Eterna Therapeutics Announces $9.2 Million Convertible Debt and Warrant Financing

CAMBRIDGE, Mass., Dec. 14, 2023 (GLOBE NEWSWIRE) --  Eterna Therapeutics Inc. (Nasdaq: ERNA) (“Eterna” or the “Company”), a life science company committed to realizing the potential of mRNA cell engineering to provide patients with transformational new medicines, today announced the execution of a securities purchase agreement with accredited investors for the sale of approximately $9.2 million aggregate principal amount of senior convertible promissory notes and accompanying warrants to purchase an aggregate of 9,579,014 shares of common stock in a private placement transaction that was priced at-the-market under Nasdaq rules. The Company expects to hold an initial closing at which it expects to receive proceeds of approximately $7.8 million on December 15, 2023 and the remainder at a closing to occur no later than January 15, 2023.

The notes, which will be issued at par, will bear interest at a rate of 12.0% per year, payable quarterly, and mature five years after issuance unless earlier redeemed, repurchased or converted in accordance with their terms. At its election, the Company may pay interest in cash or in-kind by increasing the outstanding principal amount of the notes. The notes may be converted from time to time in whole or in part into shares of Eterna common stock at a conversion price of $1.9194 per share, subject to customary adjustments for stock splits, stock dividends and recapitalizations. The notes will not contain any ratchet or other financial antidilution provisions.

Each purchaser of the convertible notes will receive warrants to purchase 200% of the number of shares of Eterna common stock into which such purchaser’s note is initially convertible. The warrants will be immediately exercisable, have an exercise price of $1.43 per share and expire five years after issuance.

In connection with the private placement, the Company agreed to amend an aggregate of 10,464,292 outstanding warrants previously issued to investors on each of December 2, 2022 and July 14, 2023 such that the exercise price of such warrants is lowered to $1.43 per share.

The offer and sale of the securities by Eterna described in this press release have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from such registration requirements.