On July 1, 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 and performance focused on reducing 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 $8 million (Press release, Ensysce Biosciences, JUL 1, 2022, View Source [SID1234616432]). The initial closing on June 30th provided $4 million on July 1st, prior to fees and offering expenses.
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Dr. Lynn Kirkpatrick, CEO of Ensysce commented, "The financing is an excellent step allowing us to advance the clinical development of our highly unique TAAP and MPAR technologies. The funding will support the completion of a number of upcoming studies and milestones, including our two Human Abuse Potential studies that we believe will support abuse deterrent labeling of PF614, and the first overdose protection human trial with PF614-MPAR. We are very pleased that we were able to secure this additional funding to continue our progress and support our mission to deliver superior pain relief options while also providing abuse and overdose protection for opioid products."
The Notes, with total gross proceeds expected to be $8 million before fees and expenses, 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, were issued with an original discount of 6% and will bear interest from date of issuance at 6% per annum. Monthly principal payments in cash or common stock will begin approximately 90 days after each respective closing. The Warrants issued at the initial closing have the right to purchase up to 4,667,890 shares of common stock at an exercise price of $0.7085, a 30% premium to the conversion price, and are exercisable for five years following the date of issuance. An initial $4 million of funding was secured upon the initial closing with a second closing of $4 million under similar terms expected to occur upon satisfaction of certain conditions.
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.