Item
1.01 Entry Into a Material Definitive Agreement
On
February 2, 2023, Ensysce Biosciences, Inc. (the “Company” or “we”) entered into
a definitive Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors
(the “Purchasers”), pursuant to which the Company agreed to issue and sell in a registered direct offering
(the “Offering”), priced “at-the-market” under the rules of The Nasdaq Stock Market, an aggregate
of 3,571,431 shares (the “Shares”) of common stock of the Company, par value $0.0001 per share (the “Common
Stock”), at an offering price of $0.84 per share, for gross proceeds of approximately $3.0 million before the deduction
of placement agent fees and offering expenses. The closing of the Offering occurred on February 6, 2023. The Shares were offered by the
Company pursuant to a shelf registration statement on Form S-3 (File No. 333-269157), which was initially filed with the Securities and
Exchange Commission (the “Commission”) on January 9, 2023 and was declared effective by the Commission on January
17, 2023 (the “Registration Statement”), and a related prospectus.
In
a concurrent private placement (the “Private Placement”), the Company issued to the Purchasers, for each share
of Common Stock purchased in the Offering, a common warrant to purchase one share of Common Stock (the “Common Warrants”).
The Common Warrants are exercisable immediately upon issuance and terminate five and one-half years following issuance. The Common Warrants
have an exercise price of $0.715 per share and are exercisable to purchase an aggregate of up to 3,571,431 shares of Common Stock. A
holder of a Common Warrant will not have the right to exercise any portion of its warrants if the holder, together with its affiliates,
would beneficially own in excess of 4.99% (or 9.99% at the election of the holder prior to the date of issuance) of the number of shares
of Common Stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”);
provided, however, that upon 61 days’ prior notice to the Company, the holder may increase or decrease the Beneficial Ownership
Limitation, provided that in no event shall the Beneficial Ownership Limitation exceed 9.99%.
Pursuant
to the engagement letter, dated December 20, 2022, between the Company and
H.C. Wainwright & Co. (the “Placement Agent”), the Company agreed to pay the Placement Agent
a cash fee equal to 7% of the aggregate gross proceed of the Offering. The Company also agreed to pay the Placement Agent $35,000 for
non-accountable expenses, $50,000 for accountable expenses and a $15,950 for a clearing fee. We issued warrants (the “Placement
Agent Warrants”) to purchase up to 250,000 shares of Common Stock to the placement agent (including its designees). These
warrants have an exercise price equal to $1.05 per share and are exercisable for five years from the commencement of sales in the Offering.
The Common Warrants and Placement Agent Warrants and the shares of our Common Stock issuable upon the exercise of the Common Warrants
and Placement Agent Warrants are not being registered under the Securities Act of 1933, as amended (the “Securities Act”),
are not being offered pursuant to the Registration Statement, and are being offered pursuant to the exemption provided in Section 4(a)(2)
under the Securities Act and Rule 506(b) promulgated thereunder.
The
Company agreed to indemnify the placement agent against certain liabilities relating to or arising out of the placement agent’s
activities under the engagement letter agreement and to contribute to payments that the placement agent may be required to make in respect
of such liabilities.
In
the Purchase Agreement, we agreed not to issue, enter into any agreement to issue or announce the issuance or proposed issuance of any
shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock for a period of 30 days following
the closing of the Offering. Our officers and directors agreed, subject to limited exceptions, for a period of 90 days after the closing
of the Offering, to not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of, directly or indirectly, or establish
or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, with respect to, any shares of Common Stock or securities convertible, exchangeable or exercisable
into, shares of Common Stock beneficially owned, held or thereafter acquired by them.
The
closing of the Offering and the Private Placement was subject to satisfaction of customary closing conditions set forth in the Purchase
Agreement. The representations, warranties and covenants contained in the Purchase Agreement were made solely for the benefit of the
parties to the Purchase Agreement. In addition, such representations, warranties and covenants (i) are intended as a way of allocating
the risk between the parties to the Purchase Agreement and not as statements of fact, and (ii) may apply standards of materiality in
a way that is different from what may be viewed as material by stockholders of, or other investors in, the Company. Accordingly, the
Purchase Agreement is filed with this report only to provide investors with information regarding the terms of transaction, and not to
provide investors with any other factual information regarding the Company. Moreover, information concerning the subject matter of the
representations and warranties may change after the date of the Purchase Agreement, which subsequent information may or may not be fully
reflected in public disclosures.
The
Company currently intends to use these net proceeds for general corporate purposes, which may include continuing to conduct clinical
trials for our lead products, providing working capital and repaying indebtedness.
The
description of terms and conditions of the form of Purchase Agreement and the form of Common Warrant set forth herein do not purport
to be complete and are qualified in their entirety by the full text of the form of Purchase Agreement and the form of Common Warrant
and Placement Agent Warrant, which are attached hereto as Exhibits 10.1, 4.1 and 4.2.