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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Eterna Therapeutics Inc | NASDAQ:ERNA | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.0601 | -3.27% | 1.78 | 1.72 | 1.80 | 1.84 | 1.78 | 1.84 | 956 | 18:27:42 |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
(State of incorporation)
|
(I.R.S. Employer Identification No.)
|
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading symbol
|
Name of each exchange on which registered
|
||
|
|
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Large accelerated filer
|
☐ |
Accelerated filer
|
☐
|
|
☒ |
Smaller reporting company
|
|
Emerging growth company
|
Page
|
||
PART I – FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements (unaudited)
|
|
1 | ||
2 | ||
3 | ||
4 | ||
5
|
||
Item 2.
|
20 | |
Item 3.
|
27 | |
Item 4.
|
27 | |
PART II – OTHER INFORMATION
|
||
Item 1.
|
28 | |
Item 1A.
|
28 |
|
Item 2.
|
30 | |
Item 3.
|
30 | |
Item 4.
|
30 | |
Item 5.
|
30 | |
Item 6.
|
31 | |
32 |
March 31, | December 31, | |||||||
2024
|
2023
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash
|
$
|
|
$
|
|
||||
Other receivables
|
|
|
||||||
Prepaid expenses and other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Restricted cash
|
||||||||
Property and equipment, net
|
|
|
||||||
Right-of-use assets - operating leases
|
|
|
||||||
Goodwill
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Accrued expenses
|
|
|
||||||
Income taxes payable
|
||||||||
Operating lease liabilities, current
|
|
|
||||||
Due to , current
|
||||||||
Deferred revenue, current
|
||||||||
Total current liabilities
|
|
|
||||||
Convertible notes, net
|
||||||||
Warrant liabilities
|
|
|
||||||
Operating lease liabilities, non-current
|
|
|
||||||
Deferred revenue, non-current
|
||||||||
Contingent consideration liability
|
||||||||
Other liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Stockholders’ (deficit) equity:
|
||||||||
Preferred stock, $
|
||||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ (deficit) equity
|
(
|
)
|
|
|||||
Total liabilities and stockholders’ (deficit) equity
|
$
|
|
$
|
|
Three months ended March 31, | ||||||||
2024
|
2023
|
|||||||
Revenue
|
$ | $ | ||||||
Cost of revenues
|
||||||||
Gross loss
|
( |
) | ( |
) | ||||
Operating expenses:
|
||||||||
Research and development
|
|
|
||||||
General and administrative
|
|
|
||||||
Total operating expenses
|
|
|
||||||
Loss from operations
|
(
|
)
|
(
|
)
|
||||
Other expense, net:
|
||||||||
Change in fair value of warrant liabilities
|
( |
) | ( |
) | ||||
Loss on non-controlling investment
|
( |
) | ||||||
Interest (expense) income, net | ( |
) | ||||||
Total other expense, net
|
(
|
)
|
(
|
)
|
||||
Loss before income taxes
|
( |
) | ( |
) | ||||
Provision for income taxes
|
( |
) | ( |
) | ||||
Net loss
|
|
(
|
)
|
|
(
|
)
|
||
Net loss per common share - basic and diluted | $ | ( |
) | $ | ( |
) | ||
Weighted average shares outstanding - basic and diluted
|
|
|
Series A Preferred | Additional Paid- | |||||||||||||||||||||||||||
|
Stock
|
Common Stock
|
in
|
Accumulated | ||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
|||||||||||||||||||||
Balances at January 1, 2024
|
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||
Issuance of note warrants
|
- | - | ||||||||||||||||||||||||||
Costs allocated to note warrants |
- | - | ( |
) | ( |
) | ||||||||||||||||||||||
Stock-based compensation
|
- | - | ||||||||||||||||||||||||||
Net loss
|
- | - | ( |
) | ( |
) | ||||||||||||||||||||||
Balances at March 31, 2024
|
$ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
|
||||||||||||||||||||||||||||
Balances at January 1, 2023
|
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||
Stock-based compensation
|
- | - | ||||||||||||||||||||||||||
Net loss
|
- | - | ( |
) | ( |
) | ||||||||||||||||||||||
Balances at March 31, 2023
|
$ | $ | $ | $ | ( |
) | $ |
For the three months ended | ||||||||
|
March 31,
|
|||||||
|
2024
|
2023
|
||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Stock-based compensation
|
|
|
||||||
Amortization of right-of-use asset
|
|
|
||||||
Gain on disposal of fixed assets
|
( |
) | ||||||
Accrued interest expense
|
||||||||
Paid-in-kind interest expense
|
||||||||
Amortization of debt discount and debt issuance costs
|
||||||||
Change in fair value of warrant liabilities
|
||||||||
Loss on non-controlling investment
|
|
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Other receivables
|
|
|
||||||
Prepaid expenses and other current assets
|
|
|
||||||
Other non-current assets
|
|
(
|
)
|
|||||
Accounts payable and accrued expenses
|
|
(
|
)
|
|||||
Operating lease liability
|
|
(
|
)
|
|||||
Due to related party
|
( |
) | ( |
) | ||||
Deferred revenue
|
( |
) | ||||||
Other liabilities
|
|
(
|
)
|
|||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(
|
)
|
|
|||||
Proceeds received from the sale of fixed assets
|
||||||||
Net cash used in investing activities
|
(
|
)
|
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds received from the convertible notes financing
|
||||||||
Fees paid related to the convertible notes financing
|
( |
) | ||||||
Net cash provided by financing activities
|
|
|
||||||
Net decrease in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
Cash, cash equivalents and restricted cash at beginning of period
|
|
|
||||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
|
$
|
|
||||
|
||||||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
|
$
|
|
||||
Income taxes
|
$ | $ | ||||||
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||
Note warrants issued
|
$ | $ | ||||||
Unpaid fees incurred in connection with the convertible notes financing
|
$ | $ | ||||||
Paid in-kind interest added to convertible notes principal
|
$ | $ | ||||||
Adjustment to lease liability and ROU asset due to remeasurement
|
$ | $ | ||||||
Property and equipment purchased but not paid
|
$ | $ | ||||||
Reconciliation of cash, cash equivalents and restricted cash at end of period:
|
||||||||
Cash and cash equivalents
|
$ | $ | ||||||
Restricted Cash
|
||||||||
Total Cash, cash equivalents and restricted cash at end of period
|
$ | $ |
1) |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
|
2) |
LIQUIDITY AND CAPITAL RESOURCES
|
3)
|
CONTRACT WITH CUSTOMER
|
4)
|
CONVERTIBLE NOTES FINANCINGS
|
|
Allocation of Proceeds and Costs
|
Allocation of
|
||||||||||||||||||
|
Relative
Fair Value |
Allocation
Percentage |
Proceeds
|
Costs
|
Proceeds,
Net |
|||||||||||||||
Convertible notes
|
$
|
|
|
%
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||
Note warrants
|
|
|
%
|
|
(
|
)
|
|
|||||||||||||
|
$
|
|
|
%
|
$
|
|
$
|
(
|
)
|
$
|
|
|
Stock
Price |
Credit
Spread |
Volatility
|
Risk-Free
Rate |
||||||||||||
Convertible notes
|
$
|
|
|
|
%
|
|
%
|
|
Stock
Price |
Exercise
Price |
Expected
Life |
Volatility
|
Dividend
|
Risk-Free
Rate |
|||||||||||||||
Warrants
|
$
|
|
$
|
|
|
|
%
|
|
%
|
|
%
|
|
Gross
convertible
notes
|
Debt
discount
and debt
issuance
costs
|
Convertible
notes, net
|
|||||||||
|
||||||||||||
Beginning balanace as of January 1, 2024
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
December 2023 notes issued in January 2024
|
|
(
|
)
|
|
||||||||
Paid-in-kind interest added to principal
|
|
-
|
|
|||||||||
Amortization of debt discount and debt issuance costs
|
-
|
|
|
|||||||||
Ending balanace as of March 31, 2024
|
$
|
|
$
|
(
|
)
|
$
|
|
5) |
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
• |
Level 1 Inputs – Valued based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement
date.
|
• |
Level 2 Inputs – Valued based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might
include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or
liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.
|
• |
Level 3 Inputs – Valued based on inputs for which there is little or no market value, which require the reporting entity to develop its own assumptions.
|
Description
|
Level
|
March 31,
2024
|
December 31,
2023
|
|||||||||
Liabilities:
|
||||||||||||
Warrant liabilities - Q1-22 warrants
|
3
|
$ |
|
$ |
|
|||||||
Market cap contingent consideration |
3 |
$ |
$ |
|
Warrant
Liabilities
|
Contingent
Consideration
|
||||||
Fair value at January 1, 2024
|
$
|
|
$ | |||||
Change in fair value
|
|
|
||||||
Fair value at March 31, 2024
|
$
|
|
$ |
March 31, 2024
|
December 31, 2023 | |||||||||||||||||||
|
Level |
Carrying
Value
|
Fair
Value
|
Carrying
Value
|
Fair
Value
|
|||||||||||||||
Convertible notes
|
3 |
$
|
|
$
|
|
$ |
$ |
6) |
GOODWILL
|
7)
|
LEASES
|
Three months ended March 31,
|
||||||||
2024 |
2023 |
|||||||
Operating lease expense
|
$
|
|
$
|
|
||||
Sublease income
|
(
|
)
|
(
|
)
|
||||
Variable lease expense
|
|
|
||||||
Total lease expense
|
$
|
|
$
|
|
Operating Lease
ROU Assets
|
||||
Operating lease ROU assets at January 1, 2024
|
$
|
|
||
Adjustment to ROU asset for remeasurement of Somerville Sublease liability
|
||||
Amortization of operating lease ROU assets
|
(
|
)
|
||
Operating lease ROU assets at March 31, 2024
|
$
|
|
Operating Lease
Liabilities
|
||||
Operating lease liabilities at January 1, 2024
|
$
|
|
||
Adjustment to lease liablity due to remeasurement of Somerville Sublease
|
||||
Accretion of interest for Somerville Sublease
|
||||
Principal payments on operating lease liabilities
|
(
|
)
|
||
Operating lease liabilities at March 31, 2024
|
|
|||
Less non-current portion
|
|
|||
Current portion at March 31, 2024
|
$
|
|
As of
March 31,
2024
|
||||
2024
|
$
|
|
||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
2028
|
|
|||
Thereafter
|
|
|||
Total payments
|
|
|||
Less imputed interest
|
(
|
)
|
||
Total operating lease liabilities
|
$
|
|
8)
|
ACCRUED EXPENSES
|
March 31,
2024 |
December 31,
2023
|
|||||||
Convertible notes interest
|
$ | $ | ||||||
Legal fees and related
|
|
|
||||||
Somerville facility
|
|
|
||||||
Professional fees
|
|
|
||||||
Accrued compensation
|
|
|
||||||
Other
|
|
|
||||||
Total accrued expenses
|
$
|
|
$
|
|
9) |
RELATED PARTY TRANSACTIONS
|
10) |
COMMITMENTS AND CONTINGENCIES
|
11) |
STOCK-BASED COMPENSATION
|
|
Three months ended March 31,
|
|||||||
|
2024
|
2023
|
||||||
Stock options granted
|
|
|
Three months ended March 31, | ||||||||
|
2024
|
2023
|
||||||
Weighted average risk-free rate
|
|
%
|
|
%
|
||||
Weighted average volatility
|
|
%
|
|
%
|
||||
Dividend yield
|
|
%
|
|
%
|
||||
Expected term
|
|
|
|
Three months ended March 31,
|
|||||||
|
2024
|
2023
|
||||||
Research and development
|
$
|
|
$
|
|
||||
General and administrative
|
|
|
||||||
Total
|
$
|
|
$
|
|
12) |
WARRANTS
|
|
Warrants
Outstanding (in thousands) |
Exercise
Price |
Expiration
Date |
Classification
|
|||||||
Q1-22 warrants | $ |
Liability |
|||||||||
Q4-22 warrants |
$ |
Equity |
|||||||||
July 2023 note warrants |
$ |
Equity | |||||||||
December 2023 note warrant issued December 15, 2023 |
$ | Equity | |||||||||
December 2023 note warrant issued January 11, 2024 |
$ | Equity |
|||||||||
13) |
NET LOSS PER SHARE
|
Three months ended March 31,
|
||||||||
2024
|
2023
|
|||||||
Warrants
|
|
|
||||||
Convertible Notes converted into common stock |
||||||||
Stock options
|
|
|
||||||
Preferred stock converted into common stock
|
|
|
||||||
RSUs
|
|
|
||||||
Total potential common shares excluded from computation
|
|
|
14) |
RECENT ACCOUNTING PRONOUNCEMENTS
|
15) |
SUBSEQUENT EVENTS
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
Three months ended March 31,
|
||||||||||||
(In thousands)
|
2024
|
2023
|
Change
|
|||||||||
Revenue
|
$
|
47
|
$
|
-
|
$
|
47
|
||||||
Cost of revenues
|
61
|
50
|
11
|
|||||||||
Gross loss
|
(14
|
)
|
(50
|
)
|
36
|
|||||||
Operating expenses:
|
||||||||||||
Research and development
|
1,458
|
1,674
|
(216
|
)
|
||||||||
General and administrative
|
4,315
|
3,592
|
723
|
|||||||||
Total operating expenses
|
5,773
|
5,266
|
507
|
|||||||||
Loss from operations
|
(5,787
|
)
|
(5,316
|
)
|
(471
|
)
|
||||||
Other expense, net:
|
||||||||||||
Change in fair value of warrant liabilities
|
(70
|
)
|
(45
|
)
|
(25
|
)
|
||||||
Loss on non-controlling investment
|
-
|
(51
|
)
|
51
|
||||||||
Interest (expense) income, net
|
(786
|
)
|
1
|
(787
|
)
|
|||||||
Total other expense, net
|
(856
|
)
|
(95
|
)
|
(761
|
)
|
||||||
-
|
||||||||||||
Loss before income taxes
|
(6,643
|
)
|
(5,411
|
)
|
(1,232
|
)
|
||||||
Provision for income taxes
|
(4
|
)
|
(5
|
)
|
1
|
|||||||
Net loss
|
$
|
(6,647
|
)
|
$
|
(5,416
|
)
|
$
|
(1,231
|
)
|
Three months ended March 31,
|
||||||||||||
2024
|
2023
|
Change
|
||||||||||
(in thousands)
|
||||||||||||
Professional fees
|
$
|
103
|
$
|
280
|
$
|
(177
|
)
|
|||||
Stock-based compensation
|
46
|
64
|
(18
|
)
|
||||||||
Payroll-related
|
325
|
203
|
122
|
|||||||||
MSA fees
|
812
|
812
|
-
|
|||||||||
Other expenses, net
|
172
|
315
|
(143
|
)
|
||||||||
Total research and development expenses
|
$
|
1,458
|
$
|
1,674
|
$
|
(216
|
)
|
Three months ended March 31,
|
||||||||||||
2024
|
2023
|
Change
|
||||||||||
(in thousands)
|
||||||||||||
Occupancy expense
|
$
|
1,901
|
$
|
23
|
$
|
1,878
|
||||||
Payroll-related
|
532
|
357
|
175
|
|||||||||
Professional fees
|
1,285
|
1,935
|
(650
|
)
|
||||||||
Stock-based compensation
|
236
|
625
|
(389
|
)
|
||||||||
Insurance
|
216
|
533
|
(317
|
)
|
||||||||
Other expenses, net
|
145
|
119
|
26
|
|||||||||
Total general and administrative expenses
|
$
|
4,315
|
$
|
3,592
|
$
|
723
|
For the three months ended
March 31,
|
||||||||||||
(in thousands)
|
2024
|
2023
|
Change
|
|||||||||
Cash (used in) provided by:
|
||||||||||||
Operating activities
|
$
|
(3,747
|
)
|
$
|
(6,049
|
)
|
$
|
2,302
|
||||
Investing activities
|
(97
|
)
|
-
|
(97
|
)
|
|||||||
Financing activities
|
1,385
|
-
|
1,385
|
|||||||||
Net decrease in cash and cash equivalents
|
$
|
(2,459
|
)
|
$
|
(6,049
|
)
|
$
|
3,590
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4. |
Controls and Procedures.
|
• |
enhancing the business process controls related to reviews over technical, complex, and non-recurring transactions;
|
• |
providing additional training to accounting personnel; and
|
• |
using an external accounting advisor to review management’s conclusions on technical, complex and non-recurring matters.
|
Item 1. |
Legal Proceedings.
|
Item 1A. |
Risk Factors.
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Item 3. |
Defaults Upon Senior Securities.
|
Item 4. |
Mine Safety Disclosures.
|
Item 5. |
Other Information.
|
Exhibit
|
Description
|
Incorporated By
Reference
|
|
Inducement Stock Option Award Agreement entered into with Sanjeev Luther
|
Exhibit 99.1 to Form S-8 filed on January 16, 2024
|
||
Employment Agreement, dated as of December 19, 2023, by and among Eterna Therapeutics Inc. and Sanjeev Luther.
|
Exhibit 10.3 to Form 8-K filed on December 20, 2023
|
||
Employment Agreement, effective January 1, 2023, by and among Eterna Therapeutics Inc. and Dorothy Clarke.
|
Exhibit 10.16 to Form 10-K filed on March 14, 2024
|
||
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed herewith
|
||
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed herewith
|
||
Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Furnished herewith
|
||
Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Furnished herewith
|
||
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
|
Filed herewith
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
Filed herewith
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
Filed herewith
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
Filed herewith
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
Filed herewith
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
Filed herewith
|
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
|
ETERNA THERAPEUTICS INC.
|
||
Date: May 14, 2024
|
By:
|
/s/ Sanjeev Luther
|
Sanjeev Luther
|
||
President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
Date: May 14, 2024
|
By:
|
/s/ Sandra Gurrola
|
Sandra Gurrola
|
||
Senior Vice President of Finance
|
||
(Principal Financial Officer and Principal Accounting Officer)
|
Date: May 14, 2024
|
/s/ Sanjeev Luther
|
Sanjeev Luther
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
Date: May 14, 2024
|
/s/ Sandra Gurrola
|
Sandra Gurrola
|
|
Senior Vice President of Finance
|
|
(Principal Financial Officer)
|
Date: May 14, 2024
|
/s/ Sanjeev Luther
|
Sanjeev Luther
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
Date: May 14, 2024
|
/s/ Sandra Gurrola
|
Sandra Gurrola
|
|
Senior Vice President of Finance
|
|
(Principal Financial Officer)
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Stockholders' (deficit) equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Preferred stock, shares authorized (in shares) | 1,000 | 1,000 |
Preferred stock, shares issued (in shares) | 156 | 156 |
Preferred stock, shares outstanding (in shares) | 156 | 156 |
Preferred stock, liquidation preference | $ 156 | $ 156 |
Common stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Common stock, shares authorized (in shares) | 100,000 | 100,000 |
Common stock, shares issued (in shares) | 5,410 | 5,410 |
Common stock, shares outstanding (in shares) | 5,410 | 5,410 |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) shares in Thousands, $ in Thousands |
Preferred Stock [Member]
Series A Cumulative Convertible Preferred Stock [Member]
|
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Accumulated Deficit [Member] |
Total |
---|---|---|---|---|---|
Balance at Dec. 31, 2022 | $ 1 | $ 26 | $ 177,377 | $ (165,297) | $ 12,107 |
Balance (in shares) at Dec. 31, 2022 | 156 | 5,127 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | $ 0 | $ 0 | 689 | 0 | 689 |
Net loss | 0 | 0 | 0 | (5,416) | (5,416) |
Balance at Mar. 31, 2023 | $ 1 | $ 26 | 178,066 | (170,713) | 7,380 |
Balance (in shares) at Mar. 31, 2023 | 156 | 5,127 | |||
Balance at Dec. 31, 2023 | $ 1 | $ 27 | 189,186 | (186,981) | 2,233 |
Balance (in shares) at Dec. 31, 2023 | 156 | 5,410 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of not warrants | $ 0 | $ 0 | 755 | 0 | 755 |
Costs allocated to note warrants | 0 | 0 | (35) | 0 | (35) |
Stock-based compensation | 0 | 0 | 282 | 0 | 282 |
Net loss | 0 | 0 | 0 | (6,647) | (6,647) |
Balance at Mar. 31, 2024 | $ 1 | $ 27 | $ 190,188 | $ (193,628) | $ (3,412) |
Balance (in shares) at Mar. 31, 2024 | 156 | 5,410 |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 | |||
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION [Abstract] | |||
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION |
Description of Business
Eterna Therapeutics Inc. is a life science company committed to realizing the potential of mRNA cell engineering to provide patients with transformational new medicines. Eterna has 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 Eterna collectively refers to as our “mRNA technology platform.” Eterna refers to aspects of its mRNA technology platform
as “mRNA delivery,” “mRNA gene editing” and “mRNA cell reprogramming.” Eterna licenses its mRNA technology platform from Factor Bioscience Limited (“Factor Limited”) under an exclusive license agreement. As used herein, the “Company” or
“Eterna” refers collectively to Eterna and its consolidated subsidiaries (Eterna LLC, Novellus, Inc. and Novellus Therapeutics Limited) unless otherwise stated or the context otherwise requires.
Basis of Presentation
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial statements and with the
instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited financial
statements include all the normal recurring adjustments that are necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented.
These condensed consolidated financial statements should be read together with the audited consolidated financial statements and notes thereto contained in Eterna’s Annual Report on Form 10-K for the year ended December 31, 2023 filed
with the Securities and Exchange Commission (the “SEC”) on March 14, 2024, as amended by the Form 10-K/A filed with the SEC on March 18, 2024 (as amended, the “2023 10-K”). The accompanying condensed consolidated balance sheet as of December
31, 2023 has been derived from the audited financial statements contained in the 2023 10-K but does not include all of the information and footnotes required by GAAP for complete financial statements. The results of operations for the three
months ended March 31, 2024 are not necessarily indicative of the results to be anticipated for the entire year ending December 31, 2024, or any other period.
|
LIQUIDITY AND CAPITAL RESOURCES |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 | |||
LIQUIDITY AND CAPITAL RESOURCES [Abstract] | |||
LIQUIDITY AND CAPITAL RESOURCES |
The Company has incurred significant operating losses and has an accumulated deficit as a result of its efforts to develop product candidates, including conducting clinical trials and providing general and
administrative support for operations. As of March 31, 2024, the Company had an unrestricted cash balance of approximately $5.1
million and an accumulated deficit of approximately $193.6 million. For the three months ended March 31, 2024, the Company incurred a net loss of $6.6 million, and the Company used cash of $3.7
million in operating activities.
In October 2022, the Company entered into a sublease for approximately 45,500
square feet of office and laboratory space in Somerville, Massachusetts. Pursuant to the sublease, the Company delivered to the sublessor a security deposit in the form of a letter of credit in the amount of $4.1 million, which will be reduced on an incremental basis throughout the term of the sublease. The letter of credit was issued by the
Company’s commercial bank, which required that the Company cash collateralize the letter of credit by depositing $4.1 million in
a restricted cash account with such bank. The amount of required restricted cash collateral will decline in parallel with the reduction in the amount of the letter of credit over the term of the sublease.
In April 2023, the Company entered into a standby equity purchase agreement (the “SEPA”) and a registration rights agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln
Park committed to purchase up to $10.0 million of the Company’s common stock in an “equity line” financing arrangement. During
the year ended December 31, 2023, the Company issued and sold approximately 214,000 shares of common stock under the SEPA for
gross proceeds of $0.3 million. No
shares have been sold under the SEPA during the three months ended March 31, 2024.
In July and December 2023, the Company received $16.5 million in gross proceeds from the issuance of
convertible notes and in January 2024 received an additional $1.4 million in gross proceeds from the issuance of additional
convertible notes. See Note 4 for additional information regarding these financings.
In connection with preparing the accompanying condensed consolidated financial statements as of and for the three months ended March 31, 2024, the Company’s management concluded that there is substantial doubt
regarding the Company’s ability to continue as a going concern because it does not expect to have sufficient cash or working capital resources to fund operations for the twelve-month period subsequent to the issuance date of these
condensed consolidated financial statements. The Company will need to raise additional capital, which could be through the sales of shares of its common stock under the SEPA, public or private equity offerings, debt financings,
out-licensing the Company’s intellectual property, strategic partnerships or other means. Other than the SEPA, the Company currently has no arrangements for capital, and no assurances can be given that it will be able to raise capital
when needed, on acceptable terms, or at all.
The accompanying condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the
normal course of business. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and
classifications of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern.
|
CONTRACT WITH CUSTOMER |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 | |||
CONTRACT WITH CUSTOMER [Abstract] | |||
CONTRACT WITH CUSTOMER |
On February 21, 2023, the Company and Lineage Cell Therapeutics, Inc. (“Lineage”)
entered into an exclusive option and license agreement (the “Lineage Agreement”), which provided Lineage with the option (the “Option Right”) to obtain an exclusive sublicense of intellectual property from the Company and to request the Company to
develop a customized cell line. The Lineage Agreement was amended in August 2023 to provide for changes specifically related to the cell line customization activities such as (i) payment terms, (ii) certain definitions, (iii) certain courses of
action if the customized cell line selected by Lineage is not successful and (iv) documentation requirements. Lineage paid the Company a $0.3
million non-refundable up-front payment (the “Option Fee”) for the Option Right and paid an initial payment of $0.4 million to commence
the cell line customization activities, per the amended payment terms. If Lineage obtains the sublicense, the Company would be entitled to receive additional license fees, including milestone payments and royalties.
The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers (“ASC 606”) when a customer obtains control of promised services or goods in an amount that reflects the consideration to which the Company expects to receive in exchange for those goods
or services.
Pursuant to ASC 606, the Company determined that the Option Right was an unexercised right held by Lineage under the Lineage Agreement at contract inception, as the cell line
customization activities and the sublicense were optional purchases at contract inception. These optional purchases of goods and services would be treated as separate contracts if and when Lineage determines that it will make such purchases.
Therefore, 100% of the Option Fee was allocated to the Option Right. The Option Fee will remain in deferred revenue until such
time that Lineage enters into the sublicense or when the Option Right expires.
The Option Right and the cell line customization activities are accounted for as
separate contracts, and the Company has determined that the amended terms discussed above represent a modification to the cell line customization contract. Because there were no goods or services transferred to Lineage before entering into the
amendment, and therefore, no previously recognized revenue, there was no catch-up adjustment to revenue required at the time of the amendment.
Lineage will make payments to the Company for the cell line customization activities
over the development period. The Company will only earn the remaining full amount of the cell line customization fee if it makes certain progress towards delivery of the customized cell line. The Company has determined that $0.4 million of consideration received could be recognized without the probability of being reversed, and it has placed a constraint on the remaining
contractual customization fee. The $0.4 million is being recognized equally over the development period, which is expected to be
approximately 20 to 25 months, as the level of effort to perform the services is happening at the same rate over time. If the development period is expected to be longer or shorter than originally planned, the Company will recognize a cumulative
catch-up adjustment in the period that such determination is made. For the three months ended March 31, 2024, the Company recognized less than $0.1
million of revenue for the customization activities. The Company did not recognize any revenue for the three months ended March 31,
2023.
The granting of the license that the Company may provide to Lineage if Lineage
exercises the Option Right is not considered a performance obligation at this time, as it is an optional request that the customer may make in the future and will be accounted for as a separate contract when the customer exercises the Option
Right.
The Company recognizes direct labor and supplies used in the customization
activities as incurred and are recorded as a cost of revenue. As provided for in the A&R Factor License Agreement discussed in Note 9, the Company is obligated to pay Factor Limited 20% of any amounts the Company receives from a customer that is related to the licensed technology under the A&R Factor License Agreement, which is also recorded as a cost of
revenue. For the three months ended March 31, 2023, the Company recognized less than $0.1 million in license fees, which is recorded
in cost of revenues, due to Factor Limited as a result of receiving the $0.3 million Option Fee payment from Lineage. There was no such license fee incurred during the three months ended March 31, 2024.
|
CONVERTIBLE NOTES FINANCINGS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONVERTIBLE NOTES FINANCINGS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONVERTIBLE NOTES FINANCINGS |
On
July 14, 2023, the Company received $8.7 million from a private placement in which the Company issued $8.7 million in aggregate principal amount of convertible notes (the “July 2023 convertible notes”) and warrants to purchase an aggregate of
approximately 6.1 million shares of its common stock (the “July 2023 warrants”). The Company recognized approximately $0.2 million in fees associated with the transaction.
On December 14, 2023, the Company entered into a purchase agreement with certain
purchasers for the private placement of $9.2 million of convertible notes (the “December 2023 convertible notes” and together with the
July 2023 convertible notes, the “convertible notes”) and warrants to purchase an aggregate of approximately 9.6 million shares of the
Company’s common stock (the “December 2023 warrants” and together with the July 2023 warrants, the “note warrants”).
There were two closings under the
December 14, 2023 purchase agreement – one on December 15, 2023 and the second on January 11, 2024. At the first closing, the Company received $7.8
million and issued $7.8 million of December 2023 convertible notes and December 2023 warrants to purchase approximately 8.1 million shares of its common stock. At the second closing, the Company received $1.4 million and issued $1.4 million of December 2023
convertible notes and December 2023 warrants to purchase approximately 1.5 million shares its common stock.
See Note 12 for more information on the note warrants.
The July 2023 convertible notes bear interest at 6% per annum, and the December 2023 convertible notes bear interest at 12%
per annum, both of which are payable quarterly in arrears. At the Company’s election, it may pay interest either in cash or in-kind by increasing the outstanding principal amount of the convertible notes. The convertible notes mature on the five-year anniversary of the date of their issuance, unless earlier converted or repurchased. The Company does not have the option to redeem any of
the convertible notes prior to maturity.
At the option of the holders, the convertible notes may be converted from time-to-time in whole or in part into shares
of the Company’s common stock at an initial conversion rate of, with respect to the July 2023 convertible notes, $2.86 per share and,
with respect to the December 2023 convertible notes, $1.9194 per share, subject to customary adjustments for stock splits, stock
dividends, recapitalization and the like. As of March 31, 2024, none of the convertible notes were converted into shares of common
stock.
The convertible notes do not contain any ratchet or other financial antidilution provisions. The convertible notes contain conversion limitations such 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 convertible notes provide for customary events of default which include (subject in certain cases to customary grace and
cure periods), among others: nonpayment of principal or interest, breach of covenants or other agreements in the convertible notes; the occurrence of a material adverse effect event (as defined in the related securities purchase agreement) and
certain events of bankruptcy. Generally, if an undisputed event of default occurs and is continuing under the convertible notes, the holder thereof may require the Company to redeem some or all of their convertible notes at a redemption price
equal to 100% of the principal amount of the convertible notes being redeemed, plus accrued and unpaid interest thereon. As of March
31, 2024, there were no events of default that occurred under the Convertible notes.
The Company determined that
there were no embedded derivatives within the convertible notes that required bifurcation from the host agreement. In connection with the December 2023 convertible notes that were issued on January 11, 2024, the Company allocated the gross proceeds
received and the fees incurred over the applicable convertible notes and warrants based on their relative fair values as follows (in thousands):
The Company estimated the fair values of the convertible notes as of
January 11, 2024 based off a valuation performed by a third-party specialist as of December 15, 2023 using a binomial tree model and the following assumptions:
The fair value of the note warrants, all of which qualified for equity
classification, was determined using the Black-Scholes pricing model as of January 11, 2024 using the following assumptions:
The amount of proceeds allocated to
the note warrants resulted in a corresponding reduction in the carrying value of the respective convertible notes as a debt discount, which is amortized with the debt issuance costs as a component of interest expense based on the effective
interest rate method over the contractual terms of the convertible notes.
The following table shows the
activity that occurred during the three months ended March 31, 2024 for the convertible notes on the accompanying condensed consolidated balance sheet:
To date, the Company has elected to
pay in-kind the accrued interest payable on the convertible notes and has added the accrued and unpaid interest to the principal amount of the applicable convertible note. The Company has recognized approximately $0.8 million in interest expense for the three months ended March 31, 2024 for the convertible notes, which includes $0.4 million for the amortization of the debt discount and debt issuance costs and $0.4 million recorded in accrued expenses in the accompanying condensed consolidated balance sheet.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS |
Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between
willing market participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable
inputs. The fair value hierarchy is as follows:
The carrying amounts
reported on the balance sheet for cash and cash equivalents, other receivable, prepaid assets and other current assets, accounts payable and accrued expenses, other current liabilities and other liabilities approximate fair value based due
to their short maturities.
The Company issued approximately 343,000 warrants in connection with a private placement during the first
quarter of 2022 (the “Q1-22 warrants”), which were determined to be classified as a liability.
The
Company completed an asset acquisition on April 26, 2023 with Exacis Biotherapeutics, Inc. (Exacis”), which consisted of primarily acquiring an exclusive license agreement by and between Exacis and Factor Limited. See Note 9 for additional
information. As part of the consideration paid to Exacis for the acquisition, the Company agreed to make certain contingent payments to Exacis related to reaching two separate targets of the Company’s market capitalization ($100.0 million and $200.0 million).
Such payments would be in the form of issuing $2 million worth of shares of the Company’s common stock to Exacis for each target
achieved (the “market cap contingent consideration.”).
The market cap contingent consideration is indexed to or settled in the Company’s own shares. As a result, the Company classified the market cap contingent consideration as a liability measured at fair value because
the financial instrument embodies a conditional obligation (the Company would only issue the shares on the condition that the applicable market capitalization threshold is met), and at inception, the monetary value of the obligation is based
solely on a fixed monetary amount ($2.0 million worth of shares for each market capitalization threshold), which will be settleable with a variable number of the Company’s
shares.
The Company uses a Black-Scholes option pricing model to estimate the fair value of its warrant liabilities and a
Monte Carlo simulation model to estimate the fair value of the contingent consideration related to the market cap contingent consideration, both of which are considered a Level 3 fair value measurement. The Company remeasures the fair value
of the warrant liabilities and the market cap contingent consideration at each reporting period and changes in the fair values are recognized in the statement of operations.
The following tables summarize the liabilities that are measured at fair value as of March 31, 2024 and December 31,2023 (in thousands):
Certain inputs used in Black-Scholes
and Monte Carlo models may fluctuate in future periods based upon factors that are outside of the Company’s control. A significant change in one or more of these inputs used in the calculation of the fair value may cause a
significant change to the fair value of the Company’s warrant liabilities or contingent consideration liabilities, which could also result in material non-cash gains or losses being reported in the Company’s condensed consolidated
statement of operations.
The following table presents
the changes in the liabilities measured at fair value from January 1, 2024 through March 31, 2024 (in thousands):
With the assistance of a third-party specialist, the Company assessed the fair value of the
contingent consideration at March 31, 2024 and determined that fair value did not materially change from the liability recorded at December 31, 2023, and therefore did not recognize a change in the fair value as of March 31, 2024.
The table below
is provided for comparative purposes only and presents information about the fair value of the Company’s convertible notes relative to the carrying values recognized in the condensed consolidated balance sheet as of March 31, 2024 and
December 31, 2023 (in thousands).
The carrying value in the table above is shown before the allocation of the proceeds to the note warrants. The Company assessed the fair value of the convertible notes as of March 31,2024 using a Monte Carlo simulation
model and as of December 31, 2023 using a binomial model, both of which are considered a Level 3 measurement.
|
GOODWILL |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 | |||
GOODWILL [Abstract] | |||
GOODWILL |
In 2018, the Company acquired IRX Therapeutics (“IRX”), which was accounted for as a business combination. The Company recorded goodwill in the
amount of $2.0 million related to the IRX acquisition . Goodwill is not amortized but is
tested for impairment annually, or more frequently if the Company becomes aware of any events occurring or changes in circumstances that indicate that the fair value of the entity is less than its carrying value. Because management evaluates
the Company as a single reporting unit, goodwill is tested for impairment at the entity level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the entity is less than its
carrying value. Such qualitative factors include macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant events. If the entity does not pass the qualitative assessment,
then the entity’s carrying value is compared to its fair value. Goodwill is considered impaired if the carrying value of the entity exceeds its fair value.
As of March 31, 2024, the Company evaluated potential triggering events that could indicate that the fair value of the entity is less than its
carrying value and determined there were no such events that occurred.
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LEASES |
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LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES |
The Company currently has operating leases for office and laboratory space in (a) the borough of Manhattan in New York, New York, (b) Cambridge, Massachusetts, and (c) Somerville, Massachusetts, which expire in 2026, 2028, and 2033,
respectively.
In October 2022, the Company entered into a sublease with a subsidiary of Bristol-Myers Squibb Company, as sublessor (“Sublessor”), for office, laboratory and research and development space of approximately 45,500 square feet in Somerville, Massachusetts. The lease expires in November 2033 and is subject to a five-year extension. Rent payments under the sublease began on November 29, 2023. The Company pays base rent of approximately $0.5 million per month during the first year of the term, which will increase 3% per year thereafter. The Company also makes monthly payments for parking, which are based on market rates that can change from time to time, and pay its share of
traditional lease expenses, including certain taxes, operating expenses and utilities.
The Company paid the Sublessor a security deposit in the form of a letter of credit in the amount of approximately $4.1
million. Provided there are no events of default by the Company under the sublease, the letter of credit will be reduced on an incremental basis throughout the term.
The Sublessor agreed to provide the Company with a tenant improvement allowance (“TIA”) of $190 per rentable square foot,
or $8.6 million. Tenant improvements in excess of this amount will be at the Company’s own cost. Construction was substantially
complete in January 2024, however, as of March 31, 2024, the Company did not have the certificate of occupancy due to circumstances beyond its control, and therefore, has not yet been able to use the premises for its intended purpose. The
total out-of-pocket costs for the improvements was approximately $1.6 million. As of March 31, 2024, the Company received the
entire $8.6 million TIA.
The Company performed an analysis on the accounting ownership of the tenant improvement assets and determined that such assets were sublessor/lessor owned. As a result, TIA payments made by the Sublessor
to the Company for the tenant improvement assets are considered a reimbursement rather than a lease incentive and not included as part of the consideration of the contract. Amounts paid by the Company for sublessor/lessor owned assets in
excess of the TIA are considered non-cash lease payments and are added to the consideration in the contract.
The Company is in discussions with the Sublessor to possibly renegotiate the terms of the sublease, which may include, among other things, deferment of rent payments as well as a reduction of the lease term, square footage, and/or
base rent. As a result, the Company has not made its rent payments on the Somerville sublease due for February, March, April or May 2024. To date, the Company owes the sublessor approximately $2.3 million in past due rent payments, including its share of amounts related to property taxes and common area maintenance costs. See Note 15 for more information
related to the past due rent.
In February 2024, the Company recognized a reduction of out-of-pocket expenses of approximately $0.4 million for the
buildout of sublessor/lessor owned assets as a result of discounts provided to the Company from certain vendors. The change in the timing of the past due rent payments described above and these cost reductions were accounted for as a lease
modification of the existing lease. The Company determined that the lease continued to be classified as an operating lease after modification and remeasured the liability for the remaining unpaid lease payments, including an aggregate $0.6 million of unpaid out-of-pocket costs above the TIA that the Company will pay for sublessor/lessor owned assets, as well as remeasuring any
variable lease payment that is based on an index or rate. The Company also requested a third-party specialist to reassess the incremental borrowing rate, which is the rate of interest that a lessee would have to pay to borrow on a
collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. This reassessment resulted in a decrease to the incremental borrowing rate from 14.4% to 11.1% as of the modification date. The
remeasurement resulted in an increase to the lease liability of approximately $4.2 million with a corresponding adjustment to the
ROU asset.
For the three months ended March 31, 2024 and 2023, the net operating lease expenses were as follows (in thousands):
The tables below show the beginning balances of the operating ROU assets and lease liabilities as of January 1, 2024 and the ending balances
as of March 31, 2024, including the changes during the period (in thousands).
As of March 31, 2024, the Company’s operating leases had a weighted-average remaining life of 9.5 years with a weighted-average discount rate of 11.07%.
The maturities of the
operating lease liabilities are as follows (in thousands):
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ACCRUED EXPENSES |
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ACCRUED EXPENSES |
Accrued expenses at March 31, 2024 and December 31, 2023 consisted of the
following (in thousands):
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RELATED PARTY TRANSACTIONS |
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RELATED PARTY TRANSACTIONS [Abstract] | |||
RELATED PARTY TRANSACTIONS |
Agreements with Factor Bioscience Inc. and Affiliates
As of March 31, 2024, the Company had the agreements described below with Factor Bioscience Inc. and/or Dr. Matthew Angel. These agreements have been deemed related party transactions because the Company’s former
chief executive officer, Dr. Angel, is the chairman and chief executive officer of Factor Bioscience Inc. and a director of its subsidiary, Factor Bioscience Limited (“Factor Limited” and together with Factor Bioscience Inc. and its other
affiliates, “Factor Bioscience”). Dr. Angel resigned as the Company’s chief executive officer effective December 31, 2023.
In September 2022, the
Company entered into a Master Services Agreement (the “MSA”) with Factor Bioscience, pursuant to which Factor Bioscience agreed to provide services to the Company as agreed between the Company and Factor Bioscience and as set forth in one or
more work orders under the MSA, including the first work order included in the MSA (“WO1”). The MSA contains customary confidentiality provisions and representations and warranties of the parties, and the MSA may be terminated by either party upon 30 days’ prior notice, subject to any superseding termination provisions contained in a particular work order.
Under WO1, Factor Bioscience
agreed to provide the Company with mRNA cell engineering research support services, including access to certain facilities, equipment, materials and training, and the Company agreed to pay Factor Bioscience an initial fee of $5.0 million, payable in 12 equal
monthly installments of approximately $0.4 million. Of the $5.0 million, the Company allocated $3.5 million to the
License Fee Obligation (as defined below). Following the initial 12-month period, the Company agreed to continue paying Factor Bioscience the monthly fee of $0.4 million until such time as WO1 is terminated. Upon entering into the MSA, the Company paid a deposit of $0.4
million, which will be applied to the last month of WO1. The Company may terminate WO1 on or after the second anniversary of the date of the MSA, subject to providing Factor Bioscience with 120
days’ prior notice. Factor Bioscience may terminate WO1 only on and after the fourth anniversary of the
date of the MSA, subject to providing the Company with 120 days’ prior notice. On May 11, 2024, the Company and Factor Bioscience
amended the termination provision of the WO1 to allow the Company to provide 75 days’ notice to terminate WO1 if such notice is provided no later than June 30, 2024. Beginning on July 1, 2024, the Company will then be required to provide 120
days' notice to terminate WO1.
In connection with entering into the MSA, Factor Limited entered into a waiver agreement with Eterna LLC, pursuant to which Factor Limited agreed to waive payment of $3.5 million otherwise payable to it (the “License Fee Obligation”) in October 2022 by Eterna LLC under the exclusive license agreement entered into
in April 2021 by and among Eterna LLC, Novellus Limited and Factor Limited (the “Original Factor License Agreement”). Under the terms of the waiver agreement, the License Fee Obligation is waived conditionally on the Company paying Factor
Bioscience a minimum of $3.5 million due under the MSA.
Because the License Fee Obligation was conditionally waived until the Company paid Factor Bioscience a minimum of $3.5
million under the MSA, the Company recorded a liability of $3.5 million. As of March 31, 2024, there was approximately $1.2 million of the unamortized License Fee Obligation remaining, which is recorded on the accompanying condensed consolidated balance sheet in the
“due to related party, current” line item.
In September 2022, Novellus Inc. (“Novellus”) and the Company entered into a Second Amendment to the Limited Waiver and Assignment Agreement (the “Waiver and Assignment
Agreement”) with Drs. Matthew Angel and Christopher Rohde (the “Founders”) whereby the Company agreed to be responsible for all future, reasonable and substantiated legal fees, costs, settlements and judgments incurred by the Founders, the
Company or Novellus for certain claims and actions and any pending or future litigation brought against the Founders, Novellus and/or the Company by or on behalf of the Westman and Sowyrda legal matters described in Note 10 (the “Covered
Claims”). The Founders will continue to be solely responsible for any payments made to satisfy a judgement or settlement of any pending or future wage act claims. Under the Waiver and Assignment Agreement, the Founders agreed that they
are not entitled to, and waived any right to, indemnification or advancement of past, present or future legal fees, costs, judgments, settlement or other liabilities they may have been entitled to receive from the Company or Novellus in
respect of the Covered Claims. The Company and the Founders will share in any recoveries up to the point at which the parties have been fully compensated for legal fees, costs and expenses incurred, with the Company retaining any excess
recoveries. The Company has the sole authority to direct and control the prosecution, defense and settlement of the Covered Claims.
In November 2022, following the expiration of one of the milestone deadlines for certain regulatory filings required under the Third Amended and Restated Exclusive License Agreement between Novellus Limited and Factor Limited entered
into in November 2020 (the “Novellus-Factor License Agreement”), which permitted Factor Limited to terminate the license granted to Novellus Limited thereunder, the Company entered into the first amendment to the Original Factor License
Agreement (as amended, the “2021 Factor License Agreement”), pursuant to which, among other things, Factor Limited granted to Eterna LLC an exclusive, sublicensable license under certain patents owned by Factor Limited (the “Factor Patents”)
for the purpose of identifying and pursuing certain opportunities to grant to third parties sublicenses to the Factor Patents. The Original Factor License Agreement also (i) terminated the Novellus-Factor License Agreement, (ii) confirmed
Factor Limited’s grant to Eterna LLC of the rights and licenses Novellus Limited previously granted to Eterna LLC under the Novellus-Factor License Agreement on the same terms and conditions as granted by Novellus Limited to Eterna LLC under
such agreement, (iii) confirmed that the sublicense granted by Novellus Limited in accordance with the Novellus-Factor License Agreement to NoveCite, Inc., a company which the Company has a 25% non-controlling interest (“NoveCite”), survived termination of the Novellus-Factor License Agreement; and (iv) removed Novellus Limited from the Original Factor
License Agreement and the license agreement entered into on October 6, 2020 between Novellus Limited and NoveCite, Inc, as amended, and replaced Novellus Limited with Factor Limited as the direct licensor to Eterna LLC and NoveCite under such
agreements, respectively.
On February 20, 2023, the Company, entered into an exclusive license agreement (the “Feb 2023 Factor Exclusive License Agreement”) with Factor Limited, pursuant to which Factor Limited granted to the Company an exclusive,
sublicensable, worldwide license under certain patents owned by Factor Limited for the purpose of, among other things, identifying and pursuing certain opportunities to develop products in respect of such patents and to otherwise grant to
third parties sublicenses to such patents. The Feb 2023 Factor Exclusive License Agreement, which terminated and superseded the Amended Factor License Agreement, was subsequently terminated and superseded by the A&R Factor License
Agreement (as defined below).
On November 14, 2023, the Company entered into an amended and restated exclusive license agreement (the “A&R Factor License Agreement”) with Factor Limited to replace in its entirety the exclusive license agreement between the
parties dated February 20, 2023 and the amendment thereto. Under the terms of the A&R Factor License Agreement, Factor Limited granted to the Company an exclusive, sublicensable license under certain patents owned by Factor Limited (the
“Factor Patents”). The A&R Factor License Agreement also provides for, among other things, the expansion of the Company’s license rights to include (i) the field of use of the Factor Patents to include veterinary uses (ii) know-how that
is necessary or reasonably useful to practice to the licensed patents, (iii) the ability to sublicense through multiple tiers (as opposed to only permitting a direct sublicense) and (iv) the transfer of technology to the Company, subject to
the use restrictions in the A&R Factor License Agreement. The term of the A&R Factor License Agreement expires on November 22, 2027, but will be automatically extended for an additional five years (such period, the “Renewal Term”) if the Company pays at least $6.0
million to Factor Limited from fees from sublicenses to the Factor Patents (“Sublicense Fees”), other cash on hand or a combination of both sources of funds. The Company will pay to Factor Limited 20% of any Sublicense Fee received by the Company during the term of the A&R Factor License Agreement. Beginning in September 2024, the Company will also begin
paying Factor Limited a monthly maintenance fee of approximately $0.4 million until the expiration of the A&R Factor License
Agreement, including any Renewal Term. The Company may terminate the A&R Factor License Agreement upon 120 days’ written
notice to Factor Limited, and both parties have additional customary termination rights. Under the A&R Factor License Agreement, the Company is obligated to pay the expenses incurred by Factor Limited in preparing, filing, prosecuting
and maintaining the Factor Patents and the Company agreed to bear all costs and expenses associated with enforcing and defending the Factor Patents in any action or proceeding arising from pursuit of sublicensing opportunities under the
license granted under the A&R Factor License Agreement.
Exacis Asset Acquisition
On April 26, 2023, the Company entered into ta purchase agreement with Exacis pursuant to which the Company acquired certain assets from Exacis, including all of Exacis’ right, title
and interest in a license that Exacis previously entered into with Factor Limited. The Company assumed none of Exacis’ liabilities, other than liabilities under the acquired license that accrue subsequent to the closing date.
The Exacis asset acquisition was deemed a related party transaction because, at the time of the acquisition, (i) Dr. Gregory Fiore was both the chief
executive officer of Exacis and a member of the Company’s board of directors, (ii) Dr. Angel was both the Company’s chief executive officer and chairman of Exacis’ scientific advisory board, and (iii) an affiliate of Factor Bioscience was
the majority stockholder of Exacis.
In October 2022, the Company entered into an Option Agreement on October 8, 2022 with Exacis (the “Exacis Option Agreement”), pursuant to which Exacis granted the Company the option to
negotiate and enter into an exclusive worldwide license to certain of the technology licensed by Exacis for the treatment of cancer in humans. The Exacis Option Agreement provided for the Company paying Exacis a fee of $250,000 for the option, which would be creditable against the fees or purchase price payable under any such license if entered into by the
Company in accordance with Exacis Option Agreement. The Company did not exercise the option, and the Exacis Option Agreement terminated on December 31, 2022.
Consulting Agreement with Former Director
In May 2023, the Company entered into a consulting agreement with Dr. Fiore, whereby Dr. Fiore agreed to provide business development consulting services to the Company for a monthly retainer of $20,000. The consulting agreement was terminable for any reason by either party upon 15 days’ written notice. The Company terminated the consulting agreement, effective July 31, 2023. Dr. Fiore served on the Company’s board of directors from June 2022 to October
4, 2023.
July 2023 and December 2023 Financings
Investors in the July 2023 convertible note financing included Brant Binder, Richard Wagner, Charles Cherington and Nicholas Singer, and investors in the
December 2023 convertible note financing included Messrs. Cherington and Singer. Each of them participated in the applicable financing under the same terms and subject to the same conditions as all the other investors. See Note 4
for additional information regarding the financings. Mr. Binder served on the Company’s board of directors from July 6, 2023 to August 8, 2023, Mr. Wagner served on the Company’s board of directors from July 6, 2023 to August 8,
2023, Mr. Cherington served on the Company’s board of directors from March 2021 to July 6, 2023, and Mr. Singer served on the Company’s board of directors from June 2022 to July 6, 2023.
Q4-22 PIPE In November 2022, the Company entered into a securities purchase agreement with certain investors providing for the
issuance of approximately of 2,185,000 units, each unit consisting of (i) one share of the Company’s common stock and (ii) two
warrants to purchase shares of the Company’s common stock, at a purchase price of $3.53 per unit. The financing closed in
December 2022. Messrs. Cherington and Singer invested in the financing on the same terms and subject to the same conditions as all other investors in the financing. Mr. Cherington served on the Company’s board of directors from March
2021 to July 6, 2023, and Mr. Singer served on the Company’s board of directors from June 2022 to July 6, 2023.
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COMMITMENTS AND CONTINGENCIES |
3 Months Ended | ||
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Mar. 31, 2024 | |||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||
COMMITMENTS AND CONTINGENCIES |
Litigation Matters
The Company is involved in litigation and arbitrations from time to time in the ordinary course of business. Legal fees and other costs
associated with such actions are expensed as incurred. In addition, the Company assesses the need to record a liability for litigation and contingencies. The Company reserves for costs relating to these matters when a loss is probable, and the
amount can be reasonably estimated.
Novellus, Inc. v. Sowyrda et al., C.A. No.
2184CV02436-BLS2
On October 25, 2021 Novellus, Inc. filed a complaint in the Superior Court of Massachusetts, Suffolk County, against former Novellus, Inc.
employees Paul Sowyrda and John Westman and certain other former investors in Novellus LLC (Novellus, Inc.’s former parent company prior to our acquisition of Novellus, Inc.), alleging breach of fiduciary duty, breach of
contract and civil conspiracy. Eterna acquired Novellus, Inc. on July 16, 2021. On May 27, 2022 Novellus, Inc. amended the complaint to withdraw all claims against all defendants except Paul Sowyrda and John Westman. On
July 1, 2022, Westman filed a motion to compel arbitration or in the alternative, to stay the litigation pending the disposition of certain litigation in the Court of Chancery for the State of Delaware filed by Mr. Sowyrda
against Novellus LLC, Dr. Christopher Rohde, Dr. Matthew Angel, Leonard Mazur and Factor Bioscience, Inc. captioned Zelickson et al., v. Angel et al., C.A. 2021-1014-JRS and by Westman against Novellus LLC captioned Westman
v. Novellus LLC, C.A. No. 2021-0882-NAC (together, the “Delaware Actions”). On July 1, 2022, Sowyrda answered the complaint and asserted counterclaims against Novellus, Inc, and third-party defendants Dr. Matthew Angel and
Dr. Christopher Rohde alleging violations of the Massachusetts Wage Act, Massachusetts Minimum Fair Wage Law, the Fair Labor Standards Act, breach of contract, unjust enrichment and quantum meruit. Sowyrda also joined in
Westman’s motion to stay the case pending the Delaware Actions. Novellus, Inc.’s claims and Mr. Sowyrda’s counterclaims relate to alleged conduct that took place before Eterna acquired Novellus, Inc.
On November 15, 2022, prior to a decision on Westman’s and Sowyrda’s motion to compel or stay, the parties agreed to voluntarily dismiss and consolidate the Delaware Actions with
this action. On December 15, 2022, Sowyrda filed an Amended Answer to the Amended Complaint, asserted affirmative defenses and filed Amended Counterclaims against Dr. Angel, Dr. Rohde, Novellus LLC, Novellus Inc., Factor
Bioscience Inc., and Eterna Therapeutics Inc. (collectively,
the “Counterclaim Defendants”) alleging against various Counterclaim Defendants breach of contract, breaches of the implied duty of good faith and fair dealing, breaches of fiduciary duty, breaches of the
operating agreement, aiding and abetting breaches of fiduciary duty, tortious interference with contract, equitable accounting, violations of the Massachusetts Wage Act, Massachusetts Minimum Fair Wage Law, the Fair Labor
Standards Act, unjust enrichment, and quantum meruit. Also on December 15, 2022, Westman filed an answer to the Amended Complaint and asserted similar counterclaims against the same Counterclaim Defendants. Westman and
Sowyrda each asserted claims for indemnification and/or advancement against Novellus, Inc. On January 11, 2023, Westman and Sowyrda served a joint motion to enforce their advancement and/or indemnification rights against
Novellus Inc. Novellus Inc. vigorously opposes this motion and served its opposition on January 27, 2023. On February 8, 2023, Westman and Sowyrda served a reply in support of their motion to enforce
indemnification/advancement rights, and submitted the motion to the Court. Novellus Inc. answered Westman and Sowyrda’s counterclaims on January 27, 2023, denying liability. The remaining Counterclaim Defendants served a
motion to dismiss most of the remaining counterclaims on January 27, 2023. The Court entered an order granting the Counterclaim Defendants’ motion to dismiss and denying Sowyrda and Westman’s motion to enforce on June 15,
2023. The Court’s order dismissed all of Westman’s claims against Counterclaim Defendants except his claim for indemnification, and all of Sowyrda’s claims except his claim for indemnification and his employment-related
claims, which Counterclaim Defendants did not move to dismiss. On July 6, 2023, Westman and Sowyrda filed a petition for interlocutory review with a single justice of the Massachusetts Appeals Court, seeking to overturn
the judge’s decision granting the Counterclaim Defendants’ motion to dismiss most of the remaining counterclaims, but not the decision denying Westman and Sowyrda’s motion to enforce advancement rights. On
July 25, 2023, the parties to the appeal filed a joint motion to the single justice in the appellate court to stay the appeal to allow for amended counterclaims to be filed by Counterclaim Plaintiffs and a motion to dismiss to
be filed by Counterclaim Defendants. Counterclaim Plaintiffs filed an initial set of amended counterclaims on August 15, 2023. Counterclaim Plaintiffs amended and refiled their amended counterclaims on September 29, 2023.
Counterclaim Defendants served their motion to dismiss all of the amended counterclaims, except for Sowyrda’s employment-related claims, on October 13, 2023. Oral argument on the motion to dismiss the amended counterclaims is
currently scheduled for May 21, 2024.
Under applicable Delaware law and Novellus Inc.’s organizational documents, the Company may be required to advance or
reimburse certain legal expenses incurred by former officers and directors of Novellus, Inc. in connection with the foregoing Westman and Sowyrda matters. However, a future advance or reimbursement is not currently probable
nor can it be reasonably estimated.
eTheRNA Immunotherapies NV and eTheRNA Inc. v. Eterna Therapeutics Inc. C.A. No. 123CV11732
On July 31, 2023, eTheRNA Immunotherapies NV and eTheRNA Inc. filed a complaint against the Company alleging the following claims: (1) federal trademark infringement; (2) federal unfair
competition; (3) Massachusetts state common law trademark infringement; (4) Massachusetts state unfair competition. On April 2, 2024, the parties settled the claims and stipulated to dismiss the complaint with prejudice.
Per the settlement agreement entered into between the parties on March 19, 2024, the Company plans to phase-out its current use of the ETERNA trademark by October 31, 2024.
Licensing Agreements
On November 14, 2023, the Company entered into the A&R Factor License
Agreement with Factor Limited. See Note 9 for details of this agreement.
Retirement Savings
Plan
The Company established a defined contribution plan, organized under Section 401(k) of the Internal Revenue Code, which allows employees to defer up to 90% of their pay on a pre-tax basis. Beginning on January 1, 2023, the Company began matching employees’ contributions at a rate of 100% of the first 3% of
the employee’s contribution and 50% of the next 2% of the employee’s contribution, for a maximum Company match of 4%.
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STOCK-BASED COMPENSATION |
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STOCK-BASED COMPENSATION |
Stock Options
During the three months ended March 31, 2024 and 2023, the Company granted the
following stock options (in thousands):
On January 1,
2024, Sanjeev Luther was appointed as President, Chief Executive Officer and a director of the Company. Upon his appointment, he was granted a non-qualified stock option to purchase approximately 1,685,000 shares of the Company’s common stock. The stock option has an exercise price of $1.80 per share, which was equal to the fair market value (as defined in the 2020 Restated Equity Incentive Plan) of the Company’s common stock on the date of grant, will vest over four years, with 25% of the shares
vesting on the first anniversary of the grant date and the remaining 75% of the shares vesting in equal monthly installments over the three years
thereafter, in each case, subject to continued service. The stock option was granted pursuant to the terms of Mr. Luther’s employment agreement and as a material inducement to his joining the Company in accordance with Nasdaq Listing Rule
5635(c)(4).
On April 26, 2024,
the vesting terms of Mr. Luther’s stock option award was amended so that the stock option vests over three years, with 25% of the shares vesting on the first anniversary of the grant date and the remaining 75% of the shares will vest in equal monthly installments over the remaining
two years, in each case, subject to continued service.
The Company
recognizes stock-based compensation expense for stock options granted to employees, directors and certain consultants. The Company estimates the fair value of stock options using the Black-Scholes option pricing model. The fair value of stock
options granted is recognized as expense over the requisite service period on a straight-lined basis.
The following weighted-average assumptions were used for stock options granted during the three months ended March 31,
2024 and 2023:
The
per-share weighted average grant-date fair value of stock options granted during the three months ended March 31, 2024 and 2023 was $1.45
and $3.15, respectively.
Vesting
of all stock option grants is subject to continuous service with the Company through the applicable vesting date. As of March 31, 2024, there were approximately 2,085,000 stock options outstanding.
Restricted Stock Units
The
Company recognizes the fair value of RSUs as expense on a straight-line basis over the requisite service period. For performance-based RSUs, the Company begins recognizing the expense once the achievement of the related performance goal is
determined to be probable.
Outstanding
RSUs are settled in an equal number of shares of common stock on the vesting date of the award. An RSU award is settled only to the extent vested. Vesting generally requires the continued employment or service by the award recipient through the
applicable vesting date. Because RSUs are settled in an equal number of shares of common stock without any offsetting payment by the recipient, the measurement of cost is based on the quoted market price of the stock at the measurement date,
which is the grant date.
In
lieu of paying cash to satisfy withholding taxes due upon the settlement of vested RSUs, at the Company’s discretion, an employee may elect to have shares of common stock withheld that would otherwise be issued at settlement, the value of which
is equal to the amount of withholding taxes payable. No RSUs vested during either of the three months ended March 31, 2024 and
2023.
The Company did not grant RSUs during either of the three months ended March 31, 2024 and 2023.
Stock-Based Compensation Expense
For the three months ended March 31, 2024 and 2023, the Company
recognized stock-based compensation expense as follows (in thousands):
|
WARRANTS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANTS |
As discussed in Notes 4 and 5,
respectively, the Company issued the note warrants and the Q1-22 warrants. The Company also has warrants outstanding from a private placement completed in the fourth quarter of 2022 (the “Q4-22 warrants”).
As of March 31, 2024, the Company has the following warrants outstanding:
As
of March 31, 2024, the weighted average remaining contractual life of the warrants outstanding was 4.46 years and the weighted
average exercise price was $2.05.
|
NET LOSS PER SHARE |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE |
The Company calculates basic and diluted net loss per share attributable to common stockholders in conformity with the two-class method required for
participating securities. The convertible notes contractually entitle the holders thereof to participate in dividends but does not contractually require the holders to participate in the Company’s losses. As such, the two-class method is not
applicable during periods with a net loss.
Basic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of shares of common
stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of shares of common
stock outstanding plus dilutive securities. Shares of common stock issuable upon exercise, conversion or vesting of outstanding stock options, RSUs, warrants and shares of Series A convertible preferred stock are considered potential shares of
common stock and are included in the calculation of diluted net loss per share using the treasury method when their effect is dilutive. The outstanding convertible notes are also considered potential shares of common stock and are included in the
calculation of diluted net loss per share using the “if-converted” method, and the more dilutive of either the two-class method or the if-converted method is reported. Diluted net loss per share is the same as basic net loss per share for periods
in which the effect of potentially dilutive shares of common stock is antidilutive.
The following table presents the number of shares subject to outstanding warrants, stock options, RSUs, Series A convertible preferred stock
and convertible notes that were excluded from the computation of diluted net loss per share of common stock for the three months ended March 31, 2024 and 2023, as their effect was anti-dilutive (in thousands):
|
RECENT ACCOUNTING PRONOUNCEMENTS |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 | |||
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |||
RECENT ACCOUNTING PRONOUNCEMENTS |
No new Accounting Standards Updates have been issued by the Financial Accounting Standards Board since January 1, 2024 that would apply
to the Company that are not disclosed in the 2023 10-K.
|
SUBSEQUENT EVENT |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 | |||
Subsequent Event [Abstract] | |||
Subsequent Event |
On May 3, 2024, the Company received a notice from the Sublessor of the Somerville, Massachusetts
facility regarding past due rent payments of approximately $2.3 million, including its share of amounts related to property taxes and
common area maintenance costs, that the Company has not paid for the months of February, March, April and May 2024. Failure to pay the past due rent payments in full, plus approximately $70,000 in late fees and interest, within five business days from the date of the notice constitutes an event of default under the sublease. The Company had discussions with
the Sublessor subsequent to receiving the notice about remedying the event of default, and as a result of those discussions, did not pay any of the past due rent payments or any of the late fees or interest within such five business day period.
The Company also has been stet discussions with the Sublessor to renegotiate the terms of the sublease, which may include, among other things, deferment of rent payments and/or a reduction of the lease term, square footage, and/or base rent.
If an event of default exists under the sublease, beyond applicable notice and cure periods, the Sublessor may draw down the letter of credit
and use, apply or retain such portion of the proceeds from the letter of credit as may be necessary (i) for the payment of any rent or any other sum in default, (ii) for the payment of any other amount which the Sublessor may, in accordance
with the terms of the sublease, spend or become obligated to spend by reason of the Company’s default, or (iii) to compensate the Sublessor, in accordance with the terms of the sublease, for any other loss or damage which the Sublessor may
suffer by reason of the Company’s default, including costs and reasonable attorneys’ fees incurred by the Sublessor to recover possession of the premises following a default by the Company. As of the date of filing of this report, the Sublessor
has not drawn down on the letter of credit. The use or application of the proceeds from the letter of credit or any portion thereof does not prevent the Sublessor from exercising any other right or remedy provided under the sublease or under
law. If any portion of the letter of credit is so used or applied, the Company must, upon demand therefor, amend the letter of credit, provide an additional letter of credit or deposit cash with the Sublessor, in each such case in an amount
sufficient to restore the security deposit within 10 business days to the appropriate amount. See the risk factor titled, “Our monthly rent payment obligations under our sublease are significant and we currently owe approximately $2.3 million in past due rent. An event of default under our sublease could be an event of default under our outstanding convertible notes,” in Item
1A. Risk Factors of Part II of this report.
|
Insider Trading Arrangements |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies) |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION [Abstract] | |
Basis of Presentation |
Basis of Presentation
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial statements and with the
instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited financial
statements include all the normal recurring adjustments that are necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented.
These condensed consolidated financial statements should be read together with the audited consolidated financial statements and notes thereto contained in Eterna’s Annual Report on Form 10-K for the year ended December 31, 2023 filed
with the Securities and Exchange Commission (the “SEC”) on March 14, 2024, as amended by the Form 10-K/A filed with the SEC on March 18, 2024 (as amended, the “2023 10-K”). The accompanying condensed consolidated balance sheet as of December
31, 2023 has been derived from the audited financial statements contained in the 2023 10-K but does not include all of the information and footnotes required by GAAP for complete financial statements. The results of operations for the three
months ended March 31, 2024 are not necessarily indicative of the results to be anticipated for the entire year ending December 31, 2024, or any other period.
|
RECENT ACCOUNTING PRONOUNCEMENTS (Policies) |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | |
Recent Accounting Pronouncements |
No new Accounting Standards Updates have been issued by the Financial Accounting Standards Board since January 1, 2024 that would apply
to the Company that are not disclosed in the 2023 10-K.
|
CONVERTIBLE NOTES FINANCINGS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONVERTIBLE NOTES FINANCINGS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Based on Relative Fair Value Allocation of Proceeds and Costs |
The Company determined that
there were no embedded derivatives within the convertible notes that required bifurcation from the host agreement. In connection with the December 2023 convertible notes that were issued on January 11, 2024, the Company allocated the gross proceeds
received and the fees incurred over the applicable convertible notes and warrants based on their relative fair values as follows (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Assumptions |
The Company estimated the fair values of the convertible notes as of
January 11, 2024 based off a valuation performed by a third-party specialist as of December 15, 2023 using a binomial tree model and the following assumptions:
The fair value of the note warrants, all of which qualified for equity
classification, was determined using the Black-Scholes pricing model as of January 11, 2024 using the following assumptions:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity of Convertible Notes |
The following table shows the
activity that occurred during the three months ended March 31, 2024 for the convertible notes on the accompanying condensed consolidated balance sheet:
|
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities Measured at Fair Value |
The following tables summarize the liabilities that are measured at fair value as of March 31, 2024 and December 31,2023 (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Warrant Liabilities |
The following table presents
the changes in the liabilities measured at fair value from January 1, 2024 through March 31, 2024 (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value and Carrying Values of Convertible Notes |
The table below
is provided for comparative purposes only and presents information about the fair value of the Company’s convertible notes relative to the carrying values recognized in the condensed consolidated balance sheet as of March 31, 2024 and
December 31, 2023 (in thousands).
|
LEASES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Operating Lease Expense |
For the three months ended March 31, 2024 and 2023, the net operating lease expenses were as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease Right-of-use Assets and Liabilities |
The tables below show the beginning balances of the operating ROU assets and lease liabilities as of January 1, 2024 and the ending balances
as of March 31, 2024, including the changes during the period (in thousands).
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturities of Operating Lease Liabilities | The maturities of the
operating lease liabilities are as follows (in thousands):
|
ACCRUED EXPENSES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses |
Accrued expenses at March 31, 2024 and December 31, 2023 consisted of the
following (in thousands):
|
STOCK-BASED COMPENSATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option Granted |
During the three months ended March 31, 2024 and 2023, the Company granted the
following stock options (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-Average Assumptions Used for Stock Options Granted |
The following weighted-average assumptions were used for stock options granted during the three months ended March 31,
2024 and 2023:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Expense |
For the three months ended March 31, 2024 and 2023, the Company
recognized stock-based compensation expense as follows (in thousands):
|
WARRANTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants Outstanding |
As of March 31, 2024, the Company has the following warrants outstanding:
|
NET LOSS PER SHARE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Diluted Net Loss per Share of Common Stock |
The following table presents the number of shares subject to outstanding warrants, stock options, RSUs, Series A convertible preferred stock
and convertible notes that were excluded from the computation of diluted net loss per share of common stock for the three months ended March 31, 2024 and 2023, as their effect was anti-dilutive (in thousands):
|
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024
Patents
| |
Description of Business [Abstract] | |
Number of patents | 100 |
CONTRACT WITH CUSTOMER (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Feb. 21, 2023 |
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Contract with Customers [Abstract] | |||
Proceeds from option and license agreement | $ 300 | $ 300 | |
Proceeds from cell line customization activities | $ 400 | ||
Performance obligation, percentage | 100.00% | ||
Revenue recognized in previous periods | 0 | ||
Catch-up adjustment to revenue | $ 0 | ||
Revenue recognized | 0 | ||
Option fee obligation payment percentage | 20.00% | ||
License fees | $ 0 | ||
Maximum [Member] | |||
Contract with Customers [Abstract] | |||
Revenue recognized | 100 | ||
License fees | $ 100 | ||
Revenue Recognized Over Time [Member] | |||
Contract with Customers [Abstract] | |||
Revenue recognized | $ 400 |
CONVERTIBLE NOTES FINANCINGS, Based on Relative Fair Value Allocation of Proceeds and Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jan. 11, 2024 |
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Allocation of Proceeds and Costs [Abstract] | |||
Relative Fair Value | $ 3,785 | ||
Allocation Percentage | 100.00% | ||
Proceeds | $ 1,405 | $ 1,405 | $ 0 |
Costs | (66) | ||
Proceeds from Convertible Debt Net | 1,339 | ||
Note Warrants [Member] | |||
Allocation of Proceeds and Costs [Abstract] | |||
Relative Fair Value | $ 2,035 | ||
Allocation Percentage | 53.76% | ||
Proceeds | $ 755 | ||
Costs | (35) | ||
Proceeds from Convertible Debt Net | 720 | ||
Convertible Notes [Member] | |||
Allocation of Proceeds and Costs [Abstract] | |||
Relative Fair Value | $ 1,750 | ||
Allocation Percentage | 46.24% | ||
Proceeds | $ 650 | ||
Costs | (31) | ||
Proceeds from Convertible Debt Net | $ 619 |
FAIR VALUE OF FINANCIAL INSTRUMENTS, Summary (Details) - USD ($) $ in Millions |
Apr. 26, 2023 |
Nov. 23, 2022 |
Mar. 31, 2022 |
---|---|---|---|
Exacis Asset Purchase [Member] | |||
Fair Value of Financial Instruments [Abstract] | |||
Asset Acquisition, issuing amount | $ 2.0 | ||
Market capitalization of monetary amount | 2.0 | ||
Exacis Asset Purchase [Member] | Contingent Consideration One [Member] | |||
Fair Value of Financial Instruments [Abstract] | |||
Market capitalization requirement, amount | 100.0 | ||
Exacis Asset Purchase [Member] | Contingent Consideration Two [Member] | |||
Fair Value of Financial Instruments [Abstract] | |||
Market capitalization requirement, amount | $ 200.0 | ||
Q1-22 PIPE Investor [Member] | |||
Fair Value of Financial Instruments [Abstract] | |||
Private placement (in shares) | 2,185,000 | ||
Q1-22 PIPE Investor [Member] | Common Warrants [Member] | |||
Fair Value of Financial Instruments [Abstract] | |||
Private placement (in shares) | 343,000 |
FAIR VALUE OF FINANCIAL INSTRUMENTS, Liabilities Measured at Fair Value (Details) - Level 3 [Member] - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Market Cap Contingent Consideration [Member] | ||
Liabilities [Abstract] | ||
Liabilities, fair value disclosure | $ 107 | $ 107 |
Common Warrants [Member] | Warrant Liabilities [Member] | ||
Liabilities [Abstract] | ||
Liabilities, fair value disclosure | $ 186 | $ 116 |
FAIR VALUE OF FINANCIAL INSTRUMENTS, Changes in Warrant Liabilities (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Changes in Fair Value of Warrant Liabilities [Roll Forward] | |
Change in fair value of contingent consideration | $ 0 |
Contingent Consideration [Member] | |
Changes in Fair Value of Warrant Liabilities [Roll Forward] | |
Fair value, beginning of period | 107 |
Change in fair value | 0 |
Fair value, end of period | 107 |
Warrant Liabilities [Member] | |
Changes in Fair Value of Warrant Liabilities [Roll Forward] | |
Fair value, beginning of period | 116 |
Change in fair value | 70 |
Fair value, end of period | $ 186 |
FAIR VALUE OF FINANCIAL INSTRUMENTS, Carrying Value and Fair Value of Convertible Notes (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Jan. 11, 2024 |
Dec. 31, 2023 |
---|---|---|---|
Debt Instrument, Fair Value Disclosure [Abstract] | |||
Convertible Debt | $ 3,785 | ||
Carrying Value [Member] | Level 3 [Member] | |||
Debt Instrument, Fair Value Disclosure [Abstract] | |||
Convertible Debt | $ 18,198 | $ 16,616 | |
Fair Value [Member] | Level 3 [Member] | |||
Debt Instrument, Fair Value Disclosure [Abstract] | |||
Convertible Debt | $ 28,340 | $ 17,594 |
GOODWILL (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
GOODWILL [Abstract] | ||
Goodwill | $ 2,044 | $ 2,044 |
LEASES, Net Operating Lease Expenses (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Net Operating Lease Expense [Abstract] | ||
Operating lease expense | $ 1,637 | $ 68 |
Sublease income | (21) | (21) |
Variable lease expense | 330 | 5 |
Total lease expense | $ 1,946 | $ 52 |
LEASES, Operating Lease Right-of-use Assets and Liabilities (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Operating Lease, ROU Assets [Abstract] | |||
Operating lease ROU assets, Beginning | $ 32,781 | ||
Adjustment to ROU asset for remeasurement of Somerville Sublease liability | 4,245 | ||
Amortization of operating lease ROU assets | (502) | $ (41) | |
Operating lease ROU assets, Ending | 36,524 | ||
Operating Lease, Liabilities [Abstract] | |||
Operating lease liabilities, Beginning | 35,070 | ||
Adjustment to lease liablity due to remeasurement of Somerville Sublease | 4,245 | ||
Accretion of interest for Somerville Sublease | 709 | ||
Principal payments on operating lease liabilities | (585) | ||
Operating lease liabilities, Ending | 39,439 | ||
Less non-current portion | 36,565 | $ 32,854 | |
Current portion | $ 2,874 |
LEASES, Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Weighted Average Remaining Lease Term and Discount Rate [Abstract] | ||
Weighted average remaining lease term | 9 years 6 months | |
Weighted average discount rate | 11.07% | |
Maturities of Operating Lease Liabilities [Abstract] | ||
2024 | $ 5,532 | |
2025 | 6,075 | |
2026 | 6,238 | |
2027 | 6,308 | |
2028 | 6,406 | |
Thereafter | 33,880 | |
Total payments | 64,439 | |
Less: Imputed interest | (25,000) | |
Total operating lease liabilities | $ 39,439 | $ 35,070 |
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
ACCRUED EXPENSES [Abstract] | ||
Convertible notes interest | $ 407 | $ 176 |
Legal fees and related | 259 | 643 |
Somerville facility | 221 | 218 |
Professional fees | 218 | 239 |
Accrued compensation | 201 | 109 |
Other | 562 | 508 |
Total accrued expenses | $ 1,868 | $ 1,893 |
COMMITMENTS AND CONTINGENCIES (Details) |
12 Months Ended | |
---|---|---|
Jan. 01, 2023 |
Dec. 31, 2022 |
|
Maximum [Member] | ||
Defined Contribution Plan [Abstract] | ||
Employees contribution, deferral percentage of their pay on a pre-tax basis | 90.00% | |
401K [Member] | ||
Defined Contribution Plan [Abstract] | ||
Employees contribution, deferral percentage of their pay on a pre-tax basis | 100.00% | |
Employer matching contribution up to first 3% | 3.00% | |
Employee contribution threshold for matching percentage | 50.00% | |
Employer matching contribution in excess of first 2% | 2.00% | |
Deferred compensation matched by employer, next match | 4.00% |
STOCK-BASED COMPENSATION, Weighted-Average Assumptions Used for Stock Options Granted (Details) - Stock Options [Member] |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Weightage-Average Assumptions Used for Stock Options Granted [Abstract] | ||
Weighted average risk-free rate | 4.49% | 3.86% |
Weighted average volatility | 99.13% | 95.04% |
Dividend yield | 0.00% | 0.00% |
Expected term | 6 years 29 days | 5 years 4 months 9 days |
STOCK-BASED COMPENSATION, Summary of Stock Options (Details) - Stock Options [Member] - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Stock-based Compensation [Abstract] | ||
Weighted average grant date fair value (in dollars per share) | $ 1.45 | $ 3.15 |
Number of stock option awards outstanding (in shares) | 2,085,000 |
STOCK-BASED COMPENSATION, Restricted Stock Units (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
RSU [Member] | ||
Stock-based Compensation [Abstract] | ||
RSUs vested (in shares) | 0 | |
RSU [Member] | Employees [Member] | ||
Stock-based Compensation [Abstract] | ||
Number of RSUs granted (in shares) | 0 | |
Performance-Based Restricted Stock Units [Member] | Employees [Member] | ||
Stock-based Compensation [Abstract] | ||
Number of RSUs granted (in shares) | 0 |
STOCK-BASED COMPENSATION, Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Stock-Based Compensation Expense [Abstract] | ||
Stock-based compensation expense | $ 282 | $ 689 |
Research and Development [Member] | ||
Stock-Based Compensation Expense [Abstract] | ||
Stock-based compensation expense | 46 | 64 |
General and Administrative [Member] | ||
Stock-Based Compensation Expense [Abstract] | ||
Stock-based compensation expense | $ 236 | $ 625 |
SUBSEQUENT EVENT (Details) - Subsequent Event [Member] |
May 03, 2024
USD ($)
|
---|---|
Operating Costs and Expenses [Abstract] | |
Past due rent amount | $ 2,300,000 |
Late fees and interest payment due on rent amount | $ 70,000 |
1 Year Eterna Therapeutics Chart |
1 Month Eterna Therapeutics Chart |
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