Eterna Therapeutics Inc. (NASDAQ:ERNA), a pharmaceutical company trading at $0.33 per share with a 52-week range of $0.22 to $2.62, is at risk of being delisted from the Nasdaq Capital Market after its Market Value of Listed Securities (MVLS) fell below the required minimum for over a month.
According to InvestingPro data, the company's stock has declined by over 82% in the past year, reflecting significant financial challenges highlighted by a "Weak" overall Financial Health Score of 1.68 out of 10. On January 6, 2025, the company received a notice from Nasdaq stating that its MVLS had been below the $35 million threshold for 35 consecutive business days, breaching the Nasdaq Listing Rule 5550(b)(2).
The company has been granted a 180-day period, until July 7, 2025, to regain compliance with the Market Value Standard. To achieve this, ERNA's MVLS must close at or above $35 million for at least 10 consecutive business days. InvestingPro analysis reveals concerning fundamentals, including a current ratio of 0.48, indicating the company's short-term obligations exceed its liquid assets.
The company is rapidly burning through cash, with negative free cash flow of $17.34 million in the last twelve months. If Eterna Therapeutics fails to meet the standard by the deadline, it could face delisting, although it would have the right to appeal.
Despite the notice, Eterna Therapeutics' common stock continues to trade on Nasdaq under the ticker "ERNA." The company's listing status remains unchanged for now.
In a separate event, Eterna Therapeutics announced board changes effective January 3, 2025. Dorothy Clarke resigned from the Board of Directors, effective January 6, 2025, at 11:59 p.m. Eastern Time. Clarke's resignation was not due to any disagreement with the company's operations, policies, or practices, and she will continue to serve as the company's general counsel.
Following Clarke's departure, Dr. Elena Ratner was appointed to the Board, effective January 7, 2025. Dr. Ratner, deemed an independent director under Nasdaq's rules, will serve on the Board until the 2025 Annual Meeting of Stockholders. The appointment comes at a crucial time as the company faces significant volatility, with a beta of 7.29, indicating substantially higher price swings compared to the broader market. Get access to 15+ additional key insights about ERNA with an InvestingPro subscription.
She will not initially serve on any Board committees. Dr. Ratner's appointment was not the result of any arrangements or understandings with other persons, and she has not been involved in any transactions with the company that would require disclosure.
Dr. Ratner will receive compensation as a non-employee director according to the company's standard practices and is expected to enter into the company's standard indemnification agreement for directors and officers.
This report is based on a press release statement and reflects the company's current situation regarding its Nasdaq listing and board composition.
In other recent news, Eterna Therapeutics Inc. has been navigating a series of significant developments. The pharmaceutical company has regained compliance with Nasdaq's listing requirements and continues to trade on the Nasdaq Stock Market. In a bid to bolster shareholder value, Eterna has initiated a stock repurchase program, authorizing the buyback of up to $1 million of its common stock.
The company has also finalized a private placement stock sale, issuing approximately 1.4 million shares of common stock and raising around $1.1 million for general working capital. In addition to these financial maneuvers, Eterna has entered into an exclusive license and collaboration agreement with Factor Bioscience Limited, securing exclusive rights to develop certain technologies for cancer, autoimmune disorders, and rare diseases.
On the research front, Eterna Therapeutics has announced a collaboration with The University of Texas MD Anderson Cancer Center. The partnership will study the effects of Eterna's cell therapy ERNA-101 on ovarian and breast cancer models, potentially laying the groundwork for future treatments.
However, despite these developments, Eterna Therapeutics is at risk of being delisted from the Nasdaq Stock Market due to an equity shortfall. The company intends to appeal this decision, temporarily delaying the suspension of trading. These are the recent developments at Eterna Therapeutics Inc.
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