What changed in this filing

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Item 2. Unregistered Sales of Equity Securities

2021-11-15 compared with 2021-08-16 · 96 added, 69 removed, 10 unchanged (94% of the section changed)

1 unchanged sentence

Recent Sales of Unregistered Securities

Set forth below is information regarding

shares of capital stock issued by us within the past three years.

Also included is the consideration received by us for such shares and

information relating to the section of the Securities Act, or rule of the Securities and Exchange Commission, under which exemption from

registration was claimed.

LACQ issued an aggregate of 1,000,001 private warrants exercisable for 1,000,001

shares of common stock to Hydra Management, LLC (“Hydra”), Matthews Lane Capital Partners LLC (“MLCP” and

together with Hydra, the “Sponsors”), and HG Vora Capital Management LLC on behalf of one or more funds or accounts managed

by it (the “Strategic Investor”) in connection with their conversion of promissory notes covering $1,000,000 of loans

to LACQ under an Expense Advancement Agreement, as amended, among LACQ, the Sponsors and the Strategic Investor (the “Expense

Advancement Agreement”).

On January 31, 2021, LACQ issued

566,288 warrants exercisable for up to 566,288 shares of common stock to Gateway Holdings Limited in exchange for previously outstanding

loans under the Expense Advancement Agreement dated December 5, 2019 between LACQ and Gateway Holdings Limited, as amended (the “GTWY

Expense Advancement Agreement”).

On June 7, 2021, LACQ entered

into exchange agreements with each of the holders of (i) LACQ’s warrants issued by LACQ to the Sponsors and the Strategic Investor

(the “Private Placement Warrants”) and (ii) other private warrants held by the Sponsors, the Strategic Investor, certain

members of former LACQ management and unaffiliated parties.

Pursuant to the exchange agreements, each of these holders exchanged

their warrants for new private warrants.

In connection with this exchange, an aggregate of 8,391,289 Private Placement Warrants and

other private warrants were exchanged for new private warrants in a transaction exempt from registration under the Act pursuant to

Section 3(a)(9) of the Act.

On June 7, 2021, we issued 500,000

warrants exercisable for up to 500,000 shares of common stock to DelMorgan Group LLC (the “DelMorgan”) under the terms

of the Email Agreement, dated January 31, 2021, between us and DelMorgan, as amended by the First Amendment to the Email Agreement,

dated June 7, 2021 (the “Email Agreement”).

On June 30, 2021, we issued

warrants to the Sponsors and the Strategic Investor to purchase 510,001 shares of common stock that are issuable upon exercise of

510,001 warrants in exchange for outstanding loans under the Expense Advancement Agreement.

On June 30, 2021, we issued

1,106,108 warrants with a 36-month term to purchase 1,106,108 shares of our common stock at a strike price per share equal to $10.01,

to GEM Yield Bahamas Limited (“GYBL”).

On June 30, 2021, we issued

125,000 shares of common stock to the underwriters in LACQ’s initial public offering to satisfy deferred underwriting fees

payable to such underwriters.

forth below is information regarding shares of capital stock issued by us within the past three years.

Also included is the consideration

received by us for such shares and information relating to the section of the Securities Act, or rule of the Securities and Exchange

Commission, under which exemption from registration was claimed.

issued an aggregate of 1,000,001 private warrants exercisable for 1,000,001 shares of common stock to Hydra Management, LLC (“Hydra”),

Matthews Lane Capital Partners LLC (“MLCP” and together with Hydra, the “Sponsors”), and HG Vora Capital

Management LLC on behalf of one or more funds or accounts managed by it (the “Strategic Investor”) in connection with

their conversion of promissory notes covering $1,000,000 of loans to LACQ under an Expense Advancement Agreement, as amended, among

LACQ, the Sponsors and the Strategic Investor (the “Expense Advancement Agreement”).

January 31, 2021, LACQ issued 566,288 warrants exercisable for up to 566,288 shares of common stock to Gateway Holdings Limited in

exchange for previously outstanding loans under the Expense Advancement Agreement dated December 5, 2019 between LACQ and Gateway

Holdings Limited, as amended (the “GTWY Expense Advancement Agreement”).

June 7, 2021, LACQ entered into exchange agreements with each of the holders of (i) LACQ’s warrants issued by LACQ to the Sponsors

and the Strategic Investor (the “Private Placement Warrants”) and (ii) other private warrants held by the Sponsors, the

Strategic Investor, certain members of former LACQ management and unaffiliated parties.

Pursuant to the exchange agreements, each

of these holders exchanged their warrants for new private warrants.

In connection with this exchange, an aggregate of 8,391,289 Private

Placement Warrants and other private warrants were exchanged for new private warrants in a transaction exempt from registration under

the Act pursuant to Section 3(a)(9) of the Act.

June 7, 2021, we issued 500,000 warrants exercisable for up to 500,000 shares of common stock to DelMorgan Group LLC (the “DelMorgan”)

under the terms of the Email Agreement, dated January 31, 2021, between us and DelMorgan, as amended by the First Amendment to the

Email Agreement, dated June 7, 2021 (the “Email Agreement”).

June 30, 2021, we issued warrants to the Sponsors and the Strategic Investor to purchase 510,001 shares of common stock that are

issuable upon exercise of 510,001 warrants in exchange for outstanding loans under the Expense Advancement Agreement.

June 30, 2021, we issued 1,106,108 warrants with a 36-month term to purchase 1,106,108 shares of our common stock at a strike price

per share equal to $10.01, to GEM Yield Bahamas Limited (“GYBL”).

June 30, 2021, we issued 125,000 shares of common stock to the underwriters in LACQ’s initial public offering to satisfy deferred

underwriting fees payable to such underwriters.

July 22, 2021, we entered into agreements with consultants to issue up to 1,500,000 shares of common stock in the form of non-transferable

1 unchanged sentence

500,000 shares of common stock based on certain service and market price conditions.

None of the foregoing transactions involved any underwriters,

underwriting discounts or commissions, or any public offering.

Unless otherwise set forth above, we believe each of these transactions was exempt from registration under the Securities

Act in reliance on Section 4(a)(2) of the Securities Act (and Regulation D promulgated thereunder) as transactions by an issuer not involving

any public offering or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer under benefit plans

and contracts relating to compensation as provided under Rule 701.

The recipients of the securities in each of these transactions represented

their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution

thereof, and appropriate legends were placed on the share certificates issued in these transactions.

All recipients had adequate access,

through their relationships with us, to information about us.

The sales of these securities were made without any general solicitation

or advertising.

Convertible Notes Payable

September 24, 2021, the Company entered into an agreement with institutional investors to issue $15.9 million of convertible notes (“Convertible

The agreement provides for two closings:

the first closing for $5.3 million (resulting in net proceeds of $4.7 million)

and closed on September 24, 2021.

The second closing for $10.6 million occurred in the fourth quarter of 2021 (See Note 11 of the Financial

Statements for additional information).

proceeds of the sale of the securities may be used for working capital purposes subject to certain customary restrictions and the Convertible

Notes are secured by the Company’s rights to its patents and licenses.

The Company may not issue any additional debt or equity

without the prior written consent of the holders.

convertible notes mature on June 23, 2023 and bear interest at a rate of 5% per annum, in addition to an original issue discount of 6%.

The interest may be settled in cash or shares at the option of the Company and is payable together with monthly redemptions of the outstanding

principal amount of the debt.

The convertible notes may be converted into the Company’s common stock at the option of the

holder in whole or in part at the conversion price of $5.87, subject to a beneficial ownership limitation of 4.99% (subject to adjustment).

the Company’s option, the Company may redeem some or all of the then-outstanding principal amount of the convertible notes for

cash in an amount equal to 100% of the outstanding principal amount of the principal to be redeemed, plus accrued but unpaid interest,

plus all other amounts due with respect to the convertible notes.

On January 1, 2022, and the first of each subsequent month, terminating

upon the full redemption of the Convertible Notes (each a “Monthly Redemption Date”), the Company shall redeem the Monthly

Redemption Amount (defined below), payable in cash or shares.

The number of shares to be settled shall be based on a conversion price

equal to the lesser of (a) $5.87 and (b) 92% of the average of the three lowest volume-weighted average prices (“VWAP”) during

the 10 consecutive trading days prior to the applicable Monthly Redemption Date.

The Company may not pay the Monthly Redemption Amount

in shares unless the applicable conversion price is greater than or equal to $0.78 and the Company has been in compliance with customary

requirements under the agreement, unless waived in writing by the holder.

Monthly Redemption Amount is defined as 1/18th of the original principal amount, plus accrued but unpaid interest, plus any other amounts

due to the holder with respect to the Convertible Notes.

If the Company elects to settle such redemptions in shares (with a total maximum

of 4,855,108 shares issuable), the Monthly Redemption Amount is calculated based on 92% of the average of the lowest three VWAPs in the

ten trading days prior to the Monthly Redemption Date.

If the Company elects to settle redemptions in cash, the Monthly Redemption Amount

shall include an 8% premium of the Monthly Redemption Amount.

at any time while the Convertible Notes are outstanding, the Company carries out one or more capital raises in excess of $5.0 million,

the holder has the right to require the Company to use up to 20% of the gross proceeds of such transaction to redeem all or a portion

of the convertible notes for an amount in cash equal to the cash Mandatory Redemption Amount (i.e., 108% of outstanding principal and

unpaid interest).

of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering.

Unless otherwise

set forth above, we believe each of these transactions was exempt from registration under the Securities Act in reliance on Section 4(a)(2)

of the Securities Act (and Regulation D promulgated thereunder) as transactions by an issuer not involving any public offering or Rule

701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer under benefit plans and contracts relating to compensation

as provided under Rule 701.

The recipients of the securities in each of these transactions represented their intentions to acquire the

securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends

were placed on the share certificates issued in these transactions.

All recipients had adequate access, through their relationships with

us, to information about us.

The sales of these securities were made without any general solicitation or advertising.

Use of Proceeds

On June 30, 2021, we consummated the Business

At the closing of the Business Combination, we received net proceeds of approximately $6.6 million after deducting

total expenses of $1.2 million.

The Securities Act Registration Statement on Form S-4

(the “Form S-4”) for which the use of proceeds from the Business Combination is being disclosed (SEC file number

333-254279) was declared effective on June 16, 2021 and all of the securities registered thereby were issued without use of an

underwriter, all proceeds to the Company.

The securities issued consisted solely of 18,000,000 shares of common stock, par value

$0.0001 per share.

The aggregate price of the offering amount registered was calculated for purposes of the Form S-4 as

The Business Combination with LACQ triggered the

conversion of the 2015 convertible notes, the 2018 convertible notes and the 2021 convertible note of Former Ensysce.

June 30, 2021, we consummated the Business Combination.

At the closing of the Business Combination, we received net proceeds of approximately

$6.6 million after deducting total expenses of $1.2 million.

Securities Act Registration Statement on Form S-4 (the “Form S-4”) for which the use of proceeds from the Business Combination

is being disclosed (SEC file number 333-254279) was declared effective on June 16, 2021 and all of the securities registered thereby

were issued without use of an underwriter, all proceeds to the Company.

The securities issued consisted solely of 18,000,000 shares of

common stock, par value $0.0001 per share.

The aggregate price of the offering amount registered was calculated for purposes of the Form

S-4 as $2,733,485.

Business Combination with LACQ triggered the conversion of the 2015 convertible notes, the 2018 convertible notes and the 2021 convertible

note of Former Ensysce.

In connection with the Closing, the 2020 convertible notes were also settled in shares of the combined entity.

The 2020 promissory notes and 2021 promissory notes

were repaid in July 2021 from the cash proceeds of the Business Combination with LACQ.

We expect to use the remaining net proceeds from the

Business Combination and the transactions set forth above primarily to fund our preclinical and clinical development

activities and for general corporate purposes.

The 2020 promissory notes and 2021 promissory notes were repaid in July 2021 from the cash proceeds of the Business Combination with

expect to use the remaining net proceeds from the Business Combination and the transactions set forth above primarily to fund our preclinical

and clinical development activities and for general corporate purposes.

Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities

during the quarter ended June 30, 2021.

did not repurchase any of our equity securities during the quarter ended June 30, 2021.

Defaults Upon Senior Securities.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Unregistered Sales of Equity Securities