| SCHEDULE OF OUTSTANDING WARRANT |
As
of September 30, 2023, outstanding warrants to purchase shares of common stock are as follows:
SCHEDULE
OF OUTSTANDING WARRANT
| | |
Shares
Underlying
Outstanding | |
|
| |
| |
|
| Reference | |
Warrants | |
|
Exercise
Price | |
Description | |
Classification |
| (a) | |
| 63,659 | |
|
$ | 2,400.00
- 2,760.00 | |
LACQ warrants | |
Equity |
| (b) | |
| 4,608 | |
|
$ | 3.64 | |
Share subscription facility | |
Equity |
| (c) | |
| 4,512 | |
|
$ | 3.64 | |
2021 Notes | |
Liability |
| (d) | |
| 38,894 | |
|
$ | 3.64 | |
2022 Notes | |
Liability |
| (e) | |
| 549,987 | |
|
$ | 3.64
- 16.80 | |
Public offering | |
Equity |
| (f) | |
| 318,451 | |
|
$ | 8.58
- 12.60 | |
Public offering | |
Equity |
| (g) | |
| 3,727,813 | |
|
$ | 3.64
- 4.86 | |
Public offering | |
Equity |
| (h) | |
| 222,072 | |
|
$ | 0.0001 | |
Public offering | |
Equity |
| | |
| 4,929,996 | |
|
| | |
| |
|
| a) |
On
June 30, 2021, as a result of the Business Combination, the Company assumed a total of 78,751
warrants previously issued by LACQ (subsequently in December 2022 and August 2023, 7,782
and 7,310 warrants, respectively, were cancelled). The warrants provide holders the right
to purchase common stock at a strike price between $2,400.00 and $2,760.00 per share and
expire June 30, 2026, five years following the completion of the Business Combination. A
total of 41,666 of the outstanding warrants are public warrants which trade on the OTC Pink
Open Market under the ticker symbol ENSCW. The remaining 21,993 warrants are private warrants
with restrictions on transfer and which have the right to a cashless exercise at the option
of the holder.
On
August 3, 2021, the Company entered into an agreement with an existing warrant holder to reduce the price of 2,083 warrants issued
on June 30, 2021 from $2,760.00 to $2,400.00. |
| |
|
| b) |
On
July 2, 2021, upon public listing of the Company’s shares, the Company issued 4,608 three-year warrants to purchase common
stock pursuant to the share subscription facility. The grant date fair value of the warrants, based on the $3,477.60 stock price
on the date of issuance, was $11.6 million, and was recognized in general and administrative expense due to the uncertainty of future
issuance of shares under the share subscription facility. |
| |
The
warrants have been subject to multiple exercise price reductions as required by a down round adjustment feature of the warrant, due
to common stock issued at a price below the then current exercise price. The adjustments have progressed from the original exercise
price of $2,402.40 per share to the current exercise price at September 30, 2023 of $3.64 per share. The difference in fair value
of the existing warrant prior to the adjustment and the value of the warrant after (utilizing a Black-Scholes model) is reflected
on the consolidated statement of operations as a deemed dividend. |
| |
|
| c) |
On
September 24, 2021 and November 5, 2021, the Company issued 1,504 and 3,008 warrants in connection with the issuance of the 2021
Notes. The warrants were immediately exercisable with an exercise price of $1,831.20 (subject to downward revision protection in
the event the Company makes certain issuances of common stock at prices below the exercise price) and expire on September 23, 2026.
As a result of the issuance of the 2022 Notes in July 2022, the exercise price of these warrants was adjusted down to $187.20. On
May 12, 2023, in exchange for $0.125 per outstanding warrant, the Company amended the warrants to reduce their exercise price to
$3.64. |
| |
|
| d) |
On
July 1, 2022 and August 9, 2022, the Company issued 19,447 warrants each in connection with the issuance of the 2022 Notes. The warrants
were immediately exercisable with an exercise price of $170.04 (subject to downward revision protection in the event the Company
makes certain issuance of common stock at prices below the conversion price) and expire on June 29, 2027 and August 8, 2027, respectively.
As a result of the issuance of shares and warrants in connection with the December public offering, the exercise price of these warrants
was adjusted down to $24.07. On May 12, 2023, in exchange for $0.125 per outstanding warrant, the Company amended the warrants to
reduce their exercise price to $3.64. |
| |
|
| e) |
On
December 9, 2022, the Company issued 549,987 equity classified warrants in connection with a public offering. The warrants were immediately
exercisable with an exercise price of $16.80 and expire on December 9, 2027. On May 12, 2023, in exchange for $0.125 per applicable
warrant, the Company amended 166,667 of these warrants to reduce their exercise price to $3.64. |
| |
|
| f) |
On
February 6, 2023, the Company issued 318,451 equity classified warrants in connection with a public offering. The warrants were immediately
exercisable with an exercise price of $8.58 - $12.60 and expire on February 2, 2028, and August 7, 2028. |
| |
|
| (g) |
On
May 12, 2023, the Company issued 3,727,813 equity classified warrants (series A-1, A-2 and placement agent warrants) in connection
with a public offering. The warrants were immediately exercisable with an exercise price of $3.64 - $4.86 and expire on November
12, 2024, May 10, 2028, and May 12, 2028. |
| |
|
| (h) |
On
May 12, 2023 the Company also issued 1,451,876 pre-funded warrants in connection with a public offering, 885,000 pre-funded warrants
were exercised in connection with the closing of the public offering, 344,804 were exercised between the closing date and September
30, 2023. As of September 30, 2023, 222,072 pre-funded warrants remain outstanding. The pre-funded warrants are immediately exercisable
with an exercise price of $0.0001. |
|
On
December 31, 2022, outstanding warrants to purchase shares of common stock are as follows:
SCHEDULE OF OUTSTANDING WARRANT
| Reference | |
Shares Underlying Outstanding Warrants | | |
Exercise Price | | |
Description | |
Classification |
| (a) | |
| 70,969 | | |
$ | 2,400.00– 2,760.00 | | |
LACQ warrants | |
Equity |
| (b) | |
| 4,608 | | |
$ | 8.58 | | |
Share subscription facility | |
Equity |
| (c) | |
| 4,512 | | |
$ | 187.20 | | |
2021 Notes | |
Liability |
| (d) | |
| 38,894 | | |
$ | 24.07 | | |
2022 Notes | |
Liability |
| (e) | |
| 549,987 | | |
$ | 16.80 | | |
Public offering | |
Equity |
| | |
| 668,970 | | |
| | | |
| |
|
| a) |
On
June 30, 2021, as a result of the Closing, the Company assumed a total of 78,751 warrants previously issued by LACQ (subsequently
in December 2022, 7,782 warrants were cancelled). The warrants provide holders the right to purchase common stock at a strike price
of between $2,400.00 and $2,760.00 per share and expire June 30, 2026, five years following the completion of the Business Combination.
A total of 41,666 of the outstanding warrants are public warrants which trade on the OTC Pink Open Market under the ticker symbol
ENSCW. The remaining 29,303 warrants are private warrants with restrictions on transfer and which have the right to a cashless exercise
at the option of the holder. |
| |
|
| |
On
August 3, 2021, the Company entered into an agreement with an existing warrant holder to reduce the price of 2,083 warrants issued
on June 30, 2021 from $2,760.00 to $2,400.00, resulting in an incremental increase in their fair value of $56,590, recognized in general
and administrative expense. |
| |
|
| b) |
On
July 2, 2021, upon public listing of the Company’s shares, the Company issued 4,608 warrants to purchase common stock pursuant
to the share subscription facility. The warrants have a three-year life and an exercise price of $2,402.40 per share. The grant date
fair value of the warrants, based on the $3,477.60 stock price on the date of issuance, was $11.6 million, and was recognized in general
and administrative expense due to the uncertainty of future issuance of shares under the share subscription facility. |
Ensysce
Biosciences, Inc.
Notes
to the Consolidated Financial Statements
| |
The
warrants have been subject to multiple exercise price reductions as required by a down round adjustment feature of the warrant, due to
common stock issued at a price below the then current exercise price (primarily the result of the conversions of the 2021 Notes and the
2022 Notes). The adjustments have progressed from the original exercise price of $2,402.40 per share to the current exercise price
at December 31, 2022 of $16.80
per share. The difference in fair value of the existing warrant prior to the adjustment and the value of the warrant after (utilizing
a Black-Scholes model) is reflected on the consolidated statement of operations as a deemed dividend. |
| |
|
| c) |
On
September 24, 2021 and November 5, 2021, the Company issued 1,504 and 3,008 warrants in connection with the issuance of the 2021
Notes. The warrants were immediately exercisable with an exercise price of $1,831.20 (subject to downward revision protection in the
event the Company makes certain issuances of common stock at prices below the conversion price) and expire on September 23, 2026.
As a result of the issuance of the 2022 Notes in July 2022, the exercise price of these warrants was adjusted down to $187.20. |
| |
|
| d) |
On
July 1, 2022 and August 9, 2022, the Company issued 19,447 warrants each in connection with
the issuance of the 2022 Notes. The warrants were immediately exercisable with an exercise
price of $170.04 (subject to downward revision protection in the event the Company makes certain
issuance of common stock at prices below the conversion price) and expire on June 29, 2027
and August 8, 2027, respectively. |
| |
|
| e) |
On
December 9, 2022, the Company issued 549,987 equity classified warrants in connection with the public offering. The warrants were
immediately exercisable with an exercise price of $16.80 (subject to downward revision protection in the event the Company makes certain
issuance of common stock at prices below the conversion price) and expire on December 9, 2027. |
|