Senti Biosciences Closes Merger, Swaps Stock for Contingent Milestone Payments

What happened

Senti Biosciences Holdings, Inc. (Nasdaq: SNTI), a South San Francisco company developing cell therapies, completed the transactions contemplated by an Agreement and Plan of Merger dated July 14, 2026, according to an 8-K filed Oct. 26, 2026. The merger closed on Oct. 21, 2026.

Under the deal, Merger Sub merged into Senti Holdings, Inc. (Midco), with Midco surviving as a wholly owned subsidiary of ST NewCo Limited, now called Parent. Each outstanding share of Midco common stock was canceled and converted into the right to receive Milestone Payment Amounts, to be distributed to Senti's equityholders as contractual contingent value rights, or CVRs.

Senti's board intends to set a record date after closing. Each holder of Senti common stock on that date will receive one CVR per share. Holders of Senti stock options, restricted stock units and warrants are also entitled to CVRs, as described in the filing.

In a separate transaction on the closing date, Senti sold 7,309,941 shares of common stock to CPIF II-7 Limited at $0.342 per share, for gross proceeds of about $2.5 million, without registration under the Securities Act. The company cited exemptions for a sale to one accredited investor.

Senti shares closed at $0.175 on the event date, down 6.91% from the prior close of $0.188, on volume of 58.3 million shares against an average of about 904,500, according to the price data.

The milestones behind the CVRs

The CVR agreement, between Midco and Continental Stock Transfer & Trust Company as rights agent, sets out three contingent cash payments, payable only if achieved on or before the seventh anniversary of closing, with a $60 million cap in total.

The first is a pro rata share of $10.0 million when a biologics license application, or BLA, for SENTI-202 is filed with the U.S. Food and Drug Administration and accepted, or if the FDA's 60-day review period passes without rejection. SENTI-202 is described as a Logic Gated off-the-shelf CAR-NK cell therapy.

The second is a pro rata share of $20.0 million on FDA approval of that BLA. The third is a pro rata share of $30.0 million if cumulative worldwide net sales of the product exceed $200.0 million between the first commercial sale and the seventh anniversary of closing.

The filing states the CVRs and any payment are highly speculative, that there can be no assurance any payment will ever be made, that the CVRs are not certificated, carry no voting or dividend rights, represent no equity or ownership in Parent or Midco, and are not transferable except in limited circumstances.

The filing does not state why the merger was structured this way or why the parties agreed to these specific milestone amounts.

The convertible notes

On the closing date, Senti notified holders of Midco's Senior Secured Convertible Notes that it is requiring the exchange of all outstanding notes for Senti common stock, with the exchange price adjusted to $0.342 per share in connection with the equity commitment letter. The exchange is required to take place on Oct. 28, 2026. There was $16.0 million in aggregate principal outstanding as of the closing date.

The noteholders are CPIF II-7 Limited and NSG BioInnovation Fund, L.P. The notes were guaranteed by Senti and its subsidiaries and secured by a first-priority lien on substantially all current and future assets of Midco, Senti and Midco's subsidiaries, subject to customary exclusions. On consummation of the exchange, those guarantees and security interests terminate.

The filing says Celadon Partners, LLC controls Parent, Celadon Partners SPV 24 Limited (Senti's largest stockholder), CPIF II-7 Limited and the investor that bought the new shares.

Other agreements signed at closing

Senti entered an Asset Assignment and Assumption Agreement and License Agreement with Opco and Midco. Opco assigned to Senti, exclusively worldwide and free of encumbrances, rights to certain patents, agreements with an external research organization, and know-how related to Senti's Rett Syndrome and TIL programs. Senti assumed obligations under the assigned agreements arising on and after the effective date, and the filing says Senti will not incur payment obligations to Opco under this agreement.

Senti also entered a master consulting agreement with Opco for transitional corporate, administrative, financial, IT and operational support, plus related research and development services. The initial term is 12 months, with a company option to extend for another 12 months, and Senti may terminate individual services early with notice as it builds standalone capabilities, subject to fee reductions.

What this means

An 8-K is the form a U.S. public company files with the SEC to disclose material events between quarterly reports. The item numbers listed on this filing map to specific disclosure categories: 1.01 for entering a material agreement, 1.02 for terminating one, 2.01 for completing an acquisition or disposition of assets, 3.02 for an unregistered sale of equity, and 9.01 for exhibits. Together they describe a single closing day on which Senti's corporate structure changed.

The merger itself is a take-private style reorganization: Midco, the operating subsidiary, is now owned by Parent, an entity controlled by Celadon Partners, rather than by public shareholders. In place of stock, shareholders get CVRs — contractual promises to pay cash if defined events occur, not shares in anything. The CVR is a common tool in biotech deals when the acquirer will not pay now for a drug that has not yet reached the FDA; the seller's holders take a chance on future milestones instead. Here the money is tied to specific regulatory steps for SENTI-202 and to a $200 million sales threshold, all within seven years.

The convertible notes are debt that holders can exchange for stock at a set price, here $0.342 per share. Senti is forcing the exchange rather than letting the notes mature or be repaid in cash. Because the notes were secured by liens on the company's assets, the exchange also clears those liens — the filing says the guarantees and security interests terminate when the exchange is completed on Oct. 28, 2026.

The $2.5 million share sale at $0.342 was a private placement, meaning the shares were sold to one investor without the registration and disclosure that a public offering requires, relying on Section 4(a)(2) and Rule 506. The registration rights agreement requires Senti to file a resale registration statement for those shares within 30 days of closing and keep it effective until they are sold. The private placement price is roughly double the $0.175 closing price on the event date, though the filing does not explain the pricing.

The filing does not say why the merger was undertaken or whether Senti will continue to operate as a standalone public company. The final portion of the filing text provided is truncated mid-sentence in the discussion of the special committee.