Item 1.01 Entry into a Material Definitive Agreement.

Private Placement of Common Stock

On September 24, 2024, Eterna Therapeutics Inc. (the "Company," "we," "us," or "our") entered into a securities purchase agreement (the "SPA") with certain accredited investors, pursuant to which we agreed to sell to such investors, and such investors agreed to purchase from us, in a private placement (the "Common Stock Private Placement"), an aggregate of 1,516,997 shares of our common stock, par value $0.005 per share (or, in lieu thereof, one pre-funded warrant to purchase one share of our common stock), for an aggregate purchase price of approximately $1.1 million (or a purchase price of $0.75 per share of common stock and $0.75 less $0.005 per pre-funded warrant).

In addition to the satisfaction or waiver of customary conditions to closing, in order to comply with the rules and regulations of The Nasdaq Stock Market LLC ("Nasdaq"), the closing of the Common Stock Private Placement is subject to the approval by our stockholders of: (i) the issuance of the shares of our common stock and pre-funded warrants (and the issuance of shares of our common stock upon exercise of the pre-funded warrants) under the SPA; (ii) the issuance of shares of our common stock in connection with the Exchange Transactions (as such term is defined below); (iii) the issuance of shares of our common stock and/or pre-funded warrants upon conversion of the bridge notes (as defined below); and (iv) all transactions related thereto. The approval by our stockholders of the foregoing matters is referred to as the "Stockholder Approval."

Each pre-funded warrant issued under the SPA will have an exercise price of $0.005 per share of common stock, subject to customary adjustments for stock dividends, stock splits, reclassifications and similar corporate events, will be exercisable at any time after issuance, and will not expire until exercised in full. A holder may not exercise their pre-funded warrant to the extent that the aggregate number of shares of our common stock beneficially owned by such holder, together with any other person whose beneficial ownership of our common stock would or could be aggregated with such holder's for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (such other persons, "Attribution Parties"), immediately after such exercise would exceed 9.99% of the number of shares of our common stock then outstanding.

Under the terms of the SPA, we are required to seek the Stockholder Approval at a stockholder meeting to be held not later than the later of November 15, 2024 or, if the preliminary proxy statement for such meeting is reviewed by the Securities and Exchange Commission, December 20, 2024. Under the terms of the SPA, in connection with the stockholder meeting and any adjournment or postponement thereof, our board of directors must recommend that our stockholders vote in favor of the proposal seeking the Stockholder Approval and neither our board of directors nor any committee thereof may withdraw or modify such recommendation.

If the closing of the Common Stock Private Placement occurs, we expect to receive approximately $1.1 million in gross proceeds and we intend to use the net proceeds therefrom for general working capital purposes.

At the closing of the Common Stock Private Placement, we and investor parties to the SPA will enter into a registration rights agreement pursuant to which we will be required to file a resale registration statement with the Securities and Exchange Commission on or prior to the fifth trading day following the date on which the closing occurs. Such registration statement will be required to register for resale the shares of our common stock issuable under the SPA and upon exercise of the pre-funded warrants issuable under the SPA. We will be required to have such registration statement declared effective within 45 days after filing, or 60 days after filing if the registration statement is subject to a full review.

The SPA contains customary representations, warranties, covenants, and indemnification obligations of the parties. The representations, warranties and covenants in the SPA were made only for purposes of the SPA and as of a specific date, were made solely for the benefit of the parties thereto, and may be subject to limitations agreed upon by such parties.

The foregoing summary description of the SPA, the pre-funded warrants issuable thereunder, and the registration rights agreement does not purport to be complete and is qualified in its entirety by reference to the such documents themselves, forms of which are filed as exhibits to this report and are incorporated herein by reference.

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