On August 9, 2022 Ensysce Biosciences, Inc. ("Ensysce" or the "Company") (NASDAQ:ENSC, OTC PINK:ENSCW), a clinical-stage biotech company applying transformative chemistry to improve prescription drug safety to reduce abuse and overdose, reported that it has completed its previously announced private placement under a securities purchase agreement with institutional investors ("Investors") for senior secured convertible notes (the "Notes") and warrants exercisable for Ensysce common stock (the "Warrants") for an aggregate investment of $8 million (Press release, Ensysce Biosciences, AUG 9, 2022, View Source [SID1234617926]). The final funding by the Investors of $4 million, prior to fees and offering expenses, was dated as of August 8, 2022, with funds received in full on August 9, 2022.
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As previously reported the Notes are convertible into shares of Ensysce common stock at a conversion price of $0.545, a 10% premium to the base price set at the time of the initial closing. The Notes have a maturity date of 18 months from the applicable closing date and will bear interest from date of issuance at 6% per annum, with monthly principal payments in cash or common stock beginning approximately 90 days after the initial closing. The Notes were issued with an original discount of six percent (6%). The Warrants issued at the second closing have the right to purchase shares up to 4,667,890 shares of common stock at an exercise price of $0.7085, a 30% premium to the conversion price. The Warrants are exercisable for five years following the date of issuance.
The total gross proceeds from the issuance of the Notes pursuant to the securities purchase agreement executed on June 30, 2022, totaling $8 million before fees and expenses, will be used for general working capital purposes. The first closing on July 1, 2022, provided $4 million of funding and the second closing on August 8, 2022, provided an additional $4 million of funding.
Dr. Lynn Kirkpatrick, CEO of Ensysce Biosciences stated, "The completion of this financing allows us to advance the clinical development of our highly unique TAAP and MPARTM technologies. Ultimately, it supports the completion of significant company milestones, including our nasal and oral human abuse potential (HAP) studies designed to support labeling claims. These accompany our recently announced positive bioequivalence (BE) study data of our novel ‘TAAP’ opioid PF614 which we believe is a significant step toward the 505(b)(2) shortened regulatory pathway to approval. With the additional funding in place, we look forward to continuing to execute on our mission of providing physicians a safer option to alleviate the suffering of patients in severe pain."
Lake Street Capital Markets LLC is acting as the sole placement agent in connection with the offering.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful. This news release is being issued pursuant to and in accordance with Rule 135c under the Securities Act of 1933, as amended.