aibioSenti Biosciences agrees to sell $10.0 million of secured convertible notes to Celadon affiliate
Tickers SNTI
Senti Biosciences agreed to sell up to $40.0 million of secured convertible notes to an affiliate of its largest stockholder. If the notes are not converted, the company must pay 200% of principal in cash at maturity, and the second tranche depends on a related deal that could pay up to $60.0 million.
Key facts
- Company
- Senti Biosciences Holdings, Inc. (NASDAQ: SNTI)
- News type
- Mergers
- Primary source
- Senti Biosciences Holdings, Inc. Form 8-K filed May 1, 2026 (SEC EDGAR)
Senti Biosciences Holdings, Inc. (Nasdaq: SNTI) agreed on April 27, 2026 that its subsidiary Senti Holdings, Inc. would issue up to $40.0 million of Senior Secured Convertible Notes in a private placement. The buyer is an entity affiliated with Celadon Partners SPV 24, which the 8-K describes as the company's largest stockholder and a holder of more than 5% of its outstanding capital stock. The company disclosed the deal in a Form 8-K filed May 1, 2026.
The two tranches
The first tranche is $10.0 million of initial notes. One closing condition was a holding company reorganization, in which Senti Biosciences, Inc. merged into a subsidiary of Senti Holdings and survived as its wholly owned subsidiary. The 8-K says that reorganization was completed on April 24, 2026.
The second tranche may be up to $30.0 million of additional notes. Celadon decides whether to buy them. The company is not obligated to issue them unless the parties sign definitive documents for a related transaction within thirty days of the initial closing. That transaction, called the CVR Transaction, would have an entity affiliated with Celadon merge into Senti Holdings. Senti Holdings would then issue a contingent value right to the company's stockholders. The CVR may pay up to $60.0 million in cash, subject to regulatory and sales milestones for the product candidate SENTI-202.
What the notes cost
The notes are senior secured debt of Senti Holdings, guaranteed by the company and its subsidiaries, and secured by a first priority lien on current and future assets. They carry no interest unless an event of default occurs.
They mature on the first business day after six months from the initial closing. If the notes have not been converted or exchanged by then, Senti Holdings must pay the holder 200% of outstanding principal and accrued interest in cash.
The conversion and exchange price is $0.6261 per share, and it carries a full-ratchet adjustment. If the company issues stock below the current price, the price drops to that level.
Limits before stockholders vote
Under Nasdaq rules, the company does not have to issue shares on exchange beyond 19.99% of the common stock outstanding on the date of the purchase agreement, which the filing calls the Exchange Cap. The company agreed to seek stockholder approval of the issuance above that cap at a meeting to be held no later than August 31, 2026. Celadon agreed to vote in support.
The company will pay Celadon a fee of 3.0% of the principal of the notes that Celadon or any buyer it brings in purchases at closing.
The company's losses and cash
The company's annual report for 2025, filed March 27, 2026, reports a net loss of $61.4 million for 2025, against $52.8 million for 2024. Research and development expense was $37.6 million for 2025, against $34.4 million a year earlier. Cash used in operations was $43.4 million for 2025.
The 8-K gives no cash balance at the date of the deal. It says the proceeds go to general corporate purposes and to CMC work and clinical trials for SENTI-202, with no cash figure to weigh against the 200% payout.
Celadon's stake and the lead drug
Celadon has agreed to pay $9.7 million in total for the initial notes, which it expects to fund through its own equity financing. The 8-K says that if stockholders approve the issuance and Celadon immediately exchanged those notes for stock, it would beneficially own 54.6% of the common stock, based on its Schedule 13D/A filed March 31, 2026. After an event of default, interest accrues at 12.0%, and holders can require redemption at the greater of 200% of principal and a formula tied to the share price.
SENTI-202, the lead candidate, is an off-the-shelf CAR-NK cell therapy in an open-label Phase 1 trial in the United States and Australia. The annual report says the company reported data from twenty AML patients: a 50% overall response rate and 42% CR/CRh, with a 7.6 months median duration of composite complete remission. These are the company's figures from a small, open-label early trial, and the report calls the safety profile favorable.