Eterna Therapeutics Reports Significant Financial Decline, Doubts Ability to Continue as Going Concern

Eterna Therapeutics Inc. reported significant financial changes in its 10-Q filing for the quarter ending September 30, 2024. The company, which focuses on developing allogenic off-the-shelf cellular therapies for solid tumors, experienced a notable decline in its financial position. Cash reserves decreased to $4.3 million from $7.6 million at the end of 2023, while total current assets fell to $4.7 million from $9.6 million. Total assets plummeted to $7.7 million, down from $49.1 million, reflecting a substantial reduction in the company's financial resources.

The company’s liabilities also increased, with total current liabilities rising to $10.0 million from $6.6 million. Convertible notes surged to $32.0 million, up from $6.8 million, contributing to a total stockholders’ deficit of $(45.4 million), a sharp decline from a positive equity of $2.2 million at the end of 2023.

Eterna reported revenues of $487,000 for the three months ended September 30, 2024, a significant increase from $51,000 in the same period of 2023. For the nine months, revenue rose to $581,000 from $51,000. Operating expenses decreased to $2.8 million for the quarter, down from $5.4 million, and to $13.5 million for the nine months, compared to $15.3 million in the prior year. The loss from operations narrowed to $(2.3 million) for the quarter, down from $(5.5 million), and $(13.0 million) for the nine months, compared to $(15.4 million) in 2023.

However, the company reported a substantial loss on extinguishment of debt of $(22.4 million) for the quarter, contributing to a net loss of $(26.6 million) for the three months and $(38.8 million) for the nine months, compared to $(5.6 million) and $(15.5 million) in the respective periods of 2023.

Strategically, Eterna entered into a new Exclusive License and Collaboration Agreement with Factor Bioscience Limited on September 24, 2024, which grants exclusive rights in cancer and autoimmune disorders. The company also terminated a sublease for its Somerville, Massachusetts office, resulting in a gain of approximately $1.6 million. This decision followed the sublessor drawing down a $4.1 million security deposit due to past due rent.

Eterna's management expressed substantial doubt regarding its ability to continue as a going concern, citing insufficient cash resources for the next twelve months. The company plans to explore various options for raising additional capital, including public and private equity offerings and strategic partnerships.