Ensysce Biosciences (NASDAQ: ENSC) acquires Cy Biopharma, lines up $77M
Rhea-AI Filing Summary
Ensysce Biosciences filed an amended current report that adds a Certificate of Correction for its Series C non-voting convertible preferred stock, files a corrected press release on its Cy Biopharma acquisition and related financing, and corrects a disclosed fee to Tungsten Partners LLC from $100,000 to $200,000.
The company has completed a stock-for-stock merger acquiring Cy Biopharma, issuing 282,122 shares of Series C Preferred Stock (282,122,000 common shares on an as-converted basis), and arranged a two-tranche private placement of 120,260 Series C Preferred shares for approximately $43 million in gross proceeds, as part of a broader financing of up to $77 million to advance CY200, an FDA Orphan Drug Designation therapy for Complex Regional Pain Syndrome, through Phase 2 proof-of-concept and into registrational development.
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Filing Explained
Series C conversion and part of the financing remain conditional, so potential dilution is not yet common-stock issuance.
The amended filing clarifies that the acquisition is complete, while the related Series C financing has not fully closed: the first tranche is expected on
Series C is non-voting preferred stock that converts automatically into common only after stockholder approval; until then, the stated as-converted share amounts are potential rather than issued common shares.
If conversion occurs, issuing those additional common shares would reduce existing holders’ percentage ownership absent offsetting changes.
The company says it will file a proxy statement and hold a stockholder meeting to resolve the conversion approval, while the milestone closing depends on the specified clinical-trial milestone.
8-K Event Classification
8 items: 1.01, 2.01, 3.02, 3.03, 5.02, 5.03, 7.01, 9.01
8 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.01
Completion of Acquisition or Disposition of Assets
Financial
The company completed a significant acquisition or sale of business assets.
Item 3.02
Unregistered Sales of Equity Securities
Securities
The company sold equity securities in a private placement or other unregistered transaction.
Item 3.03
Material Modification to Rights of Security Holders
Securities
A change was made that materially affects the rights of existing shareholders (e.g., dividend rights, voting rights).
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers
Governance
Key personnel changes including departures, elections, or appointments of directors and executive officers.
Item 5.03
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
Governance
The company amended its charter documents, bylaws, or changed its fiscal year.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Potential financing capacity: Up to $77 million
Initial private placement gross proceeds: Approximately $21.5 million
Cy Biopharma cash contributed: $17.1 million
+5 more
8 metrics
Potential financing capacity
Up to $77 million
Aggregate of private placement proceeds, Cy Biopharma cash and milestone-based tranche
Initial private placement gross proceeds
Approximately $21.5 million
Expected gross proceeds at initial close of Series C Preferred Stock sale
Cy Biopharma cash contributed
$17.1 million
Cash and cash equivalents from pre-acquisition convertible note financing
Milestone-based follow-on tranche
Up to $38.6 million
Second private placement tranche subject to achievement of a clinical trial milestone
Series C Preferred issued in merger
282,122 shares
Aggregate Series C Preferred shares to Cy Biopharma equityholders in stock-for-stock merger
Series C Preferred in private placement
120,260 shares
Total Series C Preferred shares across two private placement tranches
First tranche pricing
$321.79 per share
Price per Series C Preferred share (or $0.32179 as-converted) for 66,811 shares
Fully diluted equity value
Approximately $122.9 million
Combined company fully diluted equity value, excluding Milestone Closing and transaction fees
Key Terms
Orphan Drug Designation, Series C non-voting convertible preferred stock, stock-for-stock merger, beneficial ownership limitations, +1 more
5 terms
Orphan Drug Designation regulatory
"therapy with U.S. FDA Orphan Drug Designation for the treatment of Complex Regional Pain Syndrome"
Orphan drug designation is a special status given to medicines developed to treat rare diseases affecting only a small number of people. This status often provides benefits like faster approval processes and financial incentives, making it more attractive for companies to develop these drugs. For investors, it signals potential for exclusive market rights and reduced competition, which can impact the drug’s profitability.
Series C non-voting convertible preferred stock regulatory
"Certificate of Designation of Series C Non-Voting Convertible Preferred Stock of Ensysce Biosciences, Inc."
stock-for-stock merger financial
"The acquisition is structured as a stock-for-stock merger, pursuant to which all outstanding equity interests"
A stock-for-stock merger is a deal where one company buys another by exchanging shares instead of cash, so shareholders of the target receive stock in the buying company. For investors this matters because it changes who owns what percentage of the combined business, can alter the value and risk of their holdings like trading tickets for seats in a new theater, and affects future dividends, voting power and potential gains or losses.
beneficial ownership limitations financial
"representing 282,122,000 shares on an as-converted-to-common basis and without giving effect to any beneficial ownership limitations"
Beneficial ownership limitations are rules or contractual caps that restrict how much of a company’s stock an individual or entity can be treated as owning or controlling for legal, regulatory or corporate-governance purposes. They matter to investors because such limits affect voting power, reporting obligations, takeover risk and the ability to increase a stake — like an elevator weight limit or a lane divider that prevents any one car from taking over the whole road.
Milestone Closing financial
"a price of $402.24 per share for the second tranche of up to 53,449 shares of Series C Preferred Stock (the “Milestone Closing”)"
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What acquisition did Ensysce Biosciences (ENSC) complete in this report?
Ensysce Biosciences completed the stock-for-stock acquisition of Cy Biopharma, issuing 282,122 Series C Preferred shares. These represent 282,122,000 common shares on an as-converted basis and bring CY200, a neuroplastogenic therapy for CRPS, into Ensysce’s pipeline.
How large is the financing Ensysce Biosciences (ENSC) arranged around the Cy Biopharma deal?
The combined financing opportunity totals up to $77 million. It includes approximately $21.5 million initial private placement proceeds, $17.1 million of Cy Biopharma cash from a prior note financing, and up to $38.6 million in a milestone-based follow-on tranche.
How will ownership of Ensysce Biosciences (ENSC) look after the Cy Biopharma merger?
After stockholder approval for Series C conversion, former Cy Biopharma holders are expected to own approximately 74.94%, existing Ensysce holders about 7.57%, and new private placement investors about 17.49%, on a fully diluted basis excluding the Milestone Closing.
What is CY200 and why is it important to Ensysce Biosciences (ENSC)?
CY200 is a clinical-stage neuroplastogenic therapy with FDA Orphan Drug Designation for Complex Regional Pain Syndrome. Ensysce expects available cash and new financing to fund CY200 through a randomized Phase 2 trial’s topline data and prepare for registrational development.
What corrections does Ensysce Biosciences (ENSC) make in this amended report?
The amendment files a Certificate of Correction for the Series C Preferred designation, includes a corrected press release, and revises a fee paid to Tungsten Partners LLC under a financing agreement from $100,000 to $200,000.
What are key terms of the Series C Preferred Stock issued by Ensysce Biosciences (ENSC)?
Each Series C Preferred share will automatically convert into 1,000 common shares, subject to stockholder approval and beneficial ownership limitations. Private placement pricing is $321.79 and $402.24 per preferred share for the first and second tranches, respectively.