Ensysce Biosciences, Inc. Announces Exercise of Warrants for $2.2 Million Gross Proceeds

Rhea-AI Summary

Ensysce Biosciences (NASDAQ:ENSC) has announced the exercise of warrants that will generate approximately $2.2 million in gross proceeds. The agreement involves the immediate exercise of warrants to purchase 630,376 shares of common stock at $3.24 per share, originally issued in March 2025.

In exchange for the immediate exercise, the company will issue new unregistered warrants for up to 1,260,752 shares at an exercise price of $1.90 per share. Half of these new warrants will have an 18-month term, while the other half will have a 5-year term. H.C. Wainwright & Co. is serving as the exclusive placement agent.

The offering is expected to close around April 24, 2025. The company plans to use the net proceeds to continue development of its TAAP™ and MPAR® programs and for working capital.

Positive

• Immediate capital raise of $2.2 million through warrant exercise
• New warrants provide potential for additional future funding at $1.90 per share

Negative

• New warrants could lead to future dilution if exercised
• New warrant exercise price of $1.90 is significantly lower than original $3.24 warrant price
• Additional shares will increase the total shares outstanding, diluting existing shareholders

Insights

Financial Analyst

ENSC raised $2.2M through warrant exercises, boosting cash for clinical programs but creating significant dilution with below-market warrants.

Ensysce's $2.2 million capital raise through warrant exercises represents a substantial 70% of their current $3.1 million market capitalization—a critically important cash infusion for this clinical-stage pharmaceutical company. The transaction involves immediate exercise of 630,376 warrants at $3.24 per share, while simultaneously issuing new unregistered warrants for 1,260,752 shares at a substantially discounted exercise price of $1.90—well below the current share price of $3.66.

This structure creates two distinct financial impacts: immediate dilution from the newly issued shares plus potential future dilution that's approximately twice as large if the new warrants are exercised. The split between 18-month and 5-year terms for these new warrants creates both near and longer-term funding opportunities for the company.

For clinical-stage biopharmaceutical companies with severe pain relief programs like Ensysce, securing adequate funding is essential for advancing research through expensive clinical trials. The company has explicitly earmarked these proceeds for its TAAP™ and MPAR® programs, which appear to be their core development platforms focused on opioid abuse deterrence.

While the dilution is substantial, this cash infusion should strengthen Ensysce's balance sheet and provide working capital for continued operations, making this a necessary funding mechanism for a small-cap clinical-stage company with financing alternatives.

SAN DIEGO, CALIFORNIA / ACCESS Newswire / April 23, 2025 / Ensysce Biosciences, Inc. (NASDAQ:ENSC) (the "Company"), a clinical-stage pharmaceutical company developing innovative solutions for severe pain relief while reducing the potential for opioid 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 630,376 shares of common stock of the Company originally issued in March 2025, having an exercise price of $3.24 per share. The shares of common stock issuable upon exercise of the warrants are registered pursuant to an effective registration statement on Form S-3 (No. 333-286580). The gross proceeds to the Company from the exercise of the warrants are expected to be approximately $2.2 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 and the payment of additional $0.125 per new unregistered warrant (additional $157,594.00 in the aggregate, which are included in the gross proceeds to the Company), 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 1,260,752 shares of common stock, at an exercise price of $1.90 per share and will be immediately exercisable upon issuance. 630,376 of the new warrants will have a term of eighteen months from the issuance date, and 630,376 of the new warrants will have a term of five years from the issuance date.

The offering is expected to close on or about April 24, 2025, subject to satisfaction of customary closing conditions. The Company currently intends to use the net proceeds from the offering for continued development of its TAAP^TM and MPAR® programs and for working capital.

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 with a goal of disrupting the analgesic landscape by introducing a new class of highly novel opioids for the treatment of severe pain. Leveraging its Trypsin-Activated Abuse Protection (TAAP^TM) 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. 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, 2024.

Investor Contact

Ensysce Biosciences Company Contact:
Lynn Kirkpatrick, Ph.D.
Chief Executive Officer
(858) 263-4196

Ensysce Biosciences Investor Relations Contact:
MZ Group North America
Shannon Devine
203-741-8811
ENSC@mzgroup.us

SOURCE: Ensysce Biosciences

View the original press release on ACCESS Newswire

FAQ

How much money will Ensysce Biosciences raise from the warrant exercise announced in April 2025?

Ensysce Biosciences will raise approximately $2.2 million in gross proceeds from the warrant exercise, before deducting placement agent fees and offering expenses.

What is the exercise price for ENSC's new unregistered warrants issued in April 2025?

The new unregistered warrants have an exercise price of $1.90 per share and will be immediately exercisable upon issuance.

How will Ensysce Biosciences use the proceeds from the April 2025 warrant exercise?

The company will use the net proceeds for continued development of its TAAP™ and MPAR® programs and for working capital.

What are the terms of ENSC's new warrants issued in April 2025?

The new warrants are split equally: 630,376 warrants have an 18-month term, and 630,376 warrants have a 5-year term from the issuance date.