Ensysce Biosciences, Inc. (NASDAQ: ENSC) carries a dilution risk score of 10 out of 10 — the maximum on ShareStructure's scale — driven by a floating-rate convertible preferred structure that is actively expanding the share count in real time.
The company's Series B Convertible Preferred Stock converts into common shares at an Alternate Conversion Price equal to 90% of the lowest five-day VWAP — meaning the conversion price resets downward based on the stock's recent trading, and the buyer pays a 10% discount to that already-depressed benchmark. The fixed conversion price has ratcheted from $2.50 down to $0.55. Because ENSC currently trades below the $0.4104 conversion floor — a contractual minimum meant to cap share issuance per conversion — every conversion now issues the maximum number of shares. Roughly 3,400 preferred shares remain outstanding, convertible into an estimated 9 million common shares.
The results are already visible. Shares outstanding rose 58.4% in just six weeks — from 9.28 million on March 27 to 14.69 million by May 14, 2026. Over twelve months, the count has grown approximately 520%.
The Overhang Beyond Conversions
Preferred conversions are only one layer. Approximately 14 million warrant shares sit above the current float, including 8.7 million warrants held by 3i, LP at a $0.55 strike that carry full-ratchet anti-dilution protection — meaning the exercise price automatically resets lower if the company issues shares below that strike. Any new below-price issuance widens the warrant overhang.
Then there is the equity line of credit, or ELOC — a standby facility under which the company can sell shares to 3i, LP in increments. Of a $16 million facility, only $2 million has been drawn, leaving $14 million of undrawn capacity. At recent share-count economics, that remaining capacity could translate into more than 50 million additional shares — over three times the current outstanding count of 15.37 million.
Meanwhile, three separate Form S-3 resale registrations — filings that allow selling shareholders to offer their shares to the public — cover more than 20 million shares. The largest, filed April 2026, registers 20.3 million shares primarily for 3i. These are not yet reflected in standard float figures.
Put together, pending supply totals roughly 32 million shares against an adjusted public float — the portion of shares freely tradeable — of approximately 13.6 million. That is a pending-to-float ratio of about 2.4 to 1.
Pattern and Counterparty
3i, LP, managed by Maier Joshua Tarlow, is the dominant financing counterparty. The fund imposed a Variable Rate Transaction prohibition on Ensysce, which locks the company into 3i's instruments as long as preferred stock with at least $100,000 in stated value remains outstanding. Three reverse stock splits in roughly two years — at ratios of 1-for-20, 1-for-12, and 1-for-15, a cumulative consolidation of approximately 1-for-3,600 — illustrate the recurring dilute-and-reset cycle.
A Nasdaq bid-price compliance deadline of August 24, 2026 looms, raising the structural probability of a fourth reverse split. The company's authorized share ceiling stands at 250 million — roughly 16 times current outstanding — leaving ample room for further issuance without a shareholder vote.