Ernexa Therapeutics Inc. 10-Q

Item 5. Other Information . (a) In October 2022, we entered into a sublease with a subsidiary of Bristol-Myers Squibb Company, as sublessor, for office, laboratory and research and development space of approximately 45,500 square feet in Somerville, Massachusetts. As previously reported, on May 3, 2024, we received a notice from the sublessor regarding past due rent of approximately $2.3 million that we did not pay for the months of February, March, April and May 2024. Failure to pay the past due rent payments in full, plus approximately $70,000 in late fees and interest, within five business days from the date of the notice constituted an event of default under the sublease We also did not pay the rent for June, July or August 2024 and, as of August 1, 2024, we owed approximately $4.0 million in the aggregate in past due rent. In connection with entering into the sublease, we delivered a security deposit in the form of a letter of credit in the amount of $4.1 million. The letter of credit was collateralized with $4.1 million of cash deposited in a restricted account. On August 5, 2024, the sublessor drew down on the letter of credit for the full $4.1 million to cover the approximately $4.0 million of past due rent payments, plus interest and penalties. On August 9, 2024, we and the sublessor entered into a sublease termination agreement pursuant to which the parties agreed to terminate the sublease effective August 31, 2024. Pursuant to the sublease termination agreement, we agreed to surrender and vacate the premises, all of our right, title and interest in all furniture, fixtures and laboratory equipment at the premises will become the property of the sublessor, and both parties will be released of their obligations under the sublease. The initial term of the sublease was for 10 years that would have expired in November 2033. The sublease called for base rental payments of approximately $0.5 million per month as well as monthly payments for parking and our share of traditional lease expenses, including certain taxes, operating expenses and utilities. As a result of the sublease termination, we expect to save approximately $58.5 million in base rental payments plus parking, operating expenses, taxes and utilities that we would have paid over the remaining lease term. We do not expect that the termination of the sublease will impact our current business needs. (b) None. (c) During the quarter covered by this report, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any Rule 10b5-1 trading arrangement (as defined in Item 408(a)(1)(i) of Regulation S-K) or any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K). 32 Item 6. Exhibits Exhibit Description Incorporated By Reference 10.1* Form of Restricted Stock Award Agreement for the Restated 2020 Stock Incentive Plan Filed herewith 31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith 32.1 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Furnished herewith 32.2 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Furnished herewith 101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). Filed herewith 101.SCH Inline XBRL Taxonomy Extension Schema Document Filed herewith 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document Filed herewith 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document Filed herewith 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document Filed herewith 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document Filed herewith 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). * Indicates management contract or compensatory plan. 33 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ETERNA THERAPEUTICS INC. Date: August 13, 2024 By: /s/ Sanjeev Luther Sanjeev Luther President and Chief Executive Officer (Principal Executive Officer) Date: August 13, 2024 By: /s/ Sandra Gurrola Sandra Gurrola Senior Vice President of Finance (Principal Financial Officer and Principal Accounting Officer) 34