ERNA

Overview We are a preclinical-stage synthetic allogeneic iMSC therapy company. iMSCs are induced pluripotent stem cell-derived mesenchymal stem cells.
We envision a future where cell therapies powered by synthetic iMSCs can offer new options for patients with limited treatment paths, and our mission is to transform the treatment of cancer and autoimmune disease by developing scalable, affordable, off-the-shelf cell therapies that restore hope. 2026 Public Offering On February 6, 2026, we entered into a placement agency agreement (the “Placement Agency Agreement”) with Brookline Capital Markets, a division of Arcadia Securities, LLC (the “Placement Agent”), pursuant to which we engaged the Placement Agent for the public offering of (i) 19.0 million shares (the “Shares”) of our common stock and accompanying warrants to purchase 19.0 million shares of common stock (the “Milestone Warrants”), at a combined offering price of $0.50 per share of common stock and accompanying Milestone Warrant and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase 2.0 million shares of common stock and accompanying Milestone Warrants to purchase 2.0 million shares of common stock, at a combined offering price of $0.49 per Pre-Funded Warrant and accompanying Milestone Warrant ( the “2026 Offering”).
In connection with the 2026 Offering, we also entered into a securities purchase agreement (each, a “Purchase Agreement”) with certain investors who purchased Shares, Pre-Funded Warrants and Milestone Warrants in the 2026 Offering.
The Pre-Funded Warrants are immediately exercisable subject to certain ownership limitations, have an exercise price of $ 0.01 per share, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full.
On February 11, 2026 and February 18, 2026, the holder of the Pre-Funded Warrants exercised 1.3 million and 0.7 million Pre-Funded Warrants, respectively, for an aggregate exercise price of approximately $20,000.
There are no remaining Pre-Funded Warrants related to the 2026 Offering outstanding.
On February 6, 2026, the Milestone Warrants commenced trading on The Nasdaq Capital Market under the symbol “ERNAW.” The Milestone Warrants are immediately exercisable subject to certain ownership limitations, have an exercise price of $0.68 per share, and expire on the earlier of (i) the five (5)-year anniversary of the original issuance date or (ii) the 180 th calendar day following the public release by us of clinical trial data from the first cohort of the Phase 1 study of ERNA-101.
Pursuant to the Placement Agency Agreement, we paid the Placement Agent an aggregate cash fee of approximately $0.5 million, which was equal to 6.5% of the aggregate purchase price paid by investors in the Offering (or 1.5% with respect to certain existing investors).
We will also pay the Placement Agent a cash fee as compensation for gross proceeds we receive from any exercise of any Milestone Warrants sold in connection with the 2026 Offering, payable quarterly on each January 1, April 1, July 1 and October 1 following the closing of the 2026 Offering (or the following business day if such day is not a business day), at the same percentage and as calculated in the manner as set forth above.
We also issued approximately 0.2 million shares of common stock to the Placement Agent, which was equal to 1.5% of the aggregate number of Shares and Pre-Funded Warrants sold in the Offering (or 0.5% with respect to sales to certain existing investors).
In addition, we reimbursed the Placement Agent for its accountable offering-related legal expenses in an amount of $125,000.
The 2026 Offering closed on February 10, 2026, for aggregate gross proceeds of approximately $10.5 million before deducting Placement Agent fees and other offering expenses payable by us.
We intend to use the net proceeds from the 2026 Offering to support the advancement of our development programs, working capital and general corporate purposes.
The Placement Agency Agreement and the Purchase Agreements contain customary representations, warranties and agreements by us, customary conditions to closing, indemnification obligations of us, the Placement Agent, or the investors, as the case may be, and other obligations of the parties.
Pursuant to the terms of the Purchase Agreements and the Placement Agency Agreement, we have agreed that for a period of ninety (90) days from the closing of the 2026 Offering, that neither we nor any subsidiary may (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents or (ii) file any registration statement or prospectus, or any amendment or supplement thereto, in each case, subject to certain exceptions.
We have also agreed not to effect or enter into an agreement to effect any issuance of common stock or common stock equivalents involving a Variable Rate Transaction, as defined in the Purchase Agreements, for a period of ninety (90) days following the closing of the 2026 Offering, subject to certain exceptions, unless waived by the Placement Agent.
In addition, as part of the Purchase Agreement, subject to certain exceptions, our officers and directors entered into lock-up agreements, pursuant to which they agreed not to sell or otherwise dispose of any of the common stock for a period of ninety (90) days following the date of closing of the 2026 Offering.
On February 10, 2026, we also entered into a Warrant Agent Agreement with the transfer agent pursuant to which the transfer agent agreed to act as warrant agent with respect to the Milestone Warrants.
Amendments to Restated Articles of Incorporation, as Amended Effective June 2, 2025, we filed a certificate of amendment to our Restated Certificate of Incorporation, as amended (the “Amended COI”), with the Secretary of State of Delaware to increase the authorized shares of our common stock from 100 million to 150 million (the “Authorized Shares Amendment”).
Also effective June 2, 2025, we filed a certificate of amendment to our Amended COI with the Secretary of State of Delaware to allow for action required or permitted to be taken by our stockholders to be effected by written consent of such stockholders in addition to duly called annual or special meetings of such stockholders (“the Written Consent Amendment”) On June 10, 2025, we filed a certificate of amendment to our Amended COI with the Secretary of State of Delaware to effect a reverse stock split of our common stock at a ratio of 1-for-15 effective at 12:01 a.m.
Upon the effectiveness of the Reverse Stock Split, every fifteen shares of the issued and outstanding common stock were automatically combined and reclassified into one issued and outstanding share of common stock.
The Reverse Stock Split did not alter the par value of the common stock, and the number of authorized shares of common stock remains unchanged at 150 million.
No fractional shares were issued in connection with the Reverse Stock Split, and no cash or other consideration was paid in connection with any fractional shares.
Stockholders who otherwise would have held a fractional share after giving effect to the Reverse Stock Split instead owned one whole share of the post-reverse stock split common stock.
We issued an aggregate of 153 shares for rounding up fractional shares to whole shares.
All share and per share data in this Annual Report have been adjusted for all periods presented to reflect the Reverse Stock Split.
The Authorized Shares Amendment, Written Consent Amendment, and Reverse Stock Split Amendment were approved by our stockholders at our 2025 Annual Meeting of Stockholders on June 2, 2025 (the “Annual Meeting”). 2025 Private Placement of Equity On March 31, 2025, we entered into a securities purchase agreement (the “SPA”) with certain accredited investors and a related registration rights agreement.
Pursuant to the SPA, we agreed to issue and sell to the investors, and the investors agreed to purchase, in a private placement, an aggregate of approximately 4,621,000 shares of common stock at a purchase price of $1.569 per share (or pre-funded warrants in lieu of common stock at a purchase price of $1.494 per pre-funded warrant).
The pre-funded warrants will be exercisable until exercised in full at a nominal exercise of $0.075 per share and may not be exercised to the extent such exercise would cause the holder to beneficially own more than 4.99% or 9.99%, as applicable, of our outstanding common stock.
Upon the initial closing of the SPA on April 2, 2025 (the “First Closing”), we sold to the investors an aggregate of approximately 662,000 shares of common stock and 34,000 pre-funded warrants (such shares, including the shares underlying the pre-funded warrants, equal to 19.99% of our outstanding shares as of March 31, 2025).
Following shareholder approval at the Annual Meeting, on June 9, 2025, we sold to the investors an aggregate of approximately 3,182,000 shares of common stock and 622,000 pre-funded warrants, and on June 27, 2025, we sold the remaining approximately 121,000 shares of common stock (the June 9, 2025 and June 27, 2025 issuances collectively referred to as the “Second Closing”).
The Company raised approximately $7.2 million in gross proceeds under the SPA.
Basis of Presentation Revenue Revenue is related to an exclusive option and license agreement we had with a customer, under which we granted the customer an option to obtain an exclusive sublicense to certain of our technology for preclinical, clinical and commercial purposes in exchange for a non-refundable up-front payment to us of $0.3 million.
We also began developing certain induced pluripotent stem cell lines in exchange for a cell line customization fee.
The customer paid us $0.4 million towards the customization fee, which we were recognizing ratably over the customization period for the year ended December 31, 2024.
The Company did not recognize any revenue during the year ended December 31, 2025.
In September 2024, we entered into an agreement with Factor Limited (and together with Factor Bioscience Inc. and its other affiliates, “Factor Bioscience”) whereby we assigned the customer contract to Factor Bioscience (the “Assignment Agreement”).
The Assignment Agreement with Factor Bioscience assigned all our rights and obligations under the customer contract to Factor Bioscience.
Payments to us related to the customer contract will now be subject to the Assignment Agreement, which provides for Factor Bioscience paying us thirty percent (30%) of all amounts it receives from the customer in the event that the customer obtains a sublicense from Factor Bioscience.
Upon receipt of future payments for the customization activities set forth in the customer contract, Factor Bioscience will pay us twenty percent (20%) of all amounts Factor Bioscience receives from the customer.

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Gone since FY2024

Overview We are a preclinical-stage synthetic allogeneic iMSC therapy company.
Our vision is to improve the lives of patients with difficult-to-treat diseases through innovative, effective, and safe, but accessible cellular therapies, and our mission is to develop allogenic off-the-shelf cellular therapies, leveraging induced pluripotent stem cell (“iPSC”)-derived mesenchymal stem cells (“iMSCs”) to target solid tumors and autoimmune diseases.
September 2024 Transactions Exchange Transactions Pursuant to exchange agreements we entered into on September 24, 2024 with the holders of certain of our warrants and convertible notes, on October 29, 2024, we issued an aggregate of 38.3 million shares of our common stock in exchange for: (i) warrants to purchase an aggregate of approximately 4.4 million shares of our common stock that we issued in December 2022 with an exercise price of $1.43 per share; (ii) $8.7 million in the aggregate principal amount of convertible notes that we issued in July 2023 and warrants to purchase an aggregate of approximately 6.1 million shares of our common stock that we issued in July 2023 with an exercise price of $1.43 per share; (iii) $9.2 million in the aggregate principal amount of convertible notes that we issued in December 2023 and warrants to purchase an aggregate of approximately 9.6 million shares of our common stock that we issued in December 2023 with an exercise price of $1.43 per share (the “exchange transactions”).
The holders of the warrants described in the paragraph above exchanged all their warrants for shares of our common stock at an exchange ratio of 0.5 of a share of common stock for every one share of common stock issuable upon exercise of the applicable warrant (rounded up to the nearest whole number), and the holders of the convertible notes described in the paragraph above exchanged all their convertible notes for shares of our common stock at an exchange ratio equal to (A) the sum expressed in U.S. dollars of (1) the principal amount of the applicable convertible note, plus (2) all accrued and unpaid interest thereon through the date the applicable convertible note is exchanged plus (3) all interest that would have accrued through, but not including, the maturity date of applicable convertible note if it was outstanding from the date such convertible note is exchanged through its maturity date, divided by (B) $1.00 (rounded up to the nearest whole number).
Conversion of Bridge Notes On September 24, 2024, we closed a private placement in which we sold an aggregate principal amount of approximately $3.9 million of 12.0% senior convertible notes (the “bridge notes”).
On October 29, 2024, in accordance with the terms of the bridge notes, approximately $3.0 million of the principal amount of the bridge notes plus all accrued and unpaid interest thereon, plus such amount of interest that would have accrued on the principal amount through December 24, 2024, was automatically converted at a conversion price of $0.50 into 6.2 million shares of our common stock, and approximately $0.9 million of the principal amount of the bridge notes plus all accrued and unpaid interest thereon, plus such amount of interest that would have accrued on the principal amount through December 24, 2024, was automatically converted at a conversion price of $0.50 into pre-funded warrants to purchase 1.8 million shares of our common stock.
Private Placement Pursuant to a securities purchase agreement we entered into with certain investors on September 24, 2024, on October 29, 2024, we closed a private placement (the “common stock private placement” and together with the bridge notes and the exchange transactions, the “September 2024 Transactions”) in which we sold an aggregate of 1.4 million shares of our common stock and pre-funded warrants to purchase 0.1 million shares of our common stock at a purchase price of $0.75 per share of common stock and $0.745 per pre-funded warrant.
We received approximately $1.1 million in gross proceeds from the issuance of such securities.
For additional information regarding this private placement, see Note 6 to the accompanying consolidated financial statements.
For additional information regarding the September 2024 Transactions, see Note 6 to the accompanying consolidated financial statements.
In total, the Company issued approximately 45.9 million shares of common stock and 1.9 million pre-funded warrants on October 29, 2024 pursuant to the private placement, the exchange transactions and the conversion of the bridge notes discussed above and had 51.4 million shares of common stock issued and outstanding after the closing of the September 2024 Transactions.
Termination of Sublease In October 2022, we entered into a sublease for office and laboratory space in Somerville, Massachusetts.
In connection with entering into the sublease, we delivered a security deposit in the form of a letter of credit in the amount of $4.1 million.
The letter of credit was collateralized with $4.1 million of cash deposited in a restricted account.
On August 5, 2024, the sublessor drew down on the letter of credit for the full $4.1 million to cover the approximately $4.0 million of past due rent payments for February 2024 through August 2024, plus interest and penalties.
On August 9, 2024, we and the sublessor entered into a sublease termination agreement pursuant to which the parties agreed to terminate the sublease effective August 31, 2024.
Pursuant to the sublease termination agreement, we agreed to surrender and vacate the premises, all of our right, title and interest in all furniture, fixtures and laboratory equipment at the premises will become the property of the sublessor, and both parties will be released of their obligations under the sublease.
As a result of the sublease termination, we recognized a gain on lease termination of approximately $1.6 million for the year ended December 31, 2024, and we expect to save approximately $72 million in base rental payments, parking, operating expenses, taxes and utilities that we would have paid over the remaining lease term.
Basis of Presentation Revenue In February 2023, we entered into an exclusive option and license agreement (the “Lineage Agreement”) with Lineage Cell Therapeutics, Inc.
(“Lineage”), under which we granted Lineage an option to obtain an exclusive sublicense to certain of our technology for preclinical, clinical and commercial purposes in exchange for a non-refundable up-front payment to us of $0.3 million.
In August 2023, Lineage requested that we begin developing certain induced pluripotent stem cell lines in exchange for a cell line customization fee.
Lineage paid us $0.4 million towards the customization fee, which we were recognizing ratably over the customization period.
On September 24, 2024, we entered into an agreement with Factor Bioscience whereby we assigned the Lineage Agreement to Factor Bioscience (the “Lineage Assignment Agreement”).
The Lineage Assignment Agreement with Factor Bioscience. assigns all our rights and obligations under that the Lineage Agreement to Factor Bioscience.
Payments to us related to the Lineage Agreement will now be subject to the Lineage Assignment Agreement, which provides for Factor Bioscience paying us thirty percent (30%) of all amounts it receives from Lineage in the event that Lineage obtains a sublicense from Factor Bioscience.
Upon receipt of future payments for the customization activities set forth in the Lineage Agreement, Factor Bioscience will pay us twenty percent (20%) of all amounts Factor Bioscience receives from Lineage.
Because we have no further obligations under the agreement with Lineage, we have fully recognized as revenue amounts previously recorded in deferred revenue of approximately $0.5 million for the year ended December 31, 2024.
For additional information, see Note 5 to the accompanying consolidated financial statements.
As provided for in the A&R Factor License Agreement discussed in Note 11 to the accompanying consolidated financial statements, we were obligated to pay Factor Limited 20% of any amounts we receive from a customer that was related to the licensed technology under the A&R Factor License Agreement, which we also recognize as a cost of revenue.
We have contracted with third parties to perform various studies.
Comparison of the Years Ended December 31, 2024 and 2023 Year ended December 31, (in thousands) 2024 2023 Change Revenue $ 582 $ 68 $ 514 Cost of revenues (140 ) Gross income (loss) (168 ) Operating expenses: Research and development 4,604 5,920 (1,316 ) General and administrative 13,132 14,587 (1,455 ) Gain on lease termination (1,576 ) - (1,576 ) Acquisition of Exacis IPR&D - (460 ) Total operating expenses 16,160 20,967 (4,807 ) Loss from operations (15,674 ) (21,135 ) 5,461 Other (expense) income, net: Loss on extinguishment of debt (22,440 ) - (22,440 ) Change in fair value of convertible notes 1,017 - 1,017 Change in fair value of bridge notes derivative liability (1,459 ) - (1,459 ) Change in fair value of warrant liabilities Change in fair value of contingent consideration (52 ) Loss on non-controlling investment - (59 ) Interest income Interest expense (6,752 ) (614 ) (6,138 ) Other income (expense), net (334 ) Total other expense, net (28,835 ) (536 ) (28,299 ) Loss before income taxes (44,509 ) (21,671 ) (22,838 ) (Provision) benefit for income taxes (30 ) (33 ) Net loss $ (44,539 ) $ (21,668 ) $ (22,871 ) Revenue During the years ended December 31, 2024 and 2023, we recognized revenue related to the cell line customization activities we performed for Lineage.
The increase in revenue is due to accelerating the recognition of approximately $0.5 million of deferred revenue related to nonrefundable payments we received from Lineage due to the Lineage Assignment Agreement we entered into on September 24, 2024 with Factor Bioscience discussed earlier.
As of December 31, 2024, we did not have any deferred revenue balances on our consolidated balance sheet.
Cost of Revenue During the years ended December 31, 2024 and 2023, our cost of revenues included direct labor and materials to perform the customization cell line activities for Lineage.
The decrease in cost of revenue was primarily related to a 20% license fee paid to Factor Bioscience during the year ended December 31, 2023 related to the Lineage Agreement, which was not repeated in 2024.
Research and Development Expenses Years ended December 31, 2024 2023 Change (in thousands) Professional fees $ 759 $ 1,181 $ (422 ) MSA/license expense 3,017 3,250 (233 ) Payroll-related (199 ) Stock-based compensation (145 ) Allocated occupancy expense Other expenses, net (323 ) Total research and development expenses $ 4,604 $ 5,920 $ (1,316 ) Total research and development expenses decreased by approximately $1.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to decreased professional fees due to a reduction in consultant services, MSA/license fees as a result of the new Factor L&C Agreement, payroll-related expenses and stock-based compensation from a reduction in headcount, and other expenses incurred during 2023 related to closing down a clinical trial we ended in 2022.
General and Administrative Expenses Years ended December 31, 2024 2023 Change (in thousands) Professional fees $ 4,168 $ 6,464 $ (2,296 ) Insurance 1,140 (643 ) Payroll-related 1,607 2,045 (438 ) Stock-based compensation 1,431 1,008 Occupancy expense 5,074 3,306 1,768 Other expenses, net (269 ) Total general and administrative expenses $ 13,132 $ 14,587 $ (1,455 ) Our general and administrative expenses decreased by approximately $1.5 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to decreases in professional fees related to legal services and consultants, insurance expense due to lower premiums and payroll-related expenses resulting from less severance expense during the year ended December 31, 2024 compared to the year ended December 31, 2023.
These decreases were offset by increased occupancy expense related to our Somerville sublease that we began to incur expense for in July 2023 and was terminated effective August 31, 2024, as well as increased stock-based compensation due to stock option awards granted to the chief executive officer during the year ended December 31, 2024.
Gain on Lease Termination On August 9, 2024, we and the sublessor of our Somerville sublease entered into a sublease termination agreement effective August 31, 2024.
There was no similar transaction during the year ended December 31, 2023.

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