Ernexa Therapeutics Closes New Funding Round

Rhea-AI Summary

Ernexa Therapeutics (NASDAQ: ERNA) has secured a new private placement agreement with accredited investors, raising approximately $7.25 million through the issuance of 69.3 million shares of common stock at $0.1046 per share. The funding will be executed in two phases:

- First closing on April 2, 2025: ~10.4 million shares issued for $1.1 million in gross proceeds
- Second closing pending stockholder approval at June 2, 2025 annual meeting

This financing follows a previous $5 million PIPE investment in 2024 and recent company rebranding. The funds will support Ernexa's strategic focus on developing cell therapies for advanced cancer and autoimmune disease, with emphasis on their ovarian cancer program.

Positive

• Secured $7.25 million in new funding through private placement
• Successfully closed first tranche of $1.1 million
• Previous PIPE investment of $5 million in 2024 demonstrates continued investor interest

Negative

• Significant shareholder dilution with issuance of 69.3 million new shares
• Low share price of $0.1046 indicates potential financial distress
• Second closing contingent on shareholder approval, creating execution risk

Insights

Financial Analyst

Ernexa's $7.25M private placement represents significant dilution at a substantial discount to market value. The $0.1046 per share price marks a 45% discount to current trading levels, with 69.3 million new shares that will dramatically increase the outstanding share count. This substantial dilution suggests challenging capital-raising conditions.

The two-tranche structure is telling - only $1.1M now with the remaining $6.15M contingent on stockholder approval in June. This sequencing indicates potential resistance from shareholders regarding the dilution magnitude, as the offering likely exceeds management's independent authorization limits.

This follows Ernexa's earlier $5M PIPE in 2024, demonstrating ongoing capital requirements typical for early-stage biotech companies. The financing pattern reveals a company in transition, attempting to secure sufficient runway while advancing its ovarian cancer program.

For context, this capital infusion represents approximately 75% of Ernexa's current market cap but comes at the cost of significant ownership dilution for existing shareholders. The discount pricing signals buyer hesitancy that required enhanced incentives to participate. While the funding provides crucial development capital, the unfavorable terms reflect challenging market conditions for small-cap biotech fundraising.

Comes on the heels of company’s rebranding and new strategic direction, advancing its lead program in ovarian cancer

CAMBRIDGE, Mass., April 03, 2025 (GLOBE NEWSWIRE) -- Ernexa Therapeutics (Nasdaq: ERNA), developing innovative cell therapies for the treatment of advanced cancer and autoimmune disease, today announced that it has entered into a securities purchase agreement with accredited investors for the private placement of approximately 69.3 million shares of common stock (or pre-funded warrants to purchase shares of common stock), at a purchase price of $0.1046 per share for an aggregate purchase price of approximately $7,250,000, assuming the Company receives stockholder approval.

“These are very exciting times at Ernexa, as we advance therapeutic innovation in cell therapy for the benefit of patients with cancer and autoimmune disease,” said Sanjeev Luther, President and CEO of Ernexa Therapeutics. “Our approach has been deliberate and strategic, from our investment round at the end of last year to our rebranding last month. With this latest round, we’re doubling down on our mission to advance our ovarian cancer program.”

The transaction will occur in two closings. The first closing occurred on April 2, 2025, when the company issued approximately 10.4 million shares of common stock or prefunded warrants and received approximately $1.1 million in gross proceeds. The second closing will occur upon satisfaction of customary closing conditions, including receipt of stockholder approval, which the Company expects to receive at its 2025 annual stockholders meeting, scheduled to be held on June 2, 2025.

This fundraise comes following a private investment in public equity (PIPE) investment that the company closed in 2024, securing a round of $5 million in financing. The company also more recently announced its name change to Ernexa Therapeutics to reflect its new strategic focus.

About Ernexa Therapeutics

Ernexa Therapeutics (Nasdaq: ERNA) is developing innovative cell therapies for the treatment of advanced solid tumors 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 solution, without needing patient-specific cell harvesting.

Ernexa is developing two highly innovative cell therapy products, both currently in preclinical stages. 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 funding did Ernexa Therapeutics (ERNA) raise in their latest private placement?

Ernexa raised approximately $7.25 million through the issuance of 69.3 million shares at $0.1046 per share.

When will Ernexa (ERNA) complete the second closing of their 2025 private placement?

The second closing is expected after stockholder approval at the annual meeting scheduled for June 2, 2025.

What is the share price for Ernexa's (ERNA) April 2025 private placement?

The purchase price is $0.1046 per share of common stock or pre-funded warrants.

How much funding did Ernexa (ERNA) secure in their 2024 PIPE investment?

Ernexa secured $5 million in financing through a PIPE investment in 2024.