Sangamo Therapeutics, Inc: Form 10-Q for the period ended Mar 31, 2026

The discussion in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains trend analysis, estimates and other forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements include, without limitation, statements containing the words “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “seeks,” “should,” “will,” and other words of similar import or the negative of those terms or expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties, estimates and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual results could differ materially from those set forth in such forward-looking statements as a result of, but not limited to, the “Risk Factors” described in Part I, Item 1A our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the Securities and Exchange Commission on March 30, 2026, or the 2025 Annual Report, as supplemented by the risks described under “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. All forward-looking statements about our future plans and expectations are subject to our ability to secure adequate additional funding. You should also read the following discussion and analysis in conjunction with our Condensed Consolidated Financial Statements and accompanying notes included in this Quarterly Report and the Consolidated Financial Statements and accompanying notes thereto included in our 2025 Annual Report. See “Special Note Regarding Forward-Looking Statements.”

Overview

We are a genomic medicine company committed to translating ground-breaking science into medicines that transform the lives of patients and families afflicted with serious neurological diseases. We believe our zinc finger epigenetic regulators are ideally suited to potentially address devastating neurology disorders and our capsid engineering platform has demonstrated the ability to expand delivery beyond currently available intrathecal delivery capsids, including in the central nervous system, or CNS, in preclinical studies.

Corporate Updates

Transition to Trading on OTCQB Venture Market

On April 28, 2026, we received a written notification from Nasdaq of its determination to delist our common stock as a result of our ongoing failure to comply with the minimum bid price requirements for listing on The Nasdaq Capital Market. On May 5, 2026, trading of the Company’s common stock on The Nasdaq Capital Market was suspended and our common stock commenced trading on the OTCQB Venture Market, an over-the-counter market operated by OTC Markets Group, under our existing symbol “SGMO.” We have requested a hearing before a Nasdaq Hearings Panel for the purpose of appealing the delisting determination. The hearing date has been set for June 9, 2026. Our timely request for a hearing has stayed delisting but did not stay the trading suspension of our common stock from The Nasdaq Capital Market. Our common stock will remain suspended from trading on The Nasdaq Capital Market unless the Nasdaq Hearing Panel’s decision issued after the hearing ultimately determines to reinstate trading of our common stock on The Nasdaq Capital Market.

Financial Position – Going Concern

Based on our current operating plan, including the implementation of potential additional cost reduction measures, we estimate that our cash and cash equivalents as of March 31, 2026 will be sufficient to meet our liquidity requirements only into the third quarter of 2026. This estimate regarding our cash resources is based on assumptions that are inherently uncertain, and actual results could differ materially from those estimates. In this regard, we could use our available capital resources sooner than we currently expect and changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate. Although we believe our cash and cash equivalents, including the implementation of potential additional cost reduction measures, could fund our planned operations into the third quarter of 2026, unless we secure substantial upfront funding through a significant partnership or other transaction for our programs in the very near term, we expect that we will need to significantly scale back our operations and focus substantially all of our efforts on pursuing strategic alternatives to maximize the value of our assets for our stockholders and creditors. In particular, at any time we may determine that it is in the best interest of our stockholders and creditors to cease operations entirely, liquidate all or a portion of our assets, and/or seek protection under the U.S. Bankruptcy Code in the very near term. We have explored, and will continue to explore, whether filing for bankruptcy protection is in the best interest of Sangamo and our stakeholders and the most advantageous time for such filing in order to preserve sufficient resources to undertake an appropriate bankruptcy process.

Our history of significant losses, negative cash flows from operations, negative working capital, limited liquidity resources currently on hand and dependence on our ability to obtain additional financing to fund our operations have resulted in management’s assessment that there is substantial doubt about our ability to continue as a going concern for at least the next 12 months from the date the financial statements included in this Quarterly Report are issued. Our ability to continue to operate as a going concern is dependent upon our ability to raise substantial additional capital to fund our operations and support our research and development endeavors, including to progress our preclinical and clinical programs as described in this Quarterly Report. We need substantial additional capital in order to continue to operate as a going concern and fund our operations. We have been actively seeking, and will continue to actively seek, substantial additional capital, including through additional strategic collaborations and other direct investments in our programs, public or private equity or debt financing, and other sources. The substantial additional capital needed to support our operations and to continue to operate as a going concern may not be available on acceptable terms or at all. In particular, the perception of our ability to continue to operate as a going concern has made and will continue to make it more difficult to obtain financing for the continuation of our operations, particularly in light of currently challenging macroeconomic and market conditions. Moreover, the trading of our common stock on The Nasdaq Capital Market has been suspended, and our common stock now trades on the OTCQB Venture Market. This transition has resulted, and may continue to result, in downward pressure on the market price of our common stock, and could adversely affect the liquidity of our common stock and ultimately our ability to raise sufficient additional capital to fund our operations and to continue to operate as a going concern. See “Risk Factors—Trading of our common stock on The Nasdaq Capital Market was suspended on May 5, 2026 due to our failure to meet Nasdaq’s minimum bid price requirement, and our common stock now trades on the OTCQB Venture Market. This transition has resulted, and may continue to result, in a decrease in the market price of our common stock and could adversely affect the liquidity of our common stock and our ability to obtain sufficient additional capital to fund our operations and to continue to operate as a going concern.” Further, we have been and may continue to be unable to attract new investments as a result of the speculative nature of our newly reprioritized core neurology preclinical programs and the absence of partners to progress our more advanced clinical-stage programs. In this regard, our ability to fund our current operations and to advance the development of our technologies and product candidates and to extend our cash resources beyond the third quarter of 2026 will remain wholly dependent on our ability to secure collaborations or other transactions for our more advanced clinical-stage programs that provide significant upfront funding in the very near term. If we are not able to execute such collaborations or transactions for these more advanced clinical-stage programs in the very near term, we will not be able to secure sufficient capital to continue to operate as a going concern and to advance the development of our technologies and product candidates. In particular, despite an extensive, long-term process to secure a commercialization partner for our Fabry disease program, we are currently only in the early stages of discussions with potential counterparties. There can be no assurance that such current or potential future discussions will meaningfully advance at all or ultimately result in transactions that provide us with the substantial capital we need, and if we are unable to execute one or more such transactions for our more advanced clinical-stage programs in the very near term, particularly our Fabry disease program, we will be unable to secure the substantial additional capital needed to support our operations and to continue to operate as a going concern. If adequate funds are not available to us in the very near term, we will be required to take significant additional actions to address our liquidity needs, including substantial additional cost reduction measures such as further reducing operating expenses and further delaying, reducing the scope of, altering or discontinuing entirely our research and development activities. In this regard, we have periodically, including recently, reduced our headcount, and we are actively considering a variety of additional significant cost-cutting measures designed to preserve our cash resources and the value of our assets including, among others, further reductions in our workforce. Moreover, in light of our current financial position, we have deferred many investments in our programs until adequate capital becomes available. Accordingly, we do not expect significant progress with respect to any of our programs unless and until substantial additional funding is obtained. If we are unable to consummate one or more transactions to provide for, or enable, the substantial additional funding needed to operate our business in the very near term, our business and prospects would be materially and adversely affected, and at any time we may elect to or may be required to cease operations entirely, liquidate all or a portion of our assets, and/or seek protection under the U.S. Bankruptcy Code in the very near term, and you may lose all or part of your investment. See “—Liquidity and Capital Resources.”

Core Preclinical Neurology Programs and Technology

Our neurology development is focused on development of epigenetic regulation therapies to treat serious neurological diseases using novel engineered adeno-associated virus, or AAV, capsids to deliver our therapies to the intended neurological targets. Initial indications for our wholly owned preclinical programs include small fiber neuropathy, or SFN, a type of chronic neuropathic pain, and prion disease. As we estimate that our cash and cash equivalents as of March 31, 2026, including the implementation of potential additional cost reduction measures, will be sufficient to meet our liquidity requirements only into the third quarter of 2026, our plans and expectations discussed below are subject to our ability to secure adequate additional funding, which we may be unable to do in a timely manner or at all.

Chronic Neuropathic Pain – ST-503

• Six clinical sites are activated for the Phase 1/2 STAND study evaluating ST-503, an investigational epigenetic regulator for the treatment of intractable pain due to SFN, a type of chronic neuropathic pain.
• In March, a manuscript was published in Science Translational Medicine detailing the preclinical safety and pharmacology of ST-503 in human neurons, mice and nonhuman primates.

Prion Disease – ST-506

• Clinical Trial Application, or CTA, enabling activities have commenced for ST-506, an investigational epigenetic regulator for the treatment of prion disease, leveraging STAC-BBB, our novel proprietary neurotropic AAV capsid.
• This quarter, we held a productive interaction with the U.K.’s Medicines and Healthcare products Regulatory Agency, or MHRA, including alignment on diagnostic testing, analytical validation and nonclinical safety matters.
• The Good Laboratory Practice, or GLP, toxicology study has been completed and analysis is ongoing.

Clinical Programs

Fabry Disease

• In February 2026, we announced the presentation of clinical data from our registrational Phase 1/2 STAAR study evaluating isaralgagene civaparvovec, or ST-920, a wholly owned gene therapy product candidate for the treatment of Fabry disease, in four clinical and nonclinical platform and poster presentations at the 22nd Annual WORLDSymposiumTM that took place in San Diego, CA, February 2-6, 2026. The data showed that as of the April 10, 2025 data cutoff date, the totality of data demonstrates the potential of isaralgagene civaparvovec as a one-time, well-tolerated and durable gene therapy treatment option for Fabry disease to provide meaningful, multi-organ clinical benefits that could fundamentally shift the Fabry treatment paradigm. A positive mean annualized estimated glomerular filtration rate, or eGFR, slope of 1.965 mL/min/1.73m2/year (95% confidence interval, or CI: -0.153, 4.083) at 52-weeks was observed across all 32 dosed patients, indicating an improvement in renal function. Furthermore, a mean annualized eGFR slope of 1.747 mL/min/1.73m2/year (95% CI: -0.106, 3.601) was observed for the 19 patients who had achieved 104-weeks of follow-up. Stable cardiac function was observed over one year, including consistent cardiac structural stability across clinical and demographic subgroups. Durability of effect was demonstrated with elevated expression of alpha-galactosidase A, or α-Gal A, activity maintained for up to 4.5 years for the longest treated patient, alongside statistically significant Quality of Life improvements and other clinical benefits. Isaralgagene civaparvovec demonstrated a favorable safety and tolerability profile in the study, without the requirement for preconditioning.
• Isaralgagene civaparvovec has a clear pathway to accelerated approval from the U.S. Food and Drug Administration, or FDA, using mean annualized estimated glomerular filtration rate, or eGFR, slope at 52-weeks across all dosed patients in the study. The FDA has recently affirmed to us that two-year eGFR data may serve as confirmatory evidence for traditional approval.
• The rolling submission of a Biologics License Application, or BLA, to the FDA seeking approval of isaralgagene civaparvovec is in progress under an Accelerated Approval pathway. We have submitted the preclinical and clinical modules to the FDA for review. In addition, the antibody assay companion diagnostic, which is designed to screen patients for eligibility with isaralgagene civaparvovec, has been submitted to, and accepted by, the FDA’s Center for Devices and Radiological Health, or CDRH, seeking Premarket Approval, or PMA.
• We continue to develop the Chemistry, Manufacturing and Controls, or CMC, module, ahead of completion of the rolling BLA submission for isaralgagene civaparvovec, currently expected to occur as early as the summer of 2026 subject to our ability to secure adequate additional funding, while we continue business development discussions for a potential Fabry commercialization agreement.

American Society of Gene and Cell Therapy, or ASGCT, Annual Meeting

• Participated in the 29th ASGCT Annual Meeting that took place May 11-15, 2026, in Boston, MA, to present the progression of our neurology pipeline, including advances in zinc finger epigenetic regulation and developments in modular integrase technology.

Collaborations

Our collaborations with biopharmaceutical companies bring us important financial and strategic benefits and reinforce the potential of our research and development efforts and our zinc finger, or ZF, technology platform. They leverage our collaborators’ therapeutic and clinical expertise and commercial resources with the goal of bringing our medicines more rapidly to patients. We believe these collaborations will potentially expand the addressable markets of our product candidates. To date, we have received approximately $911.0 million in upfront licensing fees, milestone payments and proceeds from sale of our common stock to collaborators and have the opportunity to earn up to $4.8 billion in potential future milestone payments from our ongoing collaborations, in addition to potential product royalties.

Manufacturing & Process Development

We expect to be substantially reliant on external partners to manufacture clinical supply for our neurology portfolio. We retain our in-house analytical and process development capabilities.

Macroeconomic Conditions

Our business and operations and those of our collaborators may be affected by financial instability and declining economic conditions in the United States and other countries, whether caused by political instability and conflict, including the ongoing conflicts in the Middle East, conflict between Russia and Ukraine, potential future government shutdowns, general health crises, or global trade issues and changes in, and ongoing uncertainties with respect to, tariffs and international trade disputes. The macroeconomic environment has led to market disruptions, including significant volatility in commodity prices, credit and capital markets instability, including disruptions in access to bank deposits and lending commitments, supply chain interruptions, fluctuations in interest rates, the imposition of tariffs and global inflationary pressures. These macroeconomic factors could materially and adversely affect our ability to continue to operate as a going concern and could otherwise have a material adverse effect on our business, operations, operating results and financial condition as well as the price of our common stock. In particular, our ability to raise the substantial additional capital we need in order to fund our business and to continue to operate as a going concern may be adversely impacted by these macroeconomic factors, and we cannot be certain that we will be able to obtain the substantial additional capital that we need to support our operations and to continue to operate as a going concern on terms acceptable to us, or at all.

Certain Components of Results of Operations

Our revenues have consisted primarily of revenues from collaboration agreements, including upfront license fees, reimbursements for research services, and milestone achievements, and research grant funding. In 2024, we entered into license agreements for our STAC-BBB capsid with Genentech Inc., a member of the Roche Group, or Genentech, and Astellas Gene Therapies, Inc., or Astellas, and in 2025, we entered into a license agreement for our STAC-BBB capsid with Eli Lilly and Company, or Lilly. We are also party to a license agreement with Miltenyi Biotec B.V. & Co. KG, or Miltenyi, pursuant to which we granted Miltenyi certain rights to use our proprietary technology and related know-how in connection with the research, development, manufacturing and commercialization activities in the cell therapy field. Under these license agreements, we earned upfront license fees and royalties and are eligible to earn potential future payments for additional license targets or upon successful achievement of certain development and/or commercial milestones. We expect revenues to continue to fluctuate from period to period and there can be no assurance that our collaborations or partner reimbursements will continue beyond their initial terms or that we are able to meet the milestones specified in these agreements, or that we will be able to secure additional collaborations. For additional information concerning the terms of our ongoing collaboration agreements, see Note 5 – Major Customers, Partnerships and Strategic Alliances in the accompanying notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

We have historically incurred net losses since inception and expect to incur losses for at least the next several years as we continue our research and development activities. To date, we have funded our operations primarily through the issuance of equity securities and revenues from collaborations and research grants.

Subject to our ability to secure adequate additional funding to continue to operate as a going concern and progress our programs, we expect research and development expenses to increase in the near-term due to Fabry disease program BLA readiness activities and we expect to continue to devote substantial resources to research and development in the future and expect research and development expenses to increase in the next several years if we are successful in raising substantial additional capital and advancing our product candidates from research stage through clinical trials.

General and administrative expenses consist primarily of salaries and personnel related expenses for executive, finance and administrative personnel, stock-based compensation expense, professional fees, allocated facilities and information technology expenses, patent prosecution expenses and other general corporate expenses. Although we expect general and administrative expenses to remain consistent in the near term, we expect the growth of our business to require increased general and administrative expenses if we are successful in raising substantial additional capital and advancing our product candidates from research stage through clinical trials.

Critical Accounting Policies and Estimates

Our Condensed Consolidated Financial Statements and the related disclosures have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of our Condensed Consolidated Financial Statements requires us to make estimates, assumptions and judgments that affect the reported amounts in our Condensed Consolidated Financial Statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following policies to be the most critical to an understanding of our financial condition and results of operations because they require us to make estimates, assumptions and judgments about matters that are inherently uncertain.

We believe our critical accounting policies and estimates relating to revenue recognition and valuation of long-lived assets are the most significant estimates and assumptions used in the preparation of our Condensed Consolidated Financial Statements. See Note 1 – Organization, Basis of Presentation and Summary of Significant Accounting Policies in the accompanying notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

There have been no significant changes in our critical accounting policies and estimates during the three months ended March 31, 2026, as compared to the critical accounting policies and estimates disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Item 7 of the 2025 Annual Report.

Results of Operations for the Three Months Ended March 31, 2026 and 2025

Revenues

(in thousands, except percentage values)

Revenues in 2026 primarily consisted of revenues from the research agreement with Lilly, our license agreement with Miltenyi, and royalties from our license agreements with Sigma-Aldrich Corporation, or Sigma, and Open Monoclonal Technology, Inc. (now Ligand Pharmaceuticals Inc.), or Ligand. We anticipate revenues in the future will be derived primarily from our license agreements.

The decrease of $5.0 million in revenues for the three months ended March 31, 2026, compared to the same period in 2025, was primarily attributable to $5.0 million in revenue relating to our collaboration agreement with Pfizer upon transfer of a specified sublicense in 2025, and a decrease of $0.8 million in revenue relating to our license agreement with Sigma. These decreases were partially offset by $0.5 million in revenue relating to our license agreement with Miltenyi.

Operating expenses

(in thousands, except percentage values)

Research and Development Expenses

Research and development expenses consisted primarily of compensation related expenses, including stock-based compensation, laboratory supplies, preclinical and clinical studies, manufacturing clinical supply, contracted research and development, and allocated facilities and information technology expenses.

The increase of $0.6 million in research and development expenses for the three months ended March 31, 2026, compared to the same period in 2025, was primarily attributable to an increase of $3.7 million in manufacturing expenses, primarily due to BLA readiness activities for our Fabry disease program, which was partially offset by a decrease due to deferral of certain program expenses. These increases were partially offset by lower compensation and other personnel costs of $1.5 million due to changes in variable compensation and lower headcount, and lower facilities, infrastructure related expenses and allocated overhead costs of $1.6 million. Stock-based compensation expense included in research and development expenses was $0.6 million and $1.2 million for the three months ended March 31, 2026 and 2025, respectively.

We expect research and development expenses to increase in the near-term due to Fabry disease program BLA readiness activities and advancement of our other research and development programs, subject to our ability to secure adequate additional funding to continue to operate as a going concern. We expect to continue to devote substantial resources to research and development in the future and expect research and development expenses to increase in the next several years if we are successful in raising substantial additional capital to advance our research and clinical pipeline.

The length of time required to complete our development programs and our development costs for those programs may be impacted by the results of preclinical testing, scope and timing of enrollment in clinical trials for our product candidates, our decisions to pursue development programs in other therapeutic areas, whether we pursue development of our product candidates with a partner or collaborator or independently and our ability to secure the necessary funding to progress the development of our programs. In addition, we are actively seeking commercialization and collaboration partners or a direct external investment, as applicable, to progress our Fabry disease and hemophilia A programs, and capsid and modular integrase platforms. Furthermore, the scope and number of clinical trials required to obtain regulatory approval for each pursued therapeutic area is subject to the input of the applicable regulatory authorities, and we have not yet sought such input for all potential therapeutic areas that we may elect to pursue, and even after having given such input, applicable regulatory authorities may subsequently require additional clinical studies prior to granting regulatory approval based on new data generated by us or other companies, or for other reasons outside of our control. As a condition to any regulatory approval, we may also be subject to post-marketing development commitments, including additional clinical trial requirements. As a result of the uncertainties discussed above, we are unable to determine the duration of or complete costs associated with our development programs.

Our potential therapeutic products are subject to a lengthy and uncertain regulatory process that may not result in our receipt of any necessary regulatory approvals. Failure to receive the necessary regulatory approvals would prevent us from commercializing the product candidates affected. In addition, clinical trials of our product candidates may fail to demonstrate safety and efficacy, which could prevent or significantly delay regulatory approval. A discussion of the risks and uncertainties with respect to our research and development activities, including completing the development of our product candidates, and the consequences to our business, financial position and growth prospects can be found in “Risk Factors” in Part I, Item 1A of the 2025 Annual Report, as supplemented by the risks described under “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation related expenses, including stock-based compensation for executive, legal, finance and administrative personnel, professional fees, allocated facilities and information technology expenses, and other general corporate expenses.

The decrease of $3.2 million in general and administrative expenses for the three months ended March 31, 2026, compared to the same period in 2025, was primarily attributable to lower external professional services expenses of $1.6 million, and lower compensation and other personnel costs of $1.4 million due to changes in variable compensation and lower headcount. Stock-based compensation expense included in general and administrative expenses was $0.4 million and $1.4 million for the three months ended March 31, 2026 and 2025, respectively.

Other income (expense), net

The increase of $1.8 million for the three months ended March 31, 2026, compared to the same period in 2025, was related to fluctuations in foreign currency exchange rates.

Liquidity and Capital Resources

Liquidity

Since inception, we have incurred significant net losses, and we have funded our operations primarily through the issuance of equity securities, payments from corporate collaborators and strategic partners and research grants.

As of March 31, 2026, we had cash and cash equivalents of $27.6 million, compared to cash and cash equivalents of $20.9 million as of December 31, 2025. Our most significant use of capital during the quarter was for external research and development expenses, such as manufacturing, clinical trials, regulatory and preclinical activity related to our therapeutic programs, and employee compensation.

We are party to an Open Market Sale Agreement℠, as amended, or the sales agreement, with Jefferies LLC, providing for the sale of up to $325.0 million of our common stock from time to time in “at-the-market” offerings under an existing shelf registration statement. Approximately $129.5 million remained available under the sales agreement as of March 31, 2026. During the three months ended March 31, 2026, we sold 9.3 million shares of our common stock under the sales agreement for net proceeds of approximately $3.7 million. In February 2026, we issued 35.2 million shares of common stock, and pre‑funded warrants to purchase up to an aggregate of 17.8 million shares of common stock, together with accompanying warrants to purchase up to an aggregate of 53.0 million shares of common stock, for net proceeds of approximately $22.8 million, after deducting underwriting discounts and commissions and other offering costs. In connection with this offering, we entered into a warrant amendment, or the Warrant Amendment, pursuant to which we agreed to reduce the exercise price of outstanding common stock warrants issued on March 26, 2024 and held by the investor in the offering to purchase 23.8 million shares of common stock from $1.00 to $0.4719, or the Repriced Warrants. The Repriced Warrants will become exercisable six months from the closing date of the offering. In connection with the reduction in exercise price, we also agreed to extend the expiration date of the Repriced Warrants to be five and a half years from the closing of the offering.

Under Accounting Standard Codification Topic 205-40, Presentation of Financial Statements—Going Concern, or ASC Topic 205-40, we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our future financial obligations as they become due within one year after the date that the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q are issued. As required under ASC Topic 205-40, management’s evaluation should initially not take into consideration the potential mitigating effects of management’s plans that have not been fully implemented as of the date the Condensed Consolidated Financial Statements are issued. When substantial doubt exists, management evaluates whether the mitigating effects of its plans sufficiently alleviate the substantial doubt about the company’s ability to continue as a going concern. The mitigating effects of management’s plans, however, are only considered if both (i) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (ii) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Generally, to be considered probable of being effectively implemented, the plans must have been approved by the company’s Board of Directors before the date that the financial statements are issued.

Based on our current operating plan, including the implementation of potential additional cost reduction measures, we estimate that our cash and cash equivalents as of March 31, 2026, will be sufficient to meet our liquidity requirements only into the third quarter of 2026. This estimate regarding our cash resources is based on assumptions that are inherently uncertain, and actual results could differ materially from those estimates. In this regard, we could use our available capital resources sooner than we currently expect and changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate. Although we believe our cash and cash equivalents could fund our planned operations into the third quarter of 2026, unless we secure substantial upfront funding through a significant partnership or other transaction for our programs in the very near term, we expect that we will need to significantly scale back our operations at that time and focus substantially all of our efforts on pursuing strategic alternatives to maximize the value of our assets for our stockholders and creditors. In particular, at any time we may determine that it is in the best interest of our stockholders and creditors to cease operations entirely, liquidate all or a portion of our assets, and/or seek protection under the U.S. Bankruptcy Code in the very near term. We have explored, and will continue to explore, whether filing for bankruptcy protection is in the best interest of Sangamo and our stakeholders and the most advantageous time for such filing in order to preserve sufficient resources to undertake an appropriate bankruptcy process.

Our history of significant losses, negative cash flows from operations, negative working capital, limited liquidity resources currently on hand and dependence on our ability to obtain additional financing to fund our operations have resulted in management’s assessment that there is substantial doubt about our ability to continue as a going concern for at least the next 12 months from the date the financial statements included in this Quarterly Report are issued. Our ability to continue to operate as a going concern is dependent upon our ability to raise substantial additional capital to fund our operations and support our research and development endeavors, including to progress our preclinical and clinical programs as described in this Quarterly Report. We need substantial additional capital in order to continue to operate as a going concern and fund our operations. We have been actively seeking, and will continue to actively seek, substantial additional capital, including through additional strategic collaborations and other direct investments in our programs, public or private equity or debt financing, and other sources. The substantial additional capital needed to support our operations and to continue to operate as a going concern may not be available in a timely manner on acceptable terms or at all. In particular, the perception of our ability to continue to operate as a going concern has made and will continue to make it more difficult to obtain financing for the continuation of our operations, particularly in light of currently challenging macroeconomic and market conditions. Further, we have been and may continue to be unable to attract substantial new investments as a result of the speculative nature of our newly reprioritized core neurology preclinical programs and the absence of partners to progress our more advanced clinical-stage programs. In this regard, our ability to fund our current operations and to advance the development of our technologies and product candidates and to extend our cash resources beyond the third quarter of 2026 will remain wholly dependent on our ability to secure collaborations or other transactions for our more advanced clinical-stage programs that provide significant upfront funding in the very near term. If we are not able to secure such collaborations or other transactions for these more advanced clinical-stage programs, we will not be able to secure sufficient capital to continue to operate as a going concern and to advance the development of our technologies and product candidates. In particular, despite an extensive, long-term process to secure a commercialization partner for our Fabry disease program, we are currently only in the early stages of discussions with potential counterparties. There can be no assurance that such current or potential future discussions will meaningfully advance at all or ultimately result in transactions that provide us with the substantial capital we need, and if we are unable to execute one or more such transactions for our more advanced clinical-stage programs in the very near term, particularly our Fabry disease program, we will be unable to secure the substantial additional capital needed to support our operations and to continue to operate as a going concern. If adequate funds are not available to us in the very near term, we will be required to take significant additional actions to address our liquidity needs, including substantial additional cost reduction measures such as further reducing operating expenses and further delaying, reducing the scope of, altering or discontinuing entirely our research and development activities. In this regard, we have periodically, including recently, reduced our headcount, and we are actively considering a variety of significant cost-cutting measures designed to preserve our cash resources and the value of our assets, including, among others, further reductions in our workforce. Moreover, in light of our current financial position, we have deferred many investments in our programs until adequate capital becomes available. Accordingly, we do not expect significant progress with respect to any of our programs unless and until substantial additional funding is obtained. If we are unable to consummate one or more transactions to provide for, or enable, the substantial additional funding needed to operate our business in the very near term, our business and prospects would be materially and adversely affected, and at any time we may elect to or may be required to cease operations entirely, liquidate all or a portion of our assets, and/or seek protection under the U.S. Bankruptcy Code in the very near term, and you may lose all or part of your investment.

Moreover, we have historically relied in part on our collaboration partners to provide funding for and otherwise advance our preclinical and clinical programs, however, several of our prior collaborations expired or were terminated in the last several years. While we may identify new collaboration partners who can progress some of the programs that were the subject of these collaborations, as well as our Fabry disease program, our hemophilia A program and our capsid and modular integrase platforms, we have not yet been, and may never be, successful in doing so in a timely manner, or on acceptable terms or at all, and we may otherwise fail to raise sufficient additional capital in order to progress these and our other programs ourselves, in which case, we will not receive any return on our investments in these programs. In any event, we need substantial additional funding in order to execute on our current operating plan, and our ability to raise such funding and to continue our operations will be substantially impaired if we are not able to secure a commercialization partner for our Fabry disease program in the very near term. If we raise additional capital through public or private equity offerings, including sales pursuant to our at-the-market offering program with Jefferies LLC, the ownership interest of our existing stockholders will be diluted, and such dilution may be substantial given our current stock price decline, and the terms of any new equity securities may have a preference over, and include rights superior to, our common stock. If we raise additional capital through collaborations, strategic alliances or licensing arrangements with third parties, we may need to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable. If we raise additional capital through debt financing, we may be subject to specified financial covenants or covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or pursuing certain transactions, any of which could restrict our ability to commercialize our product candidates or operate our business.

In addition, as we focus our efforts on proprietary human therapeutics, we will need to seek regulatory approvals of our product candidates from the FDA or other comparable foreign regulatory authorities, a process that could cost in excess of hundreds of millions of dollars per product. We may experience difficulties in accessing the capital markets due to external factors beyond our control, such as volatility in the equity markets for emerging biotechnology companies and general economic and market conditions both in the United States and abroad. In particular, our ability to raise the substantial additional capital we need in order to fund our business may be adversely impacted by global economic conditions and disruptions to and volatility in the credit and financial markets in the United States and worldwide, such as has been experienced recently due in part to, among other things, the ongoing conflicts in the Middle East, conflict between Russia and Ukraine, and geopolitical challenges arising from the imposition of tariffs and escalating trade tensions. We cannot be certain that we will be able to obtain the substantial additional capital that we need to support our operations and to continue to operate as a going concern on terms acceptable to us in a timely manner, or at all.

Cash Flows

Operating activities

Net cash used in operating activities was $19.3 million for the three months ended March 31, 2026, primarily due to:

• a net loss of $31.0 million, adjusted for non-cash expenses related to stock-based compensation of $1.0 million, depreciation and amortization of $0.7 million, and amortization of operating lease right-of-use assets of $0.2 million; and
• a decrease in deferred revenues by $0.5 million, an increase in accounts receivable by $0.5 million, and a decrease in lease liabilities by $0.4 million. These were partially offset by an increase in accounts payable and other accrued liabilities by $4.9 million, a decrease in refundable research income tax credits by $4.5 million, a decrease in prepaid expenses and other assets by $1.2 million, and an increase in accrued compensation and employee benefits by $0.6 million.

Net cash used in operating activities was $26.1 million for the three months ended March 31, 2025, primarily due to:

• a net loss of $30.6 million, adjusted for non-cash expenses related to stock-based compensation of $2.6 million, depreciation and amortization of $1.0 million, and amortization of operating lease right-of-use assets of $0.9 million; and
• an increase in prepaid expenses and other assets by $2.6 million, a decrease in lease liabilities by $1.2 million, and a decrease in accrued compensation and employee benefits by $0.6 million. These were partially offset by an increase in accounts payable and other accrued liabilities by $4.2 million, and a decrease in accounts receivable by $0.2 million.

Investing activities

Net cash used in investing activities was not material for the three months ended March 31, 2026 and 2025.

Financing activities

Net cash provided by financing activities was $26.7 million for the three months ended March 31, 2026, related to $23.3 million of proceeds from issuance of common stock, net of offering expenses of $1.7 million, $3.7 million of proceeds from our at-the-market offering, net of offering expenses of $0.1 million, partially offset by taxes paid related to net share settlement of equity awards of $0.4 million.

Net cash provided by financing activities was $8.1 million for the three months ended March 31, 2025, related to $10.4 million of proceeds from the at-the-market offering, net of offering expenses of $0.3 million, partially offset by taxes paid related to net share settlement of equity awards of $2.2 million.

Operating Capital and Capital Expenditure Requirements

We anticipate continuing to incur operating losses for at least the next several years and need to raise substantial additional capital in order to continue operating as a going concern. The effects of the current macroeconomic and regulatory environment, including evolving staff and policy changes at the FDA, potential future government shutdowns, the effects of the ongoing conflicts in the Middle East, conflict between Russia and Ukraine, global trade issues and changes in, and uncertainties with respect to, tariffs and international trade disputes, inflation, climate change, fluctuations in interest rates and other economic uncertainty and volatility, has resulted and may continue to result in significant disruption of global financial markets, which could continue to impair our ability to access substantial additional capital on terms that are acceptable or at all, and in turn could negatively affect our liquidity and our ability to continue to operate as a going concern. Future capital requirements beyond the period into which we expect our existing cash and cash equivalents will be sufficient to fund our planned operations will be substantial, and we otherwise need to raise substantial additional capital to continue to operate as a going concern and to fund the development, manufacturing and potential commercialization of our product candidates (see “–Financial Position–Going Concern” and “–Liquidity and Capital Resources–Liquidity” above).

As we focus our efforts on proprietary human therapeutics, we will need to seek FDA approvals of our product candidates, a process that could cost in excess of hundreds of millions of dollars per product. Our future capital requirements will depend on many forward-looking factors, including the following:

• the results of preclinical testing of our early-stage core neurology program product candidates;
• the initiation, progress, timing and completion of clinical trials for our product candidates and potential product candidates;
• the outcome, timing and cost of regulatory approvals;
• the success of our existing collaboration agreements and our ability to secure additional collaborations;
• delays that may be caused by changing regulatory requirements, including the evolving staff and policy changes at the FDA;
• the number of product candidates that we pursue;
• the costs involved in filing and prosecuting patent applications and enforcing and defending patent claims;
• the timing and terms of future in-licensing and out-licensing transactions;
• the cost and timing of establishing sales, marketing, manufacturing and distribution capabilities;
• the cost of procuring clinical and commercial supplies of our product candidates;
• the extent to which we acquire or invest in businesses, products or technologies, including the costs associated with such acquisitions and investments; and
• the costs of potential disputes and litigation.

Contractual Obligations

Our future minimum contractual obligations as of December 31, 2025 were reported in the 2025 Annual Report. During the three months ended March 31, 2026, there have been no material changes outside the ordinary course of our business from the contractual obligations previously disclosed in our 2025 Annual Report, except that in March 2026, we agreed with a vendor to pay amounts related to manufacturing services in equal installments over a period of 12 months beginning March 2026.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information otherwise required under this item.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision of our principal executive officer and principal financial officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of March 31, 2026. Based on that evaluation, as of March 31, 2026, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Inherent Limitations on Controls and Procedures

Our management, including the principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures and our internal control over financial reporting will prevent all error and all fraud. A control system, no matter how well designed and operated, can only provide reasonable assurances that the objectives of the control system are met. The design of a control system reflects resource constraints; the benefits of controls must be considered relative to their costs. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, for our company have been or will be detected. As these inherent limitations are known features of the disclosure and financial reporting processes, it is possible to design into the processes safeguards to reduce, though not eliminate, these risks. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events. While our disclosure controls and procedures and our internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives, there can be no assurance that any design will succeed in achieving its stated goals under all future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with the policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Below we are providing, in supplemental form, changes to our risk factors from those previously disclosed in Part I, Item 1A of the 2025 Annual Report. Our risk factors disclosed in Part I, Item 1A of the 2025 Annual Report provide additional discussion about these supplemental risks and we encourage you to read and carefully consider the risk factors disclosed in Part I, Item 1A of the 2025 Annual Report for a more complete understanding of the risks and uncertainties material to our business.

Trading of our common stock on The Nasdaq Capital Market was suspended on May 5, 2026 due to our failure to meet Nasdaq’s minimum bid price requirement, and our common stock now trades on the OTCQB Venture Market. This transition has resulted, and may continue to result, in a decrease in the market price of our common stock and could adversely affect the liquidity of our common stock and our ability to obtain sufficient additional capital to fund our operations and to continue to operate as a going concern.

On April 30, 2025, we received a written notice, or the Notice, from the Listing Qualifications Department, or the Staff, of The Nasdaq Stock Market LLC, or Nasdaq, notifying us that because the closing bid price for our common stock had fallen below $1.00 per share for 30 consecutive business days, we no longer complied with the minimum bid price requirement, or the Minimum Bid Price Requirement, for continued listing under Nasdaq Listing Rule 5550(a)(2) on The Nasdaq Capital Market. We were provided until October 27, 2025 to regain compliance with the Minimum Bid Price Requirement. On October 29, 2025, we received an additional notification from the Staff that while we had not regained compliance with the Minimum Bid Price Requirement, we were eligible for an additional 180-day compliance period, or until April 27, 2026, to regain compliance with the Minimum Bid Price Requirement.

On April 28, 2026, we received a written notification, or the Delisting Notice, from the Staff of Nasdaq of its determination to delist our common stock as a result of our ongoing failure to comply with the minimum bid price requirement. Trading in our common stock on The Nasdaq Capital Market was subsequently suspended at the open of trading on May 5, 2026.

We have requested a hearing before a Nasdaq Hearings Panel, or the Panel, pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series for the purpose of appealing the Staff’s delisting determination. The hearing is scheduled to occur on June 9, 2026. Pursuant to Nasdaq Listing Rule 5815(a)(1)(B)(ii)(d), our timely request for a hearing stayed delisting but did not stay the trading suspension of our common stock. Our common stock will remain suspended from trading on The Nasdaq Capital Market unless the Panel’s decision issued after the hearing ultimately determines to reinstate trading of our common stock on The Nasdaq Capital Market. There can be no assurance that our appeal of the Nasdaq delisting determination will be successful or that trading of our common stock will resume on The Nasdaq Capital Market in the near term or at all, and an adverse decision by the Panel will result in an immediate delisting of our common stock from The Nasdaq Capital Market.

On May 5, 2026, our common stock commenced trading on the OTCQB Venture Market, an over-the-counter market operated by OTC Markets Group, under our existing symbol “SGMO.” This transition has resulted, and may continue to result, in downward pressure on the market price of our common stock and could adversely affect the liquidity of our common stock. In turn, this may decrease the number of institutional and other investors willing to hold or acquire our common stock and, as a result, our ability to raise sufficient additional capital to fund our operations and to continue to operate as a going concern may be substantially impaired. Moreover, there could be a further reduction in our coverage by securities analysts and the news media, and broker-dealers may be deterred from making a market in or otherwise seeking to execute trades in or generate interest in our common stock, which could cause the price of our common stock to decline further. In addition, in the event our common stock is ultimately delisted from Nasdaq, we will be subject to additional regulation in the states in which we offer our securities. Furthermore, delisting may also negatively affect our collaborators’, vendors’ and suppliers’ and confidence in us and could have a detrimental effect on employee morale.

Although our common stock is quoted on OTCQB Market, the suspension of trading in our common stock on Nasdaq limits the public resale market for our common stock. The lack of an active, liquid trading market for our common stock could impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. In addition, the reduced liquidity of our common stock could make the price of our common stock more significantly impacted by broad market fluctuations, general market conditions, fluctuations in our operating results, changes in the markets’ perception of our business, and announcements made by us, our competitors and parties with whom we have business relationships, and such volatility could have a material adverse effect on our business, financial condition and results of operations, including our ability to raise additional capital and continue as a going concern.