Eterna Therapeutics Inc. entered into a purchase agreement for a private placement of senior convertible promissory notes for gross proceeds of approximately $8,700,000 on July 13, 2023. The company will also issue accompanying warrants to purchase common stock. The notes, which were issued at par, bear interest at a rate of 6.0% per year, payable quarterly, and mature in July 2028 unless earlier redeemed, repurchased or converted in accordance with their terms. The notes may be converted from time to time in whole or in part into shares of Eterna common stock at a conversion price of $2.86 per share, subject to customary adjustments for stock splits, stock dividends.

The notes do not contain any ratchet or other financial antidilution provisions. The company has received $8,715,000 pursuant to Regulation D and included participation from 2 investors. The transaction included participation from Charles Cherington acquired $3,300,000 in aggregate principal amount of Notes and 2,307,692 accompanying warrants to purchase one share of Common Stock, representing 200% of the number of shares of Common Stock into which the Notes are initially convertible.

The notes will be matured on July 14, 2028, unless earlier converted or repurchased. The Company may not redeem the Notes at its option prior to maturity. The transaction included participation from Brant Binder, Richard Wagner, current directors of the Company, and former directors, Charles Cherington and Nicholas Singer, participated in the Private Placement on the same terms and subject to the same conditions as all other Purchasers.

The Company issued Warrants to purchase an aggregate of 6,094,392 shares of Common Stock, representing 200% of the number of shares of Common Stock into which the Notes are initially convertible. Each Warrant is immediately exercisable, has an exercise price of $2.61 per share, expires five years following the Closing Date and is subject to customary adjustments.