	(3,206)
Non-current security deposit	20
Net cash used in operating activities	(30,248)	(29,219)
Cash flows from investing activities
Acquisition of property and equipment	(539)	(4,991)
Acquisition of fixed maturity securities, available for sale	(35,087)	(42,829)
Sale of fixed maturity securities, available for sale	47,167	79,158
Net cash provided by (used in) investing activities	11,541	31,338
Cash flows from financing activities
Proceeds from ATM, net of issuance costs	17,829
Proceeds from issuance of common stock and ESPP	366	448
Net cash (used in) provided by financing activities	18,195	448
Net (decrease) increase in cash, cash equivalents, and restricted cash	(512)	2,567
Cash, cash equivalents and restricted cash, beginning of period	49,303	86,244
Cash, cash equivalents and restricted cash, end of period	$ 48,791	88,811
Supplemental disclosure of cash and non-cash operating activities:
Cash paid for interest		345
Supplemental disclosure of non-cash investing and financing activities:
Purchase of property and equipment, accrued and unpaid		$ 975

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Organization and description of the business

3 Months Ended

Mar. 31, 2024

Organization and description of the business

Organization and description of the business

Note 1—Organization and description of the business

Century Therapeutics, Inc. (the “Company”) is an innovative biotechnology company developing transformative allogeneic cell therapies to create products for the treatment of both solid tumor and hematological malignancies and autoimmune diseases with significant unmet medical need. Since inception, the Company has devoted substantially all of its time and efforts to performing research and development activities, building infrastructure and raising capital. The Company is incorporated in the state of Delaware.

Principles of Consolidation

The consolidated financial statements include the consolidated financial position and consolidated results of operations of the Company and the Company’s subsidiary, Century Therapeutics Canada ULC (“Century Canada”). All intercompany balances and transactions have been eliminated in consolidation.

Liquidity

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has limited operating history and its prospects are subject to risks, expenses, and uncertainties frequently encountered by companies in the biotechnology and pharmaceutical industries. These risks include, but are not limited to, the uncertainty of availability of additional financing and the uncertainty of achieving future profitability.

Since inception, the Company has incurred net losses and negative cash flows from operations. During the three months ended March 31, 2024, the Company incurred a net loss of $28,062. During the three months ended March 31, 2024, the Company used $30,248 of cash in operations. Cash and cash equivalents and investments were $249,868 at March 31, 2024. Management expects to incur additional losses in the future to fund its operations and conduct product research and preclinical and clinical development and recognizes the need to raise additional capital to fully implement its business plan. The Company believes it has adequate cash and financial resources to operate for at least the next 12 months from the date of issuance of these consolidated financial statements.

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Summary of significant accounting policies and basis of presentation

3 Months Ended

Mar. 31, 2024

Summary of significant accounting policies and basis of presentation

Summary of significant accounting policies and basis of presentation

Note 2—Summary of significant accounting policies and basis of presentation

Basis of presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the interim period reporting requirements of Form 10-Q and Article 10 of Regulation S-X. The consolidated balance sheet as of March 31, 2024, and the consolidated statements of operations and comprehensive loss, consolidated statements of changes in stockholders’ equity, and the consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 are unaudited, but, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.  The results for any interim period are not necessarily indicative of results for the year ending December 31, 2024 or for any other subsequent interim period.  The consolidated balance sheet at December 31, 2023 has been derived from the Company’s audited consolidated financial statements.

Certain prior year information has been reclassified to conform to the fiscal year 2024 presentation.

Segment information

Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions on how to allocate resources and assess performance. The Company views its operations and manages the business as one operating segment.

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuations supporting stock compensation, the estimation of the incremental borrowing rate for operating leases and standalone selling prices of performance obligations in collaboration agreements. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s results of operations could either benefit from, or be adversely affected by, any such change in estimate.

Concentration of credit risk and other risks and uncertainties

Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist of cash, cash equivalents, U.S. Treasury bills and bonds, as well as corporate bonds. Cash and cash equivalents, as well as short and long-term investments include a checking account and asset management accounts held by a limited number of financial institutions. At times, such deposits may be in excess of insured limits. As of March 31, 2024 and December 31, 2023, the Company has not experienced any losses on its deposits of cash and cash equivalents.

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, uncertainty of market acceptance of its products, competition from substitute products and larger companies, protection of proprietary technology, strategic relationships, and dependence on key individuals.

Products developed by the Company require clearances from the U.S. Food and Drug Administration (the “FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance the Company’s future products will receive the necessary clearances. If the Company was denied clearance, clearance was delayed, or if the Company was unable to maintain clearance, it could have a material adverse impact on the Company.

Fair value of financial instruments

The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows:

Level 1 Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active;

Level 3 Inputs are unobservable in which there is little or no market data available, which require the reporting entity to develop its own assumptions that are unobservable.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

Cash and cash equivalents

Management considers all highly liquid investments with an insignificant interest rate risk and original maturities of three months or less to be cash equivalents.

Restricted cash

As of March 31, 2024 and December 31, 2023, the Company had $1,979 in cash on deposit to secure certain lease commitments. Restricted cash is recorded separately in the Company’s consolidated balance sheets.

The following provides a reconciliation of the Company’s cash, cash equivalents, and restricted cash as reported in the consolidated balance sheets to the amounts reported in the consolidated statements of cash flows:

	March 31, 2024		December 31, 2023
Cash and cash equivalents	$	46,812	$	47,324
Restricted cash		1,979		1,979
Cash, cash equivalents, and restricted cash	$	48,791	$	49,303

Investments

The Company invests in fixed maturity securities including U.S. Treasury bills and bonds as well as corporate bonds. The investments are classified as available-for-sale and reported at fair value. Unrealized gains or losses are determined by comparing the fair market value of the securities with their cost or amortized cost. Realized gains and losses on investments are recorded on the trade date and are included in the statement of operations. Unrealized gains and losses on investments are recorded in other comprehensive loss on the consolidated statements of operations and comprehensive loss. The cost of securities sold is based on the specified identification method. Investment income is recognized as earned and discounts or premiums arising from the purchase of debt securities are recognized in investment income using the interest method over the remaining term of the security. Securities with an original maturity date greater than three months that mature within one year of the balance sheet date are classified as short-term, while investments with a maturity date greater than one year are classified as long-term.

Property and equipment, net

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is generally five years. Leasehold improvements are amortized over the shorter of the asset’s useful life or the remaining term of the lease. Construction in progress includes direct cost related to the construction of leasehold improvements and is stated at original cost. Such costs are not depreciated until the asset is completed and placed into service. Once the asset is placed into service, these capitalized costs will be allocated to leasehold improvements and will be depreciated over the shorter of the asset’s useful life or the remaining term of the lease. Computer software and equipment includes implementation costs for cloud-based software and network equipment.

Expenditures for major additions and improvements are capitalized, while minor replacements, maintenance, and repairs are charged to expense as incurred. When property is retired or otherwise disposed of, the costs and accumulated depreciation are removed from the respective accounts, with any resulting gain or loss recognized concurrently.

Research and development expenses

Research and development expenses include costs directly attributable to the conduct of research and development programs, including the cost of salaries, payroll taxes, employee benefits, stock compensation, materials, supplies, rent, depreciation on and maintenance of research equipment with alternative future use, and the cost of services provided by outside contractors. All costs associated with research and development are expensed as incurred.

Clinical trial costs are a component of research and development expenses. The Company expenses costs for its clinical trial activities performed by third parties, including clinical research organizations and other service providers, as they are incurred, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company uses information it receives from internal personnel and outside service providers to estimate the clinical trial costs incurred.

Stock-based compensation

Employees, consultants and members of the Board of Directors of the Company have received stock options and restricted stock of the Company. The Company recognizes the cost of the stock-based compensation incurred as its employees and board members vest in the awards. The Company accounts for stock-based compensation arrangements in accordance with provisions of Accounting Standards Codification (“ASC”) 718, Compensation—Stock Compensation. ASC 718 requires the recognition of compensation expense, using a fair-value based method, for costs related to all share-based payments including stock options. ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model (“Black Scholes”) to determine the fair value of options granted. The Company’s stock-based awards are subject to service-based vesting conditions and performance-based vesting conditions. Compensation expense related to awards to employees and directors with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. For performance-based awards, the Company reassesses at each reporting date whether achievement of the performance condition is probable and accrues compensation expense if and when achievement of the performance condition is probable.

Black Scholes requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. The historical volatility is calculated based on a period of time commensurate with expected term assumption. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. Forfeitures are recognized as they occur.

Foreign currency translation

The reporting currency of the Company is the U.S. dollar. The functional currency of Century Canada is the Canadian dollar. Assets and liabilities of Century Canada are translated into U.S. dollars based on exchange rates at the end of each reporting period. Expenses are translated at average exchange rates during the reporting period. Gains and losses arising from the translation of assets and liabilities are included as a component of accumulated other comprehensive loss or income on the Company’s consolidated balance sheets. Gains and losses resulting from foreign currency transactions are reflected within the Company’s

consolidated statements of operations and comprehensive loss. The Company has not utilized any foreign currency hedging strategies to mitigate the effect of its foreign currency exposure.

Intercompany payables and receivables are considered to be long-term in nature and any change in balance due to foreign currency fluctuation is included as a component of the Company’s consolidated comprehensive loss and accumulated other comprehensive loss within the Company’s consolidated balance sheets.

Basic and diluted net loss per common shares

Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted-average number of common shares outstanding during the period. The Company computes diluted net loss per common share by dividing the net loss applicable to common shareholders by the sum of the weighted-average number of common shares outstanding during the period plus the potential dilutive effects of its warrants, restricted stock and stock options to purchase common shares, but such items are excluded if their effect is anti-dilutive. Because the impact of these items is anti-dilutive during periods of net loss, there were no differences between the Company’s basic and diluted net loss per common share for the three months ended March 31, 2024 and 2023.

Collaboration revenue

The Company may enter into collaboration and licensing agreements with strategic partners for research and development, manufacturing, and commercialization of its product candidates. Payments under these arrangements may include non-refundable, upfront fees; reimbursement of certain costs; customer option fees for additional goods or services; payments upon the achievement of development, regulatory, and commercial milestones; sales of product at certain agreed-upon amounts; and royalties on product sales.

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, (“ASC 606”). This standard applies to all contracts with customers. When an agreement falls under the scope of other standards, such as ASC Topic 808, Collaborative Arrangements, or (“ASC 808”), the Company will apply the recognition, measurement, presentation, and disclosure guidance in ASC 606 to the performance obligations in the agreements if those performance obligations are with a customer. Revenue recognized by analogizing to ASC 606 is recorded as collaboration revenue on the statements of operations.

Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under a collaboration agreement, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations on a relative stand-alone selling price basis; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

As part of the accounting for these arrangements, the Company must use its judgment to determine the stand-alone selling price for each performance obligation identified in the contract for the allocation of transaction price. The estimation of the stand-alone selling price may include such estimates as forecasted revenues and costs, development timelines, discount rates, and probabilities of regulatory and commercial success. The Company also applies significant judgment when evaluating whether contractual obligations represent distinct performance obligations, allocating transaction price to performance obligations within a contract, determining when performance obligations have been met, assessing the recognition and future reversal of variable consideration and determining and applying appropriate methods of measuring progress for performance obligations satisfied over time. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, current. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, non-current.

If an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and services underlying the customer options are not considered to be performance obligations at the outset of the arrangement, as they are contingent upon option exercise. The Company evaluates the customer options for material rights or options to acquire additional goods or services for free or at a discount. If the customer options are not determined to represent a material right, no transaction price is allocated to these options and the Company will account for these options at that time they are exercised. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement.

The obligations under the Company’s collaboration agreements may include research and development services to be performed by the Company for or on behalf of the customer. Amounts allocated to these performance obligations are recognized as the Company performs these obligations, and revenue is measured based on an inputs method of costs incurred to date of budgeted costs. Under certain circumstances, the Company may be reimbursed for certain expenses incurred under the research and development services.

At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The Company evaluates factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the statements of operations in the period of adjustment.

Recent accounting pronouncements

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 requires entities to provide additional information in their tax rate reconciliation and additional disclosures about income taxes paid by jurisdiction. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The guidance should be applied prospectively, but entities have the option to apply it retrospectively for each period presented. The Company is currently evaluating the impact of adopting this new accounting guidance.

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Reduction in force

3 Months Ended

Mar. 31, 2024

Reduction in force

Reduction in force

Note 3—Reduction in force

In January 2023, the Company's Board of Directors approved, and management implemented, a new portfolio prioritization and capital allocation strategy. The resulting changes included pausing investments in CNTY-103 for glioblastoma as well as a discovery program in hematologic malignancies. The Company has shifted focus to CNTY-101 and will accelerate key programs, including one follow-on candidate for lymphoma, CNTY-102, CNTY-107 for Nectin-4+ solid tumors, and CNTY-101 in moderate to severe Systemic Lupus Eythematosus (“SLE”). In addition, the Company continues its partnered programs with Bristol Myers Squibb. The restructuring plan resulted in a reduction in the Company's workforce of approximately 25%. In connection with the restructuring plan, lab operations in Seattle and Hamilton, Ontario were closed and research activities were consolidated in Philadelphia.

During the three months ended March 31, 2023, the Company incurred $2,032 of cash-based expenses related to employee severances, benefits and related costs. Of these amounts, $292 related to general and administrative expense, while $1,740 related to R&D expense. In addition, the Company recorded non-cash stock-based compensation charge of $581 related to modification of equity awards for employees impacted by the restructuring during the year ended December 31, 2023. Of these amounts, $171 related to G&A expense, while $410 related to R&D expense. There were no remaining outstanding liabilities related to the reduction in force at March 31, 2024.

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Financial instruments and fair value measurements

3 Months Ended

Mar. 31, 2024

Financial instruments and fair value measurements

Financial instruments and fair value measurements

Note 4—Financial instruments and fair value measurements

The following table sets forth the Company’s assets that were measured at fair value as of March 31, 2024 by level within the fair value hierarchy:

	Level 1		Level 2		Level 3		Total
Cash equivalents	$	41,492		—		—	$	41,492
U.S. Treasury		—		17,838		—		17,838
Corporate bonds		—		185,218		—		185,218
Total	$	41,492	$	203,056	$	—	$	244,548

The following table sets forth the Company’s assets that were measured at fair value as of December 31, 2023, by level within the fair value hierarchy:

	Level 1		Level 2		Level 3		Total
Cash equivalents	$	42,263		—		—	$	42,263
U.S. Treasury		—		26,114		—		26,114
Corporate bonds		—		188,396		—		188,396
Total	$	42,263	$	214,510	$	—	$	256,773

There were no transfers between levels during the period ended March 31, 2024. The Company uses the services of its investment manager, which uses widely accepted models for assumptions in valuing securities with inputs from major third-party data providers.

The Company classifies all of its investments in fixed maturity debt securities as available-for-sale and, accordingly, are carried at estimated fair value.

The amortized cost, gross unrealized gains and losses, and fair value of investments in fixed maturity securities are as follows as of March 31, 2024:

			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
U.S. Treasury	$	17,855	$	—	$	(17)	$	17,838
Corporate bonds		185,329		128		(239)		185,218
Total	$	203,184	$	128	$	(256)	$	203,056

The amortized cost, gross unrealized gains and losses, and fair value of investments in fixed maturity securities are as follows as of December 31, 2023:

			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
U.S. Treasury	$	26,070	$	44	$	—	$	26,114
Corporate bonds		188,219		399		(222)		188,396
Total	$	214,289	$	443	$	(222)	$	214,510

The following table provides the maturities of our fixed maturity available-for-sale securities:

	March 31, 2024		December 31, 2023
Less than one year	$	145,204	$	125,414
One to five years		57,852		89,096
	$	203,056	$	214,510

The Company has evaluated the unrealized losses on the fixed maturity securities and determined that they are not attributable to credit risk factors. For fixed maturity securities, losses in fair value are viewed as temporary if the fixed maturity security can be held to maturity and it is reasonable to assume that the issuer will be able to service the debt, both as to principal and interest.

At March 31, 2024 and December 31, 2023, the Company had 52 and 25 available-for-sale investment debt securities in an unrealized loss position without an allowance for credit losses, respectively. Unrealized losses on corporate debt securities have not been recognized into income because the issuers’ bonds are of high credit quality (rated BBB+ or higher) and the decline in fair value is largely due to market conditions and or changes in interest rates. Management does not intend to sell and it is likely that management will not be required to sell the securities prior to the anticipated recovery of their amortized cost basis. The issuers continue to make timely payments on the bonds. The fair value is expected to recover as the bonds approach maturity.

As of March 31, 2024 and December 31, 2023, accrued interest receivable on available-for-sale investment debt securities totaling $1,583 and $1,570, respectively, is excluded from the estimate of credit losses and is included in prepaid expenses and other current assets.

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Property and equipment, net

3 Months Ended

Mar. 31, 2024

Property and equipment, net

Property and equipment, net

Note 5—Property and equipment, net

The following is a summary of property and equipment, net:

	March 31, 2024		December 31, 2023
Lab equipment	$	29,928	$	29,597
Leasehold improvements		61,136		60,862
Construction in progress		—		124
Computer software and equipment		2,899		2,899
Furniture and fixtures		1,061		1,061
Total		95,024		94,543
Less: Accumulated depreciation		(26,019)		(22,838)
Property and equipment, net	$	69,005	$	71,705

Depreciation expense was $3,226 and $2,908 for the three months ended March 31, 2024 and 2023, respectively.

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Accrued expenses and other liabilities

3 Months Ended

Mar. 31, 2024

Accrued expenses and other liabilities.

Accrued expenses and other liabilities

Note 6—Accrued expenses and other liabilities

The following is a summary of accrued expenses:

	March 31, 2024		December 31, 2023
Payroll and bonuses	$	2,868	$	6,496
Accrued clinical trial related costs		356		470
Professional and legal fees		2,043		1,642
Operating lease liability, current		2,215		1,513
Other		50		28
Total accrued expenses and other liabilities	$	7,532	$	10,149

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Long-term debt

3 Months Ended

Mar. 31, 2024

Long-term debt

Long-term debt

Note 7—Long-term debt

On September 14, 2020, the Company entered into a $10,000 Term Loan Agreement (as amended, the “Loan Agreement”) with Hercules Capital, Inc. (“Hercules”). Pursuant to the terms of the Loan Agreement, the Company borrowed $10,000 (the “Tranche 1 Advance”) from the lenders at closing. The Company granted Hercules a lien on substantially all of the Company’s assets, excluding intellectual property.

On May 1, 2023, the Company prepaid the Loan Agreement in full. The total amount paid to Hercules in connection with the prepayment was $10,617, which included all outstanding principal, accrued and unpaid interest and end of term and prepayment charges (“the Payoff Amount”). The Payoff Amount included a prepayment charge of $100 (equal to 1.0% of the outstanding principal), and an end of term fee of $395, which is being recognized as interest expense and accreted over the term of the Loan Agreement using the effective interest method. Upon receipt by Hercules of the Payoff Amount on May 1, 2023, all obligations, covenants, debts and liabilities of the Company under the Loan Agreement were satisfied and discharged in full, and the Loan Agreement was terminated.

The Company issued to Hercules warrants to purchase up to an aggregate of 16,112 shares of common stock. The warrants are exercisable for a period of ten years from the date of the issuance of each warrant at a per share exercise price equal to $13.96, subject to certain adjustments as specified in the warrants. The fair value of the warrants at issuance was $46. The Company accounted for the warrants as equity, and the fair value is recorded in additional paid-in capital. The warrant value is also recorded as a debt discount and classified as a contra-liability on the consolidated balance sheet and amortized to interest expense.

Interest expense attributable to the Loan Agreement is as follows:

	For the Three Months Ended		For the Three Months Ended
	March 31, 2024		March 31, 2023
Interest expense	$	—	$	348
Amortization of debt issuance costs, including end of term fee accretion		—		56
	$	—	$	404

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Bristol-Myers Squibb Collaboration

3 Months Ended

Mar. 31, 2024

Bristol-Myers Squibb Collaboration

Bristol-Myers Squibb Collaboration

Note 8 – Bristol-Myers Squibb Collaboration

On January 7, 2022, the Company entered into the Collaboration Agreement with Bristol-Myers Squibb to collaborate on the research, development and commercialization of iNK and iT cell programs for hematologic malignancies and solid tumors (“Collaboration Program,” and each product candidate a “Development Candidate”). The Collaboration Agreement is within the scope of ASC 808, Collaborative Arrangements as both parties are active participants in the arrangement and are exposed to significant risks and rewards. While this arrangement is in the scope of ASC 808, the Company analogizes to ASC 606 for the accounting for the Collaboration Agreement, including for the delivery of goods and services (i.e., units of account). Revenue recognized by analogizing to ASC 606 is recorded as collaboration revenue in the statements of operations.

Pursuant to the Collaboration Agreement, the Company and Bristol-Myers Squibb will initially collaborate on two Collaboration Programs focused on acute myeloid leukemia (“AML”) and multiple myeloma (“MM”), and Bristol-Myers Squibb has the option to add up to two additional Collaboration Programs for an additional fee. The Company is responsible for generating Development Candidates for each Collaboration Program, and Bristol-Myers Squibb has the option to elect to exclusively license the Development Candidates for pre-clinical development, clinical development and commercialization on a worldwide basis (“License Option”). Following Bristol-Myers Squibb’s exercise of the License Option, the Company will be responsible for performing IND-enabling studies, supporting Bristol-Myers Squibb’s preparation and submission of an IND, and manufacturing of clinical supplies until completion of a proof of concept clinical trial. Bristol-Myers Squibb will be responsible for all regulatory, clinical, manufacturing (after the proof of concept clinical trial) and commercialization activities for such Development Candidates worldwide. The Company has the option to co-promote Development Candidates generated from certain specified Collaboration Programs.

Under the terms of the Collaboration Agreement, Bristol-Myers Squibb made a non-refundable, upfront cash payment of $100,000 and will pay an exercise fee upon the exercise of the License Option (“Licensed Program” and product candidates developed under a Licensed Program, “Licensed Products”). For each Licensed Program, Bristol-Myers Squibb will pay up to $235,000 in milestone payments upon the first achievement of certain development and regulatory milestones and will pay up to $500,000 per Licensed Product in net sales-based milestone payments. Bristol-Myers Squibb will also pay the Company tiered royalties per Licensed Product as a percentage of net sales in the high-single digits to low-teens, subject to reduction for biosimilar competition, compulsory licensing and certain third party license costs. If Century exercises its co-promote option, such royalty percentage will be increased to low-teens to high-teens in respect of the sales of the co-promoted Licensed Products in the United States. The royalty term shall terminate on a Licensed Product-by-Licensed Product and country-by-country basis on the latest of (i) the 12-year anniversary of the first commercial sale of such Licensed Product in such country, (ii) the expiration of any regulatory exclusivity period that covers such Licensed Product in such country, and (iii) the expiration of the last-to-expire licensed patent of the Company or a jointly owned patent that covers such the Licensed Product in such country. After expiration of the applicable royalty term for a Licensed Product in a country, all licenses granted by the Company to Bristol-Myers Squibb for such Licensed Product in such country will be fully paid-up, royalty-free, perpetual and irrevocable.

In connection with the Collaboration Agreement, Bristol-Myers Squibb purchased 2,160,760 shares of the Company’s common stock at a price per share of $23.14, for an aggregate purchase price of $50,000. In determining the fair value of the common stock issued to Bristol-Myers Squibb, the Company considered the closing price of the common stock on the date of the transaction and included a lack of marketability discount because the shares are subject to certain restrictions. The Company determined the common stock purchase represented a premium of $7.82 per share, or $23,187 in the aggregate (“Equity Premium”), and the remaining $26,813 was recorded as issuance of common stock in stockholders’ equity.

The Company identified the following commitments under the arrangement: (i) research and development services (“R&D Services”) under each of the two initial Collaboration Programs and (ii) Bristol-Myers Squibb’s License Option to elect to exclusively license the Development Candidates for each of the two initial Collaboration Programs. The Company determined that these four commitments represent distinct

performance obligations for purposes of recognizing revenue and will recognize revenue as the Company fulfills each performance obligation.

The Company determined that the upfront payment and Equity Premium constitute the transaction price at the inception of the Collaboration Agreement. The future potential development and regulatory milestone payments were fully constrained at contract inception as the risk of significant revenue reversal related to these amounts has not yet been resolved. The achievement of the future potential milestones is not within the Company’s control and is subject to certain research and development success and therefore carries significant uncertainty. The Company will reevaluate the likelihood of achieving these milestones at the end of each reporting period and adjust the transaction price in the period the risk is resolved. In addition, the Company will recognize any consideration related to sales-based milestones and royalties when the subsequent sales occur.

The total transaction price of $123,187 was allocated to the performance obligations based on their estimated standalone selling price on January 7, 2022. The stand-alone selling price of the research and development services was estimated using the expected cost-plus margin approach, and the stand-alone selling price of the License Options was based on a discounted cash flow approach and considered several factors including, but not limited to, discount rate, development timeline, regulatory risks, estimated market demand, and future revenue potential using an adjusted market approach. The allocated transaction price is recognized as revenue in one of two ways:

● Research and development services: The Company recognizes the portion of the transaction price allocated to each of the research and development performance obligations as the research and development services are provided, using an inputs method, in proportion to costs incurred to date for each research development target as compared to total costs incurred and expected to be incurred in the future to satisfy the underlying obligation related to each research and development target. The transfer of control occurs over this period and, in management’s judgment, is the best measure of progress towards satisfying the performance obligation.

● License option rights: The transaction price allocated to the license options rights, which are considered material rights to license and commercialize the underlying research and development target, are deferred until the period that Bristol-Myers Squibb elects to exercise or elects to not exercise its option or when the option to exercise expires.

The following table summarizes the allocation of the total transaction price to the identified performance obligations under the arrangement, and the amount of the transaction price unsatisfied as of March 31, 2024:

			Cumulative collaboration		Deferred
Performance obligations:	Transaction price		revenue recognized		collaboration revenue
Option rights	$	109,164	$	-	$	109,164
Research and development services		14,023		(8,289)		5,734
Total		123,187		(8,289)		114,898
Less current portion of deferred revenue		-		-		(4,610)
Total long-term deferred revenue	$	123,187	$	(8,289)	$	110,288

The following table summarizes the allocation of the total transaction price to the identified performance obligations under the arrangement, and the amount of the transaction price unsatisfied as of December 31, 2023:

			Cumulative collaboration		Deferred
Performance obligations:	Transaction price		revenue recognized		collaboration revenue
Option rights	$	109,164	$	-	$	109,164
Research and development services		14,023		(7,434)		6,589
Total		123,187		(7,434)		115,753
Less current portion of deferred revenue		-		-		(4,372)
Total long-term deferred revenue	$	123,187	$	(7,434)	$	111,381

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies.

Commitments and Contingencies

Note 9—Commitments and contingencies

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when future expenditures are probable and such expenditures can be reasonably estimated.

Distributed Bio Master Service Agreement

On July 24, 2019, the Company entered into a Master Service Agreement with Distributed Bio, Inc (“DBio”), whereby DBio will screen for protein binders that bind to specific therapeutic targets (the “Master Service Agreement”). The Company pays for such services according to a payment schedule, and if the Company brings the protein binders into the clinic for further development, DBio will receive milestone payments of up to $16,100 in total for each product as the products move through the clinical development and regulatory approval processes. No milestone payments were due since the inception of the agreement.

The Company had $58 within accounts payable as of March 31, 2024 and $106 as of December 31, 2023, in its consolidated balance sheets related to the Master Service Agreement.

iCELL Inc. Sublicense Agreement

In March 2020, the Company entered into a Sublicense Agreement with iCELL Inc (“iCELL”) whereby iCELL granted the Company a license of certain patents and technology. The Company will pay iCELL royalties in the low single digits on net sales of the licensed product. In addition to the earned royalties, the Company will pay sales milestones, not to exceed $70,000, for the sales of the licensed product. iCELL is also eligible to receive payments of up to $4,250 in development and regulatory approval milestone payments. No milestones or royalties were due in 2024 or 2023.

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Leases

3 Months Ended

Mar. 31, 2024

Leases

Leases

Note 10—Leases

The Company has commitments under operating leases for certain facilities used in its operations. The Company maintains security deposits on certain leases in the amounts of $410 and $1,260 within security deposits and non-current assets in its consolidated balance sheets at March 31, 2024 and December 31, 2023, respectively. The Company’s leases have initial lease terms ranging from 5 to 16 years. Certain lease agreements contain provisions for future rent increases.

The following table reflects the components of lease expense:

	For the		For the
	Three Months Ended		Three Months Ended
	March 31, 2024		March 31, 2023
Operating lease expense:
Fixed lease cost	$	1,085	$	1,395
Variable lease cost		450		125
Short term lease expense		—		594
Total operating lease expense	$	1,535	$	2,114

The following table reflects supplemental balance sheet information related to leases:

		As of		As of
		March 31,		December 31,
	Location in Balance Sheet	2024		2023
Operating lease right-of-use asset, net	Operating lease right-of-use assets	$	19,314	$	20,376
Operating lease liability, current	Accrued expenses and other liabilities	$	2,215	$	1,513
Operating lease liability, long-term	Operating lease liability, long-term		44,251		46,658
Total operating lease liability		$	46,466	$	48,171

The following table reflects supplement lease term and discount rate information related to leases:

	As of March 31, 2024		As of December 31, 2023
Weighted-average remaining lease terms - operating leases	7.3 years		7.6 years
Weighted-average discount rate - operating leases	9.9	%	9.9	%

The following table reflects supplemental cash flow information related to leases as of the periods indicated:

	For the Three Months Ended		For the Three Months Ended
	March 31, 2024		March 31, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(2,186)	$	(31)
Right-of-use assets obtained in exchange for lease obligations:	$	—	$	—

The following table reflects future minimum lease payments under noncancelable leases as of March 31, 2024:

	Operating Leases
2024	$	5,900
2025		8,421
2026		7,931
2027		8,125
2028		8,325
Thereafter		43,163
Total lease payments		81,865
Less: Imputed interest		(27,423)
Less: Tenant incentive receivable		(7,976)
Total	$	46,466

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Income taxes

3 Months Ended

Mar. 31, 2024

Income taxes

Income taxes

Note 11—Income taxes

During the three months ended March 31, 2024, the Company recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits generated in the U.S. due to its uncertainty of realizing a benefit from those items. During the three months ended March 31, 2023, the Company recorded a tax provision of $1.2 million, due primarily to revenue recognition for tax purposes from the Company's Research Collaboration and Collaboration Agreement entered into with Bristol-Myers Squibb Company in 2022.

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Basic and diluted net loss per common share

3 Months Ended

Mar. 31, 2024

Basic and diluted net loss per common share

Basic and diluted net loss per common share

Note 12—Basic and diluted net loss per common share

The Company’s potentially dilutive securities, which include RSUs (“Restricted Stock Units”), restricted stock, warrants, early exercised stock options and stock options to purchase shares of the Company’s common stock, have been excluded from the computation of dilutive net loss per share as the effect would be antidilutive. Therefore, the weighted-average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share is the same. The Company excluded the following potential shares of common stock presented based on amounts outstanding at each stated period end, from the computation of diluted net loss per share for the three months ended March 31, 2024 and 2023 because including them would have had an anti-dilutive effect.

	Three Months Ended	Three Months Ended
	March 31,	March 31,
	2024	2023
Stock options to purchase common stock	4,739,854	10,370,402
Early exercised stock options subject to future vesting	84,380	385,655
Restricted stock awards subject to future vesting	24,731	49,465
Unvested restricted stock units	3,941,432	544,650
Warrants	32,009	32,009
Total	8,822,406	11,382,181

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Stock-based compensation

3 Months Ended

Mar. 31, 2024

Stock-based compensation

Stock-based compensation

Note 13—Stock-based compensation

On June 17, 2021, the Company adopted the Century Therapeutics, Inc. 2021 Equity Incentive Plan (the “2021 Incentive Plan”) which superseded the 2018 Incentive Plan and from that date forward all issuances of incentive awards will be governed by the 2021 Incentive Plan.

The 2021 Incentive Plan provides for the Company to sell or issue common stock or restricted common stock, RSUs, or to grant incentive stock options or nonqualified stock options for the purchase of common stock, to employees, members of the Board of Directors, and consultants of the Company under terms and provisions established by the Board of Directors. Under the terms of the 2021 Incentive Plan, options may be granted at an exercise price not less than fair market value.

Upon adoption of the 2021 Incentive Plan, the Company was authorized to issue 5,481,735 shares of Common Stock under the 2021 Incentive Plan (which represents 5,640,711 shares of Common Stock initially available for grant under the 2021 Incentive Plan less 158,976 shares of Common Stock reserved for issuance upon the exercise of previously granted stock options that remain outstanding under the 2018 Incentive Plan). The number of shares of common stock initially reserved for issuance under the 2021 Incentive Plan shall be increased, upon approval by the Board of Directors, on January 1, 2022 and each January 1 thereafter, in an amount equal to the least of, (i) five percent (5%) of the outstanding common stock on the immediately preceding December 31, or (ii) such number of common stock determined by the Board of Directors no later than the immediately preceding December 31. For 2023, the 2021 Incentive Plan reserved shares were increased under clause (i) by 2,954,788 shares, effective as of January 1, 2023. For 2024, the 2021 Incentive Plan reserved shares were increased under clause (i) by 3,025,220 shares, effective as of January 1, 2024. As of March 31, 2024, there were 4,905,295 shares available for issuance under the 2021 Incentive Plan.

The Company’s stock-based awards are subject to service-based vesting conditions. Compensation expense related to awards to employees and directors with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Stock awards granted typically vest over a four-year period but may be granted with different vesting terms. The Company may also issue awards with performance-based vesting conditions. For performance-based awards, the Company would reassess at each reporting date whether achievement of the performance condition is probable and accrue compensation expense if and when the achievement of the performance condition is probable. During the quarter ended June 30, 2023, the Company issued performance based RSUs that represent a contingent right to receive one share of the Company’s common stock. The RSUs shall vest 50% on November 1, 2023, with the remaining 50% vesting upon the earlier of: (i) November 1, 2024; and (ii) satisfaction of certain performance criteria. The Company is currently recording expense for these RSUs on the straight-line basis.

The Company recognizes the costs of the stock-based payments as the employees vest in the awards.

As of March 31, 2024, the Company had reserved shares of common stock for issuance as follows:

	Shares
Options and RSUs issued and outstanding	8,681,286
Shares available for future stock option and RSU grants	4,905,295
Shares available for employee stock purchase plan	954,522
Total	14,541,103

The shares of Common Stock available under the 2021 Incentive Plan as of March 31, 2024 are as follows:

	Shares
Balance December 31, 2023	3,128,244
Shares reserved for issuance	2,954,788
Options granted	(1,433,838)
RSU’s granted	(350,379)
Options and RSUs forfeited / cancelled	606,480
Balance March 31, 2024	4,905,295

Stock Options

The following table summarizes stock option activity for the three month period ended March 31, 2024:

		Weighted Average
				Remaining		Aggregate
				Contractual		Intrinsic
				Term		Value
	Shares	Exercise Price		(years)		(in thousands)
Outstanding January 1, 2024	3,938,006	$	7.11	5.66	$	2,923
Granted	1,433,838		5.29	—		—
Exercised	(155,928)		1.25	—		—
Forfeited	(380,899)		6.46	—		—
Cancelled	(95,163)		12.76	—		—
Outstanding, March 31, 2024	4,739,854	$	5.60	4.53	$	6,066
Exercisable at March 31, 2024	4,441,321	$	7.07	5.52	$	3,619

The weighted average grant date fair value of awards for options granted during the three months ended March 31, 2024 was $3.73. As of March 31, 2024, there was $18,525 of total unrecognized compensation expense related to unvested stock options with time-based vesting terms, which is expected to be recognized over a weighted average period of 3.02 years. The aggregate intrinsic value of options vested and exercisable as of March 31, 2024 and 2023 is calculated based on the difference between the exercise price and the fair value of our common stock. The intrinsic value of options exercised in 2024 and 2023 was $3,619 and $3,262, respectively.

The Company estimates the fair value of its option awards to employees and directors using Black-Scholes, which requires inputs and subjective assumptions, including (i) the expected stock price volatility, (ii) the calculation of the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. Due to the lack of substantial company-specific historical and implied volatility data of its common stock, the Company has based its estimate of expected volatility on the historical volatility of a group of similar public companies. Starting in June of 2023 the Company had sufficient historical information regarding stock trading history, and started to use the Company’s own stock volatility. The Company has never paid dividends and does not expect to in the foreseeable future. The expected term of the options granted to employees is derived from the “simplified” method as described in Staff Accounting Bulletin 107 relating to stock-based compensation. The risk-free interest rates for periods within expected term of the option are based on the U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The Company will account for actual forfeitures as they occur.

The weighted-average assumptions used to calculate the fair value of stock options granted are as follows:

	March 31, 2024		December 31, 2023
Expected dividend rate	—		—
Expected option term (years)	6.08		6.04
Expected volatility	77.86	%	77.87	%
Risk-free interest rate	4.38	%	3.68	%

Stock-based compensation expense recorded under ASC 718 related to stock options granted and common stock issued under the 2021 Employee Stock Purchase Plan (the “ESPP”) were allocated to research and development and general and administrative expense as follows:

	Three Months Ended		Three Months Ended
	March 31,		March 31,
	2024		2023
Research and development	$	1,748	$	2,112
General and administrative		1,459		1,685
Total stock-based compensation	$	3,207	$	3,797

Stock-based compensation expense by award type included within the condensed consolidated statements of operations is as follows:

	Three Months Ended		Three Months Ended
	March 31,		March 31,
	2024		2023
Stock options	$	2,091	$	3,546
Restricted stock units		1,014		97
Restricted stock awards		45		93
Employee stock purchase plan		57		61
Total stock-based compensation	$	3,207	$	3,797

Restricted Stock Units

The following table summarizes RSU activity for the three months ended March 31, 2024:

		Weighted Average
	Shares	Grant Date Fair Value
Total Unvested December 31, 2023	3,721,471	$	2.69
Granted	350,379		5.31
Forfeited	(130,418)		3.65
Total Unvested March 31, 2024	3,941,432	$	2.84

As of March 31, 2024, there was $6,774 of total unrecognized compensation expense related to the unvested restricted stock with time-based vesting terms, which is expected to be recognized over a weighted average period of 2.84 years.

Restricted Stock Awards

The following table summarizes restricted stock activity as of March 31, 2024 and December 31, 2023:

		Weighted Average
	Shares	Grant Date Fair Value
Total Unvested December 31, 2023	49,416	$	7.27
Granted	—		—
Forfeited	—		—
Vested	(24,685)		7.27
Total Unvested March 31, 2024	24,731	$	7.27

As of March 31, 2024, there was $311 of total unrecognized compensation expense related to the unvested restricted stock with time-based vesting terms, which is expected to be recognized over a weighted average period of 0.98 years. All restricted stock vests over a four-year period.

Early-Exercise of Unvested Equity Awards

Certain equity award holders early exercised unvested equity awards. The cash received upon early exercise of options of $491 was recorded as a deposit liability on the Company’s balance sheet as of March 31, 2024.

Employee Stock Purchase Plan

The Employee Stock Purchase Plan (“ESPP”) was adopted by the Board of Directors in May 2021. A total of 564,071 shares of common stock were initially reserved for issuance under this plan, which shall be increased, upon approval by the Board of Directors, on January 1, 2022 and each January 1 thereafter, to the lesser of (i) one percent (1%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year, or (ii) an amount determined by the Board of Directors no later than the last day of the immediately preceding fiscal year. For 2022, the ESPP reserved shares were increased under clause (i) by 550,055 shares, effective as of January 1, 2022. For 2023 and 2024, the board waived the annual increase to the shares reserved under the ESPP. As of March 31, 2024, there were 954,522 shares available for issuance, under the ESPP.

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Related party transactions

3 Months Ended

Mar. 31, 2024

Related party transactions

Related party transactions

Note 14—Related party transactions

License Agreements and Collaborative Agreements with Shareholder

The Company owns licenses and other contracts with FUJIFILM Cellular Dynamics, Inc. (“FCDI”). FCDI is a shareholder of Century. The acquired licenses and other contracts with FCDI are as follows:

FCDI Agreements

The Company owns a non-exclusive license agreement with FCDI. The license provides the Company with certain patents and know-how related to the reprogramming of human somatic cells to induce pluripotent stem cells (“iPSCs”) (“Reprogramming License Agreement”). Under this agreement, the Company is required to make certain developmental and regulatory milestone payments as well as royalty payments upon commercialization. Royalties are in the low single digits on the sale of all licensed products.

The Company also owns an exclusive license agreement with FCDI (“Differentiation Licenses Agreement”). The Differentiation Licenses Agreement provides the Company with patents and know-how related to human iPSC exclusively manufactured by FCDI.

In October 2019, the Company entered into the Master Collaboration Agreement with FCDI (“Collaboration Agreement”), whereby FCDI provides certain services to the Company to develop and manufacture iPSCs and immune cells derived therefrom. FCDI provides services in accordance with the approved research plan and related research budget. The initial research plan covered the period from October 2019 through March 31, 2022. In July, 2022 the Company amended the Collaboration Agreement to extend the term through September 30, 2025, and in September 2023, the Company amended the Collaboration Agreement in connection with the Autoimmune License (as defined below).

In March, 2021, the Company entered into a Manufacturing Agreement with FCDI, (“Manufacturing Agreement”), pursuant to which FCDI will provide certain agreed upon technology transfer, process development, analytical testing and cGMP manufacturing services to the Company.

In January, 2022, the Company and FCDI entered into a letter agreement (the “Letter Agreement”), which amended the Reprogramming License Agreement, Differentiation License Agreement and Manufacturing Agreement (the “FCDI Agreements”) pursuant to the Company’s Research Collaboration and License Agreement with Bristol-Myers Squibb. Pursuant to the Letter Agreement, and in consideration for amending

the FCDI Agreements, the Company paid to FCDI an upfront payment of $10,000, and will pay FCDI (i) a percentage of any milestone payments received by the Company under the FCDI Collaboration Agreement in respect of achievement of development or regulatory milestones specific to Japan, and (ii) a percentage of all royalties received by the Company under the FCDI Collaboration Agreement in respect of sales of products in Japan.

In September, 2023 the Company and FCDI entered into a worldwide license agreement whereby FCDI will grant non-exclusive licenses to the Company for certain patent rights and know-how related to cell differentiation and reprogramming for the development and commercialization of iPSC-derived therapies for the treatment of inflammatory and autoimmune diseases (the “Autoimmune License”).  In addition, the Company and FCDI entered into an amendment to each of the Reprogramming License and the Differentiation License to expand the licenses related to the development and commercialization of iPSC-derived cancer immunotherapeutic to also include inflammatory and autoimmune diseases.  Under the terms of these agreements, FCDI will be eligible to receive certain development and regulatory milestone payments as well as low single-digit royalties related to products developed in connection with such agreements. 

During the three months ended March 31, 2024 and 2023, the Company made payments of $2,707 and $12 and incurred research and development expenses of $2,666 and $32, and legal fees of $35 and $33, in each case related to these agreements, and recorded within general and administrative expenses in its consolidated statements of operations and comprehensive loss, respectively.

Bayer Option Agreement

Bayer Health, LLC (“Bayer”) has the right of first refusal to acquire certain products researched and developed by the Company. Subject to certain exceptions, Bayer’s right of first refusal is exercisable with respect to up to four products and may only exercise these option rights in a non-sequential and alternating manner, and such rights are subject to additional limitations.

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Common Stock

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Common Stock

Note 15 – Common Stock

The Company has a Sales Agreement (“Sales Agreement”), with Cowen and Company, LLC, or (“Cowen”) to provide for the offering, issuance and sale of up to an aggregate amount of $150,000 of common stock from time to time in “at-the-market” offerings (the “ATM Program”) pursuant to its shelf registration statement on Form S-3 (File No. 333-265975) and subject to the limitations thereof. During the three months ended March 31, 2024, the Company sold 4,084,502 shares pursuant to the ATM Program for net proceeds of $17,829, after deducting commissions of $551. Subsequent to March 31, 2024 through the date of the filing of these financial statements, the Company did not have any sales in the ATM Program.

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Subsequent Events

3 Months Ended

Mar. 31, 2024

Subsequent Events

Subsequent Events

Note 16—Subsequent Events

Private Placement Offering

In April, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain institutional accredited investors (the “Investors”), pursuant to which the Company agreed to issue and sell to the Investors in a private placement an aggregate of 15,873,011 shares of the Company’s common stock (the “Private Placement Shares”), at a price of $3.78 per share (the “Private Placement”).

The Private Placement closed on April 15, 2024. The Company received aggregate net proceeds from the Private Placement of approximately $56,700, after deducting placement agent fees and offering expenses. The Company intends to use the net proceeds from the private placement to support the expansion of CNTY-101 in autoimmune indications and for working capital and general corporate purposes.

Clade Therapeutics, Inc. Acquisition

In April 2024, the Company acquired Clade, a privately-held biotechnology company focused on discovering and delivering engineerable, off-the-shelf, scalable, and consistent stem cell-based medicines, with a focus on iPSC-derived αβ T cells.  The aggregate upfront consideration consists of (i) approximately $15,000 in cash and (ii) 4,535,333 shares of the Company’s common stock, par value $0.0001 per share. The cash portion of the upfront consideration is subject to customary adjustments for indebtedness, cash, and transaction expenses.

Following the closing, one potential clinical development milestone payment of $10,000 (which may be paid by the Company in cash, shares of its common stock or a combination thereof) will be made to Clade securityholders upon the achievement of the milestone.

In connection with the closing, the Company entered into customary lock-up agreements with certain of Clade’s stockholders providing that such holders will not transfer, subject to limited exceptions, any of the shares of the Company’s common stock received for 180 days after the closing.

The Company is currently in process of completing its accounting analysis of the acquisition, including assessing whether or not the acquisition qualifies as either an asset acquisition or a business combination for US GAAP reporting purposes.

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Summary of significant accounting policies and basis of presentation (Policies)

3 Months Ended

Mar. 31, 2024

Basis of presentation

Basis of presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the interim period reporting requirements of Form 10-Q and Article 10 of Regulation S-X. The consolidated balance sheet as of March 31, 2024, and the consolidated statements of operations and comprehensive loss, consolidated statements of changes in stockholders’ equity, and the consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 are unaudited, but, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.  The results for any interim period are not necessarily indicative of results for the year ending December 31, 2024 or for any other subsequent interim period.  The consolidated balance sheet at December 31, 2023 has been derived from the Company’s audited consolidated financial statements.

Certain prior year information has been reclassified to conform to the fiscal year 2024 presentation.

Segment information

Segment information

Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions on how to allocate resources and assess performance. The Company views its operations and manages the business as one operating segment.

Use of estimates

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuations supporting stock compensation, the estimation of the incremental borrowing rate for operating leases and standalone selling prices of performance obligations in collaboration agreements. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s results of operations could either benefit from, or be adversely affected by, any such change in estimate.

Concentration of credit risk and other risks and uncertainties

Concentration of credit risk and other risks and uncertainties

Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist of cash, cash equivalents, U.S. Treasury bills and bonds, as well as corporate bonds. Cash and cash equivalents, as well as short and long-term investments include a checking account and asset management accounts held by a limited number of financial institutions. At times, such deposits may be in excess of insured limits. As of March 31, 2024 and December 31, 2023, the Company has not experienced any losses on its deposits of cash and cash equivalents.

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, uncertainty of market acceptance of its products, competition from substitute products and larger companies, protection of proprietary technology, strategic relationships, and dependence on key individuals.

Products developed by the Company require clearances from the U.S. Food and Drug Administration (the “FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance the Company’s future products will receive the necessary clearances. If the Company was denied clearance, clearance was delayed, or if the Company was unable to maintain clearance, it could have a material adverse impact on the Company.

Fair value of financial instruments

Fair value of financial instruments

The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows:

Level 1 Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active;

Level 3 Inputs are unobservable in which there is little or no market data available, which require the reporting entity to develop its own assumptions that are unobservable.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

Cash and cash equivalents

Cash and cash equivalents

Management considers all highly liquid investments with an insignificant interest rate risk and original maturities of three months or less to be cash equivalents.

Restricted cash

Restricted cash

As of March 31, 2024 and December 31, 2023, the Company had $1,979 in cash on deposit to secure certain lease commitments. Restricted cash is recorded separately in the Company’s consolidated balance sheets.

The following provides a reconciliation of the Company’s cash, cash equivalents, and restricted cash as reported in the consolidated balance sheets to the amounts reported in the consolidated statements of cash flows:

	March 31, 2024		December 31, 2023
Cash and cash equivalents	$	46,812	$	47,324
Restricted cash		1,979		1,979
Cash, cash equivalents, and restricted cash	$	48,791	$	49,303

Investments

Investments

The Company invests in fixed maturity securities including U.S. Treasury bills and bonds as well as corporate bonds. The investments are classified as available-for-sale and reported at fair value. Unrealized gains or losses are determined by comparing the fair market value of the securities with their cost or amortized cost. Realized gains and losses on investments are recorded on the trade date and are included in the statement of operations. Unrealized gains and losses on investments are recorded in other comprehensive loss on the consolidated statements of operations and comprehensive loss. The cost of securities sold is based on the specified identification method. Investment income is recognized as earned and discounts or premiums arising from the purchase of debt securities are recognized in investment income using the interest method over the remaining term of the security. Securities with an original maturity date greater than three months that mature within one year of the balance sheet date are classified as short-term, while investments with a maturity date greater than one year are classified as long-term.

Property and equipment, net

Property and equipment, net

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is generally five years. Leasehold improvements are amortized over the shorter of the asset’s useful life or the remaining term of the lease. Construction in progress includes direct cost related to the construction of leasehold improvements and is stated at original cost. Such costs are not depreciated until the asset is completed and placed into service. Once the asset is placed into service, these capitalized costs will be allocated to leasehold improvements and will be depreciated over the shorter of the asset’s useful life or the remaining term of the lease. Computer software and equipment includes implementation costs for cloud-based software and network equipment.

Expenditures for major additions and improvements are capitalized, while minor replacements, maintenance, and repairs are charged to expense as incurred. When property is retired or otherwise disposed of, the costs and accumulated depreciation are removed from the respective accounts, with any resulting gain or loss recognized concurrently.

Research and development expenses

Research and development expenses

Research and development expenses include costs directly attributable to the conduct of research and development programs, including the cost of salaries, payroll taxes, employee benefits, stock compensation, materials, supplies, rent, depreciation on and maintenance of research equipment with alternative future use, and the cost of services provided by outside contractors. All costs associated with research and development are expensed as incurred.

Clinical trial costs are a component of research and development expenses. The Company expenses costs for its clinical trial activities performed by third parties, including clinical research organizations and other service providers, as they are incurred, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company uses information it receives from internal personnel and outside service providers to estimate the clinical trial costs incurred.

Stock-based compensation

Stock-based compensation

Employees, consultants and members of the Board of Directors of the Company have received stock options and restricted stock of the Company. The Company recognizes the cost of the stock-based compensation incurred as its employees and board members vest in the awards. The Company accounts for stock-based compensation arrangements in accordance with provisions of Accounting Standards Codification (“ASC”) 718, Compensation—Stock Compensation. ASC 718 requires the recognition of compensation expense, using a fair-value based method, for costs related to all share-based payments including stock options. ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model (“Black Scholes”) to determine the fair value of options granted. The Company’s stock-based awards are subject to service-based vesting conditions and performance-based vesting conditions. Compensation expense related to awards to employees and directors with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. For performance-based awards, the Company reassesses at each reporting date whether achievement of the performance condition is probable and accrues compensation expense if and when achievement of the performance condition is probable.

Black Scholes requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. The historical volatility is calculated based on a period of time commensurate with expected term assumption. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. Forfeitures are recognized as they occur.

Foreign currency translation

Foreign currency translation

The reporting currency of the Company is the U.S. dollar. The functional currency of Century Canada is the Canadian dollar. Assets and liabilities of Century Canada are translated into U.S. dollars based on exchange rates at the end of each reporting period. Expenses are translated at average exchange rates during the reporting period. Gains and losses arising from the translation of assets and liabilities are included as a component of accumulated other comprehensive loss or income on the Company’s consolidated balance sheets. Gains and losses resulting from foreign currency transactions are reflected within the Company’s

consolidated statements of operations and comprehensive loss. The Company has not utilized any foreign currency hedging strategies to mitigate the effect of its foreign currency exposure.

Intercompany payables and receivables are considered to be long-term in nature and any change in balance due to foreign currency fluctuation is included as a component of the Company’s consolidated comprehensive loss and accumulated other comprehensive loss within the Company’s consolidated balance sheets.

Basic and diluted net loss per common shares

Basic and diluted net loss per common shares

Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted-average number of common shares outstanding during the period. The Company computes diluted net loss per common share by dividing the net loss applicable to common shareholders by the sum of the weighted-average number of common shares outstanding during the period plus the potential dilutive effects of its warrants, restricted stock and stock options to purchase common shares, but such items are excluded if their effect is anti-dilutive. Because the impact of these items is anti-dilutive during periods of net loss, there were no differences between the Company’s basic and diluted net loss per common share for the three months ended March 31, 2024 and 2023.

Collaboration revenue

The Company may enter into collaboration and licensing agreements with strategic partners for research and development, manufacturing, and commercialization of its product candidates. Payments under these arrangements may include non-refundable, upfront fees; reimbursement of certain costs; customer option fees for additional goods or services; payments upon the achievement of development, regulatory, and commercial milestones; sales of product at certain agreed-upon amounts; and royalties on product sales.

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, (“ASC 606”). This standard applies to all contracts with customers. When an agreement falls under the scope of other standards, such as ASC Topic 808, Collaborative Arrangements, or (“ASC 808”), the Company will apply the recognition, measurement, presentation, and disclosure guidance in ASC 606 to the performance obligations in the agreements if those performance obligations are with a customer. Revenue recognized by analogizing to ASC 606 is recorded as collaboration revenue on the statements of operations.

Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under a collaboration agreement, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations on a relative stand-alone selling price basis; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

As part of the accounting for these arrangements, the Company must use its judgment to determine the stand-alone selling price for each performance obligation identified in the contract for the allocation of transaction price. The estimation of the stand-alone selling price may include such estimates as forecasted revenues and costs, development timelines, discount rates, and probabilities of regulatory and commercial success. The Company also applies significant judgment when evaluating whether contractual obligations represent distinct performance obligations, allocating transaction price to performance obligations within a contract, determining when performance obligations have been met, assessing the recognition and future reversal of variable consideration and determining and applying appropriate methods of measuring progress for performance obligations satisfied over time. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, current. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, non-current.

If an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and services underlying the customer options are not considered to be performance obligations at the outset of the arrangement, as they are contingent upon option exercise. The Company evaluates the customer options for material rights or options to acquire additional goods or services for free or at a discount. If the customer options are not determined to represent a material right, no transaction price is allocated to these options and the Company will account for these options at that time they are exercised. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement.

The obligations under the Company’s collaboration agreements may include research and development services to be performed by the Company for or on behalf of the customer. Amounts allocated to these performance obligations are recognized as the Company performs these obligations, and revenue is measured based on an inputs method of costs incurred to date of budgeted costs. Under certain circumstances, the Company may be reimbursed for certain expenses incurred under the research and development services.

At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The Company evaluates factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the statements of operations in the period of adjustment.

Recent accounting pronouncements

Recent accounting pronouncements

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 requires entities to provide additional information in their tax rate reconciliation and additional disclosures about income taxes paid by jurisdiction. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The guidance should be applied prospectively, but entities have the option to apply it retrospectively for each period presented. The Company is currently evaluating the impact of adopting this new accounting guidance.

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Summary of significant accounting policies and basis of presentation (Tables)

3 Months Ended

Mar. 31, 2024

Summary of significant accounting policies and basis of presentation

Schedule of reconciliation of the Company's cash, cash equivalents, and restricted cash

	March 31, 2024		December 31, 2023
Cash and cash equivalents	$	46,812	$	47,324
Restricted cash		1,979		1,979
Cash, cash equivalents, and restricted cash	$	48,791	$	49,303

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Financial instruments and fair value measurements (Tables)

3 Months Ended

Mar. 31, 2024

Financial instruments and fair value measurements

Schedule of assets measured at fair value by level within the fair value hierarchy

	Level 1		Level 2		Level 3		Total
Cash equivalents	$	41,492		—		—	$	41,492
U.S. Treasury		—		17,838		—		17,838
Corporate bonds		—		185,218		—		185,218
Total	$	41,492	$	203,056	$	—	$	244,548

	Level 1		Level 2		Level 3		Total
Cash equivalents	$	42,263		—		—	$	42,263
U.S. Treasury		—		26,114		—		26,114
Corporate bonds		—		188,396		—		188,396
Total	$	42,263	$	214,510	$	—	$	256,773

Schedule of investments in fixed maturity securities

			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
U.S. Treasury	$	17,855	$	—	$	(17)	$	17,838
Corporate bonds		185,329		128		(239)		185,218
Total	$	203,184	$	128	$	(256)	$	203,056

			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
U.S. Treasury	$	26,070	$	44	$	—	$	26,114
Corporate bonds		188,219		399		(222)		188,396
Total	$	214,289	$	443	$	(222)	$	214,510

Schedule of maturities of fixed maturity available-for-sale securities

	March 31, 2024		December 31, 2023
Less than one year	$	145,204	$	125,414
One to five years		57,852		89,096
	$	203,056	$	214,510

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Property and equipment, net (Tables)

3 Months Ended

Mar. 31, 2024

Property and equipment, net

Schedule of summary of property and equipment, net

	March 31, 2024		December 31, 2023
Lab equipment	$	29,928	$	29,597
Leasehold improvements		61,136		60,862
Construction in progress		—		124
Computer software and equipment		2,899		2,899
Furniture and fixtures		1,061		1,061
Total		95,024		94,543
Less: Accumulated depreciation		(26,019)		(22,838)
Property and equipment, net	$	69,005	$	71,705

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Accrued expenses and other liabilities (Tables)

3 Months Ended

Mar. 31, 2024

Accrued expenses and other liabilities.

Schedule of summary of accrued expenses

	March 31, 2024		December 31, 2023
Payroll and bonuses	$	2,868	$	6,496
Accrued clinical trial related costs		356		470
Professional and legal fees		2,043		1,642
Operating lease liability, current		2,215		1,513
Other		50		28
Total accrued expenses and other liabilities	$	7,532	$	10,149

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Long-term debt (Tables)

3 Months Ended

Mar. 31, 2024

Long-term debt

Schedule of interest expense attributable to the loan agreement

	For the Three Months Ended		For the Three Months Ended
	March 31, 2024		March 31, 2023
Interest expense	$	—	$	348
Amortization of debt issuance costs, including end of term fee accretion		—		56
	$	—	$	404

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Bristol-Myers Squibb Collaboration (Tables)

3 Months Ended

Mar. 31, 2024

Bristol-Myers Squibb Collaboration

Schedule of transaction price unsatisfied

The following table summarizes the allocation of the total transaction price to the identified performance obligations under the arrangement, and the amount of the transaction price unsatisfied as of March 31, 2024:

			Cumulative collaboration		Deferred
Performance obligations:	Transaction price		revenue recognized		collaboration revenue
Option rights	$	109,164	$	-	$	109,164
Research and development services		14,023		(8,289)		5,734
Total		123,187		(8,289)		114,898
Less current portion of deferred revenue		-		-		(4,610)
Total long-term deferred revenue	$	123,187	$	(8,289)	$	110,288

The following table summarizes the allocation of the total transaction price to the identified performance obligations under the arrangement, and the amount of the transaction price unsatisfied as of December 31, 2023:

			Cumulative collaboration		Deferred
Performance obligations:	Transaction price		revenue recognized		collaboration revenue
Option rights	$	109,164	$	-	$	109,164
Research and development services		14,023		(7,434)		6,589
Total		123,187		(7,434)		115,753
Less current portion of deferred revenue		-		-		(4,372)
Total long-term deferred revenue	$	123,187	$	(7,434)	$	111,381

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Leases (Tables)

3 Months Ended

Mar. 31, 2024

Leases

Schedule of components of lease expenses

	For the		For the
	Three Months Ended		Three Months Ended
	March 31, 2024		March 31, 2023
Operating lease expense:
Fixed lease cost	$	1,085	$	1,395
Variable lease cost		450		125
Short term lease expense		—		594
Total operating lease expense	$	1,535	$	2,114

Schedule of Supplemental Balance Sheet Information related to leases

		As of		As of
		March 31,		December 31,
	Location in Balance Sheet	2024		2023
Operating lease right-of-use asset, net	Operating lease right-of-use assets	$	19,314	$	20,376
Operating lease liability, current	Accrued expenses and other liabilities	$	2,215	$	1,513
Operating lease liability, long-term	Operating lease liability, long-term		44,251		46,658
Total operating lease liability		$	46,466	$	48,171

Schedule of supplemental lease term and discount rate information related to leases

	As of March 31, 2024		As of December 31, 2023
Weighted-average remaining lease terms - operating leases	7.3 years		7.6 years
Weighted-average discount rate - operating leases	9.9	%	9.9	%

Schedule of supplemental cash flow information related to leases

	For the Three Months Ended		For the Three Months Ended
	March 31, 2024		March 31, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(2,186)	$	(31)
Right-of-use assets obtained in exchange for lease obligations:	$	—	$	—

Schedule of Future minimum lease payments of operating leases

	Operating Leases
2024	$	5,900
2025		8,421
2026		7,931
2027		8,125
2028		8,325
Thereafter		43,163
Total lease payments		81,865
Less: Imputed interest		(27,423)
Less: Tenant incentive receivable		(7,976)
Total	$	46,466

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Basic and diluted net loss per common share (Tables)

3 Months Ended

Mar. 31, 2024

Basic and diluted net loss per common share

Schedule of potential shares of common stock excluded

	Three Months Ended	Three Months Ended
	March 31,	March 31,
	2024	2023
Stock options to purchase common stock	4,739,854	10,370,402
Early exercised stock options subject to future vesting	84,380	385,655
Restricted stock awards subject to future vesting	24,731	49,465
Unvested restricted stock units	3,941,432	544,650
Warrants	32,009	32,009
Total	8,822,406	11,382,181

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Stock-based compensation (Tables)

3 Months Ended

Mar. 31, 2024

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of reserved shares of common stock

	Shares
Options and RSUs issued and outstanding	8,681,286
Shares available for future stock option and RSU grants	4,905,295
Shares available for employee stock purchase plan	954,522
Total	14,541,103

Schedule of common stock available under 2021 Incentive Plan

	Shares
Balance December 31, 2023	3,128,244
Shares reserved for issuance	2,954,788
Options granted	(1,433,838)
RSU’s granted	(350,379)
Options and RSUs forfeited / cancelled	606,480
Balance March 31, 2024	4,905,295

Schedule of stock option activity

		Weighted Average
				Remaining		Aggregate
				Contractual		Intrinsic
				Term		Value
	Shares	Exercise Price		(years)		(in thousands)
Outstanding January 1, 2024	3,938,006	$	7.11	5.66	$	2,923
Granted	1,433,838		5.29	—		—
Exercised	(155,928)		1.25	—		—
Forfeited	(380,899)		6.46	—		—
Cancelled	(95,163)		12.76	—		—
Outstanding, March 31, 2024	4,739,854	$	5.60	4.53	$	6,066
Exercisable at March 31, 2024	4,441,321	$	7.07	5.52	$	3,619

Schedule of weighted-average assumptions

	March 31, 2024		December 31, 2023
Expected dividend rate	—		—
Expected option term (years)	6.08		6.04
Expected volatility	77.86	%	77.87	%
Risk-free interest rate	4.38	%	3.68	%

Schedule of stock-based compensation expense and by award type

	Three Months Ended		Three Months Ended
	March 31,		March 31,
	2024		2023
Research and development	$	1,748	$	2,112
General and administrative		1,459		1,685
Total stock-based compensation	$	3,207	$	3,797

Stock-based compensation expense by award type included within the condensed consolidated statements of operations is as follows:

	Three Months Ended		Three Months Ended
	March 31,		March 31,
	2024		2023
Stock options	$	2,091	$	3,546
Restricted stock units		1,014		97
Restricted stock awards		45		93
Employee stock purchase plan		57		61
Total stock-based compensation	$	3,207	$	3,797

Restricted stock units

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of restricted stock activity

		Weighted Average
	Shares	Grant Date Fair Value
Total Unvested December 31, 2023	3,721,471	$	2.69
Granted	350,379		5.31
Forfeited	(130,418)		3.65
Total Unvested March 31, 2024	3,941,432	$	2.84

Restricted stock

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of restricted stock activity

		Weighted Average
	Shares	Grant Date Fair Value
Total Unvested December 31, 2023	49,416	$	7.27
Granted	—		—
Forfeited	—		—
Vested	(24,685)		7.27
Total Unvested March 31, 2024	24,731	$	7.27

XML

Organization and description of the business - Going concern and liquidity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Organization and description of the business
Net Income (Loss)	$ (28,062)	$ (31,264)
Cash used in operations	(30,248)	$ (29,219)
Amount of cash and cash equivalents on short and long term investments	$ 249,868
Reduction percentage	25.00%

XML

Summary of significant accounting policies and basis of presentation (Details)	3 Months Ended
	Mar. 31, 2024 segment
Summary of significant accounting policies and basis of presentation
Number of operating segment	1

XML

Summary of significant accounting policies and basis of presentation - Restricted cash (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Dec. 31, 2022
Summary of significant accounting policies and basis of presentation
Cash on deposit	$ 1,979	$ 1,979
Cash and cash equivalents	46,812	47,324
Restricted cash	1,979	1,979
Cash, cash equivalents, and restricted cash	$ 48,791	$ 49,303	$ 88,811	$ 86,244

XML

Summary of significant accounting policies and basis of presentation - Property and equipment and Stock-based compensation (Details)	3 Months Ended
	Mar. 31, 2024
Summary of significant accounting policies and basis of presentation
Estimated useful lives of the assets	5 years
Expected dividend rate	0.00%

XML

Reduction in force (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Reduction in force
Reduction percentage	25.00%
General and administrative
Reduction in force
Amount of cash-based expenses		$ 292
Amount of non-cash stock-based compensation charge			$ 171
Research and development
Reduction in force
Amount of cash-based expenses		1,740
Amount of non-cash stock-based compensation charge			410
Employee Severance [Member]
Reduction in force
Amount of cash-based expenses		$ 2,032
Amount of non-cash stock-based compensation charge			$ 581
Amount of remaining outstanding liabilities related to the reduction	$ 0

XML

Financial instruments and fair value measurements - Assets measured at fair value (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Financial instruments and fair value measurements
Cash equivalents	$ 41,492	$ 42,263
Total assets	244,548	256,773
U.S. Treasury
Financial instruments and fair value measurements
Debt securities	17,838	26,114
Corporate bonds
Financial instruments and fair value measurements
Debt securities	185,218	188,396
Level 1
Financial instruments and fair value measurements
Cash equivalents	41,492	42,263
Total assets	41,492	42,263
Level 2
Financial instruments and fair value measurements
Total assets	203,056	214,510
Level 2 | U.S. Treasury
Financial instruments and fair value measurements
Debt securities	17,838	26,114
Level 2 | Corporate bonds
Financial instruments and fair value measurements
Debt securities	$ 185,218	$ 188,396

XML

Financial instruments and fair value measurements - Transfers between levels (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Financial instruments and fair value measurements
Transfer of assets from level 1 to level 2	$ 0
Transfer of assets from level 2 to level 1	$ 0

XML

Financial instruments and fair value measurements - Investments in fixed maturity securities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Financial instruments and fair value measurements
Amortized Cost	$ 203,184	$ 214,289
Gross Unrealized Gains	128	443
Gross Unrealized Losses	(256)	(222)
Fair Value	203,056	214,510
U.S. Treasury
Financial instruments and fair value measurements
Amortized Cost	17,855	26,070
Gross Unrealized Gains		44
Gross Unrealized Losses	(17)
Fair Value	17,838	26,114
Corporate bonds
Financial instruments and fair value measurements
Amortized Cost	185,329	188,219
Gross Unrealized Gains	128	399
Gross Unrealized Losses	(239)	(222)
Fair Value	$ 185,218	$ 188,396

XML

Financial instruments and fair value measurements - Maturities of fixed maturity available-for-sale securities (Details) $ in Thousands	Mar. 31, 2024 USD ($) item	Dec. 31, 2023 USD ($) item
Financial instruments and fair value measurements
Less than one year	$ 145,204	$ 125,414
One to five years	57,852	89,096
Debt securities	$ 203,056	$ 214,510
Number of available-for-sale investment debt securities | item	52	25
Amount of accrued interest receivable on available-for-sale investment debt securities	$ 1,583	$ 1,570
Debt Securities, Available-for-Sale, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration]	Prepaid Expense and Other Assets, Current	Prepaid Expense and Other Assets, Current

XML

Property and equipment, net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Property and equipment, net
Gross total	$ 95,024		$ 94,543
Less: Accumulated depreciation	(26,019)		(22,838)
Property and equipment, net	69,005		71,705
Depreciation	3,226	$ 2,908
Lab equipment
Property and equipment, net
Gross total	29,928		29,597
Leasehold improvements
Property and equipment, net
Gross total	61,136		60,862
Construction in progress
Property and equipment, net
Gross total			124
Computer software and equipment
Property and equipment, net
Gross total	2,899		2,899
Furniture and fixtures
Property and equipment, net
Gross total	$ 1,061		$ 1,061

XML

Accrued expenses and other liabilities - Summary of accrued expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Accrued expenses and other liabilities.
Payroll and bonuses	$ 2,868	$ 6,496
Accrued clinical trial related costs	356	470
Professional and legal fees	2,043	1,642
Operating lease liability, current	$ 2,215	$ 1,513
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Total accrued expenses and other liabilities	Total accrued expenses and other liabilities
Other	$ 50	$ 28
Total accrued expenses and other liabilities	$ 7,532	$ 10,149

XML

Long-term debt - Term Loan Agreement (Details) - USD ($) $ / shares in Units, $ in Thousands	May 01, 2023	Sep. 14, 2020
Long-term debt
Warrants to purchase units		16,112
Warrants term		10 years
Warrants exercise price		$ 13.96
Fair value of the warrants at issuance		$ 46
Loan Agreement
Long-term debt
Loan amount		10,000
Debt prepayment charges	$ 10,617
Debt instrument prepayment charge	100
Debt instrument end of term fee	$ 395
Percentage of prepayment charge on original principal amount of debt	1.00%
Tranche 1
Long-term debt
Loan amount		$ 10,000

XML

Long-term debt - Interest Expenses (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Long-term debt
Interest expense	$ 348
Amortization of debt issuance costs, including end of term fee accretion	56
Interest expense	$ 404

XML

Bristol-Myers Squibb Collaboration (Details) $ / shares in Units, $ in Thousands		3 Months Ended
	Jan. 07, 2022 USD ($) Program item $ / shares shares	Mar. 31, 2024 USD ($) $ / shares	Mar. 31, 2023 USD ($)	Dec. 31, 2023 $ / shares
Common stock, par value | $ / shares		$ 0.0001		$ 0.0001
Gross proceeds		$ 366	$ 448
Aggregate purchase price excluding premium		$ 17,829
Total transaction price	$ 123,187
Collaboration Agreement
Number of collaboration programs | Program	2
Additional number of collaboration programs | Program	2
Upfront cash payment receivable	$ 100,000
Milestone payments receivable upon achievement of certain development and regulatory milestones	235,000
Sales-based milestone payments	$ 500,000
Common stock issued | shares	2,160,760
Common stock, par value | $ / shares	$ 23.14
Gross proceeds	$ 50,000
Common stock, premium per share | $ / shares	$ 7.82
Premium amount of common stock	$ 23,187
Aggregate purchase price excluding premium	$ 26,813
Number of Commitments | item	4
FCDI Collaboration Agreement | Collaboration Agreement
Upfront cash payment receivable	$ 10,000

XML

Bristol-Myers Squibb Collaboration - Total transaction price (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Bristol-Myers Squibb Collaboration
Total	$ 114,898	$ 115,753
Less current portion of deferred revenue	(4,610)	(4,372)
Total long-term deferred revenue	110,288	111,381
Transaction price
Bristol-Myers Squibb Collaboration
Total	123,187	123,187
Total long-term deferred revenue	123,187	123,187
Cumulative collaboration revenue recognized
Bristol-Myers Squibb Collaboration
Cumulative collaboration revenue recognized	(8,289)	(7,434)
Option rights
Bristol-Myers Squibb Collaboration
Total	109,164	109,164
Option rights | Transaction price
Bristol-Myers Squibb Collaboration
Total	109,164	109,164
Research and development services
Bristol-Myers Squibb Collaboration
Total	5,734	6,589
Research and development services | Transaction price
Bristol-Myers Squibb Collaboration
Total	14,023	14,023
Research and development services | Cumulative collaboration revenue recognized
Bristol-Myers Squibb Collaboration
Cumulative collaboration revenue recognized	$ (8,289)	$ (7,434)

XML

Commitments and Contingencies (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2020	Jun. 24, 2019
Distributed Bio Master Service Agreement
Commitments and Contingencies
Milestone payments				$ 16,100
Milestone payments due	$ 0
Distributed Bio Master Service Agreement | Accrued expenses and other liabilities
Commitments and Contingencies
Accrued expenses	58	$ 106
iCELL Inc. Sublicense Agreement
Commitments and Contingencies
Milestone payments due	$ 0	$ 0
Development and regulatory approval milestone payments			$ 4,250
iCELL Inc. Sublicense Agreement | Maximum
Commitments and Contingencies
Milestone payments			$ 70,000

XML

Leases - Components of lease expenses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Lessee, Lease, Description [Line Items]
Amount of security deposits on certain leases	$ 410		$ 1,260
Operating lease expense:
Fixed lease cost	1,085	$ 1,395
Variable lease cost	450	125
Short term lease expense		594
Total operating lease expense	$ 1,535	$ 2,114
Minimum
Lessee, Lease, Description [Line Items]
Initial lease terms	5 years
Maximum
Lessee, Lease, Description [Line Items]
Initial lease terms	16 years

XML

Leases - Other information (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Leases
Operating lease right-of-use asset, net	$ 19,314	$ 20,376
Operating lease liability, current	$ 2,215	$ 1,513
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued Expenses And Other Liabilities, Current	Accrued Expenses And Other Liabilities, Current
Operating lease liability, long term	$ 44,251	$ 46,658
Total operating lease liability	$ 46,466	$ 48,171

XML

Leases - Operating lease - Other information (Details)	Mar. 31, 2024	Dec. 31, 2023
Leases
Weighted-average remaining lease terms (years) - operating leases	7 years 3 months 18 days	7 years 7 months 6 days
Weighted-average discount rate - operating leases	9.90%	9.90%

XML

Leases - Supplemental cash flow information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Supplemental cash flow information
Operating cash flows from operating leases	$ 2,186	$ 31

XML

Leases - Future minimum lease payments (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Operating Leases
2024	$ 5,900
2025	8,421
2026	7,931
2027	8,125
2028	8,325
Thereafter	43,163
Total lease payments	81,865
Less: imputed Interest	(27,423)
Less: Tenant incentive receivable	(7,976)
Total	$ 46,466	$ 48,171

XML

Income taxes - Operating loss carryforward (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income taxes
Income tax expense (benefit)	$ 1	$ 1,208
Net operating loss carryforwards	$ 0

XML

Basic and diluted net loss per common share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Numerator
Net Income (Loss)	$ (28,062)	$ (31,264)
Denominator
Weighted-average common shares for basic net loss per share	62,296,637	58,610,375
Basic net loss per common share	$ (0.45)	$ (0.53)

XML

Basic and diluted net loss per common share - Schedule of potential shares of common stock excluded from computation (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Basic and diluted net loss per common share
Securities excluded from the computation of diluted net loss per share	8,822,406	11,382,181
Stock options to purchase common stock
Basic and diluted net loss per common share
Securities excluded from the computation of diluted net loss per share	4,739,854	10,370,402
Early exercised stock options subject to future vesting
Basic and diluted net loss per common share
Securities excluded from the computation of diluted net loss per share	84,380	385,655
Restricted stock award subject to future vesting
Basic and diluted net loss per common share
Securities excluded from the computation of diluted net loss per share	24,731	49,465
Unvested restricted stock units
Basic and diluted net loss per common share
Securities excluded from the computation of diluted net loss per share	3,941,432	544,650
Warrants
Basic and diluted net loss per common share
Securities excluded from the computation of diluted net loss per share	32,009	32,009

XML

Stock-based compensation (Details) - shares	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Jun. 30, 2023	Dec. 31, 2023	Jun. 17, 2021
Employee Stock Option [Member]
Stock based compensation
Stock awards vesting period	4 years
Performance Based Restricted Stock Units
Stock based compensation
Conversion of stock shares issued		1
Performance Based Restricted Stock Units | Tranche 1
Stock based compensation
Vesting percentage	50.00%
Performance Based Restricted Stock Units | Tranche 2
Stock based compensation
Vesting percentage	50.00%
2021 Incentive Plan
Stock based compensation
Percentage of common stock outstanding			5.00%
Increase in common stock reserved	2,954,788
Additional shares authorized for issuance	3,025,220
Shares available for grant	4,905,295		3,128,244
2021 Incentive Plan | Employee Stock Option [Member]
Stock based compensation
Shares authorized for issuance				5,481,735
Shares available for grant				5,640,711
Stock reserved for issuance upon the exercise of previously granted stock options				158,976

XML

Stock-based compensation - Reserved shares of common stock (Details) - 2021 Incentive Plan	Mar. 31, 2024 shares
Stock based compensation
Reserved shares of common stock for issuance	14,541,103
Options and RSUs
Stock based compensation
Options and RSUs issued and outstanding	8,681,286
Reserved shares of common stock for issuance	4,905,295
Employee stock purchase plan
Stock based compensation
Reserved shares of common stock for issuance	954,522

XML

Stock-based compensation - Common stock available under 2021 Incentive Plan (Details)	3 Months Ended
	Mar. 31, 2024 shares
Employee Stock Option [Member]
Stock based compensation
Options granted	(1,433,838)
Restricted stock units
Stock based compensation
RSU's granted	(350,379)
2021 Incentive Plan
Stock based compensation
Beginning balance	3,128,244
Shares reserved for issuance	2,954,788
Options and RSUs forfeited / cancelled	606,480
Ending balance	4,905,295
2021 Incentive Plan | Employee Stock Option [Member]
Stock based compensation
Options granted	(1,433,838)
2021 Incentive Plan | Restricted stock units
Stock based compensation
RSU's granted	(350,379)

XML

Stock-based compensation - Stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Employee Stock Option [Member]
Shares
Outstanding, beginning (in shares)	3,938,006
Granted	1,433,838
Exercised	(155,928)
Forfeited	(380,899)
Cancelled	(95,163)
Outstanding, ending (in shares)	4,739,854	3,938,006
Exercisable	4,441,321
Weighted Average Exercise Price
Outstanding, beginning	$ 7.11
Granted	5.29
Exercised	1.25
Forfeited	6.46
Cancelled	12.76
Outstanding, ending	5.60	$ 7.11
Exercisable	$ 7.07
Weighted Average Remaining Contractual Term (years)
Outstanding	4 years 6 months 10 days	5 years 7 months 28 days
Exercisable	5 years 6 months 7 days
Weighted average grant date fair value	$ 3.73
Aggregate Intrinsic Value
Outstanding, beginning	$ 2,923
Outstanding, ending	6,066	$ 2,923
Exercisable	3,619	$ 3,262
Time Based Vesting
Weighted Average Remaining Contractual Term (years)
Unrecognized compensation expense	$ 18,525
Unrecognized compensation expense expected to be recognized over a weighted average period	3 years 7 days

XML

Stock-based compensation - Stock option weighted-average assumptions (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
weighted-average assumptions fair value of stock option granted
Expected dividend rate	0.00%
Employee Stock Option [Member]
weighted-average assumptions fair value of stock option granted
Expected option term (years)		6 years 29 days	6 years 14 days
Expected volatility		77.86%	77.87%
Risk-free interest rate		4.38%	3.68%

XML

Stock-based compensation - Stock-based compensation expense and by award type (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Stock-based compensation
Total stock-based compensation	$ 3,207	$ 3,797
Employee Stock Option
Stock-based compensation
Total stock-based compensation	2,091	3,546
Restricted stock units
Stock-based compensation
Total stock-based compensation	1,014	97
Restricted stock awards
Stock-based compensation
Total stock-based compensation	45	93
Employee stock purchase plan
Stock-based compensation
Total stock-based compensation	57	61
Research and development
Stock-based compensation
Total stock-based compensation	1,748	2,112
General and administrative
Stock-based compensation
Total stock-based compensation	$ 1,459	$ 1,685

XML

Stock-based compensation - Restricted stock (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Weighted Average Exercise Price
Deposit liability	$ 491	$ 584
Restricted stock
Weighted Average Exercise Price
Restricted stock vesting period	4 years
Unvested restricted stock with time-based vesting
Shares
Total Unvested	49,416
Vested	(24,685)
Total Unvested	24,731
Weighted Average Exercise Price
Total Unvested	$ 7.27
Vested	7.27
Total Unvested	$ 7.27
Unrecognized compensation expense	$ 311
Unrecognized compensation expense expected to be recognized over a weighted average period	11 months 23 days
Deposit liability	$ 491
Restricted stock units
Shares
Total Unvested	3,721,471
Granted	350,379
Forfeited	(130,418)
Total Unvested	3,941,432
Weighted Average Exercise Price
Total Unvested	$ 2.69
Granted	5.31
Forfeited	3.65
Total Unvested	$ 2.84
Unrecognized compensation expense	$ 6,774
Unrecognized compensation expense expected to be recognized over a weighted average period	2 years 10 months 2 days

XML

Stock-based compensation - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan 2021 - shares	12 Months Ended
	Dec. 31, 2023	Mar. 31, 2024
Stock based compensation
Shares authorized for issuance	564,071
Percentage of common stock outstanding	(1.00%)
Increase in common stock reserved	550,055
Shares available for grant		954,522

XML

Related party transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Jan. 07, 2022
Related party transactions
Accounts payable	$ 3,432		$ 2,741
Accrued expenses	50		$ 28
Collaboration Agreement
Related party transactions
Upfront cash payment receivable				$ 100,000
FCDI Collaboration Agreement
Related party transactions
Payment to related party	2,707	$ 12
Research and development	2,666	32
Legal fees	$ 35	$ 33
FCDI Collaboration Agreement | Collaboration Agreement
Related party transactions
Upfront cash payment receivable				$ 10,000

XML

Common Stock (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Common Stock
Proceeds from Issuance of Common Stock	$ 366	$ 448
Common stock issued and sold	64,809,592		60,335,701
Sales Agreement
Common Stock
Common stock issued and sold	4,084,502
Amount of commissions	$ 551
Proceeds from ATM, net of issuance costs	17,829
Sales Agreement | Maximum
Common Stock
Proceeds from Issuance of Common Stock	$ 150,000

XML

Subsequent Events (Details) - USD ($)	1 Months Ended	3 Months Ended
	Apr. 30, 2024	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Subsequent Events
Common stock issued and sold		64,809,592		60,335,701
Proceeds from Issuance of Common Stock		$ 366,000	$ 448,000
Common Stock, Par or Stated Value Per Share		$ 0.0001		$ 0.0001
Clade Therapeutics, Inc
Subsequent Events
Consideration, Cash Paid	$ 15,000,000
Consideration, shares	$ 4,535,333
Common Stock, Par or Stated Value Per Share	$ 0.0001
Milestone payments	$ 10,000
Sales Agreement
Subsequent Events
Common stock issued and sold		4,084,502
Securities Purchase Agreement
Subsequent Events
Agent fees and offering expenses	$ 56,700,000
Securities Purchase Agreement | Private Placement Shares [Member]
Subsequent Events
Common stock issued and sold	15,873,011
Issuance price per share	$ 3.78

XML

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (28,062)	$ (31,264)

XML

Insider Trading Arrangements

3 Months Ended

Mar. 31, 2024

shares

Trading Arrangements, by Individual

Material Terms of Trading Arrangement

Item 5. Other Information.

Rule 10b-1 Trading Plans

During the quarter ended March 31, 2024, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" (as those terms are defined in Item 408 of Regulation S-K), except as follows:

On January 9, 2024, Gregory Russotti, Ph.D., our Chief Technology and Manufacturing Officer, adopted a Rule 10b5-1 trading arrangement providing for the sale of up to 160,000 shares of our Series A common stock, subject to certain conditions. The arrangement's expiration date is February 14, 2025.

Name

Gregory Russotti, Ph.D.

Title

Chief Technology and Manufacturing Officer

Rule 10b5-1 Arrangement Adopted

true

Adoption Date

Jan. 09, 2024

Rule 10b5-1 Arrangement Terminated

true

Termination Date

Feb. 14, 2025

Aggregate Available

160,000