Item
1.01. Entry into a Material Definitive Agreement.
On
June 30, 2022, Ensysce Biosciences, Inc. (“Ensysce” or the “Company”) entered into a Securities Purchase Agreement
(the “SPA”) for an aggregate financing of $8.0 million with institutional investors. At the first closing under the SPA,
which occurred on June 30, 2022, the Company issued to the investors (i) senior secured convertible promissory notes in the aggregate
principal amount of $4.24 million for an aggregate purchase price of $4 million (collectively, the “Notes”) and (ii) warrants
(collectively, the “Warrants”) to purchase 4,667,890 shares of the Company’s common stock, par value $0.0001 per share
(the “Common Stock”) in the aggregate. At the second closing under the SPA, which will occur upon certain conditions being
satisfied, the Company will issue to the institutional investors referenced above, (i) Notes in the aggregate principal amount of $4.24
million for an aggregate purchase price of $4 million and (i) Warrants to purchase 4,667,890 shares of the Common Stock in the aggregate.
The
Notes, subject to an original issue discount of six percent (6%), have a term of eighteen months and accrue interest at the rate of 6.0%
per annum. The Notes are convertible into the Common Stock, at a per share conversion price equal to $0.5450, a 10% premium to the average
price of the Common Stock for the three trading days prior to the first closing under the SPA. Under the Notes, commencing on September
29, 2022 and continuing monthly on the first day of each month beginning November 1, 2022, the Company is obligated to redeem one fifteenth
(1/15th) of the original principal amount under the applicable Note, plus accrued but unpaid interest, liquidated damages and any other
amounts then owing to the holder of such Note. The Company may elect to pay all or part of the redemption amount in cash with a premium
of eight percent or in conversion shares of Common Stock based on a conversion price equal to the lesser of (i) the conversion price
and (ii) 92% of the average of the three lowest VWAPs (as defined in the SPA) during the ten (10) consecutive trading days ending on
the trading day that is immediately prior to the applicable redemption date, but in no event may the Company pay the redemption amount
in conversion shares of Common Stock unless the conversion price is at least equal to $0.1003 and certain equity conditions are satisfied.
The
Warrants have an exercise price of $0.7085, a 30% premium to the conversion price and are exercisable for five years following issuance.
The Company will issue, to the purchasers signatory to the SPA, Warrants to purchase up to a number of shares of Common Stock equal to
sixty percent (60%) of the shares of Common Stock issuable to each purchaser under the SPA upon conversion of the Note such purchaser
holds on each of the first and second closing date under the SPA.
The
Company has agreed to register with the Securities and Exchange Commission (the “SEC”) the resale of the shares of Common
Stock issuable upon conversion of the Notes as well as the shares of Common Stock issuable upon the exercise of the Warrants pursuant
to the Registration Rights Agreement, dated June 30, 2022, by and among the Company and the purchasers signatory to the SPA. The second
closing will occur no later than the 2nd trading day after the registration statement has been declared effective by the SEC.
The
Notes contain certain covenants, and events of default and triggering events, respectively, which would require repayment of the obligations
outstanding pursuant to such instruments. The obligations of the Company pursuant to the Notes are (i) secured by all assets of the Company
and all subsidiaries of the Company pursuant to the Security Agreement and Patent Security Agreement, each dated June 30, 2022, by and
among the Company, the subsidiaries of the Company and the holders of the Notes and (ii) guaranteed jointly and severally by the subsidiaries
of the Company pursuant to the Subsidiary Guarantee, dated June 30, 2022, by and among the Company, the subsidiaries of the Company and
the purchasers signatory to the SPA.