Ernexa Therapeutics Secures $6 Million in Second Closing Under Securities Purchase Agreement

Rhea-AI Summary

Ernexa Therapeutics (Nasdaq: ERNA), a company developing cell therapies for cancer and autoimmune diseases, has completed the second closing of its securities purchase agreement, raising $6.0 million in gross proceeds through the issuance of 3,181,145 shares and 622,134 prefunded warrants.

Combined with the initial closing of $1.1 million in April 2025, total gross proceeds reach $7.1 million. The financing, approved by stockholders at the 2025 Annual Meeting, will support working capital needs and debt repayment. A remaining subscription amount of $190,248 for 121,255 shares is pending. The company recently implemented a 1-for-15 reverse stock split on June 12, 2025.

Positive

• Secured total gross proceeds of $7.1 million to strengthen balance sheet
• Stockholder approval obtained for the financing
• Funds will support working capital and pipeline advancement
• Pre-funded warrants include ownership limitations to prevent excessive dilution

Negative

• Significant dilution through issuance of over 3.8 million new shares and warrants
• Company needs to repay existing notes with proceeds
• Remaining $190,248 subscription amount not yet received
• Recent 1-for-15 reverse stock split indicates previous share price challenges

Insights

Financial Analyst

Ernexa secured $7.1M total financing providing crucial short-term runway but signals ongoing cash needs with significant dilution.

Ernexa's completion of this $6 million second financing round (following an initial $1.1 million close in April) provides essential runway but indicates the company's challenging financial position. The total $7.1 million raise represents meaningful dilution through the issuance of 3.8+ million new securities (shares and pre-funded warrants) following their recent 1-for-15 reverse stock split on June 12.

The company's statement about using proceeds for "general working capital purposes and to repay certain notes" suggests these funds are primarily addressing immediate financial obligations rather than advancing specific R&D milestones. This typically indicates cash burn concerns. The pre-funded warrants structure with nominal $0.075 exercise price and ownership limitations (4.99% or 9.99%) appears designed to accommodate institutional investors while navigating regulatory requirements.

CEO Sanjeev Luther's characterization of the financing as providing "critical runway" further confirms the company's liquidity pressures. While this infusion temporarily strengthens Ernexa's balance sheet, the incomplete portion of the subscription ($190,248 for 121,255 shares) suggests possible investor hesitation. For a clinical-stage biotech developing cell therapies for cancer and autoimmune diseases, this relatively modest financing likely represents a bridge rather than a long-term solution, with future capital raises likely necessary to fund the typically expensive clinical development of cell therapies.

Stockholder-approved financing brings total gross proceeds to $7.1 million; funds to support working capital initiatives

CAMBRIDGE, Mass., June 24, 2025 (GLOBE NEWSWIRE) -- Ernexa Therapeutics (Nasdaq: ERNA), developing innovative cell therapies for the treatment of advanced cancer and autoimmune disease, today announced that the Company completed the second closing under the previously announced securities purchase agreement (the “SPA”) entered into on March 31, 2025 with certain accredited investors.

The company issued 3,181,145 shares of common stock and 622,134 prefunded warrants and received approximately $6.0 million in gross proceeds from the issuance of such securities. The initial closing under the SPA was on April 2, 2025, where the company issued 662,269 shares of common stock and 33,983 prefunded warrants for approximately $1.1 million in gross proceeds. A remaining subscription amount under the SPA of $190,248 for 121,255 shares of common stock has not yet been received.

“This financing strengthens our balance sheet and provides critical runway to advance our pipeline of cell therapies targeting cancers and autoimmune diseases,” said Sanjeev Luther, President and CEO of Ernexa Therapeutics. “We’re grateful for the continued support of our investors and remain focused on delivering meaningful innovation to patients in need.”

The second closing was subject to stockholder approval, as required under applicable Nasdaq listing rules, which was obtained at the company’s 2025 Annual Meeting of Stockholders held on June 2, 2025. The Company intends to use the net proceeds for general working capital purposes and to repay certain notes.

The pre-funded warrants will be exercisable until exercised in full at a nominal exercise price of $0.075 per share and may not be exercised to the extent such exercise would cause the holder to beneficially own more than 4.99% or 9.99%, as applicable, of the Company’s outstanding common stock.

All share and per share amounts have been adjusted to reflect a 1-for-15 reverse stock split effected on June 12, 2025.

About ErnexaTherapeutics

Ernexa Therapeutics (NASDAQ: ERNA) is developing innovative stem cell therapies for the treatment of advanced cancer and autoimmune disease. Ernexa’s core technology focuses on engineering induced pluripotent stem cells (iPSCs) and transforming them into induced mesenchymal stem cells (iMSCs). Ernexa’s allogeneic synthetic iMSCs provide a scalable, off-the-shelf treatment, without needing patient-specific cell harvesting.

ERNA-101 is the company’s lead cell therapy product, designed to activate and regulate the immune system's response to recognize and attack cancer cells. ERNA-102 is a cell therapy product designed to target inflammation and treat autoimmune disease. The company’s initial focus is to develop ERNA-101 for the treatment of ovarian cancer.

For more information, visit www.ernexatx.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, in some cases, can be identified by terms such as "believe," "may," "will," "estimate," "continue," "anticipate," "design," "intend," "expect," "could," "plan," "potential," "predict," "seek," "should," "would," "contemplate," "project," "target," "objective," or the negative version of these words and similar expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Ernexa's actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements in this press release, including, without limitation, risks and uncertainties related to: progress and possible outcomes of the Company’s lead research project, ERNA-101, and future research projects. Forward-looking statements are based upon Ernexa's current expectations and involve assumptions that may never materialize or may prove to be incorrect. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. For a detailed description of Ernexa's risks and uncertainties, you are encouraged to review its documents filed with the SEC including its recent filings on Form 8-K, Form 10-K and Form 10-Q. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they were made. Ernexa does not undertake any obligation to update the forward-looking statements contained herein to reflect events that occur or circumstances that exist after the date hereof, except as required by applicable law.

Media & Investor Relations Contact

investors@ernexatx.com

FAQ

How much did Ernexa Therapeutics (ERNA) raise in its latest financing round?

Ernexa raised $6.0 million in the second closing, bringing total gross proceeds to $7.1 million under the securities purchase agreement.

What will Ernexa Therapeutics use the funding for?

The company will use the net proceeds for general working capital purposes and to repay certain notes, while supporting their pipeline of cell therapies for cancer and autoimmune diseases.

How many shares did Ernexa (ERNA) issue in the second closing?

In the second closing, Ernexa issued 3,181,145 shares of common stock and 622,134 prefunded warrants.

When did Ernexa Therapeutics implement its reverse stock split?

Ernexa implemented a 1-for-15 reverse stock split on June 12, 2025.

What are the terms of ERNA's prefunded warrants?

The pre-funded warrants have a nominal exercise price of $0.075 per share and include ownership limitations of 4.99% or 9.99% of outstanding common stock.