Ensysce Biosciences, Inc. Announces Exercise of Warrants for $4.7 Million Gross Proceeds
Ensysce Biosciences, Inc. (ENSC) announces the immediate exercise of warrants to purchase 3,601,752 shares of common stock at a reduced price, expecting gross proceeds of approximately $4.7 million. H.C. Wainwright & Co. acts as the exclusive placement agent for the offering.
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Ensysce Biosciences, Inc. enters into definitive agreements for the immediate exercise of outstanding warrants.
The exercise price of the warrants is reduced to $1.31 per share from $3.637 per share.
The Company expects to receive approximately $4.7 million in gross proceeds from the exercise of the warrants.
H.C. Wainwright & Co. serves as the exclusive placement agent for the offering.
New unregistered warrants to purchase shares of common stock will be issued in exchange for the immediate exercise of the warrants for cash.
The new warrants will be exercisable for up to 7,203,504 shares of common stock at an exercise price of $1.06 per share.
The offering is expected to close on or before the specified date.
From a financial perspective, the immediate exercise of warrants by Ensysce Biosciences represents a strategic move to bolster its capital. The reduction in exercise price from $3.637 to $1.31 per share indicates a potential incentive provided to the warrant holders to encourage the conversion into equity. This is a common practice to prevent dilution of existing shareholders and to strengthen the company's balance sheet by increasing its cash reserves.
The expected gross proceeds of approximately $4.7 million, before fees and expenses, suggest a relatively modest capital raise, which might indicate this transaction is more about managing the company's capital structure than a significant expansion of operations. Investors should note that while this inflow of cash could support ongoing clinical trials or R&D efforts, the issuance of new warrants at an even lower exercise price of $1.06 could lead to further dilution in the future. It's also crucial to assess the company's burn rate and how this capital injection aligns with its operational runway.
Examining the market implications, the transaction details reveal that Ensysce Biosciences is actively managing its financing options. The issuance of new warrants, with different expiration dates, introduces additional layers of complexity for investors. The shorter-term warrants could potentially be seen as a more speculative investment, given their 18-month term, compared to the longer-term warrants expiring in 2028.
Investors will likely scrutinize the terms of these new warrants and the reduced exercise price to gauge market confidence in the company's future performance. The immediate exercise of existing warrants at a reduced price could be interpreted as a need for quick capital, which might raise concerns about the company's liquidity. However, it could also be seen as a proactive step by management to secure funding without resorting to more dilutive financing options such as a secondary public offering.
In the context of the biotech industry, Ensysce Biosciences' focus on improving prescription drug safety to reduce abuse and overdose is a high-impact area given the ongoing opioid crisis. The capital raised could be crucial for advancing their clinical trials or further developing their abuse-deterrent technologies. It is important to consider the competitive landscape and how Ensysce's pipeline compares to other players in the field.
Furthermore, the registration of shares upon the exercise of warrants suggests regulatory compliance and preparation for potential market fluctuations. The biotech sector is highly volatile and companies often need to secure funding when favorable conditions arise. The timing and structure of this transaction may reflect Ensysce's strategic positioning in anticipation of key milestones or data releases that could affect its stock price.
02/13/2024 - 08:00 AM
SAN DIEGO, CA / ACCESSWIRE / February 13, 2024 / Ensysce Biosciences, Inc. (NASDAQ:ENSC) (the "Company"), a clinical-stage biotech company applying transformative chemistry to improve prescription drug safety to reduce abuse and overdose, today announced the entry into definitive agreements for the immediate exercise of certain outstanding warrants to purchase up to an aggregate of 3,601,752 shares of common stock of the Company originally issued in May 2023, having an exercise price of $3.63 7 per share, at a reduced exercise price of $1.31 per share. The shares of common stock issuable upon exercise of the warrants are registered pursuant to an effective registration statement on Form S-1 (No. 333-271480). The gross proceeds to the Company from the exercise of the warrants are expected to be approximately $4.7 million , prior to deducting placement agent fees and estimated offering expenses.
H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.
In consideration for the immediate exercise of the warrants for cash, the Company will issue new unregistered warrants to purchase shares of common stock. The new warrants will be exercisable for an aggregate of up to 7,203,504 shares of common stock, at an exercise price of $1.06 per share and will be immediately exercisable upon issuance. 3,601,752 of the new warrants will expire on May 12, 2028, and 3,601,752 of the new warrants will have a term of eighteen months from the issuance date.
The offering is expected to close on or about February 14, 2024, subject to satisfaction of customary closing conditions. The Company intends to use the net proceeds from the offering for activities related to preparation for Phase 3 clinical studies for its lead agent PF614, to repay the remaining amounts on the debt incurred in October and November 2023, and for general corporate purposes.
The new warrants described above were offered in a private placement pursuant to an applicable exemption from the registration requirements of the Securities Act of 1933, as amended (the "1933 Act") and, along with the shares of common stock issuable upon their exercise, have not been registered under the 1933 Act, and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission ("SEC") or an applicable exemption from such registration requirements. The Company has agreed to file a registration statement with the SEC covering the resale of the shares of common stock issuable upon exercise of the new warrants.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.
About Ensysce Biosciences, Inc.
Ensysce Biosciences is a clinical-stage company using its proprietary technology platforms to develop safer prescription drugs. Leveraging its Trypsin-Activated Abuse Protection (TAAPTM ) and Multi-Pill Abuse Resistance (MPAR® ) platforms, the Company is developing unique, tamper-proof treatment options for pain that minimize the risk of both drug abuse and overdose. Ensysce's products are anticipated to provide safer options to treat patients suffering from severe pain and assist in preventing deaths caused by medication abuse. The platforms are covered by an extensive worldwide intellectual property portfolio for a wide array of prescription drug compositions. For more information, please visit www.ensysce.com .
Forward-Looking Statements
This release includes "forward-looking statements," including statements relating to the registered direct offering, the concurrent private placement and the use of proceeds therefrom. Such forward-looking statements are subject to a number of risks and uncertainties, many of which are not under the Company's control, such as market and other conditions. All statements, except for statements of historical fact, made in this release regarding activities, events or developments the Company expects, believes or anticipates will or may occur in the future, such as statements regarding the consummation of the offering, the satisfaction of closing conditions and the use of proceeds from the offering, are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. All forward-looking statements speak only as of the date of this release. Although the Company believes that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions or expectations will be achieved. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecasted in such statements. Except as required by law, the Company expressly disclaims any obligation to and does not intend to publicly update or revise any forward-looking statements. The Company cautions you that these forward-looking statements are inherently subject to certain risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company's control. These risks include the risks described under the heading "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.
Investor Contact
Ensysce Biosciences Company Contact:
Ensysce Biosciences Investor Relations Contact: ENSC@mzgroup.us
SOURCE: Ensysce Biosciences, Inc.
press release on accesswire.com
What is the exercise price of the warrants for Ensysce Biosciences, Inc. (ENSC)?
The exercise price of the warrants is reduced to $1.31 per share from $3.637 per share.
How many shares of common stock can be purchased through the warrants at the reduced price for ENSC?
Up to 3,601,752 shares of common stock can be purchased at the reduced price.
Who is acting as the exclusive placement agent for the offering by Ensysce Biosciences, Inc. (ENSC)?
H.C. Wainwright & Co. is serving as the exclusive placement agent for the offering.
What is the expected gross proceeds from the exercise of the warrants for ENSC?
The Company expects to receive approximately $4.7 million in gross proceeds from the exercise of the warrants.
How many shares of common stock can be purchased through the new unregistered warrants for ENSC?
The new warrants will be exercisable for up to 7,203,504 shares of common stock.
When is the offering expected to close for Ensysce Biosciences, Inc. (ENSC)?
The offering is expected to close on or before the specified date.
