Ensysce Biosciences, Inc 10-Q for FY2023 Q1

Ensysce Biosciences, Inc. (ENSC)

10-Q 2023-05-15 For: 2023-03-31

Added on April 12, 2026

About this 10-Q

Ensysce Biosciences, Inc filed this 10-Q on May 15, 2023, covering the quarter ended March 31, 2023 (FY2023 Q1).

Headline figures

Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $789.64K; up 30.9% from $603.1K a year earlier
Net loss: $2.19M; compared with a net loss of $950.93K a year earlier

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Delaware		82-2755287
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value per share		ENSC		The Nasdaq Stock Market LLC

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

	●	our estimates regarding expenses, revenue, capital requirements and timing and availability of and the need for additional financing will almost certainly not match actual amounts and timing;

	●	our ability to continue as a going concern for the next twelve months;

	●	the risk that our lead product candidate PF614 and PF614-MPAR™ may not be successful in limiting or impeding abuse, overdose, or misuse or providing additional safety upon commercialization;

	●	the need for substantial additional funding to complete the development and commercialization of our product candidates;

	●	the risk that our clinical trials may fail to replicate positive results from earlier preclinical studies or clinical trials conducted by us or third parties;

	●	the risk that the potential product candidates that we develop may not progress through clinical development or receive required regulatory approvals within expected timelines or at all;

	●	the risk that clinical trials may not confirm any safety, potency, or other product characteristics described or assumed in this Quarterly Report on Form 10-Q;

	●	the risk that we will be unable to successfully market or gain market acceptance of our product candidates;

	●	the risk that our product candidates may not be beneficial to patients or successfully commercialized;

	●	the risk that we have overestimated the size of the target market, patients’ willingness to try new therapies, and the willingness of physicians to prescribe these therapies;

	●	effects of competition;

	●	the risk that third parties on which we depend for laboratory, clinical development, manufacturing, and other critical services will fail to perform satisfactorily;

	●	the risk that we will be unable to obtain and maintain sufficient intellectual property protection for its investigational products or will infringe the intellectual property protection of others;

	●	the loss of key members of our management team;

	●	changes in our regulatory environment;

	●	the ability to attract and retain key scientific, medical, commercial, or management personnel;

	●	changes in our industry;

	●	our ability to remediate any material weaknesses or establish and maintain effective internal controls over financial reporting;

	●	the risk that our common stock will be delisted from Nasdaq;

	●	The risk that we may not be able to regain or maintain compliance with applicable listing standards of Nasdaq;

	●	other factors disclosed in this Quarterly Report on Form 10-Q; and

	●	other factors beyond our control.

Definitions:
2021 Notes		The senior secured convertible promissory notes in the aggregate original principal amount of $15.9 million, sold in two closings on September 24, 2021 and November 5, 2021, respectively, pursuant to the Securities Purchase Agreement entered into on September 24, 2021
2021 Omnibus Incentive Plan		Ensysce Biosciences, Inc. Amended and Restated 2021 Omnibus Incentive Plan
2022 Notes		The senior secured convertible promissory notes in the aggregate original principal amount of $8.48 million, sold in two closings on June 30, 2022 and August 8, 2022, respectively, pursuant to the Securities Purchase Agreement entered into on June 30, 2022
2023 Offering		The Company’s February 2023 registered direct offering of common stock and private placement warrants for aggregate consideration of $3.0 million
ADFs		Abuse deterrent formulations
Aggregate Limit		Up to $60 million of gross proceeds with respect to the GEM Agreement
ANDA		Abbreviated New Drug Application
API		Active pharmaceutical ingredient
AUC		Area under the concentration time curve
Board		Board of directors of Ensysce, or a committee thereof, as applicable
Business Combination		The definitive merger agreement among LACQ, Merger Sub and Former Ensysce, dated January 31, 2021, providing for, among other things, and subject to terms and conditions therein, the business combination between LACQ and Former Ensysce pursuant to the merger of Merger Sub with and into Former Ensysce, with Former Ensysce continuing as the surviving entity and as a wholly-owned subsidiary of LACQ
CARA		Comprehensive Addiction and Recovery Act
CDC		Center for Disease Control
CDER		Center for Drug Evaluation and Research
cGMP		Current Good Manufacturing Practice
Cmax		Maximum plasma concentration
CMC		Chemistry, manufacturing, and controls
CMOs		Contract manufacturing organizations
CNS		Central nervous system
Company		Ensysce Biosciences, Inc. and its consolidated subsidiaries
COVID-19		Novel coronavirus disease
Covistat		A subsidiary renamed EBIR, Inc.
CROs		Contract research organizations
CSA		Controlled Substances Act
CSOS		Controlled Substance Ordering System
DEA		United States Drug Enforcement Agency
Draw Down Limit		400% of the average daily trading volume for the 30 trading days immediately preceding the date the Company delivers the draw down notice with respect to the GEM Agreement
DSCSA		Title II of the Federal Drug Quality and Security Act of 2013, known as the Drug Supply Chain Security Act
EB		Ensysce Biosciences, Inc. prior to its merger with Signature Acquisition Corp. pursuant to the EB-ST Agreement.
EBIR		Previously known as Covistat, Inc., EBIR, Inc. is a clinical stage pharmaceutical company that is developing a compound utilized in the Company’s overdose protection program for the treatment of COVID-19 and 79.2%-owned subsidiary of the Company

EB-ST Agreement		Agreement and Plan of Merger, dated as of December 28, 2015, by and among Signature, SAQ, and EB
EMA		European Medicines Agency
Ensysce		Ensysce Biosciences Inc.
EPO		European Patent Office
ETASU		Elements to assure a products safe use
Exchange Act		Securities Exchange Act of 1934, as amended
FDA		United States Food and Drug Administration
FDC Act		Federal Food, Drug and Cosmetic Act, as amended
Former Ensysce		Ensysce Biosciences, Inc., a Delaware corporation, prior to the consummation of the merger with and into Merger Sub
GAAP		Generally Accepted Accounting Principles in the United States of America
GCP		Good Clinical Practices
GEM Agreement		Share Purchase Agreement between the Company, GEM Global, and GYBL, dated as of December 29, 2020, including a Registration Rights Agreement between the same parties and dated as of the same date
GEM Global		GEM Global Yield LLC SCS
GEM Warrants		4,608 shares of common stock that may be issued upon the exercise of warrants issued to GYBL under the terms of the GEM Agreement at an exercise price of $8.58 per share
GMP		Good Manufacturing Practices
GYBL		GEM Yield Bahamas Limited
Hatch-Waxman Act or Hatch-Waxman Amendments		Drug Price Competition and Patent Term Restoration Act of 1984
HHS		United States Department of Health and Human Services
IMPDs		Investigational Medicinal Product Dossiers
IND		Investigational New Drug
Investor Notes		The 2021 Notes and the 2022 Notes, collectively.
IRB		Institutional Review Board
JOBS Act		Jumpstart Our Business Startups Act of 2012
LACQ		Leisure Acquisition Corp., a Delaware Corporation
LACQ Warrants		Warrants that relate to the Business Combination or were issued prior to it and are exercisable for 29,303 shares of our common stock at a weighted average exercise price of $2,734.41 per share
Merger		The merger of Merger Sub with and into Former Ensysce, with Former Ensysce continuing as the surviving entity and a wholly owned subsidiary of LACQ, which changed its name to Ensysce Biosciences, Inc. following consummation of the Merger.
Merger Agreement		Agreement and Plan of Merger, dated as of January 31, 2021, by and among LACQ, Merger Sub and Former Ensysce, providing for, among other things, and subject to the terms and conditions therein, a business combination between Former Ensysce and LACQ pursuant to the proposed merger of Merger Sub with and into Former Ensysce, with Former Ensysce surviving the transaction as a wholly-owned subsidiary of LACQ, which changed its name to Ensysce Biosciences, Inc. following consummation of the Merger
Merger Sub		EB Merger Sub, Inc., a Delaware corporation, a wholly-owned subsidiary of LACQ prior to the consummation of the Merger
MPAR Grant		Research and development grant related to the development of its MPAR^TM overdose prevention technology awarded to the Company by NIH through NIDA in September 2018
Nasdaq		The Nasdaq Stock Market LLC
NCE		New Chemical Entity
NDA		New Drug Application

NIDA		National Institute of Drug Abuse
NIH		National Institutes of Health
NME		New molecular entity
Orange Book		FDA’s publication Approved Drug Products with Therapeutic Equivalence Evaluations
OUD Grant		Research and development grant related to the development of its TAAP/MPAR^TM abuse deterrent technology for Opioid Use Disorder awarded to the Company by NIH/NIDA in September 2019
PCT		Patent Cooperation Treaty
PDMA		U.S. Prescription Drug Marketing Act
PK		Pharmacokinetics
Prior Warrants		Warrants issued pursuant to the Securities Purchase Agreement. The Prior Warrants issued in (i) 2021 are exercisable for an aggregate of 4,512 shares of our common stock at an exercise price of $187.20 per share and (ii) 2022 are exercisable for an aggregate of 38,894 shares of our common stock at an exercise price of $24.07 per share
PTA		Patent Term Adjustment
PTE		Patent Term Extension
Public Warrants		The redeemable warrants issued by us and sold as part of the units in the LACQ IPO (whether they were purchased in the LACQ IPO or thereafter in the open market). The Public Warrants are exercisable for an aggregate of approximately 41,666 shares of our common stock at an exercise price of $2,760.00 per share
R&D		Research and Development
REMS		Risk evaluation and mitigation strategy
Resale Registration Statement		Ensysce’s Resale Registration Statement filed on August 9, 2021
SARS-CoV-2		Severe acute respiratory syndrome coronavirus 2
SAQ		Signature Acquisition Corp., a wholly-owned subsidiary of Signature
SEC		U.S. Securities and Exchange Commission
Securities Act		Securities Act of 1933, as amended
Securities Purchase Agreement		The Securities Purchase Agreement, dated as of September 24, 2021 or June 30, 2022, as the context dictates, by and between Ensysce and the institutional investors party thereto
Signature		Signature Therapeutics Inc.
SPA		A Securities Purchase Agreement, dated as of September 24, 2021 or June 30, 2022, as the context dictates, by and between Ensysce and the institutional investors party thereto
SUPPORT Act		Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act
TAAP		Trypsin Activated Abuse Protection
TEAEs		Treatment-emergent adverse events
USPTO		United States Patent and Trademark Office

		Page

	Forward-Looking Statements	i
	Glossary	iii

PART I.	FINANCIAL INFORMATION	1

Item 1.	Financial Statements (Unaudited)	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statements of Changes in Stockholders’ Equity (Deficit)	3
	Consolidated Statements of Cash Flows	4
	Notes to Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34

PART II.	OTHER INFORMATION	35

Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	35
Signatures		36

	March 31, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	1,415,765		$	3,147,702
Unbilled receivable		289,312			276,821
Right-of-use asset		19,015			27,165
Prepaid expenses and other current assets		1,646,553			1,847,481
Total current assets		3,370,645			5,299,169
Other assets		544,217			585,883
Total assets	$	3,914,862		$	5,885,052
Liabilities and stockholders’ deficit
Current liabilities:
Accounts payable	$	1,598,166		$	2,943,791
Accrued expenses and other liabilities		2,358,682			2,226,494
Lease liability		19,120			27,315
Notes payable and accrued interest ($0 and $4,063,431 at fair value at March 31, 2023 and December 31, 2022, respectively)		-			4,266,610
Total current liabilities		3,975,968			9,464,210
Long-term liabilities:
Notes payable, net of current portion (at fair value)		-			140,148
Liability classified warrants		91,318			310,346
Total long-term liabilities		91,318			450,494
Total liabilities	$	4,067,286		$	9,914,704
Commitments and contingencies (Note 6)
Stockholders’ deficit
Preferred stock, $0.0001 par value, 1,500,000 shares authorized, no shares issued and outstanding at March 31, 2023 (unaudited) and December 31, 2022		-			-
Common stock, $0.0001 par value, 250,000,000 shares authorized at March 31, 2023 (unaudited) and December 31, 2022; 1,284,664 and 534,571 shares issued at March 31, 2023 (unaudited) and December 31, 2022, respectively; 1,284,583 and 534,490 shares outstanding at March 31, 2023 (unaudited) and December 31, 2022, respectively		128			53
Additional paid-in capital		113,293,834			107,216,566
Accumulated deficit		(113,127,237	)		(110,931,063	)
Total Ensysce Biosciences, Inc. stockholders’ equity (deficit)		166,725			(3,714,444	)
Noncontrolling interests in stockholders’ deficit		(319,149	)		(315,208	)
Total stockholders’ deficit		(152,424	)		(4,029,652	)
Total liabilities and stockholders’ deficit	$	3,914,862		$	5,885,052

	2023			2022
	Three Months Ended March 31,
	2023			2022
Federal grants	$	789,635		$	603,098
Operating expenses:
Research and development		1,796,015			3,140,096
General and administrative		1,554,855			2,265,806
Total operating expenses		3,350,870			5,405,902

Loss from operations		(2,561,235	)		(4,802,804	)

Other income (expense):
Change in fair value of convertible notes		146,479			2,767,178
Change in fair value of liability classified warrants		219,028			2,794,398
Loss on debt conversions		-			(1,702,642	)
Interest expense, net		(1,497	)		(15,021	)
Other income and expense, net		5,419			7,966
Total other income, net		369,429			3,851,879

Net loss	$	(2,191,806	)	$	(950,925	)
Net loss attributable to noncontrolling interests		(3,941	)		182
Deemed dividend related to warrants down round provision		8,309			715,579
Net loss attributable to common stockholders	$	(2,196,174	)	$	(1,666,686	)
Net loss per basic and diluted share:
Net loss per share attributable to common stockholders, basic and diluted	$	(2.08	)	$	(14.66	)
Weighted average common shares outstanding, basic and diluted		1,054,202			113,696

	Number of Shares			Amount		Paid-In Capital			Accumulated Deficit			Noncontrolling interests			Total
	Stockholders’ Equity (Deficit)
	Common Stock					Additional
	Number of Shares			Amount		Paid-In Capital			Accumulated Deficit			Noncontrolling interests			Total
Balance on December 31, 2021		102,678		$	10	$	77,967,314		$	(85,845,567	)	$	(279,815	)	$	(8,158,058	)
Consultant compensation		208			0		54,250			-			-			54,250
Conversion of convertible notes		19,618			2		8,075,341			-			-			8,075,343
Settlement of restricted stock units		2,280			0		(0	)		-			-			-
Stock-based compensation		-			-		2,090,663			-			-			2,090,663
Deemed dividend related to warrants down round provision		-			-		715,579			(715,579	)		-			-
Net loss		-			-		-			(951,107	)		182			(950,925	)
Balance on March 31, 2022		124,784		$	12	$	88,903,147		$	(87,512,253	)	$	(279,633	)	$	1,111,273

Balance on December 31, 2022		534,490		$	53	$	107,216,566		$	(110,931,063	)	$	(315,208	)	$	(4,029,652	)
Balance		534,490		$	53	$	107,216,566		$	(110,931,063	)	$	(315,208	)	$	(4,029,652	)
Settlement of restricted stock units		312			-		-			-			-			-
Conversion of convertible notes		408,582			41		3,056,851			-			-			3,056,892
Settlement of commitment fee		44,444			4		399,996			-			-			400,000
Public offering, net		297,619			30		2,689,022									2,689,052
Transaction costs associated with public offering		-			-		(194,043	)		-			-			(194,043	)
Stock-based compensation		-			-		117,133			-			-			117,133
Reverse split fractional shares		(864	)		-		-			-			-			-
Deemed dividend related to warrants down round provision		-			-		8,309			(8,309	)		-			-
Net loss		-			-		-			(2,187,865	)		(3,941	)		(2,191,806	)
Balance on March 31, 2023		1,284,583		$	128	$	113,293,834		$	(113,127,237	)	$	(319,149	)	$	(152,424	)
Balance		1,284,583		$	128	$	113,293,834		$	(113,127,237	)	$	(319,149	)	$	(152,424	)

	Level 1:		Quoted prices in active markets for identical assets or liabilities.
	Level 2:		Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.
	Level 3:		Unobservable inputs which are supported by little, or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

	Total		Level 1		Level 2		Level 3
	March 31, 2023
	Total		Level 1		Level 2		Level 3
Liability classified warrants	$	91,318	$	-	$	-	$	91,318
Total	$	91,318	$	-	$	-	$	91,318

	Total			Convertible note			Liability classified warrants
Fair value, December 31, 2022	$	4,513,925		$	4,203,579		$	310,346
Conversions		(3,056,892	)		(3,056,892	)		-
Cash payments		(415,351	)		(415,351	)		-
Cash true-up liability		(584,857	)		(584,857	)		-
Change in fair value		(365,507	)		(146,479	)		(219,028	)
Fair value, March 31, 2023	$	91,318		$	-		$	91,318

	March 31, 2023		December 31, 2022
Prepaid research and development	$	1,180,547	$	1,300,473
Prepaid insurance		314,990		445,583
Other prepaid expenses		151,016		101,425
Total prepaid expenses and other current assets	$	1,646,553	$	1,847,481

	March 31, 2023		December 31, 2022
Accrued research and development	$	1,293,348	$	1,332,713
Share subscription facility commitment fees		-		400,000
Professional fees		393,077		421,530
Other accrued liabilities		672,257		72,251
Total accrued expenses and other liabilities	$	2,358,682	$	2,226,494

	Principal balance		Accrued interest		Fair value adjustment		Net debt balance
2022 Notes	$	3,905,264	$	10,544	$	287,771	$	4,203,579
Financed insurance		195,273		7,906		-		203,179
Total	$	4,100,537	$	18,450	$	287,771	$	4,406,758

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
(f)		318,451	$	8.84	Public offering	Equity
		987,421

	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 March 31, 2023 of $8.58 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. 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.

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 (subject to downward revision protection in the event the Company makes certain issuance of common stock at prices below the exercise price) and expire on December 9, 2027.

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 (subject to downward revision protection in the event the Company makes certain issuance of common stock at prices below the exercise price) and expire on February 2, 2028, and August 7, 2028.

	Stock price		Exercise price		Expected term (years)		Volatility			Risk free rate
(a) LACQ warrants (grant date varies)	$	3,477.60	$	2,400.00 - 2,760.00		3.00		110.0	%		0.5	%
(b) Share subscription facility (grant date 7/2/21)	$	3,477.60	$	2,402.40		3.00		110.0	%		0.5	%
(b) Share subscription facility (remeasurement date varies)	$	7.01- 1,029.60	$	8.58-1,080.00		1.41 - 2.49		92.6% - 125.3	%		1.0% - 4.9	%
(c) Liability classified warrants (grant date 9/24/21)	$	1,077.60	$	1,831.20		5.00		94.1	%		1.0	%
(c) Liability classified warrants (grant date 11/5/21)	$	540.00	$	1,831.20		5.00		94.1	%		1.0	%
(c) Liability classified warrants (remeasured at 3/31/23)	$	4.86	$	187.20		3.50-3.60		102.9% - 103.4	%		3.8	%
(d) Liability classified warrants (grant date 7/1/22)	$	136.80	$	170.04		5.00		98.9	%		2.9	%
(d) Liability classified warrants (grant date 8/9/22)	$	127.20	$	170.04		5.00		102.8	%		3.0	%
(d) Liability classified warrants (remeasured at 3/31/23)	$	4.86	$	24.07		4.25-4.36		101.2% - 102.1	%		3.6	%

			Weighted average
	Options		Exercise price		Remaining contractual life		Intrinsic value
Outstanding at December 31, 2022		26,334	$	707.63		6.53	$	-
Granted		-		-		-		-
Exercised		-		-		-		-
Expired / Forfeited		-		-		-		-
Outstanding at March 31, 2023		26,334	$	707.63		6.29		-
Exercisable at March 31, 2023		23,922		729.16		-		-
Vested and expected to vest		26,334	$	707.63		6.29		-

	Three Months Ended March 31, 2022
Exercise price	$	259.20 - 1,507.20
Expected stock price volatility		76.12% - 95.87	%
Expected term (years)		5.19 - 10.00
Risk-free interest rate		1.52% -2.20	%
Expected dividend yield		0	%

	●	Expected stock-price volatility. The expected volatility is derived from the historical volatilities of publicly traded companies within the Company’s industry that the Company considers to be comparable to the Company’s business over a period approximately equal to the expected term.
	●	Expected term. The expected term represents the period that the stock-based awards are expected to be outstanding. The Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate an expected term due to a lack of sufficient data. Therefore, the Company estimates the expected term for employees by using the simplified method provided by the Securities and Exchange Commission. The simplified method calculates the expected term as the average of the time-to-vesting and the contractual life of the options.
	●	Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term.
	●	Expected dividend yield. The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on the Company’s common stock.

	Restricted Stock Units			Weighted average fair value
Outstanding at December 31, 2022		1,003		$	120.02
Released		(312	)		101.40
Outstanding at March 31, 2023		691		$	128.43

	March 31, 2023
Awards outstanding under the 2021 Omnibus Incentive Plan		27,025
Awards available for future grant under 2021 Omnibus Incentive Plan		31,294
Warrants outstanding		987,421
Total shares of common stock reserved for future issuance		1,045,740

	●	continue preclinical studies and continues existing and initiates new clinical trials for PF614, PF614-MPAR™ and nafamostat, our lead product candidates being tested for chronic pain and infectious disease;

	●	advance the development of our product candidate pipeline of other product candidates, including through business development efforts to invest in or in-license other technologies or product candidates;

	●	maintain, expand and protect our intellectual property portfolio;

	●	hire additional clinical, quality control, medical, scientific and other technical personnel to support our clinical operations;

	●	seek regulatory approval for any product candidates that successfully complete clinical trials;

	●	undertake any pre-commercialization activities to establish sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval;

	●	expand our infrastructure and facilities to accommodate our growing employee base; and

	●	add operational, financial and management information systems and personnel, including personnel to support our research and development programs and any future commercialization efforts.

	●	expenses incurred to conduct the necessary preclinical studies and clinical trials required to obtain regulatory approval;

	●	expenses incurred under agreements with CROs that are primarily engaged in the oversight and conduct of our drug discovery efforts and preclinical studies, clinical trials and CMOs that are primarily engaged to provide preclinical and clinical drug substance and product for our research and development programs;

	●	other costs related to acquiring and manufacturing materials in connection with our drug discovery efforts and preclinical studies and clinical trial materials, including manufacturing validation batches, as well as investigative sites and consultants that conduct our clinical trials, preclinical studies and other scientific development services;

	●	payments made in cash or equity securities under third-party licensing, acquisition and option agreements;

	●	employee-related expenses, including salaries and benefits, travel and stock-based compensation expense for employees engaged in research and development functions;

	●	costs related to compliance with regulatory requirements; and

	●	allocated facilities-related costs, depreciation and other expenses, which include rent and utilities.

	●	the scope, progress, outcome and costs of our preclinical development activities, clinical trials and other research and development activities;

	●	establishing an appropriate safety and efficacy profile with investigational new drug (“IND”) enabling studies;

	●	successful patient enrollment in and the initiation and completion of clinical trials;

	●	the timing, receipt and terms of any marketing approvals from applicable regulatory authorities including the FDA and non-U.S. regulators;

	●	the extent of any required post-marketing approval commitments to applicable regulatory authorities;

	●	establishing clinical and commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that we or our third-party manufacturers are able to make product successfully;

	●	development and timely delivery of clinical-grade and commercial-grade drug formulations that can be used in our clinical trials and for commercial launch;

	●	obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights;

	●	significant and changing government regulation;

	●	launching commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others; and

	●	maintaining a continued acceptable safety profile of our product candidates following approval, if any, of our product candidates.

	●	advance preclinical development of our early-stage programs and clinical trials of our product candidates;

	●	manufacture, or have manufactured on our behalf, preclinical and clinical drug material and develop processes for late state and commercial manufacturing;

	●	seek regulatory approvals for any product candidates that successfully complete clinical trials;

	●	establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any product candidates for which we may obtain marketing approval and intend to commercialize on our own;

	●	hire additional clinical, quality control and scientific personnel;

	●	expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company;

	●	obtain, maintain, expand and protect our intellectual property portfolio;

	●	manage the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights, including enforcing and defending intellectual property related claims; and

	●	manage the costs of operating as a public company.

	●	the scope, progress, results and costs of researching and developing our product candidates, and conducting preclinical and clinical trials;

	●	the costs, timing and outcome of regulatory review of our product candidates;

	●	the costs, timing and ability to manufacture our product candidates to supply our clinical and preclinical development efforts and our clinical trials;

	●	the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;

	●	the costs of manufacturing commercial-grade product and necessary inventory to support commercial launch;

	●	the ability to receive additional non-dilutive funding, including grants from organizations and foundations;

	●	the revenue, if any, received from commercial sale of our products, should any of our product candidates receive marketing approval;

	●	the costs of preparing, filing and prosecuting patent applications, obtaining, maintaining, expanding and enforcing our intellectual property rights and defending intellectual property-related claims;

	●	our ability to establish and maintain collaborations on favorable terms, if at all; and

	●	the extent to which we acquire or in-license other product candidates and technologies.