This prospectus summary highlights selected information appearing elsewhere in this prospectus and in documents we file with the SEC that are incorporated by reference in this prospectus. Because it is a summary, it may not contain all of the information that may be important to you. To understand this offering fully, you should read this entire prospectus carefully, including the information incorporated by reference herein, the information set forth under the heading “Risk Factors” and our financial statements and the related notes thereto incorporated by reference in this prospectus.
Unless the context otherwise requires, all references in this prospectus to the “Company,” “Eterna,” “we,” “our,” “ours,” and “us” refer to Eterna Therapeutics Inc.
Overview
We are a life science company committed to realizing the potential of mRNA cell engineering to provide patients with transformational new medicines. We have in-licensed a portfolio of over 100 patents covering key mRNA cell engineering technologies, including technologies for mRNA cell reprogramming, mRNA gene editing, the NoveSliceTM and UltraSliceTM gene-editing proteins, and the ToRNAdoTM mRNA delivery system, which we collectively refer to as our “mRNA technology platform.” We plan to develop and advance a pipeline of therapeutic products, both internally and through strategic partnerships, with the near-term focus on deploying our mRNA technology platform through strategic partnerships. We license our mRNA technology platform from Factor Bioscience Limited under an exclusive license agreement.
Through strategic partnerships, we expect that our mRNA technology platform will be used for preclinical and eventual clinical development of product candidates for a variety of clinical indications. We expect that the initial product candidates developed by our strategic partners utilizing our mRNA technology platform will include hypoimmune induced pluripotent stem cell-derived product candidates for the treatment of neurological indications and iPSC-derived immune-modulating cells for indications such as acute myeloid leukemia and solid tumors.
Our Annual Report on Form 10-K for the year ended December 31, 2022 and our subsequent reports filed pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), provide additional information about our business, operations and financial condition.
Private Placement of Notes and Warrants
On December 14, 2023, we entered into a Securities Purchase Agreement with the Selling Stockholders providing for the private placement (the “Private Placement”) to such Selling Stockholders of (i) $9,193,000 in aggregate principal amount of the Company’s 12.0% Senior Convertible Promissory Notes due five years from issuance (the “Notes”) and (ii) warrants, each exercisable to purchase one share of common stock at an exercise price of $1.43 per share (the “Warrants”). The initial closing of the Private Placement occurred on December 15, 2023, and the second closing occurred on January 11, 2024.
The Notes (including any PIK Interest, as defined below, accruing thereon) may be converted to shares of common stock at an initial conversion price of $1.9194, subject to customary adjustments for stock splits, stock dividends and recapitalizations, as described in the Notes.
The Notes are the general senior unsecured obligations of the Company and rank equal in right of payment with all of the Company’s existing and future unsubordinated indebtedness. The Notes bear interest at 12.0% per annum, payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, commencing on January 15, 2024. At its election, the Company may pay interest either in cash or in-kind by increasing the outstanding principal amount of the Notes (such interest paid pursuant to an increase in outstanding principal, “PIK Interest”). The Notes mature five years from issuance, unless earlier converted or repurchased. The Company may not redeem the Notes at its option prior to maturity. The Notes purchased by the Selling Stockholders contain conversion limitations, providing that no conversion may be made if the aggregate number of shares of common stock beneficially owned by the holder thereof would exceed 4.99%, 9.99% or 19.99% immediately after conversion thereof, subject to certain increases not in excess of either 9.99% or 19.99% at the option of such holder.
The Company issued an aggregate of 9,579,014 Warrants, each of which has an exercise price of $1.43 per share of common stock. The Warrants are immediately exercisable, expire five years from the date of issuance and are subject to customary adjustments. The Warrants purchased by the Selling Stockholders contain a provision pursuant