Ensysce Biosciences, Inc. 10-K/A

Item 9A. Controls and Procedures. Disclosure Controls and Procedures Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2020. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that due to a material weakness in internal control over financial reporting, solely due to the events that led to the Company’s restatement of its financial statements to reclassify the Company’s Derivative Instruments as described in the Explanatory Note to this Amendment, as of December 31, 2020, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Annual Report on Form 10-K/A present fairly in all material respects our financial position, results of operations and cash flows for the period presented. 53 Management’s Annual Report on Internal Control over Financial Reporting As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting at December 31, 2020. In making these assessments, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013). Based on our assessments and those criteria, management concluded that our internal control over financial reporting was not effective as of December 31, 2020 due to a material weakness in our internal control over financial reporting, described below. Notwithstanding this material weakness, management has concluded that our audited financial statements included in this Amendment are fairly stated in all material respects in accordance with GAAP for each of the periods presented herein... In connection with the restatement described in “Note 2— Restatement of Previously Issued Financial Statements” to the accompanying financial statements included in this Annual Report, management identified a material weakness in our internal control over financial reporting related to the accounting for a significant and unusual transaction related to our Derivative Instruments. This material weakness resulted in a material misstatement of our derivative liabilities, change in fair value of loss on derivative liabilities, additional paid-in capital and retained earnings (accumulated deficit) as of and for the years ended December 31, 2020, 2019 and 2018, as of December 5, 2017; as of and for the period ended September 11, 2017 (inception) to December 31, 2017; and as of and for the periods ended March 31, 2018, June 30, 2018, September 30, 2018, March 31, 2019, June 30, 2019, September 30, 2019, March 31, 2020, June 30, 2020 and September 30, 2020. To respond to this material weakness, we have devoted, and plan to continue to devote, significant effort and resources to the remediation and improvement of our internal control over financial reporting. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance these processes to better evaluate our research and understanding of the nuances of the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. This Annual Report on Form 10-K does not include an attestation report of internal controls from our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Due solely to the events that led to our restatement of our financial statements, management has identified a material weakness in internal controls related to the accounting for Derivative Instruments, as described in Note 2 to the Notes to our Consolidated Financial Statements. In light of the restatement of our Original Financial Statements included in this Amendment, we plan to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. Item 9B. Other Information None. 54 PART III Item 10. Directors, Executive Officers and Corporate Governance Directors and Executive Officers Our current directors and executive officers as of the date of this Report are as follows: Name Age * Position A. Lorne Weil 75 Executive Chairman Daniel B. Silvers 44 Chief Executive Officer and Director Marc J. Falcone 47 Director Steven M. Rittvo 72 Director David L. Weinstein 54 Director George Peng 50 Chief Financial Officer, Treasurer and Secretary Eric Carrera 31 Senior Vice President — Finance and Business Development * As of March 1, 2021. A. Lorne Weil has served as our Executive Chairman since our formation in September 2017 and has been a principal of Hydra Management, an investment vehicle formed by Mr. Weil, since September 2014. Mr. Weil serves as Executive Chairman of Inspired Entertainment, Inc., a position he has held since December 2016. Previously, Mr. Weil served as Chairman and CEO of Inspired’s predecessor, Hydra Industries Acquisition Corp., since October 2014. Mr. Weil previously served as Chairman of the Board of Scientific Games Corporation (and its predecessor Autotote Corporation) from October 1991 to November 2013. Mr. Weil also served as the Chief Executive Officer of Scientific Games Corporation (and its predecessor Autotote Corporation) from 1992 to 2008 and from November 2010 to November 2013 (Mr. Weil had retired in 2008) and as the President from August 1997 to June 2005. Under Mr. Weil’s stewardship, the company made a number of significant acquisitions and joint ventures, including the privatization of the off-track betting operations of the State of Connecticut, and the acquisitions of Scientific Games Holdings Corp., IGT Online Entertainment Systems, Global Draw and WMS Industries, and the privatization of the Illinois, New Jersey and Italian lotteries. Prior to joining Scientific Games, Mr. Weil was President of Lorne Weil, Inc., a firm he founded which provided strategic planning and corporate development services to technology-based industries, a role he maintained from 1979 to November 1992. From 1974 to 1979, Mr. Weil was Vice President — Corporate Development at General Instrument Corporation. From 1970 to 1974, Mr. Weil was a manager with the Boston Consulting Group. Mr. Weil received his undergraduate degree from the University of Toronto, an M.S. degree from the London School of Economics and an M.B.A. from Columbia University, where he served for more than 10 years on the Board of Overseers. From 2011 to 2013, Mr. Weil was a director of Avantair Inc. In 2012, Mr. Weil was the sponsor and Chairman of the Board of Andina Acquisition Corp., a Nasdaq-listed blank check company, and currently serves as the Non-Executive Chairman of the Board of the successor entity, Tecnoglass Inc. We believe Mr. Weil is well-qualified to serve as a member of our board of directors due to his extensive business experience in strategic planning and corporate development, his experience successfully overseeing the IPO of Hydra Industries Acquisition Corp. and its subsequent merger with Inspired Gaming Group, the IPO of Andina and its subsequent merger with Tecnoglass, the contacts he has fostered over the course of his extensive career, as well as his vast operational experience. Daniel B. Silvers has served as Chief Executive Officer and a Director of the Company since our formation in September 2017. Additionally, he has served as Managing Member of Matthews Lane Capital Partners LLC, an investment firm, since June 2015 and also has served as Executive Vice President and Chief Strategy Officer of Inspired Entertainment, Inc., a company involved in the gaming equipment supplier industry, since December 2016. At Inspired, Mr. Silvers is also a member of the Office of the Executive Chairman. He is the former President of Spring Owl Asset Management LLC, an investment management firm, a position he held from March 2009 to June 2015 (including predecessor entities). From April 2009 to October 2010, Mr. Silvers also served as President of Western Liberty Bancorp, an acquisition oriented holding company that acquired and recapitalized a community bank in Las Vegas, Nevada. Mr. Silvers joined a predecessor of Spring Owl from Fortress Investment Group, a leading global alternative asset manager, where he worked from 2005 to 2009. At Fortress, Mr. Silvers’ primary focus was to originate and oversee due diligence on and asset management for real estate and gaming investments in Fortress’ Drawbridge Special Opportunities Fund. Prior to joining Fortress, Mr. Silvers was a senior member of the real estate, gaming and lodging investment banking group at Bear, Stearns & Co., Inc. Mr. Silvers serves as a director of Avid Technology, Inc., a global media technology provider. Mr. Silvers previously served on the board of directors of Forestar Group, Inc., International Game Technology, bwin.party digital entertainment plc, Universal Health Services, Inc., PICO Holdings, Inc., Ashford Hospitality Prime, Inc. and India Hospitality Corp. Mr. Silvers holds a B.S. in Economics, as well as an M.B.A with a concentration in Finance, from The Wharton School of the University of Pennsylvania. 55 We believe Mr. Silvers is well-qualified to serve as a member of our board of directors due to his extensive experience in corporate finance, capital allocation, capital markets and public company governance. Marc J. Falcone has served as a member of our board of directors since December 1, 2017. Mr. Falcone has served as the President and Chief Financial Officer of Sightline Payments LLC, a leading digital commerce platform for the gaming industry, since February 2019. Mr. Falcone is also the principal of MF Ventures LLC, a diversified investment platform with investments in companies involved in the hospitality, gaming and leisure industries, including Kentucky Downs located in Franklin, Kentucky, which operates 750 historical horse racing machines. Mr. Falcone served as Executive Vice President, Chief Financial Officer and Treasurer of Red Rock Resorts, Inc. from October 2015 until May 2017 and as Executive Vice President and Chief Financial Officer of Station Casinos LLC from June 2011 until May 2017. Mr. Falcone served as Treasurer of Station Casinos LLC since January 2013 until May 2017. Mr. Falcone also served as Chief Financial Officer of Fertitta Entertainment LLC from October 2010 through May 2016. From June 2008 to October 2010, Mr. Falcone worked at Goldman Sachs & Co. where he focused on restructuring transactions in the hospitality and gaming sectors under that firm’s Whitehall division. From May 2006 to June 2008, Mr. Falcone was a senior analyst at Magnetar Capital, LLC (an alternative asset management firm), covering the gaming, lodging, leisure, REIT and airline industries. From May 2002 to June 2006, Mr. Falcone was a Managing Director for Deutsche Bank Securities Inc. covering gaming, lodging and leisure companies and was recognized as one of the industry’s top analysts. Prior to joining Deutsche Bank Securities Inc., Mr. Falcone worked for Bear, Stearns & Co. Inc., covering the gaming, lodging and leisure industries. Mr. Falcone holds a bachelor’s degree in Real Estate Finance and Hotel Administration from Cornell University. We believe Mr. Falcone is well-qualified to serve as a member of our board of directors due to his significant experience as an executive officer at a public company in the leisure sector and investment experience with the leisure sector and leisure-related businesses. Steven M. Rittvo has served as a member of our board of directors since December 1, 2017. Since February 2017, Mr. Rittvo serves as Chairman and Chief Executive Officer of Innovation Project Development, a multi-disciplinary development management services company focused on leisure- and residential-related developments. Mr. Rittvo has been with Innovation Project Development since November 2005. In May 1993, Mr. Rittvo co-founded The Innovation Group, Inc., a gaming, hospitality and leisure sector consulting firm headquartered in Denver with offices in New Orleans, Atlantic City, Aspen, Minneapolis and Orlando. Mr. Rittvo served as President of Innovation Group until February 2017. In Mr. Rittvo’s various roles with The Innovation Group, he advised and participated in gaming studies for clients ranging from Caesars Entertainment, MGM Mirage, Pinnacle Entertainment, Mandalay Resort Group, Isle of Capri, Harrah’s Entertainment, Trump Hotels and Casinos, as well as numerous Native American tribes and government agencies throughout the United States and the World. Mr. Rittvo holds a bachelor’s degree in Systems Engineering and a master’s degree in Transportation Engineering and Planning from the Polytechnic Institute of New York. We believe Mr. Rittvo is well-qualified to serve as a member of our board of directors due to his significant experience managing leisure-related developments and advising owners, operators and other stakeholders in the leisure sector and leisure-related businesses. 56 David L. Weinstein has served as a member of the LACQ board of directors since December 1, 2017. Mr. Weinstein is a partner at Belvedere Capital, a real estate investment firm based in New York, and is primarily focused on Belvedere’s investment in Industry City, a six million square foot redevelopment project in Sunset Park, Brooklyn. Mr. Weinstein serves as Chief Executive Officer of GreenAcreage Real Estate Corp., a REIT, a position he assumed in August 2020, and also serves as a director of GreenAcreage. Mr. Weinstein was previously a partner at Belvedere Capital from September 2008 until October 2013 and rejoined as a partner in 2016. From February 2015 until August 2016, Mr. Weinstein was a member of the board of directors of Forestar Group, Inc. Mr. Weinstein previously served as President and Chief Executive Officer of MPG Office Trust, Inc., a publicly traded office REIT, from November 2010 until the sale of the Company in October 2013. He was a member of the board of directors of MPG Office Trust, Inc. from August 2008 until October 2013. From April 2007 until August 2008, Mr. Weinstein was a Managing Director of West bridge Investment Group/Westmont Hospitality Group, a real estate investment fund focused on hospitality. From 1996 until January 2007, Mr. Weinstein worked at Goldman, Sachs & Co. in New York, first as a Vice President in the real estate investment banking group (focusing on mergers, asset sales and corporate finance) and then, from 2004, as a Vice President in the Special Situations Group (focused on real estate debt investments). Mr. Weinstein holds a Bachelor of Science degree in Economics, magna cum laude, from The Wharton School of the University of Pennsylvania and a Juris Doctor, cum laude, from the University of Pennsylvania Law School. He is a member of the New York State Bar Association. We believe Mr. Weinstein is well-qualified to serve as a member of our board of directors due to his real estate banking, investment and management experience, including as a chief executive officer of a publicly traded real estate company, as well as his corporate governance experience through service as a board member of a public company will be valuable to the Company’s board of directors. George Peng has served as our Chief Financial Officer, Treasurer and Secretary since our formation in September 2017. Additionally, Mr. Peng has been a Principal of Hydra Management, LLC, an investment vehicle of Mr. Weil’s since July 2014 and as Vice President of Finance at Inspired Entertainment, Inc., since January 2017. Previously, he was Chief Financial Officer of Hydra Industries Acquisition Corp., a special-purpose acquisition corporation that acquired Inspired Entertainment, Inc., from August 2015 until January 2017. Before that, Mr. Peng was a consultant to Scientific Games Corporation from May 2013 to April 2014, where he assisted in its integration of the acquisition of WMS Industries. Mr. Peng was focused on the financial and operational impacts of integrating the accounting and finance functions of both companies, including human resource allocation, budgeting, and cost reductions. Prior to consulting to Scientific Games, Mr. Peng was a consultant primarily focused on financial planning and analysis for various industries, including retail and financial services. Previously, he was an Associate in the Investment Banking division of Credit Suisse, focusing on private equity, high yield, and leveraged lending products. Mr. Peng holds an A.B. in Economics from the University of Michigan, Ann Arbor, as well as an M.B.A. with a concentration in Finance from the Anderson School at UCLA. Mr. Peng is a CFA Charter holder, which he was awarded in 2006. Eric Carrera has served as our Senior Vice President of Finance and Business Development since September 2017. Additionally, Mr. Carrera has served as the Senior Associate of Hydra Management, LLC, an investment vehicle of Mr. Weil, since June 2015 and as Manager of Finance/M&A of Inspired Entertainment, Inc. since January 2017. Mr. Carrera was Senior Vice President at Andina Acquisition Corp. II, a special-purpose acquisition corporation, from November 2015 to March 2018 when it successfully completed its business combination with Lazydays R.V. Center, Inc., a premier RV dealership destination. From June 2011 to February 2015, Mr. Carrera was an international business development associate with Scientific Games Corporation, a supplier of technology-based products, systems and services to gaming markets worldwide. From September 2011 to December 2013, Mr. Carrera acted as an advisor to Andina Acquisition Corp. and was a member of the team that successfully completed a business transaction with Tecnoglass S.A., a Colombian manufacturer of glass and windows. Mr. Carrera received a B.S. from Boston University School of Management and is also a CFA Charter holder. Number and Terms of Office of Officers and Directors Our Board is presently comprised of five (5) members and is divided into three separate classes of directors. One class of directors is normally elected at each annual meeting of stockholders for a term of three (3) years. Mr. Falcone, our Class I director, was elected at our first annual meeting of stockholders in 2018 for a three-year term expiring at our 2021 annual meeting of stockholders. Messrs. Rittvo and Weinstein, our Class II directors, were each elected at our 2019 Special Meeting for a three-year term expiring at our 2022 annual meeting of stockholders. Messrs. Weil and Silvers were each elected at our 2020 Special Meeting for a three-year term expiring at our 2023 annual meeting of stockholders. 57 Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of a Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, Vice Presidents, Secretary, Treasurer and such other offices as may be determined by the board of directors. Director Independence Nasdaq listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that Messrs. Falcone, Rittvo and Weinstein are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Committees of the Board of Directors Our Board has two standing committees: an audit committee and a compensation committee. Our committees are comprised solely of independent directors. Audit Committee The members of our audit committee are Messrs. Falcone, Rittvo and Weinstein. Mr. Falcone currently serves as Chairman of the audit committee. All members of the audit committee qualify as independent directors under applicable rules and regulations of the SEC and Nasdaq. Each member of the audit committee is financially literate and our board of directors has determined that Mr. Falcone qualifies as an “audit committee financial expert” as defined in applicable SEC rules. We have adopted an audit committee charter, which details the principal functions of the audit committee, including: ● the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us; ● pre-approving all audit and permitted non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; ● reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence; ● setting clear hiring policies for employees or former employees of the independent auditors; ● setting clear policies for audit partner rotation in compliance with applicable laws and regulations; ● obtaining and reviewing a report, at least annually, from the independent auditors describing (i) the independent auditor’s internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues; ● reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and ● reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. 58 Compensation Committee The members of our compensation committee are Messrs. Falcone, Rittvo and Weinstein. Mr. Weinstein currently serves as Chairman of the compensation committee. All members of the compensation committee qualify as independent directors under applicable rules and regulations of the SEC and Nasdaq. We have adopted a compensation committee charter, which details the principal functions of the compensation committee, including: ● reviewing and approving the corporate goals and objectives relevant to the compensation of the Chief Executive Officer, evaluating the performance of the Chief Executive Officer in light of such goals and objectives and determining and approving the compensation of the Chief Executive Officer; ● reviewing and approving the compensation of the other executive officers; ● reviewing executive compensation policies and plans; ● administering equity-based compensation plans; ● reviewing and approving the terms of employment agreements, severance agreements and similar arrangements for executive officers; ● producing a report on executive compensation to be included in the annual proxy statement in accordance with applicable rules and regulations of the SEC in effect from time to time; and ● reviewing, modifying and approving (or, as it deems appropriate, recommending to the board for determination and approval) the compensation for non-employee directors. It is likely that prior to the consummation of a Business Combination, the compensation committee will only be responsible for the review and recommendation of any compensation arrangements to be entered into in connection with such Business Combination. The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC. Director Nominations We do not have a standing nominating committee. In accordance with Rule 5605(e)(2) of the Nasdaq Rules, a majority of the independent directors may recommend a director nominee for selection by the board of directors. The board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. As there is no standing nominating committee, we do not have a nominating committee charter in place. The board of directors will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish to nominate a director for election to the Board should follow the procedures set forth in our bylaws. Stockholder recommendations should be submitted in writing to: Leisure Acquisition Corp., 250 West 57th Street, Suite 415, New York, New York 10107, Attention: Secretary. 59 We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders. Compensation Committee Interlocks and Insider Participation None of our officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more officers serving on our board of directors, except that Mr. Weil, our Executive Chairman, is Executive Chairman of Inspired Entertainment, Inc. and Mr. Silvers, our Chief Executive Officer and a member of our board of directors, is an executive officer of Inspired Entertainment, Inc. Code of Ethics We have adopted a Code of Ethics applicable to our directors, executive officers and employees that complies with the rules and regulations of the Nasdaq. The Code of Ethics codifies the business and ethical principles that govern all aspects of our business. We have previously filed copies of our form Code of Ethics, our form of Audit Committee Charter and our form of Compensation Committee Charter as exhibits to our registration statement in connection with our Initial Public Offering. You may review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. Copies of our Code of Ethics and our audit committee and compensation committee charters are available, without charge, on our website at www.leisureacq.com or upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K. Conflicts of Interest Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity and not to us. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our Business Combination. In addition, our amended and restated certificate of incorporation provides for the waiver of any requirement to present corporate opportunities to us to the extent it would conflict with competing duties owed to other entities. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue. In addition, our sponsors, officers, directors and director nominees have agreed, pursuant to a written letter agreement, not to participate in the formation of, or become an officer or director of, any other blank check company until we have entered into a definitive agreement regarding our Business Combination or we have failed to complete our Business Combination during the Combination Period. Our management team is not currently involved in any other blank check offering. Potential investors should also be aware of the following other potential conflicts of interest: ● None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities. ● In the course of their other business activities, our officers and directors may become aware of investment and business opportunities that may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. 60 ● Our initial stockholders have agreed to waive their redemption rights with respect to any founder shares held by them in connection with the consummation of our Business Combination. Additionally, our initial stockholders have agreed to waive their redemption rights with respect to any founder shares held by them if we fail to consummate our Business Combination during Combination Period. If we do not complete our Business Combination within such applicable time period, the proceeds from our Initial Public Offering and Concurrent Private Placement held in the trust account will be used to fund the redemption of our public shares, any founder shares will be worthless, and the private placement warrants will expire worthless. With certain limited exceptions, the founder shares will not be transferable, assignable or salable by our initial stockholders until 180 days after the completion of our Business Combination. With certain limited exceptions, the private placement warrants and the common stock underlying such warrants, will not be transferable, assignable or salable by the initial purchasers or their permitted transferees until 30 days after the completion of our Business Combination. Since our sponsors, strategic investor and officers and directors may directly or indirectly own common stock and warrants, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our Business Combination. ● Our officers and directors may have a conflict of interest with respect to evaluating a particular Business Combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our Business Combination. Should one or more member of the management team seek to enter into an employment contract with a target, we would refer such matter of employment to a committee of disinterested directors of our board of directors for consideration. ● Each of A. Lorne Weil, our Executive Chairman, and Daniel B. Silvers, our Chief Executive Officer, is party to an employment agreement with Inspired. These agreements contain non-competition provisions that provide that neither Mr. Weil nor Mr. Silvers shall directly or indirectly engage in any business that is directly competitive with any business conducted by the Inspired Group during his employment, in any geographic area in which such business was so conducted by the Inspired Group. In Mr. Weil’s employment agreement with Inspired there are also non-solicitation provisions. In light of the non-competition agreements, we will not seek a Business Combination with any company with operations in the businesses described above. In addition, if our Business Combination does not cause Mr. Weil or Mr. Silvers to violate the non-competition agreements, no assurance can be given that the combined company would not in the future engage in competitive activities that would cause Mr. Weil or Mr. Silvers to be in breach of the non-competition agreements. If a court were to conclude that a violation of either or both of the non-competition agreements had occurred, it could extend the term of Mr. Weil’s or Mr. Silvers’ non-competition restrictions and/or enjoin Mr. Weil or Mr. Silvers from participating in our company, or enjoin us from engaging in aspects of the business which compete with Inspired Group, as applicable. The court could also impose monetary damages against Mr. Weil or Mr. Silvers or us. This could materially harm our business and the trading prices of our securities. Even if ultimately resolved in our favor, any litigation associated with the non-competition agreements could be time consuming, costly and distract management’s focus from locating suitable acquisition candidates and operating our business. ● Our sponsors, strategic investor, officers or directors may have a conflict of interest with respect to evaluating a Business Combination and financing arrangements as we obtained loans from our sponsors or strategic investor or an affiliate of our sponsors or strategic investor or any of our officers or directors to finance transaction costs in connection with an intended Business Combination. Up to $460,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender and would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. The conflicts described above may not be resolved in our favor. 61 In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if: ● the corporation could financially undertake the opportunity; ● the opportunity is within the corporation’s line of business; and ● it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation. Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Furthermore, our amended and restated certificate of incorporation will provide that the doctrine of corporate opportunity will not apply with respect to any of our officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have. Below is a table summarizing the entities to which our executive officers and directors currently have fiduciary duties or contractual obligations. Individual Entity Entity’s Business Affiliation A. Lorne Weil Hydra Management Investment Vehicle Principal Inspired Entertainment Gaming Technology Executive Chairman Tecnoglass Manufacturer of glass products for use in high end commercial real estate construction Non-Executive Chairman Daniel B. Silvers Matthews Lane Capital Partners Investment Vehicle Principal Inspired Entertainment Gaming Technology Chief Strategy Officer Avid Technology, Inc. Global Media Technology Provider Director George Peng Hydra Management Investment Vehicle Principal Inspired Entertainment Gaming Technology Vice President Finance Eric Carrera Hydra Management Investment Vehicle Senior Associate Inspired Entertainment Gaming Technology Manager, Finance & M&A Marc J. Falcone ECL Entertainment Entertainment Principal Sightline Payments LLC Gaming Technology Officer MF Ventures LL Investment Vehicle Principal Steven M. Rittvo Innovation Project Development Development Management Services Chairman and Chief Executive Officer David L. Weinstein GreenAcreage Real Estate Corp. Belvedere Capital REIT Real Estate Investment Firm Chief Executive Officer and Director Partner Accordingly, a scenario could arise whereby business opportunities may be provided to one of the above-listed entities by our officers or directors instead of us. For example, if any of our officers or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity and not to us. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our Business Combination. In addition, our amended and restated certificate of incorporation provides for the waiver of any requirement to present corporate opportunities to us to the extent it would conflict with competing duties owed to other entities. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue. 62 We are not prohibited from pursuing a Business Combination with a company that is affiliated with our sponsors, strategic investor, officers or directors. In the event we seek to complete our Business Combination with such a company, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA, or from an independent accounting firm, that such a Business Combination is fair to our company from a financial point of view. In the event that we submit our Business Combination to our public stockholders for a vote, our initial stockholders have agreed to vote any founder shares held by them and any public shares purchased during or after the offering in favor of our Business Combination and our officers and directors have also agreed to vote any public shares purchased during or after the offering in favor of our Business Combination. Limitation on Liability and Indemnification of Officers and Directors Our amended and restated certificate of incorporation provides that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation provides that our directors will not be personally liable for monetary damages to us or our stockholders for breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions as directors. We have entered into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate of incorporation. Our bylaws also permit us to secure insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We have obtained a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors. These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions. We believe that these provisions of our amended and restated certificate of incorporation, the directors’ and officers’ liability insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors. Item 11. Executive Compensation None of our officers or directors has received any cash (or non-cash) compensation for services rendered to us. Commencing on December 1, 2017, under an administrative services agreement, we agreed to pay our Hydra sponsor a total of up to $10,000 per month for office space, utilities and secretarial and administrative support. Effective June 30, 2020, our Hydra Sponsor agreed to stop charging the monthly administrative fee and forgave the $71,000 outstanding balance due under the agreement. We may pay our sponsors or any of our existing officers or directors, or any entity with which they are affiliated, a finder’s fee, consulting fee or other compensation in connection with identifying, investigating and completing our Business Combination. These individuals will also be reimbursed for any out of pocket expenses incurred in connection with activities on our behalf, such as identifying potential target businesses and performing due diligence on suitable Business Combinations. In addition, to facilitate the Company’s business interests in identifying potential target businesses, we have reimbursed certain professional networking organization membership fees. Our audit committee reviews on a quarterly basis all payments that were made to our sponsors, strategic investor, officers, directors or our or their affiliates and will determine which fees and expenses and the amount of expenses that will be reimbursed. 63 After the completion of our Business Combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed Business Combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed Business Combination, because the directors of the post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors. We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our Business Combination, although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with us after our Business Combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our Business Combination will be a determining factor in our decision to proceed with any potential Business Combination. We are not party to any agreements with our officers and directors that provide for benefits upon termination of employment. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters We have no compensation plans under which equity securities are authorized for issuance. The following table sets forth information available to us at March 1, 2021 with respect to the beneficial ownership of our Common Stock held by: ● each person known by us to be the beneficial owner of more than 5% of our outstanding Common Stock; ● each of our directors and executive officers that beneficially own shares of our Common Stock; and ● all of our directors and executive officers as a group. Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. Number of Shares Name and Address of Beneficial Owner (1) Beneficially Owned Percentage A. Lorne Weil and affiliated entities (2) 1,134,742 18.2 % Daniel B. Silvers and affiliated entities (3) 1,128,370 18.1 % Marc J. Falcone 25,000 * Steven M. Rittvo 25,000 * David L. Weinstein 25,000 * George Peng 87,014 1.4 % Eric Carrera 54,701 * All executive officers and directors as a group (seven individuals) 2,479,827 39.8 % Greater than 5% holders HG Vora Capital Management, LLC (4) 3,462,500 55.6 % * Less than one percent. 64 (1) This table is based on 6,224,268 shares of common stock outstanding as of March 1, 2021. Beneficial ownership is determined in accordance with the rules of the SEC which generally provide that a person has beneficial ownership of a security if such person possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. We believe that each person listed above has sole voting and investment power with respect to the shares listed except as described in the footnotes below and subject to applicable community property laws and similar laws. The Company’s warrants are not exercisable currently or within 60 days; accordingly, any such holdings of the persons listed are not reflected in this table. Unless otherwise noted, the business address of each of the following entities or individuals is c/o Leisure Acquisition Corp., 250 West 57th Street, Suite 415, New York, New York 10107 (2) Represents 266,900 shares held of record by Mr. Weil and represents 867,842 shares held of record by Hydra LAC, LLC. Mr. Weil is the managing member of Hydra LAC, LLC. Mr. Weil expressly disclaims beneficial ownership of such shares as to which he does not have a pecuniary interest. (3) Represents 887,127 shares held of record by MLCP GLL Funding, LLC, of which Matthews Lane Capital Partners LLC is the manager, and represents 241,243 shares held of record by Matthews Lane Capital Partners LLC. Mr. Silvers is the managing member of Matthews Lane Capital Partners LLC. (4) Based on a Schedule 13G/A filed with the SEC on February 14, 2019 and a Form 4 filed with the SEC on January 17, 2018 by HG Vora Capital Management, LLC, the investment manager of HG Vora Special Opportunities Master Fund, Ltd. The business address of HG Vora Capital Management is 330 Madison Avenue, 20th Floor, New York, New York 10017. Our directors and officers and other initial stockholders and their respective affiliates (including the Sponsors) have agreed to vote any shares owned by them in favor of any proposed Business Combination. Item 13. Certain Relationships and Related Transactions, and Director Independence Certain Relationships and Related Transactions Issuance of Founder Shares On September 11, 2017, we issued an aggregate of 7,187,500 founder shares to our sponsors, the strategic investor and certain members of management or their affiliates for an aggregate purchase price of $25,000 in cash, or approximately $0.003 per share. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the outstanding shares upon completion of our Initial Public Offering. In October 2017, our Hydra sponsor transferred 203,957 of its founder shares to certain of our officers and professionals. In October 2017, certain of our initial stockholders transferred 711,250 shares to our strategic investor, with 355,625 shares subject to return to such stockholders if the if certain specified market price levels for our common stock are exceeded following the closing of the Business Combination. In November 2017, Our Hydra sponsor transferred 25,000 founder shares to each of Messrs. Falcone, Rittvo and Weinstein, our independent directors. In December 2017, in connection with the completion of our Initial Public Offering, and on January 16, 2018, following the expiration of the underwriter’s over-allotment option, certain of our initial stockholders forfeited 1,437,500 and 750,000 shares, respectively. In each case, our initial stockholders forfeited such founder’s shares so as to maintain the ownership of our initial stockholders at 20% of our outstanding shares immediately following the consummation of our Initial Public Offering. The founder shares may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder. Private Placement Warrants Affiliates of our Hydra Sponsor and Matthews Lane Sponsor, the Strategic Investor and certain members of management purchased an aggregate of 6,825,000 private placement warrants for a purchase price of $1.00 per whole warrant in the Concurrent Private Placement. As such, these related parties’ aggregate interest in this transaction is valued at approximately $6,825,000. Each private placement warrant entitles the holder to purchase one share of our common stock at $11.50 per share. The private placement warrants (including the common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder. 65 Warrant Surrender Agreement On January 31, 2021, in connection with entering into the Merger Agreement, LACQ entered into a Warrant Surrender Agreement, by and among LACQ and our Sponsors, pursuant to which each of our Sponsors agreed to irrevocably forfeit and surrender 250,000 Private Placement Warrants immediately prior to, and contingent upon, the Closing. Contingent Forward Purchase Contract with Strategic Investor On December 1, 2017, our strategic investor entered into a Contingent Forward Purchase Contract with us to purchase, in a private placement for gross proceeds of approximately $62,500,000 to occur concurrently with the consummation of the business combination, 6,250,000 units on substantially the same terms as the sale of units in our initial public offering at $10.00 per unit. On December 27, 2019, in connection with the previously proposed business combination with GTWY Holdings, an amendment to the contingent forward purchase contract was effected to provide that the contingent forward purchase contract would terminate as of, and contingent upon, the closing of the transaction with GTWY Holdings such that the strategic investor would instead purchase 3,000,000 units of GTWY Holdings’ equity securities for a purchase price of $10.00 per unit. In addition, HG Vora waived its rights under the Contingent Forward Purchase Contract to purchase private placement units in connection with the proposed Merger with Ensysce. The original terms of the contingent forward purchase contract remain operative for a business combination with another target. Administrative Services Agreement On December 1, 2017, we entered into an administrative services agreement with our Hydra Sponsor under which we agreed to pay our Hydra Sponsor, or its affiliates or assignees, a total of up to $10,000 per month for office space, utilities and secretarial and administrative support until completion of our business combination. Effective June 30, 2020, our Hydra Sponsor agreed to stop charging the monthly administrative fee and forgave the $71,000 outstanding balance due under the agreement. Promissory Notes We entered into promissory notes with our sponsors whereby they agreed to loan us up to an aggregate of $400,000 to be used for a portion of the expenses of our Initial Public Offering. These loans, which were repaid on the IPO Closing Date, were non-interest bearing, unsecured and due at the earlier of June 30, 2018 or the IPO Closing Date. Expense Advance Agreement In order to finance transaction costs in connection with an intended business combination, we entered into an Expense Advancement Agreement with our Sponsors and Strategic Investor on December 1, 2017 under which they committed to loan us an aggregate of $1,000,000 pursuant to drawdowns from time to time in the event that funds held outside of the trust are insufficient to fund our expenses after our IPO and prior to our business combination (including investigating and selecting a target business and other working capital requirements). On January 15, 2020, we issued promissory notes pursuant to drawdowns under the agreement in the aggregate amount of $1,000,000, which the holders elected to convert on June 25, 2020 in accordance with the terms thereunder into warrants at a price of $1.00 per warrant. We entered into amendments to our Expense Advancement Agreement with our sponsors and Strategic Investor dated June 29, 2020, October 26, 2020, November 30, 2020 and February 23, 2021 which, in the aggregate increased the total amount of advances available to us under the agreement to $1,460,000. We issued unsecured promissory notes to such parties on October 26, 2020 and October 27, 2020 which were amended and restated on November 30, 2020 and February 24, 2021. Such promissory notes cover outstanding loans in aggregate amount of $460,000 as of March 10, 2021. The promissory notes do not bear any interest. The Company expects to repay any such loaned amounts out of the proceeds of the trust account released upon completion of a business combination. Alternatively, the sponsors and Strategic Investor would have the option to convert the outstanding loaned amounts under the promissory notes to warrants at a price of $1.00 per warrant. In the event the Company does not complete the business combination, it may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from the trust account would be used for such repayment. Accordingly, if the business combination is not completed, the Company will most likely not be able to repay the loans. 66 Potential Payments after the Business Combination After our Business Combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our Business Combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation. In connection with the Business Combination with Ensysce, none of our directors, officers or management team will continue with us, other than two of the directors will be selected by us, which may include persons who are our officers or directors. Registration Rights The holders of the founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans (and any shares of common stock issuable upon the exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans) are entitled to registration rights pursuant to a registration rights agreement entered into by us on the IPO Closing Date, which requires us to register such securities for resale. Each of our sponsors (collectively with their respective affiliates) and strategic investor is entitled to make up to two demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of our Business Combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the founder shares, on the earlier of (A) one year after the completion of our Business Combination or earlier if, subsequent to our Business Combination, the last sale price of the common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period commencing at least 150 days after our Business Combination, or (B) the date following the completion of our Business Combination on which we complete a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property, and (ii) in the case of the private placement warrants and the respective common stock underlying such warrants, 30 days after the completion of our Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements. Director Independence Nasdaq listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that Messrs. Falcone, Rittvo and Weinstein are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors have regularly scheduled meetings at which only independent directors are present. 67 Item 14. Principal Accountant Fees and Services The following is a summary of fees paid or to be paid to Marcum LLP, or Marcum, for services rendered for 2020 and 2019. Audit Fees . Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by Marcum in connection with regulatory filings. The aggregate fees billed by Marcum for professional services rendered for the audit of our annual financial statements, review of the financial information included in our Forms 10-Q for the respective periods and other required filings with the SEC and review of proxy and other registration statements for the year ended December 31, 2020 and 2019 totaled $80,845 and $53,684, respectively. The above amounts include interim procedures and audit fees, as well as attendance at audit committee meetings. Audit-Related Fees . Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. We paid Marcum $0 and $4,161 for consultations concerning financial accounting and reporting standards for the year ended December 31, 2020 and 2019. Tax Fees . We did not pay Marcum for tax planning and tax advice for the year ended December 31, 2020 and 2019. All Other Fees . We did not pay Marcum for other services for the year ended December 31, 2020 and 2019. Pre-Approval Policy Our audit committee was formed upon the consummation of our Initial Public Offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit). Item 15. Exhibits, Financial Statement Schedules The following documents are filed as part of this Report: (1) The financial statements listed in the Index to the Financial Statements on page F-1. (2) No financial statement schedules have been filed as part of this Report because they are not applicable, not required or because the information is otherwise included in the Financial Statements or notes thereto. (3) Exhibits listed on page 69. 68 LEISURE ACQUISITION CORP. INDEX TO FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm F-2 Financial Statements (As Restated): Balance Sheets F-3 Statements of Operations F-4 Statements of Changes in Stockholders’ (Deficit) Equity F-5 Statements of Cash Flows F-6 Notes to Financial Statements F-7 to F-28 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Leisure Acquisition Corp. Opinion on the Financial Statements We have audited the accompanying balance sheets of Leisure Acquisition Corp. (the “Company”) as of December 31, 2020 and 2019, the related statements of operations, changes in stockholders’ equity and cash flows for each of the years ended December 31, 2020 and 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years ended December 31, 2020 and 2019, in conformity with accounting principles generally accepted in the United States of America. Restatement of the Financial Statements As discussed in Note 2 to the financial statements, the accompanying financial statements as of December 31, 2020, and 2019 have been restated. Explanatory Paragraph – Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s business plan is dependent on the completion of a business combination and the Company’s cash and working capital as of December 31, 2020 are not sufficient to complete its planned activities. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Marcum LLP Marcum LLP We have served as the Company’s auditor since 2017 . West Palm Beach, FL March 15, 2021, except for the effects of the restatements discussed in Note 2 and Contingent Forward Purchase Contract in Note 7, as to which the date is June 7, 2021. F- 2 LEISURE ACQUISITION CORP. BALANCE SHEETS (As Restated) 2020 2019 December 31, 2020 2019 ASSETS Current assets Cash $ 49,202 $ 1,061,151 Prepaid expenses 157,483 — Prepaid income taxes 19,779 138,571 Total Current Assets 226,464 1,199,722 Cash and marketable securities held in Trust Account 12,628,170 195,312,177 TOTAL ASSETS $ 12,854,634 $ 196,511,899 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current liabilities Accounts payable and accrued expenses $ 260,404 $ 2,771,025 Total Current Liabilities 260,404 2,771,025 Promissory note 566,288 566,288 Convertible promissory notes - related party 225,000 — Warrant liability 6,260,000 7,166,250 Deferred underwriting fee payable 6,750,000 7,000,000 TOTAL LIABILITIES 14,061,692 17,503,563 Commitments - - Common stock subject to possible redemption, 0 and 16,808,829 shares at redemption value at December 31, 2020 and 2019, respectively — 174,008,335 Stockholders’ (Deficit) Equity Preferred stock, $ 0.0001 par value; 1,000,000 shares authorized; none issued and outstanding — — Common stock, $ 0.0001 par value; 100,000,000 shares authorized; 6,224,268 and 7,067,422 shares issued and outstanding (excluding 0 and 16,808,829 shares subject to possible redemption) at December 31, 2020 and 2019, respectively 622 707 Additional paid-in capital — 5,136,000 Accumulated Deficit ( 1,207,680 ) ( 136,706 ) Total Stockholders’ (Deficit) Equity ( 1,207,058 ) 5,000,001 TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY $ 12,854,634 $ 196,511,899 The accompanying notes are an integral part of the financial statements. F- 3 LEISURE ACQUISITION CORP. STATEMENTS OF OPERATIONS (As Restated) 2020 2019 Year Ended December 31, 2020 2019 Operating costs $ 1,368,841 $ 3,328,674 Loss from operations ( 1,368,841 ) ( 3,328,674 ) Other income (expense): Interest income 719,646 4,249,828 Amortization of debt discount on convertible promissory note ( 220,000 ) — Change in fair value of conversion option liability 220,000 — Change in fair value of warrant liability 1,906,250 ( 1,433,250 ) Forgiveness of accounts payable 3,298,207 — Other income, net 5,924,103 2,816,578 Income (loss) before provision for income taxes 4,555,262 ( 512,096 ) Provision for income taxes ( 244,493 ) ( 555,200 ) Net income (loss) $ 4,310,769 $ ( 1,067,296 ) Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption 3,949,616 18,270,950 Basic and diluted net income per share, Common stock subject to possible redemption $ 0.00 $ 0.17 Basic and diluted weighted average shares outstanding, Common stock 6,642,759 6,621,293 Basic and diluted net income (loss) per share, Common stock $ 0.65 $ ( 0.63 ) The accompanying notes are an integral part of the financial statements. F- 4 LEISURE ACQUISITION CORP. STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (As Restated) Shares Amount Capital Deficit) (Deficit) Common Stock Additional Paid in Retained Earnings/ (Accumulated Total Stockholders’ Equity Shares Amount Capital Deficit) (Deficit) Balance – January 1, 2019 6,064,800 $ 660 $ 4,068,751 $ 930,590 $ 5,000,001 Change in value of common stock subject to possible redemption 463,342 47 1,067,249 — 1,067,296 Waiver of a portion of deferred underwriting fee - - - - - Net income (loss) — — — ( 1,067,296 ) ( 1,067,296 ) Balance – December 31, 2019 7,067,422 707 5,136,000 ( 136,706 ) 5,000,001 Balance – December 31, 2019 7,067,422 707 5,136,000 ( 136,706 ) 5,000,001 Change in value of common stock subject to possible redemption ( 843,154 ) ( 85 ) ( 5,136,000 ) ( 5,631,743 ) ( 10,767,828 ) Waiver of a portion of deferred underwriting fee — — — 250,000 250,000 Net income — — — 4,310,769 4,310,769 Balance – December 31, 2020 6,224,268 $ 622 $ — $ ( 1,207,680 ) $ ( 1,207,058 ) The accompanying notes are an integral part of the financial statements. F- 5 LEISURE ACQUISITION CORP. STATEMENTS OF CASH FLOWS (As Restated) 2020 2019 Year Ended December 31, Year Ended December 31, 2020 2019 Cash Flows from Operating Activities: Net income (loss) $ 4,310,769 $ ( 1,067,296 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Interest earned on marketable securities held in Trust Account ( 719,646 ) ( 4,249,828 ) Forgiveness of accounts payable ( 3,298,207 ) — Change in fair value of warrant liability ( 1,906,250 ) 1,433,250 Amortization of debt discount on convertible promissory note 220,000 — Change in fair value of conversion option liability ( 220,000 ) — Deferred tax benefit — ( 1,764 ) Changes in operating assets and liabilities: Prepaid expenses ( 157,483 ) 87,083 Prepaid income taxes 118,792 31,964 Accounts payable and accrued expenses 787,586 2,341,799 Net cash used in operating activities ( 864,439 ) ( 1,424,792 ) Cash Flows from Investing Activities: Investment of cash in Trust Account ( 1,698,862 ) ( 566,288 ) Cash withdrawn from Trust Account for redemption of common stock 184,776,163 11,583,473 Cash withdrawn from Trust Account for franchise taxes and income taxes 326,352 836,205 Net cash provided by investing activities 183,403,653 11,853,390 Cash Flows from Financing Activities: Proceeds from promissory note — 566,268 Proceeds from convertible promissory notes – related parties 1,225,000 — Redemption of common stock ( 184,776,163 ) ( 11,583,473 ) Payment of offering costs — ( 8,640 ) Net cash used in financing activities ( 183,551,163 ) ( 11,025,845 ) Net Change in Cash ( 1,011,949 ) ( 597,247 ) Cash – Beginning 1,061,151 1,658,398 Cash – Ending $ 49,202 $ 1,061,151 Supplementary cash flow information: Cash paid for income taxes $ 125,701 $ 525,000 Non-Cash investing and financing activities: Change in value of common stock subject to possible redemption $ 10,767,828 $ ( 1,067,296 ) Waiver of a portion of deferred underwriting fee payable $ 250,000 $ — The accompanying notes are an integral part of the financial statements. F- 6 LEISURE ACQUISITION CORP. NOTES TO FINANCIAL STATEMENTS NOTE 1. — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Leisure Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on September 11, 2017 . The Company was formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, recapitalization, exchangeable share transaction or other similar business transaction, with one or more operating businesses or assets (a “Business Combination”). At December 31, 2020, the Company had not yet commenced operations. All activity through December 31, 2020 relates to the Company’s formation, its initial public offering (“Initial Public Offering”), which is described below, identifying a target company for a Business Combination, activities in connection with the proposed acquisition of Ensysce Biosciences, Inc., a Delaware corporation (“Ensysce”) (see Note 12) and activities in connection with the previously proposed business combination with GTWY Holdings Limited, a Canadian corporation (“GTWY Holdings”), which was terminated on July 16, 2020. The registration statement for the Company’s Initial Public Offering was declared effective on December 1, 2017. On December 5, 2017, the Company consummated the Initial Public Offering of 20,000,000 units (“Units” and, with respect to the common stock included in the Units, the “Public Shares”), generating gross proceeds of $ 200,000,000 , which is described in Note 4. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,825,000 warrants (the “Private Placement Warrants”) at a price of $ 1.00 per warrant in a private placement to Hydra LAC, LLC, an affiliate of Hydra Management, LLC (the “Hydra Sponsor”), MLCP GLL Funding LLC, an affiliate of Matthews Lane Capital Partners, LLC (the “Matthews Lane Sponsor,” and, together with the Hydra Sponsor, the “Sponsors”), HG Vora Special Opportunities Master Fund, Ltd. (“HG Vora”) and certain members of the Company’s management team, generating gross proceeds of $ 6,825,000 , which is described in Note 5. Following the closing of the Initial Public Offering on December 5, 2017, an amount of $ 200,000,000 ($ 10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement Warrants was placed in a trust account (the “Trust Account”) and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account, as described below. Transaction costs amounted to $ 11,548,735 , consisting of $ 4,000,000 of underwriting fees, $ 7,000,000 of deferred underwriting fees and $ 548,735 of Initial Public Offering costs. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company’s initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80 % of the balance in the Trust Account (excluding deferred underwriting commissions and franchise and income taxes payable on the income earned on the Trust Account) at the time of the signing of an agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50 % or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination. F- 7 The Company will provide its stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem their shares for a pro rata portion of the amount then on deposit in the Trust Account ($ 10.00 per share, plus any deposits made to the Trust Account in connection with extension payments and any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay franchise and income taxes). The per share amount to be distributed to stockholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (see Note 8). The Company will proceed with a Business Combination if the Company has net tangible assets of at least $ 5,000,001 upon consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Second Amended and Restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents with the SEC prior to completing a Business Combination. If, however, a stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or other legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsors and the Company’s other initial stockholders (collectively, the “Initial Stockholders”) have agreed to vote their Founder Shares (as defined in Note 6) and any Public Shares held by them in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. Notwithstanding the foregoing, the Company’s Second Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to an aggregate of 20% or more of the common stock sold in the Initial Public Offering. The Company has until June 30, 2021 to consummate a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100 % of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned and not previously released to pay franchise and income taxes (less up to $ 75,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law. The underwriters have agreed to waive their rights to the deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Company’s Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution (including Trust Account assets) will be less than the $10.00 per Unit in the Initial Public Offering. On November 26, 2019, the Company held a special meeting pursuant to which the Company’s stockholders approved extending the Combination Period from December 5, 2019 to April 5, 2020 (the “Initial Extension Date”). In connection with the approval of the extension, stockholders elected to redeem an aggregate of 1,123,749 shares of the Company’s common stock. As a result, an aggregate of $ 11,583,473 (or approximately $ 10.31 per share) was released from the Company’s Trust Account to pay such stockholders. F- 8 The Company agreed to contribute (the “Contribution”) $ 0.03 for each share of the Company’s common stock that was not redeemed in connection with the extension for each of the four monthly periods covered by the extension (commencing on December 6, 2019 through the Initial Extension Date), subject to certain conditions. On each of December 5, 2019, January 3, 2020, February 4, 2020 and March 4, 2020, the Company made a Contribution of $ 0.03 for each of the public shares outstanding, for an aggregate Contribution of $ 2,265,150 , which amounts were deposited into the Trust Account. On December 5, 2019, the Company entered into an expense advancement agreement with GTWY Holdings (the “GTWY Expense Advance Agreement”), pursuant to which GTWY Holdings committed to provide $ 566,288 to fund contributions to the Trust Account. The Company drew down the full amount under the GTWY Expense Advance Agreement to fund the required Contribution to the Trust Account for the period December 6, 2019 to January 5, 2020 by issuing an unsecured promissory note to GTWY Holdings. The note was converted into warrants on January 31, 2021 (see Note 7). On January 15, 2020, the Company drew down $ 1,000,000 under the expense advancement agreement with the Company’s Sponsors and strategic investor dated December 1, 2017 in exchange for issuing unsecured promissory notes to fund its working capital requirements and to fund required Contributions to the Trust Account. The holders had the option to convert the promissory notes into warrants at a price of $ 1.00 per warrant subject to the same terms and conditions as private placement warrants. The notes were converted into warrants to purchase 1,000,001 shares of the Company’s common stock at an exercise price of $ 11.50 per share on June 25, 2020 (see Note 6). On March 26, 2020, the Company held a special meeting pursuant to which the Company’s stockholders approved extending the Combination Period from April 5, 2020 to June 30, 2020 (the “Second Extension Date”). In connection with the approval of the extension, stockholders elected to redeem an aggregate of 16,837,678 shares of the Company’s common stock. As a result, an aggregate of $ 176,283,492 (or approximately $ 10.47 per share) was released from the Company’s Trust Account to pay such stockholders. Of the amount paid to redeeming stockholders, $ 136,283,492 was paid as of March 31, 2020 and the balance of $ 40,000,000 was paid on April 1, 2020. On June 26, 2020, the Company held a special meeting pursuant to which the Company’s stockholders approved extending the Combination Period from June 30, 2020 to December 1, 2020 (the “Third Extension Date”). In connection with the approval of the extension, stockholders elected to redeem an aggregate of 776,290 shares of the Company’s common stock. As a result, an aggregate of $ 8,099,292 (or approximately $ 10.43 per share) was released from the Company’s Trust Account to pay such stockholders. On November 24, 2020, the Company’s stockholders approved extending the Combination Period from December 1, 2020 to June 30, 2021 (the “Fourth Extension Date”). In connection with the approval of the extension, stockholders elected to redeem an aggregate of 38,015 shares of the Company’s common stock. As a result, an aggregate of $ 393,380 (or approximately $ 10.34 per share) was released from the Company’s Trust Account to pay such stockholders. The Initial Stockholders have agreed to (i) waive their redemption rights with respect to their Founder Shares in connection with the completion of a Business Combination, (ii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete a Business Combination within the Combination Period and (iii) not to propose an amendment to the Company’s Second Amended and Restated Certificate of Incorporation that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their shares in conjunction with any such amendment. F- 9 In order to protect the amounts held in the Trust Account, the Sponsors have agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $ 10.00 per Public Share or (ii) such lesser amount per share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsors will not be responsible to the extent of any liability for such third -party claims. The Company will seek to reduce the possibility that the Sponsors will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Nasdaq Notifications On November 30, 2020, the Company received a notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC stating that the Company was not in compliance with Listing Rule IM-5101-2 (the “Rule”), which requires that a special purpose acquisition company complete one or more business combinations within 36 months of the effectiveness of the registration statement filed in connection with its initial public offering. Since the Company’s registration statement became effective on December 1, 2017, it was required to complete an initial business combination by no later than December 1, 2020. The Rule also provides that failure to comply with this requirement will result in the Listing Qualifications Department issuing a Staff Delisting Determination under Rule 5810 to delist the Company’s securities. In addition, the Nasdaq Notice states that the Company was not in compliance with Nasdaq’s minimum publicly held shares requirement under Listing Rule 5550(a)(4), which requires a listed company’s primary equity security to maintain a minimum of 500,000 publicly held shares. The Listing Qualifications Department has advised the Company that its securities would be subject to delisting unless the Company timely requests a hearing before an independent Hearings Panel (the “Panel”). Accordingly, the Company intends to timely request a hearing. The hearing request will stay any suspension or delisting action pending the completion of the hearing and the expiration of any additional extension period granted by the Panel following the hearing. On January 27, 2021, the Panel granted the Company’s request for continued listing of the Company’s equity securities on the Nasdaq Capital Market pursuant to an extension, subject to certain milestones, through June 1, 2021 (see Note 12). See Item 1A. Risk Factors— The Nasdaq may not continue to list our securities, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Liquidity and Going Concern As of December 31, 2020, the Company had $ 49,202 in its operating bank accounts, $ 12,628,170 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and working capital deficit of $ 127,869 , which excludes $ 93,929 of prepaid income and franchise taxes. As of December 31, 2020, the Company had $ 75,000 available for drawdown under the Company’s expense advancement agreement with the Company’s Sponsors and HG Vora (see “Related Party Loans” in Note 6). F- 10 The Company will need to raise additional capital through loans or additional investments from its Sponsors, HG Vora, stockholders, officers, directors, or third parties. The Company’s Sponsors and HG Vora may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through June 30, 2021, the date that the Company will be required to cease all operations, except for the purpose of winding up, if a Business Combination is not consummated. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. NOTE 2. — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS The Company previously accounted for its outstanding Private Placement Warrants issued in connection with its Initial Public Offering and its working capital warrants issued on conversion of its convertible promissory notes (collectively, the “Private Warrants”) as components of equity instead of as derivative liabilities. In addition, the Company did not account for its convertible promissory notes as a derivative liability (together with the Private Warrants, the “Derivative Instruments”). The Warrant Agreement governing the Private Warrants (the “Warrant Agreement”) includes a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. In addition, the Warrant Agreement includes a provision that in the event of a tender offer or exchange offer made to and accepted under circumstances in which, upon completion of such tender offer, the maker thereof, together with members of any group of which such maker is a part own beneficially more than 50 % of the outstanding shares of more than 50 % of the Company’s common stock, all holders of the Private Warrants and Public Warrants would be entitled to receive cash for their Warrants (the “tender offer provision”). On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the Securities and Exchange Commission together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”). Specifically, the SEC Statement focused on potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the Warrant Agreement, although the Company does not believe the portion of the SEC Statement referring to the tender offer are applicable to the Company’s warrants because the Company has only a single class of Common Stock.. In further consideration of the SEC Statement, the Company’s management further evaluated the warrants under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15 addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock. Under ASC Section 815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. Based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the Company’s Private Placement Warrants are not indexed to the Company’s common stock in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the Private Warrants fail the “classified in stockholders’ equity” criteria as contemplated by ASC Section 815-40-25, but that the Public Warrants could continue to be classified as stockholder’s equity. As a result of the above, the Company should have classified the Derivative Instruments as derivative liabilities in its previously issued financial statements. Under this accounting treatment, the Company is required to measure the fair value of the Derivative Instruments at the end of each reporting period and recognize changes in the fair value from the prior period in the Company’s operating results for the current period. The change in the Company’s accounting to treat its outstanding Private Warrants and its convertible promissory notes as derivative liabilities did not have any effect on the Company’s previously reported investments held in trust, cash flows or cash. F- 11 The table below summarizes the effects of the restatement on the financial statements for all periods being restated: SUMMARY OF EFFECTS ON RESTATEMENT ON THE FINANCIAL STATEMENT As Previously As Reported Adjustments Restated Balance sheet as of December 5, 2017 (audited) Total Liabilities $ 7,206,932 $ 4,572,750 $ 11,779,682 Common Stock Subject to Possible Redemption 190,296,100 ( 4,572,750 ) 185,723,350 Common Stock 672 46 718 Additional Paid-in Capital 5,004,493 ( 46 ) 5,004,447 Accumulated Deficit ( 5,161 ) — ( 5,161 ) Total Stockholders’ Equity 5,000,004 — 5,000,004 Number of shares subject to redemption 19,029,610 ( 457,275 ) 18,572,335 Balance sheet as of December 31, 2017 (audited) Total Liabilities $ 7,156,239 $ 5,664,750 $ 12,820,989 Common Stock Subject to Possible Redemption 190,270,071 ( 5,664,750 ) 184,605,321 Common Stock 673 57 730 Additional Paid-in Capital 5,030,521 1,091,943 6,122,464 Accumulated Deficit ( 31,193 ) ( 1,092,000 ) ( 1,123,193 ) Total Stockholders’ Equity 5,000,001 — 5,000,001 Number of shares subject to redemption 19,015,680 ( 566,138 ) 18,449,542 Balance sheet as of March 31, 2018 (unaudited) Total Liabilities $ 7,197,431 $ 5,323,500 $ 12,520,931 Common Stock Subject to Possible Redemption 190,676,137 ( 5,323,500 ) 185,352,637 Common Stock 599 53 652 Additional Paid-in Capital 4,624,529 750,697 5,375,226 (Accumulated Deficit) / Retained Earnings 374,873 ( 750,750 ) ( 375,877 ) Total Stockholders’ Equity 5,000,001 — 5,000,001 Number of shares subject to redemption 19,010,039 ( 530,743 ) 18,479,296 Balance sheet as of June 30, 2018 (unaudited) Total Liabilities $ 7,135,244 $ 5,596,500 $ 12,731,744 Common Stock Subject to Possible Redemption 191,091,247 ( 5,596,500 ) 185,494,747 Common Stock 601 56 657 Additional Paid-in Capital 4,209,417 1,023,694 5,233,111 (Accumulated Deficit) / Retained Earnings 789,983 ( 1,023,750 ) ( 233,767 ) Total Stockholders’ Equity 5,000,001 — 5,000,001 Number of shares subject to redemption 18,989,851 ( 556,157 ) 18,433,694 Balance sheet as of September 30, 2018 (unaudited) Total Liabilities $ 7,359,152 $ 7,302,750 $ 14,661,902 Common Stock Subject to Possible Redemption 191,668,896 ( 7,302,750 ) 184,366,146 Common Stock 603 72 675 Additional Paid-in Capital 3,631,766 2,729,928 6,361,694 (Accumulated Deficit) / Retained Earnings 1,367,632 ( 2,730,000 ) ( 1,362,368 ) Total Stockholders’ Equity 5,000,001 — 5,000,001 Number of shares subject to redemption 18,974,158 ( 722,932 ) 18,251,226 F- 12 As Previously As Reported Adjustments Restated Balance sheet as of December 31, 2018 (audited) Total Liabilities $ 7,439,650 $ 5,733,000 $ 13,172,650 Common Stock Subject to Possible Redemption 192,392,104 ( 5,733,000 ) 186,659,104 Common Stock 604 56 660 Additional Paid-in Capital 2,908,557 1,160,194 4,068,751 Retained Earnings 2,090,840 ( 1,160,250 ) 930,590 Total Stockholders’ Equity 5,000,001 — 5,000,001 Number of shares subject to redemption 18,960,928 ( 565,008 ) 18,395,920 Balance sheet as of March 31, 2019 (unaudited) Total Liabilities $ 7,387,249 $ 5,391,750 $ 12,778,999 Common Stock Subject to Possible Redemption 193,168,017 ( 5,391,750 ) 187,776,267 Common Stock 605 53 658 Additional Paid-in Capital 2,132,643 818,947 2,951,590 Retained Earnings 2,866,753 ( 819,000 ) 2,047,753 Total Stockholders’ Equity 5,000,001 — 5,000,001 Number of shares subject to redemption 18,952,136 ( 528,996 ) 18,423,140 Balance sheet as of June 30, 2019 (unaudited) Total Liabilities $ 7,770,352 $ 5,391,750 $ 13,162,102 Common Stock Subject to Possible Redemption 193,586,919 ( 5,391,750 ) 188,195,169 Common Stock 610 53 663 Additional Paid-in Capital 1,713,736 818,947 2,532,683 Retained Earnings 3,285,655 ( 819,000 ) 2,466,655 Total Stockholders’ Equity 5,000,001 — 5,000,001 Number of shares subject to redemption 18,899,782 ( 526,394 ) 18,373,388 Balance sheet as of September 30, 2019 (unaudited) Total Liabilities $ 8,134,091 $ 5,528,250 $ 13,662,341 Common Stock Subject to Possible Redemption 194,076,642 ( 5,528,250 ) 188,548,392 Common Stock 614 54 668 Additional Paid-in Capital 1,224,009 955,446 2,179,455 Retained Earnings 3,775,378 ( 955,500 ) 2,819,878 Total Stockholders’ Equity 5,000,001 — 5,000,001 Number of shares subject to redemption 18,860,476 ( 537,238 ) 18,323,238 Balance sheet as of December 30, 2019 (audited) Total Liabilities $ 10,337,313 $ 7,166,250 $ 17,503,563 Common Stock Subject to Possible Redemption 181,174,585 ( 7,166,250 ) 174,008,335 Common Stock 638 69 707 Additional Paid-in Capital 2,542,569 2,593,431 5,136,000 (Accumulated Deficit) / Retained Earnings 2,456,794 ( 2,593,500 ) ( 136,706 ) Total Stockholders’ Equity 5,000,001 — 5,000,001 Number of shares subject to redemption 17,501,073 ( 692,244 ) 16,808,829 F- 13 As Previously As Reported Adjustments Restated Balance sheet as of March 31, 2020 (unaudited) Total Liabilities $ 52,060,483 $ 5,023,678 $ 57,084,161 Common Stock Subject to Possible Redemption 4,541,236 ( 4,541,236 ) — Common Stock 660 43 703 Additional Paid-in Capital 2,892,404 ( 31,557 ) 2,860,847 Retained Earnings 2,106,940 ( 450,928 ) 1,656,012 Total Stockholders’ Equity 5,000,004 ( 482,442 ) 4,517,562 Number of shares subject to redemption 433,788 ( 433,788 ) — Balance sheet as of June 30, 2020 (unaudited) Total Liabilities $ 8,359,869 $ 7,746,750 $ 16,106,619 Common Stock Subject to Possible Redemption 52,179 ( 52,179 ) — Common Stock 626 ( 4 ) 622 Additional Paid-in Capital 282,203 ( 282,203 ) 0.00 (Accumulated Deficit) / Retained Earnings 4,717,174 ( 7,412,364 ) ( 2,695,190 ) Total Stockholders’ Equity 5,000,003 ( 7,694,571 ) ( 2,694,568 ) Number of shares subject to redemption 5,156 ( 5,156 ) — Balance sheet as of September 30, 2020 (unaudited) Total Liabilities $ 8,018,370 $ 3,756,000 $ 11,774,370 Common Stock Subject to Possible Redemption 270,999 ( 270,999 ) — Common Stock 624 ( 2 ) 622 Additional Paid-in Capital 63,385 ( 63,385 ) — (Accumulated Deficit) / Retained Earnings 4,935,997 ( 3,421,614 ) 1,514,383 Total Stockholders’ Equity 5,000,006 ( 3,485,001 ) 1,515,005 Number of shares subject to redemption 26,189 ( 26,189 ) — Balance sheet as of December 30, 2020 (audited) Total Liabilities $ 7,801,692 $ 6,260,000 $ 14,061,692 Common Stock Subject to Possible Redemption 52,935 ( 52,935 ) — Common Stock 622 — 622 Additional Paid-in Capital — — — (Accumulated Deficit) / Retained Earnings 4,999,385 ( 6,207,065 ) ( 1,207,680 ) Total Stockholders’ Equity 5,000,007 ( 6,207,065 ) ( 1,207,058 ) Number of shares subject to redemption 5,094 ( 5,094 ) — Statement of Operations for the period from September 11, 2017 (inception) to December 31, 2017 (audited) Net loss $ ( 31,193 ) $ ( 1,092,000 ) $ ( 1,123,193 ) Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 18,572,335 18,572,335 Basic and diluted net income per share, Common stock subject to possible redemption — 0.00 0.00 Basic and diluted weighted average shares outstanding, Common stock 6,184,506 107,109 6,291,615 Basic and diluted net loss per share, Common Stock ( 0.01 ) ( 0.18 ) ( 0.19 ) Statement of Operations for the three months ended March 31, 2018 (unaudited) Net income (loss) $ 406,066 $ 341,250 $ 747,316 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 18,449,542 18,449,542 Basic and diluted net income (loss) per share, Common stock subject to possible redemption — 0.03 0.03 Basic and diluted weighted average shares outstanding, Common stock 5,984,320 566,138 6,550,458 Basic and diluted net (loss) income per share, Common Stock ( 0.02 ) 0.05 0.03 F- 14 As Previously As Reported Adjustments Restated Statement of Operations for the three months ended June 30, 2018 (unaudited) Net income $ 415,110 $ ( 273,000 ) $ 142,110 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 18,479,296 18,479,296 Basic and diluted net income per share, Common stock subject to possible redemption — 0.04 0.04 Basic and diluted weighted average shares outstanding, Common stock 5,989,961 530,743 6,520,704 Basic and diluted net loss per share, Common Stock ( 0.05 ) ( 0.04 ) ( 0.09 ) Statement of Operations for the six months ended June 30, 2018 (unaudited) Net income $ 821,176 $ 68,250 $ 889,426 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 18,464,501 18,464,501 Basic and diluted net income (loss) per share, Common stock subject to possible redemption — 0.08 0.08 Basic and diluted weighted average shares outstanding, Common stock 5,981,156 548,343 6,535,499 Basic and diluted net loss per share, Common Stock ( 0.10 ) 0.02 ( 0.08 ) Statement of Operations for the three months ended September 30, 2018 (unaudited) Net income (loss) $ 577,649 $ ( 1,706,250 ) $ ( 1,128,601 ) Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 18,433,694 18,433,694 Basic and diluted net income per share, Common stock subject to possible redemption — 0.05 0.05 Basic and diluted weighted average shares outstanding, Common stock 6,010,149 566,157 6,566,306 Basic and diluted net loss per share, Common Stock ( 0.05 ) ( 0.25 ) ( 0.30 ) Statement of Operations for the nine months ended September 30, 2018 (unaudited) Net income (loss) $ 1,398,825 $ ( 1,638,000 ) $ ( 239,175 ) Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 18,454,119 18,454,119 Basic and diluted net income (loss) per share, Common stock subject to possible redemption — 0.15 0.12 Basic and diluted weighted average shares outstanding, Common stock 5,994,905 550,976 6,545,881 Basic and diluted net loss per share, Common Stock ( 0.14 ) ( 0.24 ) ( 0.38 ) Statement of Operations for the year ended December 31, 2018 (audited) Net income $ 2,122,033 $ ( 68,250 ) $ 2,053,783 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 18,402,979 18,402,979 Basic and diluted net income per share, Common stock subject to possible redemption — 0.19 0.19 Basic and diluted weighted average shares outstanding, Common stock 6,002,703 549,318 6,597,021 Basic and diluted net (loss) income per share, Common Stock ( 0.22 ) 0.01 ( 0.21 ) F- 15 As Previously As Reported Adjustments Restated Statement of Operations for the three months ended March 31, 2019 (unaudited) Net income $ 775,913 $ 341,250 $ 1,117,163 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 18,935,920 18,395,920 Basic and diluted net income (loss) per share, Common stock subject to possible redemption — 0.06 0.06 Basic and diluted weighted average shares outstanding, Common stock 6,039,072 565,008 6,604,080 Basic and diluted net (loss) income per share, Common Stock ( 0.04 ) 0.05 0.01 Statement of Operations for the three months ended June 30, 2019 (unaudited) Net income $ 418,902 $ — $ 418,902 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 18,123,140 18,423,140 Basic and diluted net income (loss) per share, Common stock subject to possible redemption — 0.05 0.05 Basic and diluted weighted average shares outstanding, Common stock 6,047,864 528,996 6,576,860 Basic and diluted net loss per share, Common Stock ( 0.09 ) 0.01 ( 0.08 ) Statement of Operations for the six months ended June 30, 2019 (unaudited) Net income $ 1,194,815 $ 341,250 $ 1,536,065 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 18,409,605 18,409,605 Basic and diluted net income (loss) per share, Common stock subject to possible redemption — 0.10 0.10 Basic and diluted weighted average shares outstanding, Common stock 6,043,492 546,903 6,590,395 Basic and diluted net (loss) income per share, Common Stock ( 0.10 ) 0.06 ( 0.04 ) Statement of Operations for the three months ended September 30, 2019 (unaudited) Net income $ 489,723 $ ( 136,500 ) $ 353,223 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 18,373,388 18,373,388 Basic and diluted net income (loss) per share, Common stock subject to possible redemption — 0.05 0.05 Basic and diluted weighted average shares outstanding, Common stock 6,100,218 526,394 6,626,612 Basic and diluted net loss per share, Common Stock ( 0.08 ) ( 0.01 ) ( 0.09 ) Statement of Operations for the nine months ended September 30, 2019 (unaudited) Net income (loss) $ 1,684,538 $ 204,750 $ 1,889,288 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 18,397,400 18,397,400 Basic and diluted net income (loss) per share, Common stock subject to possible redemption — 0.15 0.15 Basic and diluted weighted average shares outstanding, Common stock 6,062,609 539,991 6,602,600 Basic and diluted net (loss) income per share, Common Stock ( 0.18 ) 0.05 ( 0.13 ) F- 16 As Previously As Reported Adjustments Restated Statement of Operations for the year ended December 31, 2019 (audited) Net income (loss) $ 365,954 $ ( 1,433,250 ) $ ( 1,067,296 ) Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 18,270,950 18,270,950 Basic and diluted net income (loss) per share, Common stock subject to possible redemption — 0.17 0.17 Basic and diluted weighted average shares outstanding, Common stock 6,081,996 539,297 6,621,293 Basic and diluted net loss per share, Common Stock ( 0.47 ) ( 0.16 ) ( 0.63 ) Statement of Operations for the three months ended March 31, 2020 (unaudited) Net income (loss) $ ( 349,854 ) $ 2,142,572 $ 1,792,718 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 15,885,267 15,885,267 Basic and diluted net income (loss) per share, Common stock subject to possible redemption — 0.01 0.01 Basic and diluted weighted average shares outstanding, Common stock 6,375,178 690,659 7,065,837 Basic and diluted net (loss) income per share, Common Stock ( 0.07 ) 0.31 0.24 Statement of Operations for the three months ended June 30, 2020 (unaudited) Net income $ 2,610,234 $ ( 1,723,072 ) $ 887,162 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — — — Basic and diluted net income (loss) per share, Common stock subject to possible redemption — — — Basic and diluted weighted average shares outstanding, Common stock 6,604,785 399,665 7,004,450 Basic and diluted net (loss) income per share, Common Stock 0.40 ( 0.27 ) 0.13 Statement of Operations for the six months ended June 30, 2020 (unaudited) Net income $ 2,260,380 $ 419,500 $ 2,679,880 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 7,942,633 7,942,633 Basic and diluted net income (loss) per share, Common stock subject to possible redemption — 0.00 0.00 Basic and diluted weighted average shares outstanding, Common stock 6,489,982 545,162 7,035,144 Basic and diluted net income per share, Common Stock 0.35 0.03 0.38 Statement of Operations for the three months ended September 30, 2020 (unaudited) Net income $ 218,823 $ 3,990,750 $ 4,209,573 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — — — Basic and diluted net income (loss) per share, Common stock subject to possible redemption — — — Basic and diluted weighted average shares outstanding, Common stock 6,257,127 5,156 6,262,283 Basic and diluted net income per share, Common Stock 0.03 0.64 0.67 F- 17 As Previously As Reported Adjustments Restated Statement of Operations for the nine months ended September 30, 2020 (unaudited) Net income $ 2,479,203 $ 4,410,250 $ 6,889,453 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption — 5,275,764 5,275,764 Basic and diluted net income (loss) per share, Common stock subject to possible redemption — 0.00 0.00 Basic and diluted weighted average shares outstanding, Common stock 6,411,797 363,846 6,775,643 Basic and diluted net income per share, Common Stock 0.39 0.63 1.02 Statement of Operations for the year ended December 31, 2020 (audited) Net income $ 2,404,519 $ 1,906,250 $ 4,310,769 Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption 4,457,537 ( 507,921 ) 3,949,616 Basic and diluted net income (loss) per share, Common stock subject to possible redemption 0.00 — 0.00 Basic and diluted weighted average shares outstanding, Common stock 6,367,631 275,128 6,642,759 Basic and diluted net loss per share, Common Stock 0.38 0.27 0.65 Cash Flow Statement for the period from September 11, 2017 (inception) to December 31, 2017 (audited) Net loss $ ( 31,193 ) $ ( 1,092,000 ) $ ( 1,123,193 ) Initial classification of warrant liability — 4,572,750 4,572,750 Change in fair value of warrant liability — 1,092,000 1,092,000 Initial classification of common stock subject to redemption 190,296,100 ( 4,572,750 ) 185,723,350 Change in value of common stock subject to redemption ( 26,029 ) ( 1,092,000 ) ( 1,118,029 ) Cash Flow Statement for the three months ended March 31, 2018 (unaudited) Net income $ 406,066 $ 341,250 $ 747,316 Change in fair value of warrant liability — ( 341,250 ) ( 341,250 ) Change in value of common stock subject to redemption 406,066 341,250 747,316 Cash Flow Statement for the six months ended June 30, 2018 (unaudited) Net income $ 821,176 $ 68,250 $ 889,426 Change in fair value of warrant liability — ( 68,250 ) ( 68,250 ) Change in value of common stock subject to redemption 821,176 68,250 889,426 Cash Flow Statement for the nine months ended September 30, 2018 (unaudited) Net income (loss) $ 1,398,825 $ ( 1,638,000 ) $ ( 239,175 ) Change in fair value of warrant liability — 1,638,000 1,638,000 Change in value of common stock subject to redemption 1,398,825 ( 1,638,000 ) ( 239,175 ) Cash Flow Statement for the year ended December 31, 2018 (audited) Net income $ 2,122,033 $ ( 68,250 ) $ 2,053,783 Change in fair value of warrant liability — 68,250 68,250 Change in value of common stock subject to redemption 2,122,033 ( 68,250 ) 2,053,783 Cash Flow Statement for the three months ended March 31, 2019 (unaudited) Net income $ 775,913 $ 341,250 $ 1,117,163 Change in fair value of warrant liability — ( 341,250 ) ( 341,250 ) Change in value of common stock subject to redemption 775,913 341,250 1,117,163 F- 18 As Previously As Reported Adjustments Restated Cash Flow Statement for the six months ended June 30, 2019 (unaudited) Net income $ 1,194,815 $ 341,250 $ 1,536,065 Change in fair value of warrant liability — ( 341,250 ) ( 341,250 ) Change in value of common stock subject to redemption 1,194,815 341,250 1,536,065 Cash Flow Statement for the nine months ended September 30, 2019 (unaudited) Net income (loss) $ 1,684,538 $ 204,750 $ 1,889,288 Change in fair value of warrant liability — ( 204,750 ) ( 204,750 ) Change in value of common stock subject to redemption 1,684,538 204,750 1,889,288 Cash Flow Statement for the year ended December 31, 2019 (audited) Net income (loss) $ 365,954 $ ( 1,433,250 ) $ ( 1,067,296 ) Change in fair value of warrant liability — 1,433,250 1,433,250 Change in value of common stock subject to redemption 365,954 ( 1,433,250 ) ( 1,067,296 ) Cash Flow Statement for the three months ended March 31, 2020 (unaudited) Net (loss) income $ ( 349,854 ) $ 2,142,572 $ 1,792,718 Change in fair value of warrant liability — ( 2,184,000 ) ( 2,184,000 ) Amortization of debt discount on convertible promissory note — 31,428 31,428 Change in value of conversion option liability — 10,000 10,000 Change in value of common stock subject to redemption ( 349,857 ) ( 4,191,379 ) ( 4,541,236 ) Cash Flow Statement for the six months ended June 30, 2020 (unaudited) Net income $ 2,260,380 $ 419,500 $ 2,679,880 Change in fair value of warrant liability — ( 419,500 ) ( 419,500 ) Amortization of debt discount on convertible promissory note — 220,000 220,000 Change in value of conversion option liability — ( 220,000 ) ( 220,000 ) Change in value of common stock subject to redemption 3,260,378 ( 3,312,557 ) ( 52,179 ) Issuance of warrants in connection with conversion of promissory note – related party 1,000,000 ( 1,000,000 ) — Cash Flow Statement for the nine months ended September 30, 2020 (unaudited) Net income $ 2,479,203 $ 4,410,250 $ 6,889,453 Change in fair value of warrant liability — ( 4,410,250 ) ( 4,410,250 ) Amortization of debt discount on convertible promissory note — 220,000 220,000 Change in value of conversion option liability — ( 220,000 ) ( 220,000 ) Change in value of common stock subject to redemption 3,479,198 ( 3,750,197 ) ( 270,999 ) Issuance of warrants in connection with conversion of promissory note – related party 1,000,000 ( 1,000,000 ) — Cash Flow Statement for the year ended December 31, 2020 (audited) Net income $ 2,404,519 $ 1,906,250 $ 4,310,769 Change in fair value of warrant liability — ( 1,906,250 ) ( 1,906,250 ) Amortization of debt discount on convertible promissory note — 220,000 220,000 Change in value of conversion option liability — ( 220,000 ) ( 220,000 ) Change in value of common stock subject to redemption 3,654,513 3,707,448 ( 52,935 ) Issuance of warrants in connection with conversion of promissory note – related party 1,000,000 ( 1,000,000 ) — F- 19 NOTE 3. — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from the Company’s estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less, when purchased, to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020 and 2019. Marketable Securities Held in Trust Account At December 31, 2020 and 2019, the assets held in the Trust Account were substantially held in a money market fund that invests primarily in U.S. Treasury Bills. During the year ended December 31, 2020 and 2019, the Company withdrew $ 326,352 and $ 836,205 of interest income from the Trust Account to pay franchise and income taxes. Derivative Instruments The Company accounts for debt and equity issuances as either equity-classified or liability-classified instruments based on an assessment of the instruments specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own common shares and whether the holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of issuance of the instruments and as of each subsequent quarterly period end date while the instruments are outstanding. For issued or modified instruments that meet all of the criteria for equity classification, the instruments are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified instruments that do not meet all the criteria for equity classification, the instruments are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the instruments are recognized as a non-cash change in fair value of warrant liability on the statements of operations. Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheets. F- 20 Income Taxes The Company complies with the accounting and reporting requirements of Accounting Standards Codification (“ASC”) Topic 740 “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020 and 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Income (Loss) Per Common Share Net income (loss) per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture. The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 17,825,001 shares in the calculation of diluted loss per share, since the inclusion of such warrants would be anti-dilutive. The Company’s statement of operations includes a presentation of income (loss) per share for common shares subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income (loss) per common share, basic and diluted, for Common stock subject to possible redemption is calculated by dividing the proportionate share of income or loss on marketable securities held by the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Common stock subject to possible redemption outstanding since original issuance. Net loss per share, basic and diluted, for non-redeemable common stock is calculated by dividing the net income (loss), adjusted for income or loss on marketable securities attributable to Common stock subject to possible redemption, by the weighted average number of non-redeemable common stock outstanding for the period. Non-redeemable common stock includes Founder Shares and non-redeemable shares of common stock as these shares do not have any redemption features. Non-redeemable common stock participates in the income or loss on marketable securities based on non-redeemable shares’ proportionate interest. The following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts): SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE 2020 2019 For the year ended December 31, 2020 2019 Common stock subject to possible redemption Numerator: Earnings attributable to Common stock subject to possible redemption Interest earned on marketable securities held in Trust Account $ — $ 3,784,472 Less: interest available to be withdrawn for payment of taxes — ( 672,550 ) Net income $ — $ 3,111,922 Denominator: Weighted Average Common stock subject to possible redemption Basic and diluted weighted average shares outstanding 3,949,616 18,270,950 Basic and diluted net income per share $ 0.00 $ 0.17 Non-Redeemable Common Stock Numerator: Net Income (Loss) minus Net Earnings Net loss $ 4,310,769 $ ( 1,067,296 ) Less: Net income allocable to Common stock subject to possible redemption — ( 3,239,823 ) Non-Redeemable Net Income (Loss) $ 4,309,136 $ ( 4,307,119 ) Denominator: Weighted Average Non-Redeemable Common Stock Basic and diluted weighted average shares outstanding 6,642,759 6,621,293 Basic and diluted net income (loss) per share $ 0.65 $ ( 0.63 ) F- 21 Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution, which, at times may exceed the federal depository insurance coverage of $ 250,000 . The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement” (“ASC 820”), approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature, except for the Derivative Instruments (see Note 6 and 11). Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. NOTE 4. — INITIAL PUBLIC OFFERING Pursuant to the Initial Public Offering, the Company sold 20,000,000 Units at a purchase price of $ 10.00 per Unit. Each Unit consists of one share of common stock, and one-half of one warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of common stock at an exercise price of $ 11.50 (see Note 8). NOTE 5. — PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, affiliates of the Hydra Sponsor and Matthews Lane Sponsor, HG Vora and certain members of management purchased an aggregate of 6,825,000 Private Placement Warrants at $ 1.00 per Private Placement Warrant, for an aggregate purchase price of $ 6,825,000 . Each Private Placement Warrant entitles the holder to purchase one share of common stock at an exercise price of $ 11.50 . The proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Private Placement Warrants. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the common stock issuable upon the exercise of the Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. NOTE 6. — RELATED PARTY TRANSACTIONS Founder Shares On September 11, 2017, the Company issued an aggregate of 7,187,500 shares of common stock to the Initial Stockholders (“Founder Shares”) for an aggregate purchase price of $ 25,000 . On December 5, 2017, certain of the Initial Stockholders surrendered and returned to the Company, for nil consideration, an aggregate of 1,437,500 Founder Shares, which were cancelled, leaving an aggregate of 5,750,000 Founder Shares outstanding. The 5,750,000 Founder Shares included an aggregate of up to 750,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Initial Stockholders would own 20 % of the Company’s issued and outstanding shares after the Initial Public Offering. The underwriters’ election to exercise their over-allotment option expired unexercised on January 15, 2018 and, as a result, 750,000 Founder Shares were forfeited, resulting in 5,000,000 Founder Shares outstanding. F- 22 The Initial Stockholders have agreed, subject to certain exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier of (i) one year after the date of the completion of a Business Combination, or (ii) the date on which the last sales price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing 150 days after a Business Combination, or earlier, in each case, if subsequent to a Business Combination, the Company completes a subsequent liquidation, merger, stock exchange, or other similar transaction which results in all of the Company’s stockholders having the right to exchange their common stock for cash, securities or other property. Administrative Services Agreement The Company entered into an agreement whereby, commencing on December 1, 2017 through the earlier of the completion of a Business Combination or the Company’s liquidation, the Company would pay Hydra Sponsor a monthly fee of up to $ 10,000 for office space, utilities and secretarial and administrative support. For the year ended December 31, 2020 and 2019, the Company incurred $ 60,000 and $ 120,000 , respectively, in fees for these services. Effective June 30, 2020, Hydra Sponsor agreed to stop charging the Company the monthly administrative fee and forgave the $ 71,000 outstanding balance due. Related Party Loans In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Hydra Sponsor, an affiliate of the Matthews Lane Sponsor and HG Vora (the “Funding Parties”) loaned an aggregate of $ 1,000,000 to the Company, in accordance with unsecured promissory notes issued on January 15, 2020 to the Funding Parties, pursuant to an expense advancement agreement dated December 1, 2017 which were subsequently converted by the holders into warrants on June 25, 2020. The expense advancement agreement was amended to increase the total amount of advances available to the Company under the agreement by an additional $ 300,000 , of which the Company drew down $ 225,000 pursuant to promissory notes issued in October and November 2020 and $ 75,000 remained available for drawdown as of December 31, 2020 which was drawn down on February 1, 2021. On February 23, 2021, the expense advancement agreement was further amended to increase the loan commitment amount by an additional $ 160,000 which was drawn down on February 24, 2021 (see Note 12). The Funding Parties may, but are not obligated to, loan the Company additional funds from time to time or at any time, as may be required (“Working Capital Loans”). Under the expense advancement agreement, the Working Capital Loans would either be paid upon completion of a Business Combination, without interest, or, at the holder’s discretion could be converted into warrants at a price of $ 1.00 per warrant. The warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. As of December 31, 2020, there was $ 225,000 outstanding under the Working Capital Loans (the $ 1,000,000 previously loaned by the Funding Parties having been converted into warrants on June 25, 2020). The outstanding amount was $ 460,000 as of March 10, 2021 (see Note 12). The Company assessed the provisions of the Working Capital Loans under ASC 815-15 (see Note 2). The derivative component of the obligation is initially valued and classified as a derivative liability with an offset to loss on conversion option liability. The conversion option was valued using a Modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement (see Note 11). The Modified Black Scholes Option Pricing Model’s primary unobservable input utilized in determining the fair value of the conversion option is the probability of consummation of the Business Combination. The probability assigned to the consummation of the Business Combination was 85% which was determined based on the observed success rates of business combinations for special purpose acquisition companies. The Company’s management evaluated the conversion option amounts outstanding as of December 31, 2020 and concluded that the amounts were immaterial. The following table presents the change in the fair value of conversion option: SCHEDULE OF CHANGE IN THE FAIR VALUE OF CONVERSION OPTION Fair value as of January 1, 2020 $ — Initial measurement 220,000 Change in fair value 10,000 Elimination of conversion option upon conversion of promissory note on June 25, 2020 ( 230,000 ) Fair value as of December 31, 2020 $ — F- 23 NOTE 7. — COMMITMENTS Forgiveness of Accounts Payable During the year ended December 31, 2020, two of the Company’s service providers forgave certain amounts due to them in connection with previously provided services. As a result, the Company recorded a forgiveness of accounts payable in the amount of $ 3,298,207 . GTWY Holdings Promissory Note On December 5, 2019, the Company entered into the GTWY Expense Advancement Agreement, pursuant to which GTWY Holdings committed to provide $ 566,288 to fund contributions to the Trust Account. The Company drew down the full amount under the GTWY Expense Advancement Agreement to fund the required Contribution to the Trust Account for the period December 6, 2019 to January 5, 2020 by issuing an unsecured promissory note that was non-interest bearing to GTWY Holdings (the “Gateway Promissory Note”). The Gateway Promissory Note provided for repayment out of the proceeds of the Trust Account released to the Company if the Company completes an initial Business Combination and, otherwise, out of funds held by the Company outside the Trust Account. At December 31, 2020, there was $ 566,268 outstanding under the note. On January 31, 2021, the Company and GTWY Holdings entered into an amendment to the Gateway Promissory Note to permit conversion of the promissory note into warrants at a price of $ 1.00 per warrant. In connection with such amendment, GTWY Holdings elected to convert the full principal balance of the Gateway Promissory Note into 566,288 warrants (see Note 10). Registration Rights Pursuant to a registration rights agreement entered into on December 1, 2017, the holders of the Founder Shares, Private Placement Warrants (and their underlying securities), Private Placement Units (and their underlying securities) (as defined below) and any warrants that may be issued upon conversion of the Working Capital Loans (and their underlying securities) are entitled to registration rights. The holders of these securities are entitled to make up to two demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriters Agreement The underwriters of the Initial Public Offering are entitled to a deferred fee of three and one-half percent ( 3.5 % ) of the gross proceeds of the Initial Public Offering, or $ 7,000,000 . Up to $ 0.05 per Unit (or up to $ 1,000,000 ) of the deferred fee may be paid to third parties (who are members of FINRA) that assist the Company in consummating its initial Business Combination. The election to make such payments to third parties will be solely at the discretion of the Company’s management team, and such third parties will be selected by the management team in their sole and absolute discretion. The deferred fee will be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement. On November 23, 2020, the underwriters agreed to waive $ 250,000 of the deferred fee which had been held in the Trust Account and was to be paid upon consummation of the Business Combination, resulting in an aggregate of $ 6,750,000 deferred underwriting fee payable as of December 31, 2020 (see Note 12). The Company recorded the waiver of the deferred fee as a credit to retained earnings in the accompanying statement of stockholders’ equity. Contingent Forward Purchase Contract On December 1, 2017, the strategic investor entered into a contingent forward purchase contract (the “Contingent Forward Purchase Contract”) with the Company to purchase, in a private placement for gross proceeds of $ 62,500,000 to occur concurrently with the consummation of the Business Combination, 6,250,000 Units on substantially the same terms as the sale of Units in the Initial Public Offering at $ 10.00 per Unit. In connection with previously proposed business combination transaction with GTWY Holdings, an amendment to the Contingent Forward Purchase Contract was effected on December 27, 2019 to provide that the Contingent Forward Purchase Contract would terminate as of, and contingent upon, the closing of the transaction with GTWY Holdings such that the strategic investor would instead purchase 3,000,000 units of GTWY Holdings’ equity securities (with each unit consisting of one GTWY Holdings Share and one-half of one GTWY Holdings Warrant) for a purchase price of $10.00 per unit. The Contingent Forward Purchase Contract was waived by the strategic investor in the connection with the proposed Business Combination with Ensysce. F- 24 Service Provider Agreement From time to time the Company has entered into and may enter into agreements with various services providers and advisors, including investment banks, to help us identify targets, negotiate terms of potential Business Combinations, consummate a Business Combination and/or provide other services. In connection with these agreements, the Company may be required to pay such service providers and advisors fees in connection with their services to the extent that certain conditions, including the closing of a potential Business Combination, are met. If a Business Combination does not occur, the Company would not expect to be required to pay these contingent fees. There can be no assurance that the Company will complete a Business Combination. NOTE 8 — STOCKHOLDERS’ EQUITY Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $ 0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. As of December 31, 2020 and 2019, there were no shares of preferred stock issued or outstanding. Common Stock — The Company is authorized to issue 100,000,000 shares of common stock with a par value of $ 0.0001 per share. Holders of the Company’s common stock are entitled to one vote for each share. The underwriters’ election to exercise their over-allotment option expired unexercised on January 15, 2018 and, as a result, 750,000 Founder Shares were forfeited. At December 31, 2020 and 2019, there were 6,224,268 and 7,067,422 shares of common stock issued and outstanding, respectively, excluding 0 and 16,808,829 shares of common stock subject to possible redemption, respectively. Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of common stock issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. If any such registration statement has not been declared effective by the 60 th business day following the closing of the Business Combination, holders of the Public Warrants shall have the right, during the period beginning on the 61 st business day after the closing of the Business Combination and ending upon such registration statement being declared effective by the SEC, and during any other period when the Company shall fail to have maintained an effective registration statement covering the shares of common stock issuable upon exercise of the Public Warrants, to exercise such Public Warrants on a “cashless basis.” Notwithstanding the above, if the Company’s common stock is at the time of any exercise of a Public Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. The Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $ 0.01 per warrant; ● at any time during the exercise period; ● upon a minimum of 30 days’ prior written notice of redemption; ● if, and only if, the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders ; and ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants. F- 25 If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. NOTE 9 — INCOME TAXES The Company did not have any deferred tax assets or liabilities at December 31, 2020 and 2019. The provision for income taxes consists of the following: SCHEDULE OF INCOME TAX PROVISION Year Ended December 31, 2020 2019 Federal: Current $ 244,493 $ 556,964 Deferred — ( 1,764 ) State and Local: Current — — Deferred — — Change in valuation allowance — — Income tax provision $ 244,493 $ 555,200 As of December 31, 2020 and 2019, the Company did not have any of U.S. federal and state net operating loss carryovers available to offset future taxable income. In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management determined that a valuation allowance was not required for the years ended December 31, 2020 and 2019. A reconciliation of the federal income tax rate to the Company’s effective tax rate is as follows: SCHEDULE OF FEDERAL INCOME TAX RATE RECONCILIATION 2020 2019 As of December 31, 2020 2020 2019 Statutory federal income tax rate 21.0 % 21.0 % True-ups ( 6.9 )% ( 1.2 )% Change in fair value of warrant liability ( 8.8 )% ( 58.8 )% Business Combination expenses 0.0 % 69.4 % Income tax provision 5.3 % ( 108.4 )% F- 26 For the year ended December 31, 2020, the effective tax rate differs from the statutory tax rate primarily due to the reversal of previously recorded permanent differences for transactional expenses incurred in connection with the now terminated GTWY Holdings acquisition, as well as permanent differences attributable to the change in the fair value of the warrants. For the year ended December 31, 2019, the effective tax rate differs from the statutory tax rate due to the permanent differences recorded for transactional expenses incurred with the GTWY Holdings acquisition. The Company files income tax returns in the U.S. federal jurisdiction and is subject to examination by the various taxing authorities. The Company’s tax returns for the year ended December 31, 2020 and 2019 remain open and subject to examination. The Company considers New York to be a significant state tax jurisdiction. NOTE 10 — FAIR VALUE MEASUREMENTS The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2020 and 2019, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: SCHEDULE OF FAIR VALUE MEASUREMENTS Description Level December 31, 2020 December 31, 2019 Assets: Marketable securities held in Trust Account 1 $ 12,628,170 $ 195,312,177 Liabilities: Warrant Liability – Private Warrants 3 6,260,000 7,166,250 The Private Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the accompanying balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the statements of operations. The Private Warrants were valued using a Modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement. The Modified Black Scholes model’s primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the probability of consummation of the Business Combination. The probability assigned to the consummation of the Business Combination was determined based on the observed success rates of business combinations for special purpose acquisition companies. The key inputs into the Black Scholes Option Pricing Model for the Private Warrants were as follows: SCHEDULE OF BLACK SCHOLES OPTION PRICING MODEL FOR THE PRIVATE WARRANTS Input December 31, 2020 December 31, 2019 Risk-free interest rate 0.36 % 1.69 % Expected Term (years) 5.0 5.0 Probability of Business Combination 30.0 % 90.0 % Expected volatility 19.7 % 13.5 % Exercise price $ 11.50 $ 11.50 Stock Price $ 12.43 $ 10.42 Annual dividend yield 0.00 % 0.00 % The following table presents the changes in the fair value of warrant liabilities: SUMMARY OF CHANGES IN THE FAIR VALUE OF WARRANT LIABILITIES Private Placement Fair value as of December 31, 2018 5,733,000 Change in fair value 1,433,250 Fair value as of December 31, 2019 7,166,250 Change in fair value ( 906,250 ) Fair value as of December 31, 2020 $ 6,260,000 F- 27 NOTE 11. — SUBSEQUENT EVENTS The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the financial statements were issued. Based upon this review, other than as described below and as described in Note 2, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. On January 27, 2021, the Panel granted the Company’s request for continued listing of the Company’s equity securities on the Nasdaq Capital Market pursuant to an extension, subject to certain milestones, through June 1, 2021 so that the Company may seek to complete an initial business combination and regain compliance with the listing rules. If the Company does not regain compliance with the Rule by the required date, Nasdaq would delist the Company’s equity securities from the Nasdaq Capital Market. On January 31, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Ensysce, and EB Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”), relating to a proposed business combination transaction between the Company and Ensysce. Pursuant to the Merger Agreement, Merger Sub will merge with and into Ensysce, with Ensysce surviving such merger as a wholly owned subsidiary of the Company and the stockholders of Ensysce becoming stockholders of the Company (the “Merger”). Ensysce’s issued and outstanding share capital as of immediately prior to the Merger Effective Time will, at the closing (the “Closing”) of the transactions contemplated by the Merger Agreement (collectively, the “Transaction”), be canceled and converted into the right to receive the Company’s common stock, par value $ 0.0001 per share (the “LACQ Common Stock”) calculated based on an exchange ratio of 0.06585 (the “Exchange Ratio”). The Transaction will be consummated subject to the deliverables and provisions as further described in the Merger Agreement. On January 31, 2021, the underwriters of the Company’s initial public offering agreed to reduce the total deferred underwriting fee that is to be paid to such underwriters upon the consummation of the Company’s initial business combination to $ 2,000,000 , which may under certain situations be payable in the form of LACQ Common Stock. On January 31, 2021, the Company and GTWY Holdings entered into an amendment to the Gateway Promissory Note to permit conversion of all or a portion of the promissory note into warrants at a price of $ 1.00 per warrant. In connection with such amendment, GTWY Holdings elected to convert the full principal balance of the Gateway Promissory Note into 566,288 warrants. On February 23, 2021, the Company entered into a fourth amendment to the Company’s Expense Advancement Agreement with its sponsors and strategic investor to increase the total amount of advances available to the Company under the agreement by $ 160,000 . The promissory notes covering the prior loan balance in the aggregate amount of $ 300,000 was amended and restated on February 24, 2021 in order to reflect the incremental increase of the total amount of advances available to the Company thereunder to $ 460,000 and all of which increase was drawn on February 24, 2021. F- 28 (3) Exhibits. No. Description of Exhibit 2.1† Agreement and Plan of Merger, dated January 31, 2021, by and among Leisure Acquisition Corp., Ensysce Biosciences, Inc. and EB Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 filed with the Company’s Current Report on Form 8-K on February 2, 2021) 3.1(a) Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 filed with the Company’s Current Report on Form 8-K on December 5, 2017) 3.1(b) Amendment to Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 filed with the Company’s Current Report on Form 8-K on December 9, 2019) 3.1(c) Amendment No. 2 to Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 filed with the Company’s Current Report on Form 8-K on March 31, 2020) 3.1(d) Amendment No. 3 to Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 filed with the Company’s Current Report on Form 8-K on June 30, 2020) 3.1(e) Amendment No. 4 to Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 filed with the Company’s Current Report on Form 8-K on November 30, 2020) 3.2 Bylaws (incorporated by reference to Exhibit 3.3 filed with the Company’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3, 2017) 4.1 Specimen Unit Certificate (incorporated by reference to Exhibit 4.1 filed with the Company’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3, 2017) 4.2 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.2 filed with the Company’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3, 2017) 4.3 Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 filed with the Company’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3, 2017) 4.4 Warrant Agreement, dated December 1, 2017, between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 filed with the Company’s Current Report on Form 8-K on December 5, 2017) 4.5*** Description of Registrant’s Securities (incorporated by reference to Exhibit 4.5 filed with the Company’s Annual Report on Form 10-K on March 15, 2021) 10.1(a) Investment Management Trust Agreement, dated December 1, 2017, between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K on December 5, 2017) 10.1(b) Amendment to Investment Management Trust Agreement, dated December 5, 2019 (incorporated by reference to Exhibit 10.1(b) filed with the Company’s Annual Report on Form 10-K on March 10, 2020). 10.1(c) Amendment No. 2 to Investment Management Trust Agreement, dated March 26, 2020 (incorporated by reference to Exhibit 3.1 filed with the Company’s Current Report on Form 8-K on March 31, 2020) 10.1(d) Amendment No. 3 to Investment Management Trust Agreement, dated June 29, 2020 (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K on June 30, 2020) 10.1(e) Amendment No. 4 to Investment Management Trust Agreement, dated November 30, 2020 (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K on November 30, 2020) 10.2 Registration Rights Agreement, dated December 1, 2017, among the Company and certain security holders (incorporated by reference to Exhibit 10.2 filed with the Company’s Current Report on Form 8-K on December 5, 2017) 10.3 Warrant Purchase Agreement, dated December 1, 2017, between the Company and certain security holders (incorporated by reference to Exhibit 10.3 filed with the Company’s Current Report on Form 8-K on December 5, 2017) 10.4 Administrative Services Agreement, dated December 1, 2017, between the Company and Hydra Management, LLC (incorporated by reference to Exhibit 10.4 filed with the Company’s Current Report on Form 8-K on December 5, 2017) 10.5(a) Expense Advancement Agreement, dated December 1, 2017, between the Company, HG Vora Special Opportunities Master Fund, Ltd., Hydra Management, LLC and Matthews Lane Capital Partners LLC (incorporated by reference to Exhibit 10.5 filed with the Company’s Current Report on Form 8-K on December 5, 2017) 10.5(c) Amendment to Expense Advancement Agreement, dated June 29, 2020 (incorporated by reference to Exhibit 10.2 filed with the Company’s Current Report on Form 8-K on June 30, 2020) 10.5(b) Amendment to Expense Advancement Agreement, dated October 26, 2020 (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K on October 29, 2020) 10.5(d) Amendment No. 3 to Expense Advancement Agreement, dated November 30, 2020 (incorporated by reference to Exhibit 10.2 filed with the Company’s Current Report on Form 8-K on November 30, 2020) 10.5(e) Amendment No. 4 to Expense Advancement Agreement, dated February 23, 2021 (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K on February 25, 2021) 10.5(f) Form of Amended and Restated Promissory Note relating to Expense Advancement Agreement (5) (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K on February 25, 2021) 69 10.6(a) Letter Agreement, dated December 1, 2017, among the Company, its officers, directors and security holders (incorporated by reference to Exhibit 10.6 filed with the Company’s Current Report on Form 8-K on December 5, 2017) 10.6(b) Amendment to Letter Agreement, dated December 5, 2019 (incorporated by reference to Exhibit 10.6(b) filed with the Company’s Annual Report on Form 10-K on March 10, 2020). 10.7 Contingent Forward Purchase Contract, dated December 1, 2017, between the Company and HG Vora Special Opportunities Master Fund, Ltd (incorporated by reference to Exhibit 10.7 filed with the Company’s Current Report on Form 8-K on December 5, 2017) 10.8 Form of Director and Officer Indemnity Agreement (incorporated by reference to Exhibit 10.8 filed with the Company’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3, 2017) 10.9 Securities Subscription Agreement, dated September 11, 2017, between the Registrant and HG Vora Special Opportunities Master Fund, Ltd (incorporated by reference to Exhibit 10.4 filed with the Company’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3, 2017) 10.10 Securities Subscription Agreement, dated September 11, 2017, between the Registrant and Hydra Management, LLC (incorporated by reference to Exhibit 10.5 filed with the Company’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3, 2017) 10.11 Securities Subscription Agreement, dated September 11, 2017, between the Registrant and Matthews Lane Capital Partners LLC (incorporated by reference to Exhibit 10.6 filed with the Company’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3, 2017) 10.12(a) Expense Advance Agreement, dated December 5, 2019, between the Company and GTWY Holdings Limited (incorporated by reference to Exhibit 10.12 filed with the Company’s Annual Report on Form 10-K on March 10, 2020). 10.12(b) Amendment to GTWY Holdings Limited Promissory Note, dated January 31, 2021 (incorporated by reference to Exhibit 10.3 filed with the Company’s Current Report on Form 8-K on February 2, 2021) 10.13 Fee Waiver Letter, dated November 23, 2020 (incorporated by reference to Exhibit 10.3 filed with the Company’s Current Report on Form 8-K on November 30, 2020) 10.14 Fee Waiver Letter, dated January 31, 2021 (incorporated by reference to Exhibit 10.2 filed with the Company’s Current Report on Form 8-K on February 2, 2021) 10.15 Warrant Surrender Agreement, among MLCP GLL Funding LLC, Hydra LAC, LLC, and Leisure Acquisition Corp., dated January 31, 2021 (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K on February 2, 2021) 31.1* Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1** Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2** Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS* XBRL Instance Document 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document 101.SCH* XBRL Taxonomy Extension Schema Document 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* XBRL Taxonomy Extension Labels Linkbase Document 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document * Filed herewith. ** Furnished. *** Previously filed † Certain schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). LACQ agrees to furnish supplementally a copy of all omitted schedules to the Securities and Exchange Commission upon its request. Item 16. Form 10-K Summary None. 70 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. June 7, 2021 LEISURE ACQUISITION CORP. By: /s/ Daniel B, Silvers Name: Daniel B. Silvers Title: Chief Executive Officer KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints A. Lorne Weil and Daniel B. Silvers and each or any one of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the United States Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Position Date /s/ A. Lorne Weil A. Lorne Weil Executive Chairman June 7, 2021 /s/ Daniel B. Silvers Daniel B. Silvers Chief Executive Officer and Director (Principal Executive Officer) June 7, 2021 /s/ George Peng George Peng Chief Financial Officer, Treasurer and Secretary ( Principal Financial and Accounting Officer ) June 7, 2021 /s/ Marc J. Falcone Marc J. Falcone Director June 7, 2021 /s/ Steven M. Rittvo Steven M. Rittvo Director June 7, 2021 /s/ David L. Weinstein David L. Weinstein Director June 7, 2021 71