On September 27, 2021 Ensysce Biosciences, Inc. ("Ensysce" or the "Company") (NASDAQ: ENSC, OTC: ENSCW), a clinical-stage biotech company with proprietary technology platforms to reduce the economic and social burden of prescription drug abuse and overdose, reported that it has entered into a securities purchase agreement with institutional investors ("Investors") in the form of senior secured convertible notes (the "Notes") and warrants exercisable for Ensysce common stock (the "Warrants") in a private placement for an aggregate investment of $15 million (Press release, Ensysce Biosciences, SEP 27, 2021, View Source [SID1234590290]). An initial funding by the Investors occurred on September 24, 2021, for $5 million prior to fees and offering expenses.
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The Notes are convertible into shares of Ensysce common stock at a conversion price of $5.87, a 30% premium to the base price set at the time of the initial closing. The Notes have a maturity date of 21 months from the applicable closing date and will bear interest from date of issuance at 5.0% 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 have the right to purchase up to 361,158 shares of common stock at an exercise price of $7.63, 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, expected to be $15 million before fees and expenses, will be used for general working capital purposes. At the first closing, $5 million of funding was secured. The second closing is expected to occur upon satisfaction of certain conditions, at which time the Company will issue to the institutional investors referenced above, (i) Notes in the aggregate principal amount of $10.6 million for an aggregate purchase price of $10 million and (ii) Warrants to purchase 722,317 shares of the Company’s common stock at an exercise price of $7.63.
"This financing marks another step forward in advancing our mission to transform pain treatment and provide a critical solution to the opioid crisis," said Dr. Lynn Kirkpatrick, CEO of Ensysce Biosciences. "These proceeds complement the funds received upon our merger with Leisure Acquisition Corp and funding available through our federal government grants. This financing should enable us to advance our lead clinical programs, including completion of our PF614-102 bioequivalence study and our nasal and oral human abuse liability studies, as a well as to continue expanding our pipeline of products in the pain, opioid use disorder (OUD) and ADHD space."
A registered broker-dealer 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.