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Item 1A. Risk Factors

2022-03-31 compared with 2021-03-15 · 2027 added, 1463 removed, 2 unchanged (100% of the section changed)

You should carefully consider the following

risk factors and all other information contained in this Report, including the financial statements.

If any of the following events

occur, our business, financial condition or results of operations may be materially and adversely affected.

In that event, the

trading price of our securities could decline, and you could lose all or part of your investment.

The risk factors described below

are not necessarily exhaustive and you are encouraged to perform your own investigation with respect to us and our business.

more detailed risk factors related to Ensysce and the Transactions, see the Registration Statement on Schedule S-4 to be filed

by the Company subsequent to the filing of this Form 10-K.

Summary Risk Factors

You should carefully consider the risks

set forth in the section entitled “Risk Factors below, including, but not limited to the following:

are a blank check company with no operating history and no revenues, and you have no

basis on which to evaluate our ability to achieve our business objective and since the

completion of the initial public offering, our activity has been limited to the evaluation

of business combination candidates and seeking to complete an initial business combination.

may delist us if we fail to meet the requirements of a Nasdaq order relating to timing

relating to our proposed Business Combination with Ensysce or fail to meet other listing

criteria either before or after the closing of the Merger, if the Merger is consummated.

proposed business combination with Ensysce is subject to certain conditions and there

can be no assurance that it will close.

business is subject to the risk that its success is dependent on its ability to develop

and commercialize its lead product candidates and other risks commonly associated with

biotechnology companies and there can be no assurance that it will be successful.

officers’ and directors’ primary industry experience relates to the leisure

sector and they do not have experience with companies in the biotechnology sector.

performance our management team or their respective affiliates may not be indicative

of future performance of an investment in us.

our proposed Business Combination will be submitted to a vote of the stockholders, our

initial stockholders and their respective affiliates, including the sponsors and the

strategic investor and directors and officers, have agreed to vote in favor of the proposed

Business Combination Ensysce with and have sufficient votes to approve the Business Combination

without the vote of other stockholders.

only opportunity to affect the investment decision regarding a potential business combination

will be limited to the exercise of your right to redeem your shares from us for cash.

ability of our public stockholders to redeem their shares for cash may make our financial

condition unattractive to potential business combination targets, which may make it difficult

for us to enter into a business combination with a target.

ability of our public stockholders to exercise redemption rights with respect to a large

number of our shares may not allow us to complete the most desirable business combination

or optimize our capital structure.

requirement that we complete our initial business combination within the prescribed time

frame may give potential target businesses leverage over us in negotiating a business

combination and may limit the time we have in which to conduct due diligence on potential

business combination targets, in particular as we approach our dissolution deadline,

which could undermine our ability to complete our initial business combination on terms

that would produce value for our stockholders.

search for a business combination, and any target business with which we ultimately consummate

a business combination, may be materially adversely affected by COVID-19 outbreak or

any future pandemic and the status of debt and equity markets.

we seek stockholder approval of our initial business combination, our sponsor, directors,

officers, advisors or any of their affiliates may elect to purchase shares or warrants

from public stockholders, which may reduce the public “float” of our Class

A common stock.

a stockholder fails to receive notice of our offer to redeem our public shares in connection

with our initial business combination, or fails to comply with the procedures for tendering

its shares, such shares may not be redeemed.

will not have any rights or interests in funds from the trust account, except under certain

limited circumstances.

To liquidate your investment, therefore, you may be forced to

sell your public shares or warrants, potentially at a loss.

will not be entitled to protections normally afforded to investors of many other blank

check companies.

third parties bring claims against us, the proceeds held in the trust account could be

reduced and the per share redemption amount received by stockholders may be less than

$10.00 per share.

we have not completed our initial business combination within the required time period,

our public stockholders may receive only approximately $10.00 per share, or less in certain

circumstances, on our redemption of their stock, and our warrants will expire worthless.

may engage in a business combination with one or more target businesses that have relationships

with entities that may be affiliated with our sponsor, officers or directors which may

raise potential conflicts of interest.

Risks Related to our Status as a

Blank Check Company and our Nasdaq Listing

We are a blank check company with no

operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.

We are a blank check company with no operating

results, and we will not commence operations until completing a Business Combination.

Because we have no operating history and

have no operating results, you have no basis upon which to evaluate our ability to achieve our business objective of completing

our Business Combination with one or more target businesses.

We may be unable to complete a Business Combination.

If we fail to

complete a Business Combination, we will never generate any operating revenues.

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.

The LACQ common stock and Public Warrants

are currently listed on the Nasdaq and LACQ expects to apply to continue to be listed on the Nasdaq upon consummation of the business

On November 30, 2020, LACQ received a notice

(the “Nasdaq Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”)

stating that LACQ 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 LACQ’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 LACQ’s securities.

In addition, the Nasdaq Notice stated that LACQ 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 advised LACQ that its securities

would be subject to delisting unless LACQ timely requested a hearing before an independent Hearings Panel (the “Nasdaq Panel”).

Following a hearing on LACQ’s appeal, the Nasdaq panel granted LACQ’s request for continued listing through June 1,

2021 on the condition that (i) on or before January 31, 2021, LACQ will have executed a definitive merger agreement;

before March 15, 2021 (which had been extended by Nasdaq from March 1, 2021), LACQ will file a joint proxy/registration statement

(iii) on or before May 28, 2021, LACQ will obtain stockholder approval for the merger;

and (iv) on or before June

1, 2021, LACQ will complete the merger and evidence compliance with all initial listing standards as required under Nasdaq’s

listing qualifications rules.

In addition, LACQ will need to comply with and continue to maintain compliance with the requirement

as to number of public stockholders.

LACQ is not currently in compliance with the listing condition.

There can be no assurance that LACQ will

be able to obtain an additional extension from Nasdaq with respect to the conditions in Nasdaq’s grant of the appeal, meet

the continued listing standards on the closing date of the business combination, or comply with the continued listing standards

of Nasdaq following the business combination.

If Nasdaq delists the LACQ common stock and/or Public Warrants from trading on its

exchange for failure to meet the listing standards either prior to or after the closing date of the business combination, LACQ’s

securityholders could face significant material adverse consequences including:

● a limited availability of market quotations

for LACQ’s securities;

● reduced liquidity for LACQ’s securities;

● a determination that the LACQ common stock

is a “penny stock” which will require brokers trading in such securities to adhere to more stringent rules and possibly

result in a reduced level of trading activity in the secondary trading market for LACQ’s securities;

● a limited amount of news and analyst coverage;

● a decreased ability to issue additional

securities or obtain additional financing in the future.

Risks Related to our Proposed Business

Combination with Ensysce

There is no assurance when or even

if the Merger will be completed.

Failure to obtain required approvals necessary to satisfy closing conditions may delay or prevent

completion of the Merger.

Completion of the Merger

is subject to the satisfaction or waiver of a number of conditions.

There can be no assurance that we and Ensysce will be able

to satisfy the closing conditions or that closing conditions beyond their control will be satisfied or waived.

If the Merger is

not completed, it is most likely that we will not be able to complete a Business Combination before the expiration of the Combination

Period and we will be required to liquidate.

will be unable to close the Transactions if the redemptions of public shares result in its Tangible Net Assets being less than

$5,000,001 unless it is able to obtain sufficient equity financing.

LACQ’s amended

and restated certificate of incorporation, as amended, does not provide a specified maximum redemption threshold, except that

in no event will LACQ redeem its public shares in an amount that would cause its Net Tangible Assets to be less than $5,000,001

(such that LACQ is not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement

which may be contained in the agreement relating to an initial business combination.

It is also a condition to closing under the

Merger Agreement that, among other things, following payment to all stockholders who have exercised their redemption rights (and

after giving effect to the payment of expenses related to the

Transactions that are to be paid at or after Closing (provided that LACQ can pay such expenses in equity securities and

not cash)) and LACQ having cash of at least $5,000,000.

If redemptions by LACQ’s public stockholders cause LACQ to be unable

to meet this closing condition, then Ensysce will not be required to consummate the business combination, although they may, in

their sole discretion, waive this condition.

In the event that Ensysce waives this condition, LACQ does not intend to seek additional

stockholder approval or to extend the time period in which its public stockholders can exercise their redemption rights.

event, however, will LACQ close the Transactions if redemptions of public shares would cause LACQ’s Net Tangible Assets

to be less than $5,000,001.

If redemptions exceed this level, we will not be able to close the Transactions unless we are able

to obtain a sufficient amount of equity financing to meet the Net Tangible Asset test.

There can be no assurance that we will

be able to do so.

Even if the Business

Combination closes, there can be no assurance that the combined company will be successful and we and our stockholders will realize

the benefits of the Business Combination.

The realization of the

benefits in connection with the Business Combination will depend on Ensysce’s success in operating our business after completion

of the Merger and developing and commercializing its product candidates, which will be subject to risks, which will be addressed

in more detail in the Form S-4 to be filed by us in in connection with the business combination, including the following:

is a clinical-stage pharmaceutical company with a limited operating history.

has not yet demonstrated an ability to generate revenues, obtain regulatory approvals,

engage in clinical development beyond Phase 1 trials, manufacture any product on a commercial

scale or arrange for a third party to do so on Ensysce’s behalf or enter into licensing

arrangements to commercialize a product, or conduct sales and marketing activities necessary

for successful product commercialization.

has invested a significant portion of its efforts and financial resources in the research

and development of its lead product candidate, and expects to continue to do so.

ability to generate revenues from the sale of abuse-deterrent opioid products, which

may not occur at a significant level for several years, if at all, will depend heavily

on the successful development, regulatory approval and eventual commercialization of

this lead product candidate, as well as other product candidates it may develop.

operations have consumed substantial amounts of cash since inception.

Ensysce expects

to continue to spend substantial amounts to continue the clinical and preclinical development

of Ensysce’s product candidates.

Accordingly, Ensysce will need to raise additional

capital to complete its currently planned clinical trials and any future clinical trials

and to further develop and commercialize its products.

business will be subject to the risks commonly associated with research and development

of pharmaceutical products, including risks related to:

lead product candidates may not be successful in limiting or impeding abuse, overdose

or misuse or provide additional safety upon commercialization;

may experience failure or delay in completing clinical development;

product candidates may cause undesirable side effects or have other properties that could

delay or prevent their regulatory approval;

might not be able to obtain regulatory approval for its product candidates;

clinical trials may fail to replicate positive results from earlier preclinical studies

or clinical trials conducted by Ensysce or third parties;

may face issues in connection with its patent or its patents may not provide sufficient

protection for its products.

Business Combination with Ensysce is outside of LACQ’s original investment strategy.

LACQ was organized as

a blank check company to identify and build a company in the leisure sector that would complement and benefit from LACQ’s

management teams experience in this sector.

LACQ’s officers and directors have substantial experience in evaluation the

operating and financial merits of companies from a wide range of industries, but do not have experience with companies in the

biotechnology sector.

While we believe that proposed Business Combination with Ensysce is a in the best interests of LACQ, there

can be no assurance that the review of the proposed Business Combination with Ensysce , a biotechnology

company developing a pharmaceutical product, and the ability to identify the potential benefits and risks associated with Ensysce ’s

business, was not affected by this proposed target being outside of the LACQ management team’s and the LACQ board’s

primary area of expertise.

Our management will not maintain control

of Ensysce after our Business Combination, if the Business Combination is consummated.

Our stockholders prior

to the Business Combination will collectively own a minority interest in the post Business Combination company, if the Business

Combination is consummated, Accordingly, our management will not maintain our control of the target business.

We cannot provide

assurance that new management will possess the skills, qualifications or abilities necessary to profitably operate such business.

Risks Related to Searching for and

Consummating a Business Combination

stockholders may not be afforded an opportunity to vote on our proposed Business Combination, which means we may complete our

Business Combination even though a majority of our public stockholders do not support such a combination.

We may not hold a stockholder vote to

approve our Business Combination unless the Business Combination would require stockholder approval under applicable law or stock

exchange listing requirements or if we decide to hold a stockholder vote for business or other legal reasons.

For instance, Nasdaq

rules currently allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder

approval if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration in our Business

Therefore, if the structure of our Business Combination involved the issuance of more than 20% of our outstanding

shares, we would seek stockholder approval of such Business Combination.

However, except as required by law, the decision as to

whether we will seek stockholder approval of a proposed Business Combination or will allow stockholders to sell their shares to

us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing

of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval.

we may complete our Business Combination even if holders of a majority of our public shares do not approve of the Business Combination

Please refer to “Item 1.

Business – Stockholders May Not Have the Ability to Approve Our Business Combination”

for additional information.

If we seek stockholder approval of

our Business Combination, after approval of our board, our initial stockholders have agreed to vote in favor of such Business

Combination, regardless of how our public stockholders vote.

Unlike many other blank check companies

in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the public

stockholders in connection with a Business Combination, after approval of our board, our initial stockholders have agreed to vote

their founder shares, as well as any public shares purchased during or after our Initial Public Offering, in favor of our Business

Our initial stockholders own shares representing approximately 96.4% (as of December 31, 2020) of our outstanding

shares of common stock.

Accordingly, if we seek stockholder approval of our Business Combination, it is more likely that the necessary

stockholder approval will be received than would be the case if our initial stockholders agreed to vote their founder shares in

accordance with the majority of the votes cast by our public stockholders.

Your only opportunity to affect the

investment decision regarding a potential Business Combination will be limited to the exercise of your right to redeem your shares

from us for cash, unless we seek stockholder approval of the business combination.

Since our board of directors may complete

a Business Combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote

on the Business Combination, unless we seek such stockholder vote.

Accordingly, if we do not seek stockholder approval, your only

opportunity to affect the investment decision regarding a potential Business Combination may be limited to exercising your redemption

rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our

public stockholders in which we describe our Business Combination.

Even if we seek stockholder approval, our initial stockholders

and their respective affiliates, including the sponsors and the strategic investor and directors and officers, have agreed to

vote in favor of the Business Combination and have sufficient votes to approve the Business Combination without the vote of other

stockholders.

The ability of our public stockholders

to redeem their shares for cash may make our financial condition unattractive to potential Business Combination targets, which

may make it difficult for us to enter into a Business Combination with a target.

We may seek to enter into a Business Combination

transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain

amount of cash.

If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition

and, as a result, would not be able to proceed with the Business Combination.

Furthermore, in no event will we redeem our public

shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s

“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement

relating to our Business Combination.

Consequently, if accepting all properly submitted redemption requests would cause our net

tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above,

we would not proceed with such redemption and the related Business Combination and may instead search for an alternate Business

Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a Business Combination

transaction with us.

The ability of our public stockholders

to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable Business

Combination or optimize our capital structure.

At the time we enter into an agreement

for our Business Combination, we will not know how many stockholders may exercise their redemption rights, and therefore will

need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption.

If our business combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price,

or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the Trust Account

to meet such requirements, or arrange for third party financing.

In addition, if a larger number of shares are submitted for redemption

than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account

or arrange for third party financing.

Raising additional third party financing may involve dilutive equity issuances or the incurrence

of indebtedness at higher than desirable levels.

The above considerations may limit our ability to complete the most desirable

Business Combination available to us or optimize our capital structure.

The amount of the deferred underwriting commissions payable

to the underwriters will not be adjusted for any shares that are redeemed in connection with a Business Combination.

The per-share

amount we will distribute to stockholders who properly exercise their redemption rights will not be reduced by the deferred underwriting

commission and after such redemptions, the per-share value of shares held by non-redeeming stockholders will reflect our obligation

to pay the deferred underwriting commissions.

The ability of our public stockholders

to exercise redemption rights with respect to a large number of our shares could increase the probability that our Business Combination

would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.

If our Business Combination agreement

requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount

of cash at closing (as is the case of the Merger Agreement with Ensysce), the probability that our Business Combination would

be unsuccessful is increased.

If our Business Combination is unsuccessful, you would not receive your pro rata portion of the

Trust Account until we liquidate the Trust Account.

If you are in need of immediate liquidity, you could attempt to sell your

stock in the open market;

however, at such time our stock may trade at a discount to the pro rata amount per share in the Trust

In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection

with our redemption until we liquidate or you are able to sell your stock in the open market.

The requirement that we complete our

Business Combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a Business

Combination and may decrease our ability to conduct due diligence on potential Business Combination targets as we approach our

dissolution deadline, which could undermine our ability to complete our Business Combination on terms that would produce value

for our stockholders.

Any potential target business with which

we enter into negotiations concerning a Business Combination will be aware that we must complete our Business Combination during

the Combination Period.

Consequently, such target business may obtain leverage over us in negotiating a Business Combination,

knowing that if we do not complete our Business Combination with that particular target business, we may be unable to complete

our Business Combination with any target business.

This risk will increase as we get closer to the timeframe described above.

In addition, we may have limited time to conduct due diligence and may enter into our Business Combination on terms that we would

have rejected upon a more comprehensive investigation.

We may not be able to complete our

Business Combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding

up and we would redeem our public shares and liquidate, in which case our public stockholders may only receive $10.00 per share,

or less than such amount in certain circumstances, and our warrants will expire worthless.

Our sponsors, strategic investor, officers

and directors have agreed that we must complete our Business Combination during the Combination Period.

We may not be able to

find a suitable target business and complete our Business Combination within such time period.

If we have not completed our Business

Combination within such time period, we will:

(i) cease all operations except for the purpose of winding up, (ii) as promptly

as reasonably possible but not more than ten business days thereafter, redeem the 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 on the funds held in the

Trust Account and not previously released to us to pay our 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 liquidating distributions, if any), subject to applicable law,

and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders

and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for

claims of creditors and the requirements of other applicable law.

In such case, our public stockholders may only receive $10.00

per share, and our warrants will expire worthless.

In certain circumstances, our public stockholders may receive less than $10.00

per share on the redemption of their shares.

See “— If third parties bring claims against us, the proceeds held in

the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share”

and other risk factors below.

If we seek stockholder approval of

our Business Combination, our sponsors, strategic investor, directors, officers, advisors and their affiliates may elect to purchase

shares from public stockholders, which may influence a vote on a proposed Business Combination and reduce the public “float”

of our common stock.

If we seek stockholder approval of our

Business Combination and we do not conduct redemptions in connection with our Business Combination pursuant to the tender offer

rules, our sponsors, strategic investor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated

transactions or in the open market either prior to or following the completion of our Business Combination, although they are

under no obligation to do so.

Such a purchase may include a contractual acknowledgement that such stockholder, although still

the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption

In the event that our sponsors, strategic investor, directors, officers, advisors or their affiliates purchase shares

in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such

selling stockholders would be required to revoke their prior elections to redeem their shares.

The purpose of such purchases could

be to vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining stockholder approval

of the Business Combination, or to satisfy a closing condition in an agreement with a target that requires us to have a minimum

net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would

otherwise not be met.

This may result in the completion of our Business Combination that may not otherwise have been possible.

In addition, if such purchases are made,

the public “float” of our common stock and the number of beneficial holders of our securities may be reduced, possibly

making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities exchange.

If a stockholder fails to receive notice

of our offer to redeem our public shares in connection with our Business Combination, or fails to comply with the procedures for

tendering its shares, such shares may not be redeemed.

We will comply with the tender offer rules

or proxy rules, as applicable, when conducting redemptions in connection with our Business Combination.

Despite our compliance

with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not

become aware of the opportunity to redeem its shares.

In addition, the tender offer documents or proxy materials, as applicable,

that we will furnish to holders of our public shares in connection with our Business Combination will describe the various procedures

that must be complied with in order to validly tender or redeem public shares.

For example, we may require our public stockholders

seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”

to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials

mailed to such holders, or up to two business days prior to the vote on the proposal to approve the Business Combination in the

event we distribute proxy materials, or to deliver their shares to the transfer agent electronically.

In the event that a stockholder

fails to comply with these or any other procedures, its shares may not be redeemed.

Business – Tendering

Stock Certificates in Connection with a Tender Offer or Redemption Rights” for additional information.

If the net proceeds of the Initial

Public Offering and the Concurrent Private Placement not being held in the Trust Account are insufficient, it could limit the

amount available to fund our search for a target business or businesses and complete our Business Combination and we may be required

to depend on the availability of loans from our sponsors, management team or strategic investor to fund our search for a Business

Combination, to pay our franchise and income taxes and to complete our Business Combination.

If we are unable to obtain these

loans, we may be unable to complete our Business Combination.

If the funds available to us outside the

Trust Account are not sufficient to fund our working capital requirements, we may be required to borrow funds from our sponsors,

management team, strategic investor or other third parties to operate or may be forced to liquidate.

Other than working capital

loans of $1,460,000 which have been received through March 10, 2021 ($1,000,000 of which was converted into working capital warrants),

none of our sponsors or strategic investor, members of our management team or any of their affiliates is under any obligation to

advance funds to us in such circumstances.

Any such loans and advances would be repaid only from funds held outside the Trust Account

or from funds released to us upon completion of our Business Combination.

We do not expect to seek loans from parties other than

our sponsors or strategic investor or an affiliate of our sponsors or strategic investor as we do not believe third parties will

be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account.

we are unable to obtain these loans, we may be unable to complete our Business Combination.

If we are unable to complete our Business

Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust

Consequently, our public stockholders may only receive approximately $10.00 per share plus any pro rata interest earned

on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $75,000

of interest to pay dissolution expenses) on our redemption of our public shares, and our warrants will expire worthless.

circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares.

If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption

amount received by stockholders may be less than $10.00 per share” and other risk factors below.

We may be unable to obtain additional

financing to complete our Business Combination or to fund the operations and growth of a target business, which could compel us

to restructure or abandon a particular Business Combination.

Although we believe that the net proceeds

of the Initial Public Offering and Concurrent Private Placement, as well as the private placement made by our strategic investor,

will be sufficient to allow us to complete our Business Combination, such aggregate net proceeds may not be sufficient to meet

the capital requirements for our Business Combination.

If the net proceeds of the Initial Public Offering and Concurrent Private

Placement prove to be insufficient, either because of the size of our Business Combination, the depletion of the available net

proceeds in search of a target business, the obligation to repurchase for cash a significant number of shares from stockholders

who elect redemption in connection with our Business Combination or the terms of negotiated transactions to purchase shares in

connection with our Business Combination, we may be required to seek additional financing or to abandon the proposed Business Combination.

We cannot assure you that such financing will be available on acceptable terms, if at all.

To the extent that additional financing

proves to be unavailable when needed to complete our Business Combination, we would be compelled to either restructure the transaction

or abandon that particular Business Combination and seek an alternative target business candidate.

If we are unable to complete

our Business Combination, our public stockholders may receive only approximately $10.00 per share plus any pro rata interest earned

on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $75,000

of interest to pay dissolution expenses) on the liquidation of our Trust Account and our warrants will expire worthless.

even if we do not need additional financing to complete our Business Combination, we may require such financing to fund the operations

or growth of the target business.

The failure to secure additional financing could have a material adverse effect on the continued

development or growth of the target business.

None of our officers, directors or stockholders

is required to provide any financing to us in connection with or after our Business Combination.

If we are unable to complete

our Business Combination, our public stockholders may only receive approximately $10.00 per share on the liquidation of our Trust

Account, and our warrants will expire worthless.

Risks Related to Our Securities

You will not have any rights or interests

in funds from the Trust Account, except under certain limited circumstances.

To liquidate your investment, therefore, you may

be forced to sell your public shares or warrants, potentially at a loss.

Our public stockholders will be entitled

to receive funds from the Trust Account only upon the earliest to occur of:

(i) our completion of a Business Combination, (ii)

the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated

certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do

not complete our Business Combination during the Combination Period and (iii) the redemption of our public shares if we are unable

to complete a Business Combination during the Combination Period, subject to applicable law and as further described herein.

addition, if we are unable to complete a Business Combination during the Combination Period for any reason, compliance with Delaware

law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution

of the proceeds held in our Trust Account.

In that case, public stockholders may be forced to wait beyond during the Combination

Period before they receive funds from our Trust Account.

In no other circumstances will a public stockholder have any right or

interest of any kind in the Trust Account.

Accordingly, to liquidate your investment, you may be forced to sell your public shares

or warrants, potentially at a loss.

You will not be entitled to protections

normally afforded to investors of many other blank check companies.

Because we have net tangible assets in

excess of $5,000,000 and timely filed a Current Report on Form 8-K after the IPO Closing Date, including an audited balance sheet

demonstrating this fact, we are exempt from rules promulgated by the SEC to protect stockholders in blank check companies, such

Accordingly, stockholders are not afforded the benefits or protections of those rules.

Among other things, this means

our Units were immediately tradable at the IPO Closing Date and we will have a longer period of time to complete our Business

Combination than do companies subject to Rule 419.

Moreover, if we were subject to Rule 419, that rule would prohibit the release

of any interest earned on funds held in the Trust Account to us unless and until the funds in the Trust Account were released

to us in connection with our completion of a Business Combination.

If we seek stockholder approval of

our Business Combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group”

of stockholders are deemed to hold in excess of 20% of our common stock, you will lose the ability to redeem all such shares in

excess of 20% of our common stock.

If we seek stockholder approval of our

Business Combination and we do not conduct redemptions in connection with our Business Combination pursuant to the tender offer

rules, our 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 Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20%

of the public shares sold in the IPO, which we refer to as the “Excess Shares.” However, this does not restrict our

stockholders’ ability to vote all of their shares (including Excess Shares) for or against our Business Combination.

inability to redeem the Excess Shares will reduce a stockholder’s influence over our ability to complete our Business Combination

and could result in a stockholder suffering a material loss on investment if the stockholder sells Excess Shares in open market

transactions.

Additionally, redemption distributions will not be made with respect to the Excess Shares if we complete our Business

As a result, such stockholder would continue to hold the Excess Shares and, in order to dispose of such shares, would

be required to sell such stock in open market transactions, potentially at a loss.

Because of our limited resources and

the significant competition for Business Combination opportunities, it may be more difficult for us to complete our Business Combination.

If we are unable to complete our Business Combination, our public stockholders may receive only approximately $10.00 per share

on our redemption of our public shares, or less than such amount in certain circumstances, and our warrants will expire worthless.

We expect to encounter intense competition

from other entities having a business objective similar to ours, including private investors (which may be individuals or investment

partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses

we intend to acquire.

Many of these individuals and entities are well-established and have extensive experience in identifying

and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.

of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our

financial resources will be relatively limited when contrasted with those of many of these competitors.

While we believe there

are numerous target businesses we could potentially acquire with the net proceeds of the Initial Public Offering and the Concurrent

Private Placement, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be

limited by our available financial resources.

This inherent competitive limitation gives others an advantage in pursuing the acquisition

of certain target businesses.

Furthermore, because we are obligated to pay cash for the shares of common stock which our public

stockholders redeem in connection with our Business Combination, target companies will be aware that this may reduce the resources

available to us for our Business Combination.

This may place us at a competitive disadvantage in successfully negotiating a Business

If we are unable to complete our Business Combination, our public stockholders may receive only approximately $10.00

per share on the liquidation of our Trust Account and our warrants will expire worthless.

In certain circumstances, our public

stockholders may receive less than $10.00 per share upon our liquidation.

See “— If third parties bring claims against

us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be

less than $10.00 per share” and other risk factors below.

If the net proceeds of our Initial

Public Offering and Concurrent Private Placement not being held in the Trust Account are insufficient to allow us to operate during

the Combination Period, we may be unable to complete our Business Combination, in which case our public stockholders may only

receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.

As of December 31, 2020, we have $49,202

available to us outside the Trust Account to fund our working capital requirements.

The funds available to us outside of the Trust

Account may not be sufficient to allow us to operate during the Combination Period assuming that our Business Combination is not

completed during that time.

Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants

to assist us with our search for a target business.

If we are unable to complete our Business Combination, our public stockholders may receive only approximately $10.00 per share

on the liquidation of our Trust Account and our warrants will expire worthless.

In certain circumstances, our public stockholders

may receive less than $10.00 per share upon our liquidation.

See “— If third parties bring claims against us, the

proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than

$10.00 per share” and other risk factors below.

If third parties bring claims against

us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be

less than $10.00 per share.

Our placing of funds in the Trust Account

may not protect those funds from third-party claims against us.

Although we will seek to have all vendors, service providers (other

than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with

us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our

public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented

from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility

or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage

with respect to a claim against our assets, including the funds held in the Trust Account.

If any third party refuses to execute

an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives

available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes

that such third party’s engagement would be significantly more beneficial to us than any alternative.

Examples of possible instances where we

may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise

or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver

or in cases where management is unable to find a service provider willing to execute a waiver.

In addition, there is no guarantee

that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations,

contracts or agreements with us and will not seek recourse against the Trust Account for any reason.

Upon redemption of our public

shares, if we are unable to complete our Business Combination within the prescribed timeframe, or upon the exercise of a redemption

right in connection with our Business Combination, we will be required to provide for payment of claims of creditors that were

not waived that may be brought against us within the 10 years following redemption.

Accordingly, the per-share redemption amount

received by public stockholders could be less than $10.00 per share (plus any pro rata interest earned on the funds held in the

Trust Account and not previously released to us to pay our franchise and income taxes) , due to claims of such creditors.

sponsor has agreed that it will be liable to us, jointly and severally, if and to the extent any claims by a vendor (other than

our independent public accountants) for services rendered or products sold to us, or a prospective target business with which we

have discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per public

share or (ii) such lesser amount per public 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, in each case net, of the interest which may be withdrawn to pay our franchise

and income tax obligations.

This liability will not apply with respect to any claims by a third party who executed a waiver of

any and all rights to seek access to the Trust Account and except as to any claims under our indemnity of the underwriters of our

Initial Public Offering against certain liabilities, including liabilities under the Securities Act.

Moreover, in the event that

an executed waiver is deemed to be unenforceable against a third party, then our sponsors will not be responsible to the extent

of any liability for such third-party claims.

We have not independently verified whether each sponsor has sufficient funds to satisfy

its indemnity obligations and believe that our sponsors’ only substantive assets are securities of our company.

asked our sponsors to reserve for such indemnification obligations.

Therefore, we cannot assure you that our sponsors would be

able to satisfy those obligations.

As a result, if any such claims were successfully made against the Trust Account, the funds

available for our Business Combination and redemptions could be reduced to less than $10.00 per public share.

In such event, we

may not be able to complete our Business Combination, and you would receive such lesser amount per share in connection with any

redemption of your public shares.

None of our officers or directors will indemnify us for claims by third parties including, without

limitation, claims by vendors and prospective target businesses.

Our directors may decide not to enforce

the indemnification obligations of our sponsors, resulting in a reduction in the amount of funds in the Trust Account available

for distribution to our public stockholders.

In the event that the proceeds in the

Trust Account are reduced 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, in each case

net of the interest which may be withdrawn to pay our franchise and income tax obligations, and each sponsor asserts that it is

unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent

directors would determine whether to take legal action against our sponsors to enforce their indemnification obligations.

While we currently expect that our independent

directors would take legal action on our behalf against our sponsors to enforce their indemnification obligations to us, it is

possible that our independent directors in exercising their business judgment may choose not to do so if, for example, the cost

of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent

directors determine that a favorable outcome is not likely.

If our independent directors choose not to enforce these indemnification

obligations, the amount of funds in the Trust Account available for distribution to our public stockholders may be reduced below

$10.00 per share.

If, after we distribute the proceeds

in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed

against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board may be exposed to

claims of punitive damages.

If, after we distribute the proceeds in

the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against

us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy

laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court

could seek to recover all amounts received by our stockholders.

In addition, our board of directors may be viewed as having breached

its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages,

by paying public stockholders from the Trust Account prior to addressing the claims of creditors.

If, before distributing the proceeds

in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed

against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders

and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in

the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against

us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included

in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders.

extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our stockholders

in connection with our liquidation may be reduced.

If we are deemed to be an investment

company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities

may be restricted, which may make it difficult for us to complete our business combination.

If we are deemed to be an investment company

under the Investment Company Act, our activities may be restricted, including:

restrictions on

the nature of our investments;

restrictions on

the issuance of securities, each of which may make it difficult for us to complete our Business Combination.

In addition, we may have imposed upon

us burdensome requirements, including:

registration as

an investment company;

adoption of a specific

form of corporate structure;

reporting, record

keeping, voting, proxy and disclosure requirements and other rules and regulations.

In order not to be regulated as an investment

company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily

in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting,

owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S.

government securities and cash items) on an unconsolidated basis.

Our business will be to identify and complete a Business Combination

and thereafter to operate the post-transaction business or assets for the long term.

We do not plan to buy businesses or assets

with a view to resale or profit from their resale.

We do not plan to buy unrelated businesses or assets or to be a passive investor.

We do not believe that our anticipated

principal activities will subject us to the Investment Company Act.

To this end, the proceeds held in the Trust Account may only

be invested in United States “government securities” within the meaning of Section 2(a) (16) of the Investment Company

Act having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under

the Investment Company Act which invest only in direct U.S.

government treasury obligations.

Pursuant to the trust agreement,

the trustee is not permitted to invest in other securities or assets.

By restricting the investment of the proceeds to these instruments,

and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling

businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company”

within the meaning of the Investment Company Act.

The Trust Account is intended as a holding place for funds pending the earliest

(i) the completion of our primary business objective, which is a Business Combination;

(ii) the redemption of any

public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation

to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our Business Combination

during the Combination Period;

or (iii) absent a Business Combination, our return of the funds held in the Trust Account to our

public stockholders as part of our redemption of the public shares.

If we do not invest the proceeds as discussed above, we may

be deemed to be subject to the Investment Company Act.

If we were deemed to be subject to the Investment Company Act, compliance

with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder

our ability to complete a Business Combination.

If we are unable to complete our Business Combination, our public stockholders

may receive only approximately $10.00 per share on the liquidation of our Trust Account and our warrants will expire worthless.

Changes in laws or regulations, or

a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.

We are subject to laws, regulations and

rules enacted by national, regional and local governments and Nasdaq.

In particular, we will be required to comply with certain

SEC and other legal requirements or regulations.

Compliance with, and monitoring of, applicable laws and regulations may be difficult,

time consuming and costly.

Those laws and regulations and their interpretation and application may also change from time to time

and those changes could have a material adverse effect on our business, investments and results of operations.

In addition, a

failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our

business and results of operations.

Our stockholders may be held liable

for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

Under the DGCL, stockholders may be held

liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.

pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares in the event

we do not complete our Business Combination during the Combination Period may be considered a liquidating distribution under Delaware

If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable

provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against

the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting

period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating

distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the

stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.

is our intention to redeem our public shares as soon as reasonably possible following during the Combination Period in the event

we do not complete our Business Combination and, therefore, we do not intend to comply with the foregoing procedures.

Because we will not be complying with

Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide

for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following

our dissolution.

However, because we are a blank check company, rather than an operating company, and our operations will be limited

to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as

lawyers, investment bankers, etc.) or prospective target businesses.

If our plan of distribution complies with Section 281(b)

of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s

pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be

barred after the third anniversary of the dissolution.

We cannot assure you that we will properly assess all claims that may be

potentially brought against us.

Further, stockholders will not know at the time of dissolution the scope of potential claims against

As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but

no more) and any liability of our stockholders may extend beyond the third anniversary of such date.

Furthermore, if the pro rata

portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do

not complete our Business Combination during the Combination Period is not considered a liquidating distribution under Delaware

law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations

for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the

case of a liquidating distribution.

We are not registering the shares of

common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such

registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able

to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.

We are not registering the shares of common

stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time.

However, under

the terms of the warrant agreement, we have agreed to use our best efforts to file a registration statement under the Securities

Act covering such shares and maintain a current prospectus relating to the common stock issuable upon exercise of the warrants,

until the expiration of the warrants in accordance with the provisions of the warrant agreement.

We cannot assure you that we

will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth

in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current

or correct or the SEC issues a stop order.

If the shares issuable upon exercise of the warrants are not registered under the Securities

Act, we will be required to permit holders to exercise their warrants on a cashless basis.

However, no warrant will be exercisable

for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants,

unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the

exercising holder, or an exemption from registration is available.

Notwithstanding the above, if our common stock is at the time

of any exercise of a 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, we may, at our 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 we so elect, we will not be required to file or maintain in effect a registration statement, but we will be required to

use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the

warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities

laws and there is no exemption available.

If the issuance of the shares upon exercise of the warrants is not so registered or

qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant

and such warrant may have no value and expire worthless.

In such event, holders who acquired their warrants as part of a purchase

of units will have paid the full unit purchase price solely for the shares of common stock included in the units.

the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying

shares of common stock for sale under all applicable state securities laws.

The grant of registration rights to

our initial stockholders may make it more difficult to complete our Business Combination, and the future exercise of such rights

may adversely affect the market price of our common stock.

Pursuant to an agreement entered into

on the IPO Closing Date, our initial stockholders and our strategic investor and their permitted transferees can demand that we

register their founder shares, the shares issuable pursuant to the contingent forward purchase contract, the shares of common

stock issuable upon exercise of the warrants pursuant to the contingent forward purchase contract, the private placement warrants

and the shares of common stock issuable upon exercise of the private placement warrants held by them and holders of warrants that

may be issued upon conversion of working capital loans may demand that we register such warrants or the common stock issuable

upon exercise of such warrants.

In addition, given that the lock-up period on the founder shares is potentially shorter than most

other blank check companies, these shares may become registered and available for sale sooner than founder shares in such other

We will bear the cost of registering these securities.

The registration and availability of such a significant number

of securities for trading in the public market may have an adverse effect on the market price of our common stock.

the existence of the registration rights may make our Business Combination more costly or difficult to conclude.

This is because

the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration

to offset the negative impact on the market price of our common stock that is expected when the securities owned by our initial

stockholders or holders of working capital loans or their respective permitted transferees are registered.

We do not have a specified maximum

redemption threshold.

The absence of such a redemption threshold may make it possible for us to complete a Business Combination

with which a substantial majority of our stockholders do not agree.

Our amended and restated certificate of

incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares

in an amount that would cause our net tangible assets to be less than $5,000,001 (such that we are not subject to the SEC’s

“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement

relating to our Business Combination.

As a result, we may be able to complete our Business Combination even though a substantial

majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder

approval of our Business Combination and do not conduct redemptions in connection with our Business Combination pursuant to the

tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsors, strategic investor,

officers, directors, advisors or their affiliates.

In the event the aggregate cash consideration we would be required to pay for

all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant

to the terms of the proposed Business Combination exceed the aggregate amount of cash available to us, we will not complete the

Business Combination or redeem any shares, all shares of common stock submitted for redemption will be returned to the holders

thereof, and we instead may search for an alternate Business Combination.

The exercise price for the public warrants

is higher than in many similar blank check company offerings in the past, and, accordingly, the warrants are more likely to expire

The exercise price of the public warrants

is higher than is typical in many similar blank check companies in the past.

Historically, the exercise price of a warrant was

generally a fraction of the purchase price of the units in the initial public offering.

The exercise price for our public warrants

is $11.50 per share.

As a result, the warrants are less likely to ever be in the money and more likely to expire worthless.

In order to effectuate our Business

Combination, we may seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that

will make it easier for us to complete our Business Combination but that our stockholders may not support.

In order to effectuate a Business Combination,

blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments.

For example, blank check companies have amended the definition of Business Combination, increased redemption thresholds and changed

industry focus.

We cannot assure you that we will not seek to amend our charter or governing instruments in order to effectuate

our Business Combination.

The provisions of our amended and restated

certificate of incorporation that relate to our pre-Business Combination activity (and corresponding provisions of the agreement

governing the release of funds from our Trust Account) may be amended with the approval of holders of 65% of our common stock,

which is a lower amendment threshold than that of some other blank check companies.

It may be easier for us, therefore, to amend

our amended and restated certificate of incorporation and the trust agreement to facilitate the completion of a Business Combination

that some of our stockholders may not support.

Some other blank check companies have

a provision in their charter that prohibits the amendment of certain of its provisions, including those which relate to a company’s

pre-Business Combination activity, without approval by a certain percentage of the company’s stockholders.

In those companies,

amendment of these provisions requires approval by between 90% and 100% of the company’s public stockholders.

and restated certificate of incorporation provides that any of its provisions related to pre-Business Combination activity (including

the requirement to deposit proceeds of our Initial Public Offering and the Concurrent Private Placement into the Trust Account

and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described

herein) may be amended if approved by holders of 65% of our common stock entitled to vote thereon, and corresponding provisions

of the trust agreement governing the release of funds from our Trust Account may be amended if approved by holders of 65% of our

common stock entitled to vote thereon.

In all other instances, our amended and restated certificate of incorporation may be amended

by holders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable provisions of the DGCL

or applicable stock exchange rules.

Our initial stockholders, who collectively beneficially own founder shares representing approximately

21% of our common stock, will participate in any vote to amend our amended and restated certificate of incorporation and/or trust

agreement and will have the discretion to vote in any manner they choose.

As a result, we may be able to amend the provisions

of our amended and restated certificate of incorporation which govern our pre-Business Combination behavior more easily than some

other blank check companies, and this may increase our ability to complete a Business Combination with which you do not agree.

Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.

Our sponsors, strategic investor, officers

and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and

restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public

shares if we do not complete our Business Combination during the Combination Period, unless we provide our public stockholders

with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable

in cash, equal to the aggregate amount then on deposit in the Trust Account, divided by the number of then outstanding public

These agreements are contained in a letter agreement that we have entered into with initial stockholders.

Our stockholders

are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies

against our sponsors, strategic investor, officers or directors for any breach of these agreements.

As a result, in the event

of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.

Our initial stockholders may exert

a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.

As of December 31, 2020, our initial stockholders

own founder shares representing approximately 80.3% of our issued and outstanding shares of common stock and our strategic investor

owns an additional 1,000,000 public shares (which were acquired as part of units purchased in our Initial Public Offering), representing

aggregate ownership of 96.4% of the outstanding shares of common stock.

Accordingly, our initial stockholders may exert a substantial

influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our

amended and restated certificate of incorporation and approval of major corporate transactions.

If our initial stockholders purchase

any additional shares of common stock in the open market or in privately negotiated transactions, this would increase their control.

Factors that would be considered in making such additional purchases would include consideration of the current trading price of

our common stock.

In addition, because of their ownership position, our initial stockholders will continue to have considerable

influence on elections for our boards of directors and will continue to exert control at least until the completion of our Business

We may amend the terms of the warrants

in a manner that may be adverse to holders with the approval by the holders of at least 50% of the then outstanding public warrants.

As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of

shares of our common stock purchasable upon exercise of a warrant could be decreased, all without your approval.

Our warrants were issued in registered

form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us.

The warrant agreement

provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any

defective provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make

any change that adversely affects the interests of the registered holders.

Accordingly, we may amend the terms of the public warrants

in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.

Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public

warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of

the warrants, shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a

We may redeem your unexpired warrants

prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

We have the ability to redeem outstanding

warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that

the last reported sales price of our common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day

period ending on the third trading day prior to the date on which we give proper notice of such redemption and provided certain

other conditions are met.

If and when the warrants become redeemable by us, we may exercise our redemption right even if we are

unable to register or qualify the underlying securities for sale under all applicable state securities laws.

Redemption of the

outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be

disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to

hold your warrants or (iii) to accept the nominal redemption price of $0.01 per warrant which, at the time the outstanding warrants

are called for redemption, is likely to be substantially less than the market value of your warrants.

None of the private placement

warrants will be redeemable by us so long as they are held by their initial purchasers or their permitted transferees.

Our warrants and founder shares may

have an adverse effect on the market price of our common stock and make it more difficult to effectuate our Business Combination.

We issued warrants to purchase 10,000,000

shares of our common stock as part of the units offered in our Initial Public Offering and we issued warrants to purchase an aggregate

of 6,825,000 shares of common stock at $11.50 per share in the Concurrent Private Placement.

Our initial stockholders currently

own an aggregate of 5,000,000 founder shares.

In addition, our sponsors or strategic investor made working capital loans in the

aggregate amount of $1,460,000, as of March 10, 2021, of which $1,000,000 has been converted to warrants and an additional $460,000

loans may be converted into warrants, at the price of $1.00 per warrant at the option of the lender.

Such warrants would be identical

to the private placement warrants, including as to exercise price, exercisability and exercise period.

In addition, we issued to

GTWY Holdings Limited warrants to purchase 566,288 shares of LACQ common stock in exchange for previously outstanding loans under

the GTWY Expense Advancement Agreement.

To the extent we issue shares of common

stock to effectuate a Business Combination, the potential for the issuance of a substantial number of additional shares of common

stock upon exercise of these warrants and conversion rights could make us a less attractive acquisition vehicle to a target business.

Any such issuance will increase the number of issued and outstanding shares of our common stock and reduce the value of the shares

of common stock issued to complete the Business Combination.

Therefore, our warrants and founder shares may make it more difficult

to effectuate a Business Combination or increase the cost of acquiring the target business.

The private placement warrants are identical

to the warrants sold as part of the units in our Initial Public Offering except that, so long as they are held by their initial

purchasers or their permitted transferees, (i) they will not be redeemable by us, (ii) they (including the common stock issuable

upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by such purchasers

until 30 days after the completion of our Business Combination, (iii) they may be exercised by the holders on a cashless basis

and (iv) are subject to registration rights.

Because each unit contains one-half

of one warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.

Each unit contains one-half of one warrant.

Because, pursuant to the warrant agreement, the warrants may only be exercised for a whole number of shares, only a whole warrant

may be exercised at any given time.

This is different from other offerings similar to ours whose units include one share of common

stock and one warrant to purchase one whole share.

We have established the components of the units in this way in order to reduce

the dilutive effect of the warrants upon completion of a Business Combination since the warrants will be exercisable in the aggregate

for one-half of the number of shares compared to units that each contain a warrant to purchase one whole share, thus making us,

we believe, a more attractive merger partner for target businesses.

Nevertheless, this unit structure may cause our units to be

worth less than if they included a warrant to purchase one whole share.

Because we must furnish our stockholders

with target business financial statements, we may lose the ability to complete an otherwise advantageous Business Combination

with some prospective target businesses.

The federal proxy rules require that a

proxy statement with respect to a vote on a Business Combination meeting certain financial significance tests include target historical

and/or pro forma financial statement disclosure in periodic reports.

We will include the same financial statement disclosure in

connection with our tender offer documents, whether or not they are required under the tender offer rules.

These financial statements

may be required to be prepared in accordance with, or be reconciled to, GAAP or IFRS depending on the circumstances and the historical

financial statements may be required to be audited in accordance with the standards of the PCAOB.

These financial statement requirements

may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial

statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our Business

Combination within the prescribed time frame.

We are an emerging growth company within

the meaning of the Securities Act, as well as a smaller reporting company within the meaning of the Securities Act, and if we

take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting

companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance

with other public companies.

We are an “emerging growth company”

within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various

reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not

limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced

disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the

requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute

payments not previously approved.

As a result, our stockholders may not have access to certain information they may deem important.

We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier,

including if the market value of our common stock held by non-affiliates exceeds $700 million as of any June 30 before that time,

in which case we would no longer be an emerging growth company as of the following December 31.

We cannot predict whether investors

will find our securities less attractive because we will rely on these exemptions.

If some investors find our securities less

attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise

Related to Our Business, Financial Condition and Capital Requirements

are a clinical-stage pharmaceutical company with a limited operating history.

We have incurred significant financial losses since our

inception and anticipate that we will continue to incur significant financial losses for the foreseeable future.

are a clinical-stage pharmaceutical company with a limited operating history.

We have not yet demonstrated an ability to generate revenues,

obtain regulatory approvals, engage in clinical development beyond Phase 1 trials, manufacture any product on a commercial scale or arrange

for a third party to do so on our behalf or enter into licensing arrangements to commercialize a product, or conduct sales and marketing

activities necessary for successful product commercialization.

have no products approved for commercial sale and we have not generated any revenue from product sales to date, nor do we expect to generate

any significant revenue from product sales for the next few years.

We will continue to incur significant research and development and

other expenses related to our product development, preclinical and clinical activities and ongoing operations.

As a result, we are not

profitable and have incurred losses in each period since our inception.

Net losses and negative cash flows have had, and will continue

to have, an adverse effect on our stockholders’ equity and working capital.

Our net loss was $29.1 million for the year ended December

As of December 31, 2021, we had an accumulated deficit of $85.8 million.

We expect to continue to incur significant losses

for the foreseeable future as we continue our research and development of, and seek regulatory approvals for, our product candidates.

we continue to suffer losses as we have since inception, investors may not receive any return on their investment and may lose their

entire investment.

addition, as a public company, we incur significant additional legal, accounting and other expenses that we did not incur as a private

company as we:

the requirements and demands of being a public company;

our operational, financial and management systems and increases personnel to support our operations;

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

our clinical-stage product candidate PF614 through clinical development;

our preclinical stage product candidates into clinical development;

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

any pre-commercialization activities to establish sales, marketing and distribution capabilities for any product candidates for which

we may receive regulatory approval in regions where we choose to commercialize our products on our own or jointly with third parties;

expand and protect our intellectual property portfolio;

milestone, royalty or other payments due under any future in-license or collaboration agreements.

Pharmaceutical

product development entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail

to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, secure market access and reimbursement and

become commercially viable.

Therefore, any investment in us would be highly speculative.

Our prospects are subject to the costs, uncertainties,

delays and difficulties frequently encountered by companies in clinical development, especially clinical-stage pharmaceutical companies

such as ours.

Any predictions you make about our future success or viability may not be as accurate as they would otherwise be if we

had a longer operating history or a history of successfully developing and commercializing pharmaceutical products.

We will likely encounter

unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives.

Additionally,

our expenses could increase beyond our expectations if we are required by the United States Food and Drug Administration, or FDA, or

other regulatory authorities to perform clinical trials in addition to those that we currently expect to conduct, or if there are any

delays in establishing appropriate manufacturing arrangements for or in completing our clinical trials or the development of any of our

product candidates.

ability to generate revenue from any of our potential products is subject to our ability to obtain regulatory approval and fulfill numerous

other requirements and we may never be successful in generating revenues or becoming profitable.

ability to become and remain profitable depends on our ability to generate revenue or execute other business development arrangements.

We do not expect to generate significant revenue, if any, unless and until we are able to obtain regulatory approval for, and successfully

commercialize the product candidates we are developing or may develop.

Successful commercialization, to the extent it occurs, will require

achievement of many key milestones, including demonstrating safety and efficacy in clinical trials, obtaining regulatory approval for

these product candidates, manufacturing, marketing and selling, or entering into other agreements to commercialize, those products for

which we may obtain regulatory approval, satisfying any post-marketing requirements and obtaining reimbursement for our products from

private insurance or government payors.

Because of the uncertainties and risks associated with these activities, we cannot accurately

and precisely predict the timing and amount, if any, of revenues, the extent of any further losses or when we might achieve profitability.

We may never succeed in these activities and, even if we do, we may never generate revenues that are sufficient enough for us to achieve

profitability.

Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual

failure to become and remain profitable may depress the market price of our common stock and could impair our ability to raise capital,

expand our business, diversify our product offerings or continue our operations.

require substantial additional funding.

If we are unable raise capital when needed, we could be forced to delay, reduce or terminate

our product discovery and development programs or commercialization efforts.

are a clinical stage pharmaceutical company that will need to raise additional capital to continue to operate as a going concern.

quarterly operating results are likely to show continued losses in the future.

Our operations have consumed substantial amounts of cash

since inception.

We expect to continue to spend substantial amounts to continue the clinical and preclinical development of our product

candidates, including our planned Phase 2 program for nafamostat and planned clinical trials for PF614 and PF614-MPAR™.

need to raise additional capital to complete our currently planned clinical trials and any future clinical trials.

Other unanticipated

costs may arise in the course of our development efforts.

If we are able to obtain marketing approval for product candidates that we

develop, we would require significant additional amounts of funding in order to launch and commercialize such product candidates.

cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of any product

candidate we develop and we may require substantial additional funding to complete the development and commercialization of our product

future need for additional funding depends on many factors, including:

scope, progress, results and costs of researching and developing our current product candidates, as well as other additional product

candidates we may develop and pursue in the future, including the costs related to preclinical and clinical development of the product;

timing of, and the costs involved in, obtaining marketing approvals for our product candidates and any other additional product candidates

we may develop and pursue in the future;

number of future product candidates that we may pursue and their development requirements;

to receipt of regulatory approval, the costs of commercialization activities for our product candidates, to the extent such costs

are not the responsibility of any future collaborators, including the costs and timing of establishing product sales, marketing,

distribution and manufacturing capabilities;

to receipt of regulatory approval, the amount of revenue, if any, received from commercial sales of our product candidates or any

other additional product candidates we may develop and pursue in the future;

extent to which we in-license or acquire rights to other products, product candidates or technologies;

ability to establish collaboration arrangements for the development of our product candidates on favorable terms, if at all;

headcount growth and associated costs as we expand our research and development and establishes a commercial infrastructure;

costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights, including

enforcing and defending intellectual property related claims;

costs of operating as a public company.

change in the outcome of any of these or other factors with respect to the development of any of our product candidates could significantly

change the costs and timing associated with the development of that product candidate, and many of these factors are outside of our control.

Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain

process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory and marketing

approval and achieve product sales.

In addition, our product candidates, if approved, may not achieve commercial success.

we will need to continue to rely on additional financing to achieve our business objectives.

We cannot be certain that additional funding

will be available on acceptable terms, or at all.

Please see the risk factors under “ Risks Related to the Ownership of Common

Stock and Financial Reporting .”

believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements

through the third quarter of 2022, while continuing to advance our main product candidates, such as PF614 and PF614 MPAR™, through

clinical development.

Our estimate may prove to be wrong, and we could use our available capital resources, if any, sooner than we currently

Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster

than we currently anticipate, and we may need to seek additional funds sooner than planned.

To the extent this occurs, it could impose

significant dilution on our stockholders.

may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds

for our current or future operating plans.

Attempting to secure additional financing may divert our management from our day-to-day activities,

which may adversely affect our ability to develop our product candidates.

Our failure to raise capital as and when needed or on acceptable

terms would have a negative impact on our financial condition and our ability to pursue our business strategy, and we may have to delay,

reduce the scope of, suspend or eliminate one or more of our platforms, programs, planned clinical trials or future commercialization

may incur additional dilution upon repayment of the 2021 Notes with common stock.

the terms of the SPA, we are permitted to repay principal and interest on the 2021 Notes by issuing additional shares of common stock.

In addition, the conversion price of the 2021 Notes, and the exercise price of the warrants issued therewith, are subject to downward

revision in the event we make certain issuances of our common stock at prices below the conversion price.

We have registered shares of

common stock under a Registration Statement on Form S-1 in the event either of these events occur.

In such case, stockholders will have

dilution in amounts exceeding the straight conversion of the 2021 Notes or, with respect to the warrants issued therewith, we

will receive a reduced level of proceeds from the exercise of the warrants.

price of our common stock on the Nasdaq and Public Warrants on the OTC Pink Open Market may be volatile.

price of our common stock on the Nasdaq and our Public Warrants on the OTC Pink Open Market may fluctuate due to a variety of factors,

in the industries in which we and our customers operate;

in our operating performance and the performance of our competitors in general;

and adverse impact of the COVID-19 pandemic on the markets and the broader global economy;

or anticipated fluctuations in our quarterly or annual operating results;

of research reports by securities analysts about us, our competitors or our industry;

public’s reaction to our press releases, other public announcements and filings with the SEC;

failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to

and departures of key personnel;

in laws and regulations affecting our business;

of, or involvement in, litigation involving us;

about, among other things, the results of our clinical trials or other developments, or the use or abuse of opioids,

in our capital structure, such as future issuances of securities or the incurrence of additional debt;

or anticipated sales, of large blocks of our common stock;

volume of shares of our common stock available for public sale;

economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs,

social, political and economic risks and acts of war or terrorism.

and other factors, many of which are beyond our control, may cause the market price and demand for our shares of common stock to fluctuate

substantially.

Low trading volume could increase the volatility of our share price in response to news in the market, could prevent investors

from readily selling their shares and may otherwise negatively affect the market price and liquidity of our shares.

In addition, in the

past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation

against the company that issued the stock.

If any of our stockholders brought a lawsuit against us, we could incur substantial costs

defending the lawsuit.

Such a lawsuit could also divert the time and attention of our management from our business, which could significantly

harm our profitability and reputation.

proceeds under the GEM Agreement may be less than anticipated.

The issuances of common stock pursuant to the GEM Agreement would result

in dilution of existing stockholders and could have a negative impact on the market price of our common stock.

Additionally, the negative

covenants under the GEM Agreement are onerous and any breach by us thereunder may entitle GEM Global and GYBL to indemnification payments,

reimbursements of legal and other expenses and other compensation thereby diverting our time and resources.

are entitled to draw down up to $60.0 million of gross proceeds from GEM Global in exchange for shares of our common stock at a price

equal to 90% of the average closing bid price of the shares of our common stock on Nasdaq for a 30-day period, subject to meeting the

terms and conditions of the GEM Agreement.

This share subscription facility is available for a period of 36 months from the closing date

of the Merger.

Please see the section entitled “ Business ” for additional information.

The limitations on the amount

and frequency of the draws that we can make under the GEM facility, which include the requirement that (i) there be an effective registration

statement and (ii) size restrictions relating to our trading volume, may affect the ability to draw under the GEM Agreement and result

in proceeds that are less than anticipated.

In addition, while the 2021 Notes are outstanding, any draws under the GEM facility would

require approval from the convertible note holders.

occurrence of the Merger triggered (i) payment of a commitment fee of $1.2 million to GEM Global payable in either our common stock or

cash and (ii) the issuance of a warrant granting GYBL the right to purchase 1,106,108 shares of our common stock, at a strike price per

share of $10.01, the closing bid price for such common shares on the closing date of the Merger.

The number of shares underlying the

warrant as well as the strike price is subject to adjustments for recapitalizations, reorganizations, change of control, stock split,

stock dividend, reverse stock splits and certain issuances of additional shares of our common stock.

issuances of shares at discount under the GEM Agreement and the anti-dilution protection granted to GEM Global in connection with issuances

of additional shares of our common stock, would result in dilution of existing stockholders and have a negative impact on the market

price of our common stock and our ability to obtain equity financing.

An adjustment in the price of the GEM Warrant to $4.50 occurred

in connection with our offering of the 2021 Notes.

In addition, terms of the 2021 Notes currently limit our ability to draw on

the GEM facility while the 2021 Notes remain outstanding.

addition, the negative covenants under the GEM Agreement are onerous and any breach thereof may trigger indemnification, reimbursement

of losses and other liability for us thereby diverting our time and resources.

additional capital could cause dilution to our stockholders, adversely affect the market price of our common stock, restrict our operations

or require us to relinquish rights to our technologies or product candidates.

such time, if ever, as we can generate substantial revenues, we will be required to obtain further funding through public or private

equity offerings, debt financings, collaborations and licensing arrangements or other sources, which may dilute our stockholders or restrict

our operating activities.

Adequate additional financing may not be available to us on acceptable terms, or at all.

To the extent that

we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the

terms may include liquidation or other preferences that adversely affect your rights as a stockholder.

addition, we may sell securities in the public or private equity markets if and when conditions are favorable, or at prices per share

below the current market price of our common stock, even if we do not have an immediate need for additional capital at that time.

of substantial amounts of shares of our common stock, or the perception that such sales could occur, could adversely affect the prevailing

market price of our shares and our ability to raise capital.

We may issue additional shares of common stock in future financing transactions

or as incentive compensation for our executive management and other key personnel, consultants and advisors.

Issuing any equity securities

would be dilutive to the equity interests represented by our then-outstanding shares of common stock.

Moreover, sales of substantial

amounts of shares in the public market, or the perception that such sales could occur, may adversely affect the prevailing market price

of our common stock and make it more difficult for us to raise additional capital.

financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability

to take specific actions, such as incurring additional debt, making acquisitions, engaging in acquisition, merger or collaboration transactions,

selling or licensing our assets, making capital expenditures, redeeming our stock, making certain investments, declaring dividends or

encumbering our assets to secure future indebtedness.

Such restrictions could adversely impact our ability to conduct our operations

and execute our business plan.

we raise additional funds through upfront payments or milestone payments pursuant to strategic collaborations, strategic alliances or

marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or

intellectual property, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit,

reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates

that we would otherwise prefer to develop and market ourselves.

business is highly dependent on the success of our product candidates.

If we are unable to successfully complete clinical development,

obtain regulatory approval for or commercialize one or more of our product candidates, or if we experience delays in doing so, our business

will be materially harmed.

future success and ability to generate significant revenue from our product candidates, which we do not expect will occur for several

years, is dependent on our ability to successfully develop, obtain regulatory approval for and commercialize one or more of our product

A Phase 1b study of PF614 was initiated in 2021, and Part A of the study completed enrollment in December 2021.

trial was also initiated for PF614-MPAR™ in December 2021.

All of our other product candidates are in earlier stages of development

and will require substantial additional investment for manufacturing, preclinical testing, clinical development, regulatory review and

approval in one or more jurisdictions.

If any of our product candidates encounter safety or efficacy problems, development delays or

regulatory issues or other problems, our development plans and business would be materially harmed.

may not have the financial resources to continue development of our product candidates.

Even if clinical trials are completed, we may

experience other issues that may delay or prevent regulatory approval of, or our ability to commercialize, our product candidates, including:

to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and

insufficiency

of our financial and other resources to complete the necessary clinical trials and preclinical studies;

or inconclusive results from our clinical trials, preclinical studies or the clinical trials of others for product candidates that

are similar to ours, leading to a decision or requirement to conduct additional clinical trials or preclinical studies or abandon

product-related

adverse events experienced by subjects in our clinical trials, including unexpected toxicity results, or by individuals using drugs

or therapeutic biologics similar to our product candidates;

in submitting an Investigational New Drug application, or IND, or comparable foreign applications or delays or failure in obtaining

the necessary approvals from regulators to commence a clinical trial or a suspension or termination, or hold, of a clinical trial

once commenced;

imposed by the FDA, the European Medicines Agency, or EMA, or comparable foreign regulatory authorities regarding the scope or design

of our clinical trials;

effectiveness of our product candidates during clinical trials;

than expected performance of control arms, such as placebo groups, which could lead to negative or inconclusive results from our

clinical trials;

in enrolling subjects in clinical trials;

drop-out rates of subjects from clinical trials;

supply or quality of product candidates or other materials necessary for the conduct of our clinical trials;

than anticipated clinical trial or manufacturing costs;

FDA, EMA or comparable regulatory authority inspection and review of a clinical trial site;

of our third-party contractors or investigators to comply with regulatory requirements or the clinical trial protocol or otherwise

meet their contractual obligations in a timely manner, or at all;

FDA, EMA or comparable regulatory authority inspection and review of manufacturing facilities or inability of those facilities to

maintain a compliance status acceptable to the FDA, EMA or comparable regulatory authorities;

and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around

clinical testing generally or with respect to our therapies in particular;

interpretations of data by the FDA, EMA and comparable foreign regulatory authorities.

product candidates will require additional, time-consuming development efforts prior to commercial sale, including preclinical studies,

clinical trials and approval by the FDA and applicable foreign regulatory authorities.

All product candidates are prone to the risks

of failure that are inherent in pharmaceutical product development, including the possibility that such product candidate will not be

shown to be sufficiently safe and effective for approval by regulatory authorities.

In addition, we cannot assure stockholders that any

such products that are approved will be manufactured or produced economically, successfully commercialized or widely accepted in the

marketplace or be more effective than other commercially available alternatives.

depend heavily on the success of our lead product candidate PF614, which is currently in clinical trials.

Our clinical trials of PF614

may not be successful.

If we are unable to commercialize PF614 or experience significant delays in doing so, our business will be materially

have invested a significant portion of our efforts and financial resources in the research and development of our lead product candidate,

PF614 and we expect to continue to do so.

Our ability to generate revenues from the sale of abuse-deterrent opioid products, which may

not occur at a significant level for several years, will depend heavily on the successful development, regulatory approval and eventual

commercialization of PF614.

cannot commercialize product candidates in the United States without first obtaining regulatory approval for the product from the FDA;

similarly, we cannot commercialize product candidates outside of the United States without obtaining regulatory approval from similar

regulatory authorities outside of the United States.

Even if PF614 or another product candidate were to successfully obtain approval

from the FDA and non-U.S.

regulatory authorities, any approval might contain significant limitations related to use restrictions for

specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management

requirements.

If we are unable to obtain regulatory approval for PF614 in one or more jurisdictions, or any approval contains significant

limitations, we may not be able to obtain sufficient funding or generate sufficient revenue to continue the development, marketing and/or

commercialization of PF614 or any other product candidate that we may discover, in-license, develop or acquire in the future.

even if we obtain regulatory approval for P614, we will still need to develop a commercial organization, or collaborate with third parties

for the commercialization of PF614, establish commercially viable pricing and obtain approval for adequate reimbursement from third-party

and government payors.

If we or our commercialization collaborators are unable to successfully commercialize PF614, we may not be able

to generate sufficient revenues to continue our business.

to the significant resources required for the development of our product pipeline, and depending on our ability to access capital, we

must prioritize the development of certain product candidates over others.

Moreover, we may fail to expend our limited resources on product

candidates or indications that may have been more profitable or for which there is a greater likelihood of success.

currently have three clinical-stage product candidates as well as certain other product candidates that are at various stages of preclinical

We seek to maintain a process of prioritization and resource allocation to maintain an optimal balance between aggressively

pursuing our more advanced clinical-stage product candidates, such as nafamostat, PF614 and PF614-MPAR™, and ensuring the development

of additional potential product candidates.

to the significant resources required for the development of our product candidates, we must focus on specific diseases and disease pathways

and decide which product candidates to pursue and advance and the amount of resources to allocate to each.

Our decisions concerning the

allocation of research, development, collaboration, management and financial resources toward particular product candidates or therapeutic

areas may not lead to the development of any viable commercial products and may divert resources away from better opportunities.

make incorrect determinations regarding the viability or market potential of any of our product candidates or misinterpret trends in

the pharmaceutical industry, in particular for opioid abuse and drug overdose, our business, financial condition, and results of operations

could be materially adversely affected.

As a result, we may (i) fail to capitalize on viable commercial products or profitable market

opportunities, (ii) be required to forego or delay pursuit of opportunities with other product candidates or other diseases and disease

pathways that may later prove to have greater commercial potential than those we choose to pursue, or (iii) relinquish valuable rights

to such product candidates through collaboration, licensing, or other royalty arrangements in cases in which it would have been advantageous

for us to invest additional resources to retain sole development and commercialization rights.

PF614 and PF614-MPAR™ product candidates may not be successful in limiting or impeding abuse, overdose or misuse or providing additional

safety upon commercialization.

are committing a substantial majority of our resources to the development of products utilizing our TAAP and MPAR TM .

can be no assurance that our products will perform as tested and limit or impede the actual abuse, overdose or misuse of such products

or provide other benefits in commercial settings.

Moreover, there can be no assurance that if our products are approved by the FDA, the

post-approval epidemiological studies required by the FDA as a condition of any such approvals of the products will show a reduction

in the consequences of abuse and misuse by patients for whom the applicable product is prescribed.

The failure of our products to limit

or impede actual abuse, overdose or misuse or provide other safety benefits in practice will have a material adverse impact on market

acceptance for such products and on our financial condition and results of operations.

we fail to discover, develop and commercialize other product candidates, we may be unable to grow our business and our ability to achieve

our strategic objectives would be impaired.

In addition, we may also seek to commercialize certain treatments that may not be proprietary

the development and commercialization of our current product candidates are our initial focus, as part of our long-term growth strategy,

we plan to develop other product candidates.

We may also seek to commercialize treatments that may not be proprietary to us.

to evaluate internal opportunities from our existing product candidates or other potential product candidates.

While our technology platforms

have potential applicability to other uses, we have not conducted any clinical trials on these other uses, and we may not be successful

in developing product candidates for other uses.

addition, we intend to devote capital and resources for basic research to discover and identify additional product candidates.

research programs require technical, financial and human resources, whether or not any product candidates are ultimately identified.

Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for

clinical development for many reasons, including the following:

research methodology used may not be successful in identifying potential product candidates;

may develop alternatives that render our product candidates obsolete;

candidates that we develop may nevertheless be covered by third parties’ patents or other exclusive rights;

product candidate may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely

to be effective or otherwise does not meet applicable regulatory criteria;

product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all;

product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors.

the future, we may also seek to in-license or acquire product candidates or the underlying technology.

The process of proposing, negotiating

and implementing a license or acquisition is lengthy and complex.

Other companies, including many with substantially greater financial,

marketing and sales resources, may compete with us for the license or acquisition of product candidates.

We have limited resources to

identify and execute the acquisition or in-licensing of third-party products, businesses and technologies and integrate them into our

current infrastructure.

Moreover, we may devote resources to potential acquisitions or in-licensing opportunities that are never completed,

or we may fail to realize the anticipated benefits of such efforts.

We may not be able to acquire the rights to additional product candidates

on terms that we find acceptable, or at all.

addition, future acquisitions may entail numerous operational and financial risks, including:

to unknown liabilities;

of our business and diversion of our management’s time and attention to develop acquired products or technologies;

of substantial debt, dilutive issuances of securities or depletion of cash to pay for acquisitions;

than expected acquisition and integration costs;

in combining the operations and personnel of any acquired businesses with our operations and personnel;

amortization expenses;

of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership;

to motivate key employees of any acquired businesses.

we are unsuccessful in identifying and developing additional product candidates, either through internal development or licensing or

acquisition from third parties, our potential for growth and achieving our strategic objectives may be impaired.

we do not achieve our projected development and commercialization goals within the timeframes we expect, the development and commercialization

of our product candidates may be delayed, and our business and results of operations may be harmed.

planning purposes, we seek to estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product

development objectives.

These milestones may include our expectations regarding the commencement or completion of scientific studies

and clinical trials, the submission of regulatory filings, or commercialization objectives.

From time to time, we may publicly announce

the expected timing of some of these milestones, such as the completion of an ongoing clinical trial, the initiation of other clinical

programs, receipt of marketing approval or a commercial launch of a product.

The potential achievement of many of these milestones may

be outside of our control.

Each of these milestones is based on a variety of assumptions which, if not realized as expected, may cause

the timing of such potential achievement of the respective milestones to vary considerably from our estimates, including:

available capital resources or capital constraints we experience;

rate of progress, costs and results of our clinical trials and research and development activities, including the extent of scheduling

conflicts with participating clinicians and collaborators;

ability to identify and enroll patients who meet clinical trial eligibility criteria;

receipt of approvals by the FDA and other regulatory authorities and the timing thereof;

actions, decisions or rules issued by regulators;

ability to access sufficient, reliable and affordable supplies of materials used in the manufacture of our product candidates;

efforts of our collaborators with respect to the commercialization of our product candidates;

securing of, costs related to, and timing issues associated with, product manufacturing as well as sales and marketing activities.

we fail to achieve any announced milestones in the timeframes we expect, the development and commercialization of our product candidates

may be delayed, and our business and results of operations may be harmed, and it could negatively impact our share price performance.

Please see “ Business ” for more information.

products may reduce or eliminate commercial opportunity for our product candidates, if approved.

If our competitors develop technologies

or product candidates more rapidly than we do, or their technologies or product candidates are more effective or safer than any such

technologies or product candidate of ours, our ability to develop and successfully commercialize our own technologies or product candidates

may be adversely affected.

clinical and commercial landscapes for the solution of opioid abuse and drug overdose are highly competitive and subject to rapid and

significant technological change.

We face competition with respect to our indications for our product candidates and will face competition

with respect to any other product candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies,

specialty pharmaceutical companies and biotechnology companies worldwide.

There are a number of large pharmaceutical and biotechnology

companies that currently market and sell drugs or are pursuing the development of product candidates for the treatment of the indications

that we are pursuing.

These companies include, but are not limited to, Purdue Pharma, LP, and Collegium Pharmaceutical, Inc.

competitors include not only pharmaceutical companies but also academic institutions, government agencies and other public and private

research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development,

manufacturing and commercialization.

believe that a significant number of product candidates are currently under development for the same indications that we are currently

pursuing, and some or all may become commercially available in the future for the treatment of conditions for which we are trying or

may try to develop product candidates.

Our potential competitors include large pharmaceutical and biotechnology companies, specialty

pharmaceutical and generic drug companies, academic institutions, government agencies and research institutions.

See the section entitled

“ Business — Competition ” for examples of the competition that our product candidates face.

competitors may have significantly greater financial resources, established presence in the market, expertise in research and development,

manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing approved products than

Accordingly, our competitors may be more successful than we may be in obtaining regulatory approval for therapies and achieving widespread

market acceptance.

Our competitors’ products may be more effective, or more effectively marketed and sold, than any product candidate

we may commercialize and may render our therapies obsolete or non-competitive before we can recover development and commercialization

If any of our product candidates, including PF614, is approved, these product candidates could compete with a range of therapeutic

treatments that are in development.

In addition, our competitors may succeed in developing, acquiring or licensing technologies and products

that are more effective or less costly than PF614, our other product candidates or any other product candidates that we may develop,

which could render our product candidates obsolete and noncompetitive.

we obtain approval for any of our product candidates, we may face competition based on many different factors, including the efficacy,

safety and tolerability of our products, the ease with which our products can be administered, the timing and scope of regulatory approvals

for these products, the availability and cost of manufacturing, marketing and sales capabilities, price, reimbursement coverage and patent

Existing and future competing products could present superior treatment alternatives, including being more effective, safer,

less expensive or marketed and sold more effectively than any products we may develop.

products may make any products we develop obsolete or noncompetitive before we are able to recover the expense of developing and commercializing

our product candidates.

Such competitors could also recruit our employees, which could negatively impact our level of expertise and our

ability to execute our business plan.

addition, our competitors may obtain patent protection, regulatory exclusivities or FDA approval and commercialize products more rapidly

than we do, if we are successful at all, which may impact future approvals or sales of any of our product candidates that receive regulatory

If the FDA approves the commercial sale of PF614 or any other product candidate, we will also be competing with respect to

marketing capabilities and manufacturing efficiency.

We expect any such competition among products will be based on product efficacy

and safety, the timing and scope of regulatory approvals, availability of supply, marketing and sales capabilities, product price, reimbursement

coverage by government and private third-party payors, regulatory exclusivities and patent position.

Our profitability and financial

position will suffer if our product candidates receive regulatory approval but cannot compete effectively in the marketplace.

and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller

number of our competitors.

Smaller and other early-stage companies may also prove to be significant competitors, particularly through

collaborative arrangements with large and established companies.

These third parties compete with us in recruiting and retaining qualified

scientific and management personnel and establishing clinical trial sites, as well as in acquiring technologies complementary to, or

necessary for, our programs.

business could be harmed if we lose the services of our key personnel or if we are unable to hire additional highly qualified employees.

business depends upon our ability to attract and retain highly qualified personnel, including managerial, sales and technical personnel.

We compete for key personnel with other companies, healthcare institutions, academic institutions, government entities and other organizations.

We do not have written employment agreements with our Chief Executive Officer.

Our ability to maintain and expand our business may be

impaired if we are unable to retain our current key personnel or hire or retain other qualified personnel in the future.

currently only have six full-time employees and six consultants and we expect to add additional employees.

Our future success also depends

on our ability to identify, attract, hire or engage, retain and motivate other well-qualified managerial, technical, clinical and regulatory

for such individuals, particularly in the United States, is intense, and we may not be able to hire sufficient personnel to support our

There can be no assurance that such professionals will be available in the market, or that we will be able to retain existing

professionals or to meet or to continue to meet their compensation requirements.

Furthermore, our cost base with respect to such compensation,

which may include equity compensation, may increase significantly, which could have a material adverse effect on our financial results,

including the potential for additional dilution to our stockholders.

Failure to establish and maintain an effective management team and

work force could adversely affect our ability to operate, grow and manage our business.

employees, independent contractors, principal investigators, consultants, commercial collaborators, service providers and other vendors

may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could

have an adverse effect on our results of operations.

are exposed to the risk that we and our contract research organizations’ (“ CROs ”) employees and contractors,

including principal investigators, consultants, commercial collaborators, service providers and other vendors may engage in fraudulent

or other illegal activity.

Misconduct by these parties could include intentional, reckless and/or negligent conduct or other unauthorized

activities that violate the laws and regulations of the FDA and other similar regulatory bodies, including those laws that require the

reporting of true, complete and accurate information to such regulatory bodies;

manufacturing standards;

federal and state healthcare

fraud and abuse and health regulatory laws and other similar foreign fraudulent misconduct laws;

or laws that require the true, complete

and accurate reporting of financial information or data.

Activities subject to these laws also involve the improper use or misrepresentation

of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation.

It is not always possible to identify and deter third-party misconduct, and the precautions we take to detect and prevent this activity

may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other

actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.

If any such actions are instituted against

us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business

and financial results, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines,

possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, reputational harm, diminished profits

and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our

results of operations

of our programs are partially supported by government grant awards, which may not be available to us in the future.

have received funding under grant award programs funded by governmental agencies, such as the NIH and NIDA.

To fund a portion of our

future research and development programs, we may apply for additional grant funding from these or similar governmental agencies in the

However, funding by these, and other, governmental agencies may be significantly reduced or eliminated in the future for a number

For example, some programs are subject to a yearly appropriations process in Congress.

In addition, we may not receive full

funding under current or future grants because of budgeting constraints of the agency administering the program or unsatisfactory progress

on the study being funded.

Also, the continued spread of COVID-19 could affect governmental priorities in the future or prospective funding

for our product candidates.

Therefore, we cannot provide any assurance that we will receive any future grant funding from any government

agencies, or, that if received, we will receive the full amount of the particular grant award.

Any such reductions could delay the development

of our product candidates and the introduction of new products.

expect to expand our organization, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

expect to experience growth in the number of our employees and the scope of our operations.

To manage these growth activities, we must

continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and

train additional qualified personnel.

Our management may need to devote a significant amount of their attention to managing these growth

Due to our limited financial resources and the limited experience of our management team in managing a company with such

anticipated growth, we may not be able to effectively manage the expansion of our operations, retain key employees, or identify, recruit

and train additional qualified personnel.

Our inability to manage the expansion of our operations effectively may result in weaknesses

in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity

among remaining employees.

Our expected growth could also require significant capital expenditures and may divert financial resources

from other projects, such as the development of additional product candidates.

If we are unable to effectively manage our expected growth,

our expenses may increase more than expected, our ability to generate revenues could be reduced and we may not be able to implement our

business strategy, including the successful commercialization of our product candidates.

Related to Our Dependence on Third-Party Providers

currently rely on, and expect to rely on in the future, third parties to conduct our clinical trials, and those third parties may not

perform satisfactorily, including failing to meet deadlines for completing such trials, failing to satisfy legal or regulatory requirements

or terminating the relationship.

currently rely on, and expect to rely on in the future, third-party CROs to conduct research and development activities and our clinical

trials for our product candidates.

Agreements with these CROs might terminate for a variety of reasons, including for their failure to

Entry into alternative arrangements, if necessary, could significantly delay our product development activities.

reliance on these CROs for research and development activities and clinical trials will reduce our control over these activities but

will not relieve us of any of our responsibilities.

For example, we will remain responsible for ensuring that each of our clinical trials

is conducted in accordance with the general investigational plan and protocols in the applicable IND.

Moreover, the FDA requires compliance

with standards, commonly referred to as good clinical practices, or GCPs, for conducting, recording and reporting the results of clinical

trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial

participants are protected.

these CROs do not successfully carry out their contractual duties, meet expected deadlines or conduct the clinical trials in accordance

with regulatory requirements or our stated protocols, it could adversely affect the development of our product candidates and it could

result in us not being able to obtain, or being delayed in obtaining, marketing approvals for our product candidates and it could adversely

affect our efforts to successfully commercialize our product candidates.

expect to be completely dependent on third parties to manufacture our product candidates, and our commercialization of our product candidates

could be halted, delayed or made less profitable if those third parties fail to maintain a compliance status acceptable to the FDA or

comparable foreign regulatory authorities, fail to provide to us with sufficient quantities of our product candidates or fail to do so

at acceptable quality levels or prices.

do not currently have, nor do we plan to acquire, the capability or infrastructure to manufacture the ingredients in our product candidates

for use in our clinical trials or for commercial product, if any.

We have entered into a Manufacturing Agreement (the “ Recro

Agreement ”) with Recro Gainesville LLC (“ Recro ”) for the production of PF614 capsules and other materials

and services with respect to our clinical studies.

In addition, we do not have the capability to encapsulate any of our product candidates

as a finished product for commercial distribution.

As a result, we expect to be obligated to rely on contract manufacturers, like Recro,

if and when any of our product candidates are approved for commercialization.

In the event that Recro is unable to perform its obligations

under the Recro Agreement, we may be unable to replace the Recro Agreement on terms as favorable to us.

We have not entered into an agreement

with any contract manufacturers for commercial supply and may not be able to engage a contract manufacturer for commercial supply of

any of our product candidates on favorable terms to us, or at all.

processes used by our contract manufacturers to manufacture our product candidates must be approved by the FDA or comparable foreign

regulatory authorities and the facilities at which the product candidates are manufactured must maintain a compliance status acceptable

to the FDA and foreign regulatory authorities.

FDA and foreign regulatory authorities will conduct inspections after we submit a new

drug application, or NDA, to the FDA or its equivalent to other relevant regulatory authorities.

We will not control the manufacturing

process of, and will be completely dependent on, its contract manufacturing partners for compliance with cGMPs for manufacture of both

active drug substances and finished products.

These cGMP regulations cover all aspects of the manufacturing, testing, quality control

and record keeping relating to our product candidates.

If our contract manufacturers, including Recro, do not successfully manufacture

material that conforms to our specifications and the strict regulatory requirements of the FDA or others, our product candidates may

not be approved.

If these facilities do not maintain a compliance status acceptable to the FDA, Drug Enforcement Agency, or DEA, or comparable

regulatory authorities, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop,

obtain regulatory approval for or market our product candidates, if approved.

contract manufacturers, including Recro, will be subject to ongoing periodic unannounced inspections by the FDA, DEA and corresponding

state and foreign agencies for compliance with cGMPs, security, recordkeeping and similar regulatory requirements.

Although we will not

have control over our contract manufacturers’ compliance with these regulations and standards, we are nonetheless responsible for

assuring such compliance.

Failure by any of our contract manufacturers to comply with applicable regulations could result in sanctions

being imposed on us, including fines, injunctions, civil penalties, failure to grant approval to market any of our product candidates,

delays, suspensions or withdrawals of approvals, operating restrictions and criminal prosecutions, any of which could significantly and

adversely affect our business and results of operations.

Failure by our contract manufacturers to comply with or maintain any of these

standards could adversely affect our ability to develop, obtain regulatory approval for or market any of our product candidates.

for any reason, these third parties, including Recro, are unable or unwilling to perform, we may not be able to terminate our agreements

with them, and we may not be able to locate alternative manufacturers or formulators or enter into favorable agreements with them and

we cannot be certain that any such third parties will have the manufacturing capacity to meet future requirements.

If these manufacturers

or any alternate manufacturer of finished drug product experiences any significant difficulties in its respective manufacturing processes

for our ingredients or finished products or should cease doing business with us, we could experience significant interruptions in the

supply of any of our product candidates or may not be able to create a supply of our product candidates at all.

Our inability to coordinate

the efforts of our third-party manufacturing partners, or the lack of capacity available at our third-party manufacturing partners, could

impair our ability to supply any of our product candidates at required levels.

Because of the significant regulatory requirements that

we would need to satisfy in order to qualify a new bulk or finished product manufacturer, if we face these or other difficulties with

our current manufacturing partners, we could experience significant interruptions in the supply of any of our product candidates if we

decide to transfer the manufacture of any of our product candidates to one or more alternative manufacturers in an effort to deal with

the difficulties.

manufacturing problem or the loss of a contract manufacturer, including Recro, could be disruptive to our operations and delay development

of our investigational products.

Additionally, we rely on third parties to supply the raw materials needed to manufacture our potential

Any reliance on suppliers may involve several risks, including a potential inability to obtain critical materials and reduced

control over production costs, delivery schedules, reliability and quality.

Any unanticipated disruption to a future contract manufacturer

caused by problems at suppliers could delay shipment of any of our investigational products and, if approved, product candidates.

cannot guarantee that our future manufacturing and supply partners will be able to reduce the costs of commercial scale manufacturing

of any of our product candidates over time.

If the commercial-scale manufacturing costs of any of our product candidates are higher than

expected, these costs may significantly impact our operating results.

In order to reduce costs, we may need to develop and implement

process improvements.

However, in order to do so, we will need, from time to time, to notify or make submissions with regulatory authorities,

and the improvements may be subject to approval by such regulatory authorities.

cannot be sure that we will receive these necessary approvals or that these approvals will be granted in a timely fashion.

We also cannot

guarantee that we will be able to enhance and optimize output in our commercial manufacturing process.

If we cannot enhance and optimize

output, we may not be able to reduce our costs over time.

we are unable to develop our sales, marketing and distribution capability on our own or through collaborations with marketing partners,

we will not be successful in commercializing our product candidates.

currently have no marketing, sales or distribution capabilities.

We intend to establish a sales and marketing organization, either on

our own or in collaboration with third parties, with technical expertise and supporting distribution capabilities to commercialize PF614

or one or more of our other product candidates that may receive regulatory approval in key territories.

These efforts will require substantial

additional resources, some or all of which may be incurred in advance of any approval of the product candidate.

Any failure or delay

in the development of our or third parties’ internal sales, marketing and distribution capabilities would adversely impact the

commercialization of PF614, our other product candidates and other future product candidates.

that may inhibit our efforts to commercialize our product candidates on our own include:

inability to recruit and retain effective sales and marketing personnel;

inability of sales personnel to obtain access to or persuade physicians to prescribe any future products;

lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies

with more extensive product lines;

costs and expenses associated with creating an independent sales and marketing organization.

respect to our existing and future product candidates, we may choose to collaborate with third parties that have direct sales forces

and established distribution systems to serve as an alternative to our own sales force and distribution systems.

Our future product revenue

may be lower than if we directly marketed or sold our product candidates, if approved.

In addition, any revenue we receive will depend

in whole or in part upon the efforts of these third parties, which may not be successful and are generally not within our control.

we are not successful in commercializing any approved products, our future product revenue will suffer and we may incur significant additional

we do not establish sales and marketing capabilities successfully, either on our own or in collaboration with third parties, we will

not be successful in commercializing our product candidates.

Related to Product Development, Regulatory Approval, Manufacturing and Commercialization

regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming and inherently unpredictable,

and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.

are not permitted to commercialize, market, promote or sell any product candidate in the United States without obtaining regulatory approval

from the FDA.

Foreign regulatory authorities, such as the EMA, impose similar requirements.

The time required to obtain approval by the

FDA and comparable foreign authorities is inherently unpredictable, but typically takes many years following the commencement of clinical

trials and depends upon numerous factors, including substantial discretion of the regulatory authorities.

In addition, approval policies,

regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s

clinical development and may vary among jurisdictions.

To date, we have not submitted an NDA to the FDA or similar drug approval submissions

to comparable foreign regulatory authorities for our most advanced product candidate, PF614, or any other product candidate.

complete additional preclinical studies and clinical trials to demonstrate the safety and efficacy of our product candidates in humans

before we will be able to obtain these approvals.

testing is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome.

cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all.

The clinical development

of our initial and potential additional product candidates is susceptible to the risk of failure inherent at any stage of development,

including failure to demonstrate efficacy in a clinical trial or across a broad population of patients, the occurrence of adverse events

that are severe or medically or commercially unacceptable, failure to comply with protocols or applicable regulatory requirements, and

determination by the FDA or any comparable foreign regulatory authority that a product candidate may not continue development or is not

It is possible that even if any of our product candidates has a beneficial effect, that effect will not be detected during

clinical evaluation as a result of one or more of a variety of factors, including the size, duration, design, measurements, conduct or

analysis of our clinical trials.

Conversely, as a result of the same factors, our clinical trials may indicate an apparent positive effect

of such product candidate that is greater than the actual positive effect, if any.

Similarly, in our clinical trials, we may fail to

detect toxicity of, or intolerability caused by, such product candidate, or mistakenly believe that our product candidates are toxic

or not well tolerated when that is not in fact the case.

Serious adverse events, or SAEs, or other adverse effects, as well as tolerability

issues, could hinder or prevent market acceptance of the product candidate at issue.

current and future product candidates could fail to receive regulatory approval for many reasons, including the following:

FDA or comparable foreign regulatory authorities may disagree as to the design or implementation of our clinical trials;

may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate

is safe and effective for our proposed indication;

results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory

authorities for approval;

may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from clinical trials or preclinical

data collected from clinical trials of our product candidates may not be sufficient to support the submission of an NDA to the FDA

or other submission or to obtain regulatory approval in the United States, the European Union or elsewhere;

FDA or comparable foreign regulatory authorities may find deficiencies with the manufacturing processes of third-party manufacturers

with which we contract for clinical and commercial supplies;

approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering

our clinical data insufficient for approval.

lengthy approval process as well as the unpredictability of clinical trial results may result in us failing to obtain regulatory approval

to market any product candidate we develop, which would substantially harm our business, results of operations and prospects.

and other comparable foreign authorities have substantial discretion in the approval process and determining when or whether regulatory

approval will be granted for any product candidate that we develop.

Even if we believe the data collected from future clinical trials

of our product candidates are promising, such data may not be sufficient to support approval by the FDA or any other regulatory authority.

addition, even if we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited

indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance

of costly post-marketing clinical trials, or may approve a product candidate with labeling that does not include the claims necessary

or desirable for the successful commercialization of that product candidate.

Any of the foregoing scenarios could materially harm the

commercial prospects for our product candidates.

FDA may recommend scheduling with respect to any of our current or future product candidates.

In such event, prior to a product launch,

the DEA will need to determine the controlled substance schedule of the product, taking into account the recommendation of the FDA.

timing of the scheduling process is uncertain and may delay our ability to market any product candidate that we successfully developed

and approved.

FDA has the authority to grant an Emergency Use Authorization (“ EUA ”) to allow unapproved medical products to be used

in an emergency to diagnose, treat, or prevent serious or life-threatening diseases or conditions when, based on the totality of scientific

evidence, there is evidence of effectiveness of the medical product, and there are no adequate, approved, and available alternatives.

Based on the outcomes of our clinical testing for nafamostat, Ensysce expects to apply for an EUA for use against coronaviral infections,

which would permit us to commercialize nafamostat prior to FDA approval of an NDA.

However, commercialization under an EUA is permitted

only during the period of time that FDA determines that the statutory criteria for EUA are met, meaning that we would be required to

obtain NDA approval to continue marketing the product.

Furthermore, the FDA may revoke an EUA based on a determination that the product

no longer satisfies the criteria for issuance of an EUA—for example, if there is no longer evidence of effectiveness of the product

or there are other adequate, approved alternatives.

Accordingly, we cannot predict how long, if at all, an EUA for nafamostat or any

other product candidates may remain in place.

Any termination or revocation of an EUA (if any) for nafamostat or any other product candidates

could adversely impact our business in a variety of ways, including if nafamostat is not yet approved by the FDA and if we and our manufacturing

partners have invested in the supply chain to provide nafamostat under an EUA.

our clinical trials fail to replicate positive results from earlier preclinical studies or clinical trials conducted by us or third parties,

we may be unable to successfully develop, obtain regulatory approval for, or commercialize our product candidates.

results observed from preclinical studies or early-stage clinical trials of our product candidates may not necessarily be predictive

of the results of later-stage clinical trials that we conduct.

Similarly, positive results from such preclinical studies or early-stage

clinical trials may not be replicated in our subsequent preclinical studies or clinical trials.

For example, preclinical studies showed

that PF614 does not readily convert into oxycodone in the blood stream and the Phase 1 trial we have conducted with TAAP prodrug (a medication

or compound that, after administration, is metabolized (i.e., converted within the body) into a pharmacologically active drug, or “prodrug”)

PF614, demonstrated that, after oral administration of the TAAP prodrug, the corresponding opioid was measured in the subjects’

Furthermore, our product candidates may not be able to demonstrate similar activity or adverse event profiles as other product

candidates that we believe may have similar profiles.

can be no assurance that any of our clinical trials will ultimately be successful or support further clinical development of any of our

product candidates.

There is a high failure rate for drugs proceeding through clinical trials.

Many companies in the pharmaceutical and

biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage

development, and we cannot be certain that we will not face similar setbacks.

These setbacks have been caused by, among other things,

preclinical findings made while clinical trials were underway or safety or efficacy observations made in preclinical studies and clinical

trials, including previously unreported adverse events.

preclinical and clinical data are often susceptible to varying interpretations and analyses and many companies that believed their product

candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA, EMA or comparable foreign

regulatory authority approval.

FDA, EMA or comparable foreign regulatory authorities may disagree with our regulatory plan for our product candidates.

have submitted IND applications for PF614 and nafamostat and completed a Phase 1 trial for each product candidate.

We have applied for

and received fast track designation for PF614.

However, fast track designation does not guaranty a faster development or regulatory review

or approval process and does not assure FDA approval.

We have received feedback from the FDA on requirements to achieve abuse deterrent

labeling claims for PF614.

We have submitted an IND for PF614-MPAR™ and have received feedback on required pre-clinical, manufacturing

and clinical studies that will be required for an NDA.

clinical trial results may not support approval of our product candidates.

The general approach for FDA approval of a new drug is dispositive

data from two or more well-controlled Phase 3 clinical trials of the product candidate in the relevant patient population.

Phase 3 clinical

trials typically involve a large number of patients, have significant costs, and take years to complete.

In addition, there is no assurance

that the endpoints and trial designs that we intend to use for our planned clinical trials, including those that we have developed based

on feedback from regulatory agencies or those that have been used for the approval of similar drugs, will be acceptable for future approvals.

For example, while we have designed our Phase 2 clinical trials of nafamostat for coronaviral infections after receiving input and feedback

from the FDA, there can be no assurance that the design of our planned clinical trials will be satisfactory to the FDA, the FDA will

not require us to modify our trials, these trials will enable us to conduct the required Phase 3 studies or other testing or that completing

these trials will result in regulatory approval.

topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become

available and are subject to audit and verification procedures that could result in material changes in the final data.

time to time, we may publish interim topline or preliminary data from our clinical trials.

Interim data from clinical trials that we

may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues

and more patient data become available.

Preliminary or topline data also remain subject to audit and verification procedures that may

result in the final data being materially different from the preliminary data we previously published.

As a result, interim and preliminary

data should be viewed with caution until the final data is available.

Adverse differences between preliminary or interim data and final

data could significantly harm our reputation and business prospects.

if we complete the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time-consuming and

uncertain and may prevent us from obtaining approvals for the commercialization of our product candidates.

product candidate we develop and the activities associated with such development and commercialization, including our design, testing,

manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale, and distribution, are subject

to comprehensive regulation by the FDA and other regulatory authorities in the United States and by comparable authorities in other countries.

Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate in a given jurisdiction.

We have not received approval to market any product candidates from regulatory authorities in any jurisdiction and it is possible that

none of the product candidates we are developing or may seek to develop in the future will ever obtain regulatory approval.

no experience in submitting and supporting the applications necessary to gain marketing approvals and we expect to rely on third-party

CROs or regulatory consultants to assist us in this process.

Securing regulatory approval requires the submission of extensive preclinical

and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the product

candidate’s safety and efficacy.

Securing regulatory approval also requires the submission of information about the product manufacturing

process to, and inspection of manufacturing facilities by, the relevant regulatory authority.

Any product candidates we develop may not

be effective, may be only moderately effective, or may prove to have undesirable or unintended side effects, toxicities or other characteristics

that may preclude us from obtaining marketing approval or prevent or limit commercial use.

process of obtaining marketing approvals, both in the United States and abroad, is expensive, may take many years if additional clinical

trials are required, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type,

complexity, and novelty of the product candidates involved.

Changes in marketing approval policies during the development period, changes

in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may

cause delays in the approval or rejection of an application.

The FDA and comparable authorities in other countries have substantial discretion

in the approval process and may refuse to accept any application or may decide that our data is insufficient for approval and requires

additional preclinical, clinical or other studies.

In addition, varying interpretations of the data obtained from preclinical and clinical

testing could delay, limit, or prevent marketing approval of a product candidate.

Any marketing approval that we may ultimately obtain

could be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.

example, during the product approval process, the FDA will determine whether a REMS plan is necessary to assure the safe use of the product.

All opioid analgesic products currently on the market in the United States are subject to a REMS.

A REMS may be required to include various

elements, such as a medication guide or patient package insert, a communication plan to educate health care providers of the risks, limitations

on who may prescribe or dispense the drug or other measures that the FDA deems necessary to assure the safe use of the drug.

the REMS plan must include a timetable to assess the strategy at eighteen months, three years and seven years after approval.

be required to develop a REMS for the product, or participate in a REMS with other manufacturers, or to develop a similar strategy as

required by a regulatory authority.

if approved, our contract manufacturers will need to obtain quota from DEA to manufacture sufficient quantities and maintain inventories

of product to be commercially distributed.

we experience delays in obtaining manufacturing approval or if we fail to obtain manufacturing approval of any product candidates we

may develop, the commercial prospects for those product candidates may be harmed, and our ability to generate revenues will be materially

product candidate for which we obtain marketing approval will be subject to ongoing enforcement of post-marketing requirements by regulatory

agencies, and we could be subject to substantial penalties, including withdrawal of our product from the market, if we fail to comply

with all regulatory requirements or if we experience unanticipated problems with our products, when and if any of them are approved.

product candidate for which we obtain marketing approval, as well as the manufacturing processes, post-approval clinical data, labeling,

advertising and promotional activities for such product, will be subject to continual requirements of and review by the FDA and other

regulatory authorities.

These requirements include, but are not limited to, restrictions governing promotion of an approved product,

submissions of safety and other post-marketing information and reports, registration and listing requirements, cGMP requirements relating

to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, and requirements regarding

drug distribution and the distribution of samples to physicians and recordkeeping.

FDA also may impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy

of a product, including the adoption and implementation of risk evaluation and mitigation strategies.

The FDA and other federal and state

agencies, including the Department of Justice, closely regulate compliance with all requirements governing drug products, including requirements

pertaining to marketing and promotion of drugs in accordance with the provisions of the approved labeling and manufacturing of products

in accordance with cGMP requirements.

For example, the FDA and other agencies actively enforce the laws and regulations prohibiting the

promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

Violations of such requirements may lead to investigations alleging violations of the Federal Food, Drug, and Cosmetic Act and other

statutes, including the False Claims Act and other federal and state healthcare fraud and abuse laws as well as state consumer protection

Our failure to comply with all regulatory requirements, and later discovery of previously unknown adverse events or other problems

with our products, manufacturers or manufacturing processes, may yield various results, including:

involving patients using our products;

on such products, manufacturers or manufacturing processes;

on the labeling or marketing of a product;

on distribution or use;

to conduct post-marketing studies or clinical trials;

or untitled letters;

or recall of the product from the market;

to approve pending applications or supplements to approved applications that Ensysce submits;

restitution or disgorgement of profits or revenues;

or withdrawal of marketing approvals;

to relationships with any potential collaborators;

press coverage and damage to our reputation;

to permit the import or export of our products;

or the imposition of civil or criminal penalties.

Non-compliance

by us or any future collaborator with regulatory requirements, including safety monitoring or pharmacovigilance, and with requirements

related to the development of our products can also result in significant financial penalties.

employees, independent contractors, principal investigators, consultants, commercial collaborators, service providers and other vendors

may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could

have an adverse effect on our results of operations.

are exposed to the risk that our employees and contractors, including principal investigators, consultants, commercial collaborators,

service providers and other vendors may engage in fraudulent or other illegal activity.

Misconduct by these parties could include intentional,

reckless and/or negligent conduct or other unauthorized activities that violate the laws and regulations of the FDA and other similar

regulatory bodies, including those laws that require the reporting of true, complete and accurate information to such regulatory bodies;

manufacturing standards;

federal and state healthcare fraud and abuse and health regulatory laws and other similar foreign fraudulent

misconduct laws;

or laws that require the true, complete and accurate reporting of financial information or data.

Activities subject

to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials, which could

result in regulatory sanctions and serious harm to our reputation.

It is not always possible to identify and deter third-party misconduct,

and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses

or in protecting Ensysce from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with

such laws or regulations.

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting

our rights, those actions could have a significant impact on our business and financial results, including the imposition of significant

civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and

other federal healthcare programs, reputational harm, diminished profits and future earnings, and curtailment of our operations, any

of which could adversely affect our ability to operate our business and our results of operations.

may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, the preclinical and clinical studies

necessary for development and commercialization of our product candidates.

obtain the requisite regulatory approvals to commercialize any of our product candidates, we must demonstrate through extensive preclinical

studies and clinical trials that our product candidates are safe and effective in humans.

We may experience delays in completing our

clinical trials or preclinical studies and initiating or completing additional clinical trials or preclinical studies, including as a

result of regulators not allowing or delay in allowing clinical trials to proceed under an IND, or not approving or delaying approval

for any clinical trial grant or similar approval that we need to initiate a clinical trial.

We may also experience numerous unforeseen

events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize the product

candidates we develop, including:

or institutional review boards, or IRBs, or other reviewing bodies may not authorize us or our investigators to commence a clinical

trial, or to conduct or continue a clinical trial at a prospective or specific trial site;

may not reach agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to

extensive negotiation and may vary significantly among different CROs and trial sites;

may experience challenges or delays in recruiting principal investigators or study sites to lead our clinical trials;

number of subjects or patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment

in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any

given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical

trials at a higher rate than we anticipates;

third-party contractors, including those manufacturing our product candidates or conducting clinical trials on our behalf, may fail

to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

may have to amend clinical trial protocols submitted to regulatory authorities or conduct additional studies to reflect changes in

regulatory requirements or guidance, which we may be required to resubmit to an IRB and regulatory authorities for re-examination;

or other reviewing bodies may find deficiencies with or subsequently find fault with the manufacturing processes or facilities of

third-party manufacturers with which we enter into agreement for clinical and commercial supplies, or the supply or quality of any

product candidate or other materials necessary to conduct clinical trials of our product candidates may be insufficient, inadequate

or not available at an acceptable cost, or we may experience interruptions in supply;

potential for approval policies or regulations of the FDA or the applicable foreign regulatory agencies to significantly change in

a manner rendering our clinical data insufficient for approval.

or IRBs of the institutions in which clinical trials are being conducted may suspend, limit or terminate a clinical trial, or data monitoring

committees may recommend that we suspend or terminate a clinical trial, due to a number of factors, including failure to conduct the

clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial

site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, safety issues or adverse side effects,

failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions, or lack of adequate

funding to continue the clinical trial.

Negative or inconclusive results from our clinical trials or preclinical studies could mandate

repeated or additional clinical trials and, to the extent we choose to conduct clinical trials in other indications, could result in

changes to or delays in clinical trials of our product candidates in such other indications.

We do not know whether any clinical trials

that we conduct will demonstrate adequate efficacy and safety to result in regulatory approval to market our product candidates for the

indications that we are pursuing.

If later-stage clinical trials do not produce favorable results, our ability to obtain regulatory approval

for our product candidates will be adversely impacted.

failure to successfully initiate and complete clinical trials and to demonstrate the efficacy and safety necessary to obtain regulatory

approval to market our product candidates would significantly harm its business.

The development costs of our product candidates will

also increase if we experience delays in testing or regulatory approvals and we may be required to obtain additional funds to complete

clinical trials.

We cannot assure stockholders that our clinical trials will begin as planned or be completed on schedule, if at all,

or that we will not need to restructure or otherwise modify our trials after they have begun.

Significant clinical trial delays could

also shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors

to bring products to market before we do and impair our ability to successfully commercialize our product candidates, which may harm

our business and results of operations.

In addition, many of the factors that cause, or lead to, delays of clinical trials may ultimately

lead to the denial of regulatory approval of our product candidates.

we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise

adversely affected.

timely completion of clinical trials in accordance with our protocols depends on, among other things, our ability to enroll a sufficient

number of patients who remain in the study until its conclusion.

may experience difficulties in patient enrollment in our clinical trials for a variety of factors, including:

effects of COVID-19 on our ability to recruit and retain patients, including as a result of potential heightened exposure to COVID-19,

prioritization of hospital resources toward the pandemic and unwillingness by patients to enroll or comply with clinical trial protocols

if quarantines or travel restrictions impede patient movement or interrupt healthcare services;

patient eligibility criteria defined in the protocol;

size of the patient population required for analysis of the trial’s primary endpoints;

proximity of patients to study sites;

design of the trial;

ability to recruit clinical trial investigators with the appropriate competencies and experience;

clinical trials and clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate

being studied in relation to other available therapies, including any new drugs that may be approved for the indications that we

are investigating;

ability to obtain and maintain patient consents;

risk that patients enrolled in clinical trials will drop out of the trials before completion.

addition, our clinical trials may compete with other clinical trials for product candidates that are in the same therapeutic areas as

our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who

might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.

Since the number

of qualified clinical investigators is limited, we may conduct some of our clinical trials at the same clinical trial sites that some

of our competitors use, which will reduce the number of patients who are available for our clinical trials in such clinical trial site.

Furthermore, if significant adverse events or other side effects are observed in any of our clinical trials, we may have difficulty recruiting

patients to our trials and patients may drop out of our trials.

inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or might require us to

abandon one or more clinical trials or our development efforts altogether.

Delays in patient enrollment may result in increased costs,

negatively affect the timing or outcome of the planned clinical trials, delay the product candidate development and approval process

and jeopardize our ability to seek and obtain the regulatory approval required to commence product sales and generate revenue, which

could cause our value to decline and limit our ability to obtain additional financing if needed.

track designation by the FDA for PF614 may not lead to a faster development or regulatory review or approval process and does not assure

FDA approval.

have obtained fast track designation for PF614 that will enable us to facilitate the development and expedite the review of PF614.

track designation does not ensure that PF614 will receive marketing approval or that approval will be granted within any particular timeframe.

As a result, we may not experience a faster development process, review or approval compared to conventional FDA procedures.

the FDA may withdraw fast track designation if it believes that the designation is no longer supported by data from our clinical development

Fast track designation does not guarantee that an NDA will obtain priority review designation.

If any of these events occur,

it could require us to conduct more extensive clinical trials and go through more extensive FDA review, which could substantially increase

expenses and delay the time for commercializing our products.

the FDA does not conclude that certain of our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval

pathway, or if the requirements for such product candidates under Section 505(b)(2) are not as we expect, the approval pathway for those

product candidates will likely take significantly longer, cost significantly more and entail significantly greater complications and

risks than anticipated, and in either case may not be successful.

may seek FDA approval through the Section 505(b)(2) regulatory pathway for our product candidate PF614.

Section 505(b)(2) of the Federal

Food, Drug and Cosmetic Act, or FDC Act, permits the submission of an NDA where at least some of the information required for approval

comes from studies that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference.

Section 505(b)(2), if applicable to us under the FDC Act, would allow an NDA we submit to FDA to rely in part on data in the public domain

or on the FDA’s prior conclusions regarding the safety and effectiveness of an approved product, or listed drug, which could expedite

the development program for our product candidates by potentially decreasing the amount of data that we would need to generate in order

to obtain FDA approval.

If the FDA does not agree that the 505(b)(2) regulatory pathway is appropriate or scientifically justified for

PF614, we may need to conduct additional preclinical and clinical trials, provide additional data and information, and meet additional

standards for regulatory approval.

For example, the FDA may not agree that we have provided a scientific bridge, through, for example,

comparative bioavailability data, to demonstrate that reliance on the prior findings of safety or efficacy for a listed drug is justified.

If this were to occur, the time and financial resources required to obtain FDA approval for this product candidate, and complications

and risks associated with this product candidate, would likely substantially increase.

We could need to obtain additional funding, which

could result in significant dilution to the ownership interests of our then existing stockholders to the extent we issue equity securities

or convertible debt.

We cannot assure you that we would be able to obtain such additional financing on terms acceptable to us, if at

Moreover, the inability to pursue the Section 505(b)(2) regulatory pathway would likely result in new competitive products reaching

the market more quickly than our product candidates, which would likely materially adversely impact of our competitive position and prospects.

Even if we are allowed to pursue the Section 505(b)(2) regulatory pathway, we cannot assure our stockholders that our product candidates

will receive the requisite approvals for commercialization.

addition, notwithstanding the approval of a number of products by the FDA under Section 505(b)(2) over the last few years, certain brand-name

pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505(b)(2).

If the FDA’s interpretation

of Section 505(b)(2) is successfully challenged, the FDA may change its 505(b)(2) policies and practices, which could delay or even prevent

the FDA from approving any NDA that we submit under Section 505(b)(2).

In addition, the pharmaceutical industry is highly competitive,

and Section 505(b)(2) NDAs are subject to special requirements designed to protect the patent rights of sponsors of previously approved

drugs that are referenced in a Section 505(b)(2) NDA.

These requirements may give rise to patent litigation and mandatory delays in approval

of our NDAs for up to 30 months or longer depending on the outcome of any litigation.

It is not uncommon for a manufacturer of an approved

product to file a citizen petition with the FDA seeking to delay approval of, or impose additional approval requirements for, pending

competing products.

If successful, such petitions can significantly delay, or even prevent, the approval of the new product.

the FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers and responds to the petition.

In addition, even if we are able to utilize the Section 505(b)(2) regulatory pathway, there is no guarantee this would ultimately lead

to accelerated product development or earlier approval.

even if our product candidates are approved under Section 505(b)(2), the approval may be subject to limitations on the indicated uses

for which the products may be marketed or to other conditions of approval, or may contain requirements for costly post-marketing testing

and surveillance to monitor the safety or efficacy of the products.

we submit a 505(b)(2) application that references a third-party product, we may be subject to a patent infringement suit and the approval

of our product may be delayed.

we submit a 505(b)(2) application that relies in whole or in FDA’s findings for a listed drug, we will be required to certify to

the FDA that either:

(1) there is no patent information listed in the FDA’s publication Approved Drug Products with Therapeutic

Equivalence Evaluations, which we refer to as the Orange Book, with respect to the listed drug;

(2) the patents listed in the Orange

Book have expired;

(3) the listed patents have not expired, but will expire on a particular date and approval is sought after patent

or (4) the listed patents are invalid or will not be infringed by the manufacture, use or sale of our product.

A certification

that our new drug will not infringe the Orange Book-listed patents for the applicable listed drug, or that such patents are invalid,

is called a paragraph IV certification.

If we submit a paragraph IV certification to the FDA, a notice of the paragraph IV certification

must also be sent to the NDA holder once our 505(b)(2) application is filed by the FDA.

The third party may then initiate a lawsuit to

defend the patents identified in the notice.

The filing of a patent infringement lawsuit within 45 days of receipt of the notice automatically

prevents the FDA from approving our 505(b)(2) application until the earliest of 30 months or the date on which the patent expires, the

lawsuit is settled, or the court reaches a decision in the infringement lawsuit in our favor.

If the third party does not file a patent

infringement lawsuit within the required 45-day period, our 505(b)(2) application will not be subject to the 30-month stay of FDA approval.

in methods of product candidate manufacturing or formulation may result in additional costs or delay.

product candidates proceed through preclinical studies to late-stage clinical trials towards potential approval and commercialization,

it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way

in an effort to optimize processes and results.

Such changes carry the risk that they will not achieve these intended objectives.

of these changes could cause our product candidates to perform differently and affect the results of planned clinical trials or other

future clinical trials conducted with the materials manufactured using altered processes.

Such changes may also require additional testing,

FDA notification or FDA approval.

This could delay or prevent completion of clinical trials, require conducting bridging clinical trials

or repeating one or more clinical trials, increase clinical trial costs, delay or prevent approval of our product candidates and jeopardize

our ability to commence sales and generate revenue.

product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval,

limit the commercial profile of an approved label, or result in significant negative consequences following regulatory approval, if obtained.

side effects caused by any of our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials

and could result in restrictive warnings or contraindication or the delay or denial of regulatory approval by the FDA or comparable foreign

regulatory authorities.

In our planned and future clinical trials of our product candidates, we may observe a less favorable safety and

tolerability profile than was observed in earlier-stage testing of these candidates.

side effects have been observed in our product candidates to date.

For example, in clinical trials of PF614, opioid side effects were

Many compounds that initially showed promise in clinical or earlier-stage testing are later found to cause undesirable or unexpected

side effects that prevented further development of the compound.

Results of future clinical trials of our product candidates could reveal

a high and unacceptable severity and prevalence of side effects or unexpected characteristics, despite a favorable tolerability profile

observed in earlier-stage testing.

If unacceptable side effects arise in the development of our product candidates, we, the FDA or comparable

foreign regulatory authorities, the IRBs, or independent ethics committees at the institutions in which its trials are conducted, could

suspend, limit or terminate our clinical trials, or the independent safety monitoring committee could recommend that we suspend, limit

or terminate our trials, or the FDA or comparable foreign regulatory authorities could order us to cease clinical trials or deny approval

of our product candidates for any or all targeted indications.

Treatment-emergent side effects that are deemed to be drug-related could

delay recruitment of clinical trial subjects or may cause subjects that enroll in our clinical trials to discontinue participation in

our clinical trials.

In addition, these side effects may not be appropriately recognized or managed by the treating medical staff.

may need to train medical personnel using our product candidates to understand the side effect profiles for our clinical trials and upon

any commercialization of any of our product candidates.

Inadequate training in recognizing or managing the potential side effects of

our product candidates could result in harm to patients that are administered our product candidates.

Any of these occurrences may adversely

affect our business, financial condition and prospects significantly.

clinical trials of our product candidates are conducted in carefully defined sets of patients who have agreed to enter into clinical

Consequently, it is possible that our clinical trials may indicate an apparent positive effect of a product candidate that is

greater than the actual positive effect, if any, or alternatively fail to identify undesirable side effects.

liability lawsuits against us or any of our future collaborators could divert our resources and attention, cause us to incur substantial

liabilities and limit commercialization of our product candidates.

are exposed to potential product liability and professional indemnity risks that are inherent in the research, development, manufacturing,

marketing and use of pharmaceutical products.

Currently, we have no products that have been approved for commercial sale;

use of our product candidates by us and any collaborators in clinical trials, and the sale of these product candidates, if approved,

in the future, may expose us to liability claims.

We face an inherent risk of product liability lawsuits related to the use of our product

candidates in patients and will face an even greater risk if product candidates are approved by regulatory authorities and introduced

commercially.

Product liability claims may be brought against us by participants enrolled in our clinical trials, patients, health care

providers, pharmaceutical companies, our collaborators or others using, administering or selling any of our future approved products.

If we cannot successfully defend ourselves against any such claims, we may incur substantial liabilities or be required to limit commercialization

of our product candidates.

Regardless of the merits or eventual outcome, liability claims may result in:

demand for any of our future approved products;

to our reputation;

of clinical trial participants;

of clinical trial sites or entire trial programs;

litigation costs;

monetary awards to, or costly settlements with, patients or other claimants;

recalls or a change in the indications for which they may be used;

of management and scientific resources from our business operations;

inability to commercialize our product candidates.

the clinical trial process is designed to identify and assess potential side effects, clinical development does not always fully characterize

the safety and efficacy profile of a new medicine, and it is always possible that a drug, even after regulatory approval, may exhibit

unforeseen side effects.

If our product candidates were to cause adverse side effects during clinical trials or after approval, we may

be exposed to substantial liabilities.

Physicians and patients may not comply with any warnings that identify known potential adverse

effects and patients who should not use our product candidates.

If any of our product candidates are approved for commercial sale, we

will be highly dependent upon consumer perceptions of us and the safety and quality of our products.

We could be adversely affected if

we are subject to negative publicity associated with illness or other adverse effects resulting from patients’ use or misuse of

our products or any similar products distributed by other companies.

we maintain product liability insurance coverage consistent with industry norms, including clinical trial liability, this insurance may

not fully cover potential liabilities that we may incur.

The cost of any product liability litigation or other proceeding, even if resolved

in our favor, could be substantial.

We will need to increase our insurance coverage if we commercialize any product that receives regulatory

In addition, insurance coverage is becoming increasingly expensive.

If we are unable to maintain sufficient insurance coverage

at an acceptable cost or to otherwise protect against potential product liability claims, it could prevent or inhibit the development

and commercial production and sale of our product candidates, which could harm our business, financial condition, results of operations

and prospects.

is a Schedule II controlled substance under the federal CSA, and any failure to comply with the CSA or its state equivalents would have

a negative impact on our business.

the ingredient in PF614, is classified as a Schedule II controlled substance under the Controlled Substances Act, or CSA and regulations

promulgated by the DEA.

The law and regulations classify substances as Schedule I, II, III, IV or V controlled substances, with Schedule

I controlled substances considered to present the highest risk of substance abuse and Schedule V controlled substances the lowest risk.

Scheduled controlled substances are subject to DEA regulations relating to supply, procurement, manufacturing, storage, shipment, sale,

use, distribution and physician prescription procedures.

For example, Schedule II controlled substances are subject to various restrictions,

including, but not limited to, mandatory written prescriptions and the prohibition of refills.

In addition to federal scheduling, oxycodone

is subject to state-controlled substance laws and regulations, and in some cases, with additional requirements than those imposed by

federal law and regulations.

Though state-controlled substances laws often mirror federal law, because the states are separate jurisdictions,

they may schedule products separately.

must register annually with the DEA to manufacture, distribute, dispense, import, export and conduct research using controlled substances.

In addition, the DEA requires entities handling controlled substances to maintain complete and accurate records and file reports, including

reports related to thefts or losses of any controlled substances, and to obtain authorization to destroy any controlled substances.

entities also must follow specific labeling and packaging requirements.

Facilities must maintain appropriate security measures to control

against diversion of controlled substances.

Security requirements vary by controlled substance schedule with the most stringent requirements

applying to Schedule I and Schedule II controlled substances.

Required security measures include background checks on employees and physical

control of inventory through measures such as vaults and inventory reconciliations.

contract manufacturing organizations, or CMOs, who manufacture and distribute PF614 are required to be registered with DEA and relevant

state authorities and comply with all security, recordkeeping and reporting requirements.

Manufacturers and distributors are subject

to routine inspections and audits by the DEA related to compliance with security, recordkeeping and reporting requirements.

maintain the required registrations or to comply and follow these requirements can lead to significant civil and/or criminal penalties

and possibly even lead to a revocation of a DEA registration to manufacture or distribute such products.

Manufacturing

of oxycodone is subject to annual quotas that limit the amount of API and dosage forms that can be produced in any given year;

of our CMOs to obtain the necessary manufacturing and/or procurement quota would have a negative impact on our business.

CSA and DEA regulations establish an annual aggregate production quota for Schedule I and II controlled substances, including oxycodone

and other narcotic drugs.

In addition, each manufacturer of active pharmaceutical ingredient, or API or dosage forms must obtain an individual

manufacturing or production quota that limits the amount of product that a company can produce and/or distribute in a given year.

DEA allocates manufacturing quota issued to companies so as to not exceed the aggregate quota established for a given year.

companies must demonstrate the need for procurement quota based on expected demand and sales of the controlled substance the DEA requires

the submission of substantial evidence of expected legitimate medical and scientific need for the drug product before assigning its aggregate

production quotas, or manufacturing and procurement quotas to manufacturers.

The DEA has decreased the aggregate quota for certain narcotic

drugs, including oxycodone over the last five years.

Also, in October 2018, Congress passed the SUPPORT Act which requires the DEA to

consider potential diversion in establishing quotas for narcotic drugs which could lead to continued decreases in quota available to

API manufacturers and dosage form manufacturers of these substances.

future years, we may need greater amounts of controlled substances that are subject to the DEA’s quota system to sustain our development

We may also need significantly greater amounts to implement our commercialization plans if the FDA approves our proposed formulations.

If any of our manufacturers of API or dosage forms are unable to obtain the necessary annual quota to meet the research and development

or commercial demand for PF614, our business would be negatively impacted.

Any delay or refusal by the DEA in establishing a quota, a

reduction in quota, or a failure to increase quota over time could delay or stop the clinical development or commercial sale of some

of our products or product candidates.

This could have a material adverse effect on our business, results of operations, financial condition

and prospects.

Related to our Intellectual Property

we are unable to obtain and maintain patent protection for our products candidates, or if the scope of the patent protection obtained

is not sufficiently broad, our competitors could develop and commercialize product candidates that are similar or identical to our product

candidates, and our ability to successfully commercialize our product candidates may be adversely affected.

commercial success will depend, in part, on our ability to obtain and maintain patent protection in the United States and other countries

with significant commercial markets with respect to our product candidates.

We seek to protect our proprietary position by filing patent

applications in the United States and abroad related to our product candidates that are important to our business, as appropriate.

cannot be certain that patents will be issued or granted with respect to applications that are currently pending or that we may apply

for in the future with respect to one or more of our product candidates, or that issued or granted patents will not later be found to

be invalid and/or unenforceable.

patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent

applications at a reasonable cost or in a timely manner.

It is also possible that we will fail to identify patentable aspects of our

research and development output before it is too late to obtain patent protection.

Although we may enter into non-disclosure and confidentiality

agreements with parties who have access to patentable aspects of our research and development output, such as our employees, distribution

partners, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such output before

a patent application is filed, thereby jeopardizing our ability to seek patent protection.

patent position of pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent

years been the subject of much litigation.

As a result, the issuance, scope, validity, enforceability and commercial value of our patent

rights are highly uncertain.

Our pending and future patent applications may not result in patents being issued, and even if issued, the

patents may not meaningfully protect our product candidates, effectively prevent competitors and third parties from commercializing competitive

products or otherwise provide us with any competitive advantage.

Even if the patent applications that we own or licenses issue as patents,

they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise

provide us with any competitive advantage.

For product candidates for which we do not hold or do not obtain composition of matter patents,

competitors who obtain the requisite regulatory approval can offer products with the same composition as our product candidate so long

as the competitors do not infringe any method patents that we may hold.

Method patents protect the product when used or sold for the

specified method.

However, this type of patent protection can be more difficult to enforce and does not limit a competitor from making

and marketing a product that is identical to our product candidate that is either labeled or marketed for an indication that is outside

of the patented method, or for which there is a substantial use in commerce outside the patented method.

Our competitors or other third

parties may be able to circumvent our patents by developing similar or alternative products in a non-infringing manner.

in either the patent laws, implementing regulations or interpretation of the patent laws in the United States and other countries may

also diminish the value of our patents or narrow the scope of our patent protection.

The laws of foreign countries may not protect our

rights to the same extent as the laws of the United States, and many companies have encountered significant difficulties in protecting

and defending such rights in foreign jurisdictions.

cannot be certain that our patents and patent rights will be effective in protecting our product candidates and technologies.

to protect such assets may have a material adverse effect on our business, operations, financial condition and prospects.

may face litigation from third parties claiming that our products or business infringe, misappropriate, or otherwise violate their intellectual

property rights, or seeking to challenge the validity of our patents.

future success is also dependent in part on the strength of our intellectual property, trade secrets and know-how, which have been developed

from years of research and development, and on our ability, and the ability of our future collaborators, to develop, manufacture, market

and sell our product candidates, if approved, and use our proprietary technologies without alleged or actual infringement, misappropriation

or other violation of the patents and other intellectual property rights of third parties.

may be exposed to, or be threatened with, adversarial proceedings or additional future litigation by third parties regarding intellectual

property rights with respect to our current and any future product candidates and technology, including interference or derivation proceedings,

post grant review and inter partes review before the United States Patent and Trademark Office, or USPTO, or similar adversarial proceedings

or litigation in other jurisdictions seeking to challenge the validity of our intellectual property rights, claiming that we have misappropriated

the trade secrets of others, or claiming that our technologies, products or activities infringe the intellectual property rights of others.

have been many lawsuits and other proceedings involving patent and other intellectual property rights in the biotechnology and pharmaceutical

industries, including patent infringement lawsuits, interferences, oppositions, post grant review, inter partes review and reexamination

proceedings before the USPTO, and corresponding foreign patent offices.

Numerous United States and foreign issued patents and pending

patent applications, which are owned by third parties, exist in the fields in which we are developing product candidates.

As the biotechnology

and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims

of infringement of the intellectual property rights of third parties.

are aware of patents owned by third parties, including potential competitors, that are directed to compositions comprising a chemically

modified opioid, such as oxycodone, which decreases the potential of the opioid to be abused or cause overdose and related methods of

Third parties, including potential competitors, may assert infringement claims against us based on existing patents or patents that

may be granted in the future including, perhaps, the aforementioned patents, regardless of their merit.

There is a risk that third parties

may choose to engage in litigation with us to enforce or to otherwise assert their patent rights against us.

if we believe such claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable

and infringed, and the holders of any such patents may be able to block our ability to commercialize such product candidate unless we

obtain a license under the applicable patents, or until such patents expire or are finally determined to be invalid or unenforceable.

Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of our compositions, formulations,

or methods of treatment, prevention or use, the holders of any such patents may be able to block our ability to develop and commercialize

the applicable product candidate unless we obtain a license or until such patent expires or is finally determined to be invalid or unenforceable.

In either case, such a license may not be available on commercially reasonable terms, or at all.

Even if we were able to obtain a license,

it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.

Some claimants may have substantially

greater resources than we do and may be able to sustain the costs of complex intellectual property litigation to a greater degree and

for longer periods of time than we could.

In addition, patent holding companies that focus solely on extracting royalties and settlements

by enforcing patent rights may target us.

even in the absence of litigation, we may need to obtain licenses from third parties to advance our research or to enable the commercialization

of our product candidates.

We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all.

an event, we would be unable to further practice our technologies or develop and commercialize any of our product candidates at issue,

which could harm our business and financial condition significantly.

making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop

and commercialize one or more of our product candidates, if approved.

Defense of these claims, regardless of their merit, would involve

substantial litigation expense and would be a substantial diversion of management and employee time and resources from our business.

Third parties making such claims may have the ability to dedicate substantially greater resources to these legal actions than us or our

licensors or collaborators can.

In the event of a successful claim of infringement, misappropriation or other violation against us, we

may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign

our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary

litigation and other proceedings may also absorb significant management time.

The cost to us of any patent litigation or other proceeding,

even if resolved in our favor, could be substantial.

During the course of any patent or other intellectual property litigation or other

proceeding, there could be public announcements of the results of hearings, rulings on motions, and other interim proceedings or developments

and if securities analysts or investors regard these announcements as negative, the perceived value of our product candidates or intellectual

property could be diminished.

Accordingly, the market price of our common stock may decline.

Uncertainties resulting from the initiation

and continuation of patent litigation or other proceedings could have a material adverse effect on our business, ability to compete in

the marketplace, financial condition, results of operations and growth prospects.

may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming

and unsuccessful.

may infringe, misappropriate or otherwise violate our patents, trademarks, copyrights or other intellectual property, or those of our

To counter infringement, misappropriation, unauthorized use or other violations, we may be required to file legal claims,

which can be expensive and time consuming and divert the time and attention of our management and scientific personnel.

can be no assurances that we will be successful with respect to any litigation matters which may arise in the ordinary course of our

Such a failure may have a material impact on our business, results of operations and financial condition in the future.

may not be able to prevent, alone or with any future licensors, infringement, misappropriation or other violations of our intellectual

property rights, particularly in countries where the laws may not protect those rights as fully as in the United States.

Any claims we

assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents.

In addition, in a patent infringement proceeding, there is a risk that a court will decide that a patent of ours is invalid or unenforceable,

in whole or in part, and that we do not have the right to stop the other party from using the invention at issue.

There is also a risk

that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do

not have the right to stop the other party from using the invention at issue on the grounds that our patents do not cover the invention.

An adverse outcome in a litigation or proceeding involving our patents could limit our ability to assert our patents against those parties

or other competitors, and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive

Any of these occurrences could adversely affect our competitive business position, business prospects and financial condition.

Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable,

or that the party against whom we have asserted trademark infringement has superior rights to the marks in question.

In this case, we

could ultimately be forced to cease use of such trademarks.

any infringement, misappropriation or other intellectual property litigation, any award of monetary damages we receive may not be commercially

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there

is a risk that some of our confidential information could be compromised by disclosure during litigation.

Moreover, there can be no assurance

that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years

before they are concluded.

Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the

attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings.

expiration or loss of patent protection may adversely affect our future revenues and operating earnings.

rely on patent, trademark, trade secret and other intellectual property protection in the discovery, development, manufacturing and sale

of our product candidates.

In particular, patent protection is important in the development and eventual commercialization of our product

Patents covering our product candidates normally provide market exclusivity, which is important in order to improve the probability

that our product candidates are able to become profitable.

of our patents relating to PF614 and the use of nafamostat for treating respiratory diseases will expire in less than ten years.

we are seeking additional patent coverage which may protect the technology underlying these patents, there can be no assurances that

such additional patent protection will be granted, or if granted, that these patents will not be infringed upon or otherwise held enforceable.

Even if we are successful in obtaining a patent, patents have a limited lifespan.

In the United States, the normal statutory term of

a patent is generally 20 years after it is filed.

Various extensions may be available;

however, the life of a patent, and the protection

it affords, is limited.

Without patent protection of our product candidates, we may be open to competition from generic versions of such

methods and compositions.

we do not obtain protection under the Hatch-Waxman Amendments by extending the patent term, our business may be harmed.

commercial success will largely depend on our ability to obtain and maintain patent and other intellectual property in the United States

and other countries with respect to our product candidates.

Given the amount of time required for the development, testing and regulatory

review of new product candidates, patents protecting our product candidates might expire before or shortly after such candidates begin

to be commercialized.

We expect to seek extensions of patent terms in the United States and, if available, in other countries where we

are prosecuting patents.

upon the timing, duration and specifics of FDA marketing approval of our product candidates, one or more of our United States patents

may be eligible for limited patent term extension, or PTE, under the Drug Price Competition and Patent Term Restoration Act of 1984,

referred to as the Hatch-Waxman Amendments.

The Hatch-Waxman Amendments permit a patent restoration term of up to five years beyond the

normal expiration of the patent as compensation for patent term lost during development and the FDA regulatory review process, which

is limited to the approved indication (and potentially additional indications approved during the period of extension) covered by the

This extension is limited to only one patent that covers the approved product, the approved use of the product, or a method of

manufacturing the product.

However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent

regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to

grant extensions to our patents, or may grant more limited extensions than we request.

We may not be granted an extension because of,

for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing

to satisfy applicable requirements.

Moreover, the applicable time-period or the scope of patent protection afforded could be less than

Even if we are able to obtain an extension, the patent term may still expire before or shortly after we receive FDA marketing

If we are unable to extend the expiration date of our existing patents or obtain new patents with longer expiry dates, our

competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical

data to obtain approval of competing products following our patent expiration and launch their product earlier than might otherwise be

may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business.

prosecuting and defending patents covering our product candidates in all countries throughout the world would be prohibitively expensive,

and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.

In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws

in the United States.

Further, licensing partners may not prosecute patents in certain jurisdictions in which we may obtain commercial

rights, thereby precluding the possibility of later obtaining patent protection in these countries.

Consequently, we may not be able

to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products

made using our inventions in and into the United States or other jurisdictions.

Competitors may use our technologies in jurisdictions

where we have not obtained patent protection to develop our own products and may also export infringing products to territories where

we have patent protection, but enforcement is not as strong as that in the United States.

These products may compete with our product

candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets

and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for

us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.

to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts

and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our

patent applications at risk of not issuing, and could provoke third parties to assert claims against us.

We may not prevail in any lawsuits

that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful.

Accordingly, our efforts to enforce

our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual

property that we develop or license.

Furthermore, while we intend to protect our intellectual property rights in our expected significant

markets, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market

our product candidates.

Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate, which

may have an adverse effect on our ability to successfully commercialize our product candidates in all of our expected significant foreign

Additionally,

the requirements for patentability may differ in certain countries, particularly developing countries.

For example, unlike other countries,

China has a heightened requirement for patentability, and specifically requires a detailed description of medical uses of a claimed drug.

In India, unlike the United States, there is no link between regulatory approval of a drug and our patent status.

Furthermore, generic

or biosimilar drug manufacturers or other competitors may challenge the scope, validity or enforceability of us or our licensors’

patents, requiring us or our licensees or any future licensors to engage in complex, lengthy and costly litigation or other proceedings.

In addition, certain countries in Europe and developing countries, including China and India, have compulsory licensing laws under which

a patent owner may be compelled to grant licenses to third parties.

In certain jurisdictions, such as in the Russian Federation, our

patents may not be honored since patent holders in the United States may be deemed “unfriendly countries”.

In those countries

and jurisdictions, we and our licensees or any future licensors may have limited remedies if patents are infringed or if we or our licensees

or any future licensors are compelled to grant a license to a third party, which could materially diminish the value of those patents.

This could limit our potential revenue opportunities.

Accordingly, we and our licensees’ or any future licensors’ efforts

to enforce intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual

property that we own or license.

may be subject to claims that we or our employees, consultants, contractors or advisors have infringed, misappropriated or otherwise

violated the intellectual property of a third party, or claiming ownership of what we regard as our own intellectual property.

of the contributors to our intellectual property, including patents and applications, were previously employed at universities or other

biotechnology or pharmaceutical companies, including our competitors or potential competitors.

Although we try to ensure that our employees

do not use the intellectual property and other proprietary information, know-how or trade secrets of others in their work for us, we

may be subject to claims that we or these employees have used or disclosed such intellectual property or other proprietary information.

Litigation may be necessary to defend against these claims.

addition, while we typically require our employees, consultants and contractors who may be involved in the development of intellectual

property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with

each party who in fact develops intellectual property that we regard as our own.

For example, we have not obtained assignments for certain

patent applications relating to abuse-resistant amphetamines.

To the extent that we fail to obtain such assignments, such assignments

do not contain a self-executing assignment of intellectual property rights or such assignments are breached, we may be forced to bring

claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual

If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual

property rights or personnel.

Such intellectual property rights could be awarded to a third party, and we could be required to obtain

a license from such third party to commercialize our technology or products.

Such a license may not be available on commercially reasonable

terms or at all.

Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs

and be a distraction to our management and scientific personnel.

reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them

or that our trade secrets will be misappropriated or disclosed and if we are unable to protect the confidentiality of our trade secrets,

the value of our technology could be materially adversely affected and our business would be harmed.

addition to seeking patents for some of our technology and products, we also rely on trade secrets, including unpatented know-how, technology

and other proprietary information, in seeking to develop and maintain a competitive position.

Because we expect to rely on third parties

to manufacture our product candidates and we expect to collaborate with third parties on the development of our product candidates, we

must, at times, share trade secrets with them.

We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality

agreements with parties who have access to them, such as our employees, consultants, independent contractors, advisors, corporate collaborators,

outside scientific collaborators, contract manufacturers, suppliers and other third parties.

We also enter into confidentiality and invention

or patent assignment agreements with employees and certain consultants.

We also seek to preserve the integrity and confidentiality of

our data, trade secrets and know-how by maintaining physical security of our premises and physical and electronic security of our information

technology systems.

Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to

protect our proprietary technologies will be effective.

our inception, we have sought to contract with manufacturers to supply commercial quantities of pharmaceutical formulations and products.

As a result, we have disclosed, under confidentiality agreements, various aspects of our technology with potential manufacturers and

We believe that these disclosures, while necessary for our business, may have resulted and may result in the attempt by potential

manufacturers and suppliers to improperly assert ownership claims to our technology in an attempt to gain an advantage in negotiating

manufacturing and supplier rights.

cannot guarantee that our trade secrets and other proprietary and confidential information will not be disclosed or that competitors

will not otherwise gain access to our trade secrets.

Any party with whom we have executed such an agreement may breach that agreement

and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.

Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and

the outcome is unpredictable.

In addition, some courts both within and outside the United States may be less willing or unwilling to

protect trade secrets.

Further, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor,

we would have no right to prevent such third party, or those to whom they communicate such technology or information, from using that

technology or information to compete with us.

If any of our trade secrets were to be disclosed to or independently developed by a competitor,

our business and competitive position could be harmed.

secrets and know-how can be difficult to protect as trade secrets and know-how will over time be disseminated within the industry through

independent development, the publication of journal articles, and the movement of personnel skilled in the art from company to company

or academic to industry scientific positions.

If we fail to prevent material disclosure of the know-how, trade secrets and other intellectual

property related to our technologies to third parties, we will not be able to establish or maintain a competitive advantage in our market,

which could materially adversely affect our business, results of operations and financial condition.

Even if we are able to adequately

protect our trade secrets and proprietary information, our trade secrets could otherwise become known or could be independently discovered

by our competitors.

For example, we are aware that certain of our former employees founded Elysium Therapeutics, which appears to be

developing orally administered abuse deterrent opioids.

Additionally, competitors could purchase our products and attempt to replicate

some or all of the competitive advantages we derive from our development efforts, design around our protected technology or develop their

own competitive technologies that fall outside of our intellectual property rights.

If any of our trade secrets were to be lawfully obtained

or independently developed by a competitor, in the absence of patent protection, we would have no right to prevent them, or those to

whom they communicate, from using that technology or information to compete with us.

may not be able to prevent misappropriation of our intellectual property, trade secrets or confidential information, particularly in

countries where the laws may not protect those rights as fully as in the United States.

Furthermore, because of the substantial amount

of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information

could be compromised by disclosure during this type of litigation.

may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.

may be subject to claims that former employees, collaborators or other third parties have an ownership interest in the patents and intellectual

property that we own or that we may own or license in the future.

While it is our policy to require our employees and contractors who

may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may

be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own;

our licensors may face similar obstacles.

In addition, we have not updated the records in the patent offices to reflect our ownership

of our patent filings obtained as a result of the merger with Signature, including patent filings relating to PF614 and other technologies.

Failure to update such ownership may result in an innocent purchaser potentially acquiring rights in such patents that are adverse to

our interests.

Furthermore, as noted above, we have not obtained assignments for certain patent applications relating to abuse-resistant

amphetamines.

We could be subject to ownership disputes arising, for example, from conflicting obligations of consultants or others who

are involved in developing our product candidates.

Litigation may be necessary to defend against any claims challenging inventorship

or ownership.

If we fail in defending any such claims, we may have to pay monetary damages and may lose valuable intellectual property

rights, such as exclusive ownership of, or right to use, intellectual property, which could adversely impact our business, results of

operations and financial condition.

may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent,

which might adversely affect our ability to develop and market our product candidates.

the extent undertaken, we cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents,

the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified

each and every third-party patent and pending application in the United States and abroad that is or may be relevant to or necessary

for the commercialization of our product candidates in any jurisdiction.

Patent applications in the United States and elsewhere are not

published until approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being

commonly referred to as the priority date.

In addition, certain United States patent applications can remain confidential until patents

Therefore, patent applications covering our products could have been filed by others without our knowledge.

Additionally, pending

patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our product

candidates or the use of our product candidates.

scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution

Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect, which may negatively

impact our ability to market our product candidates.

We may incorrectly determine that our product candidates are not covered by a third-party

patent or may incorrectly predict whether a third party’s pending application will issue with claims of relevant scope.

Our determination

of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, and our failure to identify

and correctly interpret relevant patents may negatively impact our ability to develop and market our product candidates.

we fail to identify and correctly interpret relevant patents, we may be subject to infringement claims.

We cannot guarantee that we will

be able to successfully settle or otherwise resolve such infringement claims.

If we fail in any such dispute, in addition to being forced

to pay damages, we may be temporarily or permanently prohibited from commercializing any of our product candidates that are held to be

We might, if possible, also be forced to redesign product candidates or services so that we no longer infringe the third-party

intellectual property rights.

Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial

and management resources that we would otherwise be able to devote to our business.

intellectual property agreements with third parties may be subject to disagreements over contract interpretation, which could narrow

the scope of our rights to the relevant intellectual property or technology or increase our financial or other obligations to our licensors.

provisions in our intellectual property agreements may be susceptible to multiple interpretations.

Disputes may arise between us and

any of these counterparties regarding intellectual property rights that are subject to such agreements, including, but not limited to:

scope of rights granted under the agreement and other interpretation-related issues;

and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the

right to sublicense patent and other rights to third parties;

diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of

our product candidates, and what activities satisfy those diligence obligations;

ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and

our partners;

right to transfer or assign our license;

effects of termination.

resolution of any contract interpretation disagreement that may arise could affect the scope of our rights to the relevant intellectual

property or technology, or affect financial or other obligations under the relevant agreement, either of which could have a material

adverse effect on our business, financial condition, results of operations and prospects.

we fail to comply with our obligations under any agreements, we may be required to pay damages and could lose intellectual property rights

that are necessary or useful for developing and protecting our product candidates.

have acquired all intellectual property rights from Signature and Mucokinetica, with the exception of our pending application directed

to the use of orally administered nafamostat to treat coronaviruses.

Any future collaboration agreements or license agreements we enter

into are likely to impose various development, commercialization, funding, milestone, royalty, diligence, sublicensing, insurance, patent

prosecution and enforcement or other obligations on us.

If we breach any such material obligations, or use the intellectual property

licensed to us in an unauthorized manner, we may be required to pay damages and the licensor may have the right to terminate the license,

which could result in us being unable to develop, manufacture and sell products that are covered by the licensed technology, or having

to negotiate new or reinstated licenses on less favorable terms, or enable a competitor to gain access to the licensed technology.

property rights do not necessarily address all potential threats to our business.

granted, patents may remain open to opposition, interference, re-examination, post-grant review, inter partes review, nullification or

derivation action in court or before patent offices or similar proceedings for a given period after allowance or grant, during which

time third parties can raise objections against such grant.

In the course of such proceedings, which may continue for a protracted period

of time, the patent owner may be compelled to limit the scope of the allowed or granted claims thus attacked, or may lose the allowed

or granted claims altogether.

In addition, the degree of future protection afforded by our intellectual property rights is uncertain

because even granted intellectual property rights have limitations, and may not adequately protect our business.

The following examples

are illustrative:

may be able to make formulations that are similar to our product candidates or other formulations but that are not covered by the

claims of our patent rights;

patents of third parties may have an adverse effect on our business;

or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued

patent or pending patent application that we own;

or any future strategic partners might not have been the first to file patent applications covering certain of our inventions;

may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual

property rights;

is possible that our pending patent applications will not lead to issued patents;

patents that we may own or that we exclusively license in the future may not provide us with any competitive advantage, or may be

held invalid or unenforceable, as a result of legal challenges by our competitors;

competitors might conduct research and development activities in countries where we do not have patent rights and then use the information

learned from such activities to develop competitive products for sale in our major commercial markets;

parties performing manufacturing or testing for us using our product candidates or technologies could use the intellectual property

of others without obtaining a proper license;

may not develop additional proprietary technologies that are patentable;

patents of others may have an adverse effect on our business.

any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and

validity, scope and enforceability of any patents listed in the Orange Book that cover our product candidates can be challenged by third

one of our product candidates is approved by the FDA, one or more third parties may challenge the current patents, or patents that may

issue in the future, within our portfolio which could result in the invalidation of, or render unenforceable, some or all of the relevant

patent claims or a finding of non-infringement.

For example, if a third party submits an application under Section 505(b)(2) or an abbreviated

new drug application, or ANDA, for a generic drug containing any of our product candidates, and relies in whole or in part on studies

conducted by or for us, the third party will be required to certify to the FDA that either:

(1) there is no patent information listed

in the Orange Book with respect to our NDA for the applicable approved drug candidate;

(2) the patents listed in the Orange Book have

(3) the listed patents have not expired, but will expire on a particular date and approval is sought after patent expiration;

or (4) the listed patents are invalid or will not be infringed by the manufacture, use or sale of the third party’s generic drug.

A certification that the new drug will not infringe the Orange Book-listed patents for the applicable approved drug candidate, or that

such patents are invalid, is called a paragraph IV certification.

If the third party submits a paragraph IV certification to the FDA,

a notice of the paragraph IV certification must also be sent to us once the third party’s ANDA is accepted for filing by the FDA.

We may then initiate a lawsuit to defend the patents identified in the notice.

The filing of a patent infringement lawsuit within 45

days of receipt of the notice automatically prevents the FDA from approving the third party’s ANDA until the earliest of 30 months

or the date on which the patent expires, the lawsuit is settled, or the court reaches a decision in the infringement lawsuit in favor

of the third party.

If we do not file a patent infringement lawsuit within the required 45-day period, the third party’s ANDA will

not be subject to the 30-month stay of FDA approval.

a third party may challenge the current patents, or patents that may be issued in the future, within our portfolio which could result

in the invalidation of some or all of the patents that might otherwise be eligible for listing in the Orange Book for one of our products.

If a third party successfully challenges all of the patents that might otherwise be eligible for listing in the Orange Book for one of

our products, we will not be entitled to the 30-month stay of FDA approval upon the filing of an ANDA for a generic drug containing any

of our product candidates, and relies in whole or in part on studies conducted by or for us.

Litigation or other proceedings to enforce

or defend intellectual property rights are often very complex in nature, may be very expensive and time-consuming, may divert our management’s

attention from our core business, and may result in unfavorable results that could limit our ability to prevent third parties from competing

with our product candidates.

we do not obtain protection under the Hatch-Waxman Amendments by obtaining data exclusivity, our business may be harmed.

commercial success will largely depend on our ability to obtain and market exclusivity in the United States and other countries with

respect to our product candidates.

Depending upon the timing, duration and specifics of FDA marketing approval of our product candidates,

certain of our product candidates may be eligible for marketing exclusivity.

FDC Act provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to obtain approval

of an NDA or Section 505(b)(2) NDA for a new chemical entity, or NCE.

A drug is an NCE if the FDA has not previously approved any other

new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance.

exclusivity is granted for an NCE, during the exclusivity period, the FDA may not accept for review or approve an abbreviated new drug

application, or ANDA, or a Section 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does

not own or have a legal right of reference to all the data required for approval.

However, an application may be submitted after four

years if it contains a certification of patent invalidity or non-infringement to one of the patents listed in the FDA’s publication

Approved Drug Products with Therapeutic Equivalence Evaluations, which we refer to as the Orange Book, with the FDA by the innovator

FDC Act also provides three years of marketing exclusivity for an NDA, or supplement to an existing NDA if new clinical investigations,

other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval

of the application, for example new indications, dosages, dosage forms or strengths of an existing drug.

This three-year exclusivity

covers only the conditions associated with the new clinical investigations and prohibits the FDA from approving an ANDA, or a Section

505(b)(2) NDA submitted by another company with overlapping conditions associated with the new clinical investigations for the three-year

Three-year exclusivity does not prohibit the FDA from approving ANDAs for drugs containing the original conditions of use.

and three-year exclusivity will not delay the submission or approval of an NDA for the same drug.

However, an applicant submitting an

NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical

trials necessary to demonstrate safety and effectiveness.

we are unable to obtain such marketing exclusivity for our product candidates, our competitors may be able to take advantage of our investment

in development and clinical trials by referencing our approval to obtain approval of competing products and launch their product earlier

than might otherwise be the case.

Cyber-attacks

or other failures in our telecommunications or information technology systems, or those of our collaborators, CROs, third-party logistics

providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption

of our business operations.

our collaborators, CROs, third-party logistics providers, distributors and other contractors and consultants utilize information technology,

or IT, systems and networks to process, transmit and store electronic information in connection with our business activities.

of digital technologies has increased, cyber incidents, including third parties gaining access to employee accounts using stolen or inferred

credentials, computer malware, viruses, spamming, phishing attacks or other means, and deliberate attacks and attempts to gain unauthorized

access to computer systems and networks, have increased in frequency and sophistication.

These threats pose a risk to the security of

us, our collaborators’, CROs’, third-party logistics providers’, distributors’ and other contractors’ and

consultants’ systems and networks, and the confidentiality, availability and integrity of our data.

There can be no assurance that

we will be successful in preventing cyber-attacks or successfully mitigating their effects.

Similarly, there can be no assurance that

our collaborators, CROs, third-party logistics providers, distributors and other contractors and consultants will be successful in protecting

our clinical and other data that is stored on their systems.

Like other companies, we have on occasion experienced, and will continue

to experience, threats to our data and systems, including malicious codes and viruses, phishing, business email compromise attacks or

other cyber-attacks.

Any cyber-attack, data breach or destruction or loss of data could result in a violation of applicable United States

and international privacy, data protection and other laws and subject us to litigation and governmental investigations and proceedings

by federal, state and local regulatory entities in the United States and by international regulatory entities, resulting in exposure

to material civil and/or criminal liability.

Further, our general liability insurance and corporate risk program may not cover all potential

claims to which we are exposed and may not be adequate to indemnify us for all liability that may be imposed, which could have a material

adverse effect on our business and prospects.

For example, the loss of clinical trial data from completed or ongoing clinical trials

for any of our product candidates could result in delays in our development and regulatory approval efforts and significantly increase

our costs to recover or reproduce the data.

In addition, we may suffer reputational harm or face litigation or adverse regulatory action

as a result of cyber-attacks or other data security breaches and may incur significant additional expense to implement further data protection

Related to the Ownership of Common Stock and Financial Reporting

additional capital could cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies

or product candidates.

expect our expenses to increase in connection with our planned operations.

Unless and until we can generate a substantial amount of revenue

from our product candidates, we expect to finance our future cash needs through public or private equity offerings, debt financings,

collaborations, licensing arrangements or other sources, or any combination of the foregoing.

In addition, we may seek additional capital

due to favorable market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future

operating plans.

For example, the subsequent conversion of the 2021 Notes sold on September 24, 2021 and November 5, 2021 into common

stock would result in dilution to stockholders.

the extent that we raise additional capital through the sale of common stock, convertible securities or other equity securities, our

stockholders’ ownership interest may be diluted.

In addition, debt financing, if available, may result in fixed payment obligations

and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional

debt, making capital expenditures, creating liens, redeeming stock or declaring dividends, that could adversely impact our ability to

conduct our business.

In addition, securing financing could require a substantial amount of time and attention from our management and

may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management’s

ability to oversee the development of our product candidates.

Further, we may incur additional dilution from repayment of the 2021 Notes

in common stock or resetting the conversion price of the 2021 Notes if we issue equity at a price below the conversion price of the 2021

Also, we will receive reduced proceeds if the exercise price of the warrants granted in connection with the 2021 Notes is reduced.

we raise additional capital through collaborations or marketing, distribution or licensing arrangements with third parties, we may have

to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not

be favorable to us.

If we are unable to raise additional capital when needed, we may be required to grant to third parties rights to

develop and market our product candidates that we would otherwise prefer to develop and market ourselves.

addition, any issuances of common stock pursuant to the GEM Agreement would result in dilution of the ownership interest of our stockholders.

Any such issuances may also have a negative impact on the market price of our common stock because of the discount at issuance.

require substantial additional funding.

If we are unable raise capital when needed, we could be forced to delay, reduce or terminate

our product discovery and development programs or commercialization efforts ” for description of risks related to additional

internal controls over financial reporting currently do not meet all of the standards contemplated by Section 404 of Sarbanes-Oxley Act,

and failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley

Act could impair our ability to produce timely and accurate financial statements or comply with applicable regulations and have a material

adverse effect on our business.

previously operated as a private company.

In connection with the preparation of our consolidated financial statements for the years ended

December 31, 2021 and 2020, we concluded that there were material weaknesses in our internal controls over financial reporting.

weakness is a significant deficiency, or a combination of significant deficiencies, in internal controls over financial reporting such

that it is reasonably possible that a material misstatement of the annual or interim financial statements will not be prevented or detected

on a timely basis.

The material weaknesses identified are insufficient internal controls because of inadequate technical accounting expertise

and inappropriate level of supervision and review due to the limited number of accounting personnel.

While we have taken steps to remediate

the material weaknesses in our internal controls over financial reporting, including hiring a Chief Financial Officer in February 2021,

we may not be successful in remediating such weaknesses.

the Merger, our management has significant requirements for enhanced financial reporting and internal controls as a public company.

process of designing and implementing effective internal controls is a continuous effort that will require us to anticipate and react

to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal

controls that is adequate to satisfy our reporting obligations as a public company.

If we are unable to establish or maintain appropriate

internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis or

result in material misstatements in our consolidated financial statements, which could harm our operating results.

In addition, we are

required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness

of our internal controls over financial reporting.

This assessment needs to include disclosure of any material weaknesses identified

by our management in our internal control over financial reporting.

The rules governing the standards that must be met for our management

to assess our internal control over financial reporting are complex and require significant documentation, testing, and possible remediation.

Testing and maintaining internal controls may divert management’s attention from other matters that are important to our business.

Our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting

on an annual basis.

However, while we remain an emerging growth company, we will not be required to include an attestation report on

internal control over financial reporting issued by our independent registered public accounting firm.

If we are not able to complete

an initial assessment of our internal controls and otherwise implement the requirements of Section 404 of the Sarbanes-Oxley Act in a

timely manner or with adequate compliance, our independent registered public accounting firm may not be able to certify as to the adequacy

of our internal controls over financial reporting.

impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us

to adverse regulatory consequences, including sanctions by the Securities and Exchange Commission, or SEC, or violations of applicable

stock exchange listing rules, which may result in a breach of the covenants under existing or future financing arrangements.

could be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial

Confidence in the reliability of our financial statements also could suffer if we or our independent registered public accounting

firm continue to report a material weakness in our internal controls over financial reporting.

This could materially adversely affect

us and lead to a decline in the market price of our common stock.

Related to Our Securities and to Being a Public Company

are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of

certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,”

this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public

are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage

of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging

growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section

404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,

and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any

golden parachute payments not previously approved.

As a result, our stockholders may not have access to certain information they may

deem important.

We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status

earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million as of the end of any second quarter

of a fiscal year, in which case we would no longer be an emerging growth company as of the last day of such fiscal year.

We cannot predict

whether investors will find our securities less attractive because we will rely on these exemptions.

If some investors find our securities

less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise

would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

Further, Section 102(b)(1) of the JOBS

Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private

companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class

of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that

apply to non-emerging growth companies but any such an election to opt out is irrevocable.

We have elected not to opt out of such

extended transition period, which means that when a standard is issued or revised and it has different application dates for public

or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt

the new or revised standard.

This may make comparison of our financial statements with another public company which is neither

an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult

or impossible because of the potential differences in accounting standards used.

Additionally, we qualify

as a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

Smaller reporting companies may

take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial

We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value

of common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal

quarter, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of

common stock held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.

To the extent we take advantage of such reduced disclosure obligations, we may also make comparison of its financial statements

with other public companies difficult or impossible.

Compliance obligations

under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our Business Combination, require substantial financial

and management resources, and increase the time and costs of completing an acquisition.

Section 404 of the Sarbanes-Oxley

Act requires that we evaluate and report on our system of internal controls.

As long as we maintain our status as an “emerging

growth company,” we will not be required to comply with the independent registered public accounting firm attestation requirement

on our internal control over financial reporting.

The fact that we are a blank check company makes compliance with the requirements

of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target company with which

we seek to complete our Business Combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding

adequacy of its internal controls.

The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley

Act may increase the time and costs necessary to complete any such acquisition.

Provisions in our amended and restated

certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing

to pay in the future for our common stock and could entrench management.

Our amended and restated certificate of

incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their

best interests.

These provisions include a staggered board of directors and the ability of the board of directors to designate

the terms of and issue new series of preferred shares, which may make the removal of management more difficult and may discourage

transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

We are also subject to anti-takeover provisions

under Delaware law, which could delay or prevent a change of control.

Together these provisions may make the removal of management

more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices

for our securities.

If we effect our Business Combination

with a company with operations or opportunities outside of the United States, we would be subject to a variety of additional risks

that may negatively impact our operations.

If we effect our Business Combination

with a company with operations or opportunities outside of the United States, we would be subject to any special considerations

or risks associated with companies operating in an international setting, including any of the following:

higher costs and

difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements

of overseas markets;

rules and regulations

regarding currency redemption;

complex corporate

withholding taxes on individuals;

laws governing the

manner in which future Business Combinations may be effected;

tariffs and trade

regulations related

to customs and import/export matters;

longer payment cycles

and challenges in collecting accounts receivable;

tax issues, such

as tax law changes and variations in tax laws as compared to the United States;

currency fluctuations

and exchange controls;

rates of inflation;

cultural and language

employment regulations;

crime, strikes,

riots, civil disturbances, terrorist attacks, natural disasters and wars;

deterioration of

political relations with the United States;

government appropriations

We may not be able to adequately address

these additional risks.

If we were unable to do so, our operations might suffer, which may adversely impact our results of operations

and financial condition.

Risks Related to The Company after a Business Combination

Subsequent to the completion of our

Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that

could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause

you to lose some or all of your investment.

Even if we conduct extensive

due diligence on a target business with which we combine, we cannot assure you that this diligence will surface all material issues

that may be present inside a particular target business, that it would be possible to uncover all material issues through a customary

amount of due diligence, or that factors outside of the target business and outside of our control will not later arise.

result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment

or other charges that could result in our reporting losses.

Even if our due diligence successfully identifies certain risks, unexpected

risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis.

though these charges may be non-cash items and would not have an immediate impact on our liquidity, unexpected risks may arise

and previously known risks may materialize in a manner not consistent with LACQ’s risk analysis.

Even though some of these

charges may be non-cash items and not have an immediate impact on LACQ’s liquidity, charges of this nature could contribute

to negative market perceptions about LACQ or its securities.

Accordingly, LACQ’s stockholders following the business combination

could suffer a reduction in the value of their shares .

We may issue additional common or preferred

shares to complete our Business Combination or under an employee incentive plan after completion of our Business Combination,

any one of which would dilute the interest of our stockholders and likely present other risks.

Our amended and restated certificate of

incorporation authorizes the issuance of up to 100,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares

of preferred stock, par value $0.0001 per share.

As of March 10, 2021, there were 75.4 million authorized but unissued shares of

common stock available for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding

warrants, and there were no shares of preferred stock issued and outstanding.

We may issue a substantial number of additional

shares of common or preferred stock to complete our Business Combination or under an employee incentive plan after completion

of our Business Combination.

However, our amended and restated certificate of incorporation provides, among other things, that

prior to our Business Combination, we may not issue additional shares of capital stock that would entitle the holders thereof

to receive funds from the Trust Account or vote on any Business Combination.

The issuance of additional shares of common or preferred

may significantly

dilute the equity interest of existing stockholders;

may subordinate

the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;

could cause a change

in control if a substantial number of shares of common stock is issued, which may affect, among other things, our ability

to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers

and directors;

may adversely affect

prevailing market prices for our units, common stock and/or warrants.

Resources could be wasted in researching

acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge

with another business.

If we are unable to complete our Business Combination, our public stockholders may receive only approximately

$10.00 per share, or less than such amount in certain circumstances, on the liquidation of our Trust Account and our warrants

will expire worthless.

We anticipate that the investigation of

each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other

instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others.

If we decide not to complete a specific Business Combination, the costs incurred up to that point for the proposed transaction

likely would not be recoverable.

Furthermore, if we reach an agreement relating to a specific target business, we may fail to

complete our Business Combination for any number of reasons including those beyond our control.

Any such event will result in

a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or

merge with another business.

If we are unable to complete our Business Combination, our public stockholders may receive only approximately

$10.00 per share on the liquidation of our Trust Account and our warrants will expire worthless.

We may issue notes or other debt securities,

or otherwise incur substantial debt, to complete a Business Combination, which may adversely affect our leverage and financial

condition and thus negatively impact the value of our stockholders’ investment in us.

Although we have no commitments as of

the date of this Annual Report on Form 10-K to issue any notes or other debt securities, or to otherwise incur outstanding debt,

we may choose to incur substantial debt to complete our Business Combination.

We have agreed that we will not incur any indebtedness

unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in

the Trust Account.

As such, no issuance of debt will affect the per-share amount available for redemption from the Trust Account.

Nevertheless, the incurrence of debt could have a variety of negative effects, including:

default and foreclosure

on our assets if our operating revenues after a Business Combination are insufficient to repay our debt obligations;

acceleration of

our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain

covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

our immediate payment

of all principal and accrued interest, if any, if the debt security is payable on demand;

our inability to

obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing

while the debt security is outstanding;

our inability to

pay dividends on our common stock;

using a substantial

portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on

our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general

corporate purposes;

limitations on our

flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

increased vulnerability

to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;

limitations on our

ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution

of our strategy;

other disadvantages

compared to our competitors who have less debt.

We may only be able to complete one

Business Combination, which will cause us to be solely dependent on a single business which may have a limited number of products

This lack of diversification may negatively impact our operations and profitability.

We may effectuate our Business Combination

with a single target business or multiple target businesses simultaneously or within a short period of time.

However, we may not

be able to effectuate our Business Combination with more than one target business because of various factors, including the existence

of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present

operating results and the financial condition of several target businesses as if they had been operated on a combined basis.

completing our Business Combination with only a single entity, our lack of diversification may subject us to numerous economic,

competitive and regulatory developments.

Further, we would not be able to diversify our operations or benefit from the possible

spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several Business Combinations

in different industries or different areas of a single industry.

Accordingly, the prospects for our success may be:

solely dependent

upon the performance of a single business, property or asset;

dependent upon the

development or market acceptance of a single or limited number of products, processes or services.

This lack of diversification may subject

us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon

the particular industry in which we may operate subsequent to our business combination.

We may attempt to complete our Business

Combination with a private company about which little information is available, which may result in a Business Combination with

a company that is not as profitable as we suspected, if at all.

In pursuing our acquisition strategy,

we may seek to effectuate our Business Combination with a privately held company.

Very little public information generally exists

about private companies, and we could be required to make our decision on whether to pursue a potential Business Combination on

the basis of limited information, which may result in a Business Combination with a company that is not as profitable as we suspected,

Risks Related to Our Sponsor, Management, Directors and

We are dependent upon our executive

officers and directors and their departure could adversely affect our ability to operate.

Our operations are dependent upon a relatively

small group of individuals and, in particular, our executive officers and directors.

We believe that our success depends on the

continued service of our executive officers and directors, at least until we have completed our Business Combination.

our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly,

will have conflicts of interest in allocating management time among various business activities, including identifying potential

Business Combinations and monitoring the related due diligence.

We do not have an employment agreement with, or key man insurance

on the life of, any of our directors or executive officers.

The unexpected loss of the services of one or more of our directors

or executive officers could have a detrimental effect on us.

Our ability to successfully effect

our Business Combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some

of whom may join us following our Business Combination.

The loss of key personnel could negatively impact the operations and profitability

of our post-combination business.

Our ability to successfully effect our

Business Combination is dependent upon the efforts of our key personnel.

The role of our key personnel in the target business,

however, cannot presently be ascertained.

Although some of our key personnel may remain with the target business in senior management

or advisory positions following our Business Combination, it is likely that some or all of the management of the target business

will remain in place.

While we intend to closely scrutinize any individuals we engage after our Business Combination, we cannot

assure you that our assessment of these individuals will prove to be correct.

These individuals may be unfamiliar with the requirements

of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar

with such requirements.

In addition, the officers and directors

of an acquisition candidate may resign upon completion of our Business Combination.

The departure of a Business Combination target’s

key personnel could negatively impact the operations and profitability of our post-combination business.

The role of an acquisition

candidate’s key personnel upon the completion of our Business Combination cannot be ascertained at this time.

contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition

candidate following our Business Combination, it is possible that members of the management of an acquisition candidate will not

wish to remain in place.

The loss of key personnel could negatively impact the operations and profitability of our post-combination

Past performance by our management

team may not be indicative of future performance of an investment in our company.

Information regarding performance by,

or businesses associated with, our management team, including Mr.

Silvers is presented for informational purposes

Past performance by our management team, including with respect to Mr.

Weil’s involvement with two successor entities

of blank check companies, is not a guarantee either (i) that we will be able to locate a suitable candidate for our Business Combination

or (ii) of success with respect to any Business Combination we may consummate.

You should not rely on the historical record

of our management team’s performance as indicative of future performance.

We may have a limited ability to assess

the management of a prospective target business and, as a result, may affect our Business Combination with a target business whose

management may not have the skills, qualifications or abilities to manage a public company, which could, in turn, negatively impact

the value of our stockholders’ investment in us.

When evaluating the desirability of effecting

our Business Combination with a prospective target business, our ability to assess the target business’s management may

be limited due to a lack of time, resources or information.

Our assessment of the capabilities of the target’s management,

therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected.

the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations

and profitability of the post-combination business may be negatively impacted.

Accordingly, any stockholders who choose to remain

stockholders following the Business Combination could suffer a reduction in the value of their shares.

Such stockholders are unlikely

to have a remedy for such reduction in value.

Our officers and directors will allocate

their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our

This conflict of interest could have a negative impact on our ability to complete our Business Combination.

Our officers and directors are not required

to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between

our operations and our search for a Business Combination and their other businesses.

We do not intend to have any full-time employees

prior to the completion of our Business Combination.

Each of our officers is engaged in several other business endeavors for which

he may be entitled to substantial compensation and our officers are not obligated to contribute any specific number of hours per

week to our affairs.

Our independent directors may also serve as officers or board members for other entities.

If our officers’

and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their

current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our

ability to complete our Business Combination.

Our sponsors and our strategic investor,

and their affiliates, have no obligation to provide us with potential investment opportunities or to devote any specified amount

of time or support to our company’s business.

Although we expect to benefit from our

sponsors’ and our strategic investor’s network of relationships and processes for sourcing, evaluating and allocating

investment opportunities among itself, us, and other parties, our sponsors and strategic investor have no legal or contractual

obligation to seek on our behalf or to present to us investment opportunities that might be suitable for our business.

and our strategic investor may allocate potential investments at their discretion to any of our sponsors, the strategic investor,

us, or other parties.

We have no investment management, advisory, consulting or other agreement in place with our sponsors or

strategic investor that obligate any of them to undertake efforts on our behalf or that govern the manner in which they will allocate

investment opportunities.

Even if our sponsors and our strategic investor refer an opportunity to us, no assurance can be given

that such opportunity will result in an acquisition agreement or a Business Combination.

Certain of our officers and directors

are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended

to be conducted by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity

a particular business opportunity should be presented.

Until we consummate our Business Combination,

we intend to engage in the business of identifying and combining with one or more businesses.

Our sponsors, strategic investor

and officers and directors are, and may in the future become, affiliated with entities that are engaged in a similar business.

In addition, our sponsors, officers and directors 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 officers and directors also may become

aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain

fiduciary or contractual duties.

Accordingly, they may have conflicts of

interest in determining to which entity a particular business opportunity should be presented.

These conflicts may not be resolved

in our favor and a potential target business may be presented to another entity prior to its presentation to us.

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.

Our officers, directors, security holders

and their respective affiliates may have competitive pecuniary interests that conflict with our interests.

We have not adopted a policy that expressly

prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest

in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest.

we may enter into a Business Combination with a target business that is affiliated with our sponsors, our directors or officers,

although we do not intend to do so.

We do not have a policy that expressly prohibits any such persons from engaging for their

own account in business activities of the types conducted by us.

Accordingly, such persons or entities may have a conflict between

their interests and ours.

Our Executive Chairman and Chief Executive

Officer are parties to certain agreements that limit the types of companies that we can target for a Business Combination, among

other restrictions, which could limit our prospects for a Business Combination.

Lorne Weil, our Executive Chairman,

and Daniel B.

Silvers, our Chief Executive Officer, is party to an employment agreement with Inspired.

These employment agreements

contain non-competition provisions that provide that neither Mr.

Silvers shall directly or indirectly engage in any

business which is directly competitive with any business conducted by Inspired and its associated companies that it controls (collectively,

the “Inspired Group”) during his employment, in any geographic area in which such business was so conducted by the

Inspired Group.

These agreements are collectively referred to as the non-competition agreements.

In light of the non-competition

agreements, we will not seek a Business Combination with any company with operations in the businesses described above.

if our Business Combination does not cause 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 which would cause 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.

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.

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 could be time consuming, costly and distract management’s focus from

locating suitable acquisition candidates and operating our business.

Our Executive Chairman is party to

a certain agreement that will limit his ability to solicit or hire employees of Inspired, which could make us a less attractive

buyer to certain target companies.

In the employment agreement entered into

Lorne Weil, our Executive Chairman, with Inspired, there are also provisions preventing him from being able to directly

or indirectly solicit or entice away or endeavor to solicit or entice away from the Inspired Group for the purposes of employment

or engagement of any person who on the date of the termination of Mr.

Weil’s employment is employed or engaged by the Inspired

Group in a senior management capacity and with whom Mr.

Weil worked closely during the period of 12 months prior to the date of

termination of Mr.

Weil’s employment (whether or not such person would commit a breach of his contract of employment by

To the extent a target company may be interested in hiring personnel from the Inspired Group, we might be a less attractive

buyer as a result of the non-competition agreements.

We may engage in a Business Combination

with one or more target businesses that have relationships with entities that may be affiliated with our sponsors, strategic investor,

officers, directors or existing holders which may raise potential conflicts of interest.

In light of the involvement of our sponsors,

strategic investor, officers and directors with other entities, we may decide to acquire one or more businesses affiliated with

our sponsors, strategic investor, officers or directors.

Our directors also serve as officers and board members for other entities,

including, without limitation, those described in “Item 10.

Directors, Executive Officers and Corporate Governance”

Such entities may compete with us for Business Combination opportunities.

Although we will not be specifically focusing

on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such

affiliated entity met our criteria for a Business Combination and such transaction was approved by a majority of our disinterested

Despite our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA, or

from an independent accounting firm, regarding the fairness to our company from a financial point of view of a Business Combination

with one or more domestic or international businesses affiliated with our officers, directors or existing holders, potential conflicts

of interest still may exist and, as a result, the terms of the Business Combination may not be as advantageous to our public stockholders

as they would be absent any conflicts of interest.

Since our sponsors, strategic investor,

officers and directors will lose their entire investment in us if our Business Combination is not completed, a conflict of interest

may arise in determining whether a particular Business Combination target is appropriate for our Business Combination.

Our initial stockholders hold in the aggregate

5,000,000 founder shares, representing 80.3% of the total outstanding shares as of December 31, 2020.

The founder shares will

be worthless if we do not complete our Business Combination.

In addition, affiliates of our Hydra Sponsor and Matthews Lane Sponsor,

our strategic investor and certain members of management hold an aggregate of 6,825,000 private placement warrants and an aggregate

of 1,000,001 working capital warrants that will also be worthless if we do not complete a Business Combination.

Holders of founder

shares have agreed (A) to vote any shares owned by them in favor of any proposed Business Combination and (B) not to redeem any

founder shares in connection with a stockholder vote to approve a proposed Business Combination.

In addition, we may obtain loans

from our sponsors, strategic investor, affiliates of our sponsors or strategic investor or an officer or director, and we may

pay our sponsors, strategic investor, officers, directors and any of their respective affiliates’ fees and expenses in connection

with identifying, investigating and consummating a Business Combination.

The personal and financial interests of

our sponsors, strategic investor, their affiliates or our officers and directors may influence their motivation in identifying

and selecting a target Business Combination, completing a Business Combination and influencing the operation of the business following

the Business Combination.

This risk may become more acute at the end of the Combination Period.

Since our sponsors, strategic investor,

officers and directors will not be eligible to be reimbursed for their out-of-pocket expenses from the funds held in the Trust

Account if our Business Combination is not completed, a conflict of interest may arise in determining whether a particular Business

Combination target is appropriate for our Business Combination.

At the closing of our Business Combination,

our sponsors, strategic investor, officers and directors, or any of their respective affiliates, may 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 from the funds held in the Trust Account.

In the event our Business Combination is

completed, there is no cap or ceiling on any such reimbursement from the funds held in the Trust Account of out-of-pocket expenses

incurred in connection with activities on our behalf.

However, our sponsors, strategic investor, officers and directors, or any

of their respective affiliates will not be eligible for any such reimbursement from the funds held in the Trust Account if our

Business Combination is not completed.

These financial interests of our sponsors, strategic investor, officers and directors may

influence their motivation in identifying and selecting a target Business Combination and completing a Business Combination.

of December 31, 2020, the aggregate amount of unreimbursed expenses was approximately $10,000.

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting

standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective

or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements

that apply to non-emerging growth companies but any such election to opt out is irrevocable.

We have elected not to opt out of such extended

transition period, which means that when a standard is issued or revised and it has different application dates for public or private

companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised

This may make comparison of our financial statements with another public company that is not an emerging growth company or

is an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential

differences in accounting standards used.

Additionally,

we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

Smaller reporting companies may take

advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.

We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held

by non-affiliates is greater than or equal to $250 million as of the end of that fiscal year’s second fiscal quarter, and (ii)

our annual revenues are greater than or equal to $100 million during the last completed fiscal year and the market value of our common

stock held by non-affiliates exceeds $700 million as of the end of that fiscal year’s second fiscal quarter.

To the extent we take

advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies

difficult or impossible.

amount of our future losses is uncertain and our quarterly and annual operating results may fluctuate significantly or fall below the

expectations of investors or securities analysts, each of which may cause our stock price to fluctuate or decline.

quarterly and annual operating results may fluctuate significantly in the future due to a variety of factors, many of which are outside

of our control and may be difficult to predict, including the following:

timing and success or failure of clinical trials for our product candidates or competing product candidates, or any other change

in the competitive landscape of our industry,

ability to successfully recruit and retain subjects for clinical trials, and any delays caused by difficulties in such efforts, including

as a result of COVID-19;

risk/benefit profile, cost and reimbursement policies with respect to our product candidates, if approved, and existing and potential

future therapeutics that compete with our product candidates;

ability to obtain marketing approval for our product candidates and the timing and scope of any such approvals we may receive;

timing and cost of, and level of investment in, research and development activities relating to our product candidates, which may

change from time to time;

cost of manufacturing our product candidates, which may vary depending on the quantity of production and the terms of our agreements

with manufacturers;

ability to attract, hire and retain qualified personnel;

that we will or may incur to develop additional product candidates;

level of demand for our product candidates should they receive approval, which may vary significantly;

changing and volatile U.S.

and global economic environments;

accounting pronouncements or changes in our accounting policies.

cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results.

As a result, comparing our operating results on a period-to-period basis may not be meaningful.

This variability and unpredictability

could also result in our failing to meet the expectations of industry or financial analysts or investors for any period.

If our operating

results or revenue fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the

forecasts we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially.

Such a stock price decline could occur even when we have met any previously publicly stated guidance we may provide, if any.

the Nasdaq delists our common stock and/or our Public Warrants do not continue to trade on the OTC Pink Open Market, this could limit

investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

Nasdaq delists our common stock and/or our Public Warrants do not continue to trade on the OTC Pink Open Market, as applicable, from

trading on their exchanges for failure to meet the listing standards, our stockholders could face significant material adverse consequences

limited availability of market quotations for our securities;

liquidity for our securities;

determination that our common stock is a “penny stock” which will require brokers trading in such securities to adhere

to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

limited amount of news and analyst coverage;

decreased ability to issue additional securities or obtain additional financing in the future, including our inability to obtain

financing under the GEM Agreement.

for shares of our common stock, if exercised, will increase the number of shares eligible for future resale in the public market and

result in dilution to our stockholders.

are Public Warrants currently exercisable for an aggregate of approximately 10,000,000 shares of our common stock at an exercise price

of $11.50 per share.

In addition, there are private warrants exercisable for an aggregate of 11,090,873 shares of our common stock at

a weighted-average exercise price of $10.36 per share.

To the extent such warrants are exercised, additional shares of our common stock

will be issued, which will result in dilution to the holders of shares of our common stock and increase the number of shares of common

stock eligible for resale in the public market.

Sales of substantial numbers of such shares of common stock in the public market or the

fact that such warrants may be exercised could adversely affect the market price of our common stock.

blocks of our total outstanding shares may be sold into the market.

If there are substantial sales of shares of our common stock, the

price of our common stock could decline.

price of our common stock could decline if there are substantial sales of shares of our common stock by our directors, executive officers,

or significant stockholders, if there is a large number of shares of our common stock available for sale, or if there is the perception

that these sales could occur.

Immediately after the Merger, a significant portion of our shares of common stock or warrants exercisable

for our shares of common stock were held by persons who had been affiliated with LACQ prior to the Merger but did not remain so with

respect to us after the Merger.

In addition, we have registered shares of common stock that we may issue under our 2021 Omnibus Incentive

Shares held by our directors, executive officers and other affiliates are subject to restrictions on resale under the Securities

Act and may be subject to various vesting agreements.

of our initial stockholders have agreed, subject to certain exceptions, not to transfer, pledge, assign, sell or otherwise dispose of

any of our common stock held by them immediately after the Merger until the earlier to occur of (a) one year after the Merger and (b)

the date on which we complete a liquidation, merger, share exchange or other similar transaction after closing that results in all of

our stockholders having the right to exchange their common shares for cash, securities or other property.

However, if the closing price

of our common shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations

and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Merger, the shares of those

initial stockholders will be released from the lock-up.

market price of the shares of our common stock could decline as a result of the sale of a substantial number of our shares of common

stock in the public market or the perception in the market that the holders of a large number of such shares intend to sell their shares.

issuance of additional capital stock in connection with financings, acquisitions, investments, our 2021 Omnibus Incentive Plan and to

repay interest or principal on the 2021 Notes or otherwise will dilute all other stockholders.

expect to issue additional capital stock in the future that will result in dilution to all other stockholders.

We expect to grant equity

awards to employees, directors, and consultants under our 2021 Omnibus Incentive Plan.

We may use our common stock to make repayment

of some or all of the principal and interest on the 2021 Notes.

We may also raise capital through equity financings in the future.

part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies and issue equity

securities to pay for any such acquisition or investment.

Any such issuances of additional capital stock may cause stockholders to experience

significant dilution of their ownership interests and the per share value of our common stock to decline.

on the OTC Pink Open Market is volatile and sporadic, which could depress the market price of the Public Warrants and make it difficult

for the Public Warrant holders to resell their Public Warrants.

Public Warrants are quoted on the OTC Pink Open Market.

Trading in securities quoted on the OTC Pink Open Market is often thin and characterized

by wide fluctuations in trading prices, due to many factors, some of which may have little to do with our operations or business prospects.

This volatility could depress the market price of the Public Warrants for reasons unrelated to operating performance.

Moreover, the OTC

Pink Open Market is not a stock exchange, and trading of securities on the OTC Pink Open Market is often more sporadic than the trading

of securities listed on Nasdaq.

These factors may result in investors having difficulty reselling any Public Warrants.

LACQ determined that the Public Warrants should be classified as equity and its private warrants will be treated as equity on

a pro forma basis, due to the uncertainty with respect to classification of warrants issued by SPACs as equity or indebtedness, there

can be no assurance that future guidance might not require us to change this position and restate our financial statements and have other

adverse consequences.

LACQ’s financial statements were restated to classify its private warrants as liabilities, we have determined that it is appropriate

to continue to classify the Public Warrants as equity.

We reviewed the terms of the warrant agreement related to the

Public Warrants and concluded that they do not include any provision requiring the Public Warrants to be classified as liabilities.

In this respect, it should be noted that the warrant agreement included a provision that in the event of a tender or exchange offer made

to and accepted by holders of more than 50% of the outstanding shares of a single class of common shares, all holders of the warrants

could be entitled to receive cash for their warrants (the “ tender offer provision ”).

This tender offer provision was

similar to one of the examples referred to in the SEC Statement as a basis for concluding that warrants issued by a SPAC should be classified

as liabilities and not equity.

LACQ concluded that, while the SEC Statement did not expressly refer to a multi-class structure (such

as a structure where a SPAC had two classes of common stock), the SEC Statement with respect to a tender offer provision in a warrant

agreement applied to a multi-class structure (such as a Class A and Class B structure) and not a single class structure like the Public

Certain other SPACs, including those with single class structures, have taken different approaches in their public filings

with the SEC and have classified similar warrants as liabilities.

classified its private warrants as liabilities because they provided for potential changes to the settlement amounts dependent upon the

characteristics of the holder of the warrant (i.e., certain rights differ if the warrants are held by the original holder and its permitted

transferees or by a subsequent transferee).

LACQ entered into agreements with the holders of its private warrants under which each holder

exchanged its private warrants for warrants on the same terms as the private warrants, except that they are non-transferable except

to certain permitted transferees.

LACQ believed that as a result of the exchange, the private warrants would be appropriately classified

as equity and not liabilities subsequent to the date of such agreements.

accounting treatment of warrants issued in SPAC transactions is subject to substantial uncertainty and there can be no

assurance that future guidance might not require us to change LACQ’s position and restate our financial statements or treat private

warrants as liabilities, which could have a material adverse effect on us.

common stock could be delisted from Nasdaq and may become subject to “penny stock” rules, which could damage our reputation

and the ability of investors to sell their shares.

can be no assurance that our common stock will maintain our listing on Nasdaq which could have a material adverse effect on us.

any delisting, our common stock could become subject to the regulations of the SEC relating to the market for penny stocks.

are securities with a price of less than $5.00 per share unless (i) the securities are traded on a “recognized” national

exchange or (ii) the issuer has Net Tangible Assets less than $2,000,000 (if the issuer has been in continuous operation for at least

three years) or $5,000,000 (if in continuous operation for less than three years), or with average annual revenues of less than $6,000,000

for the last three years.

procedures applicable to penny stocks requires a broker-dealer to (i) obtain from the investor information concerning his financial situation,

investment experience and investment objectives;

(ii) reasonably determine, based on that information, that transactions in penny stocks

are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating

the risks of penny stock transactions;

(iii) provide the investor with a written statement setting forth the basis on which the broker-dealer

made the determination in (ii) above;

and (iv) receive a signed and dated copy of such statement from the investor, confirming that it

accurately reflects the investor’s financial situation, investment experience and investment objectives.

The regulations applicable

to penny stocks may severely affect the market liquidity for our common stock and could limit the ability of stockholders to sell their

common stock in the secondary market.

directors and executive officers own a significant percentage of our common stock and will be able to exert significant control over

matters subject to stockholder approval.

of December 31, 2021, our executive officers and directors beneficially owned approximately 52.0% of our common stock.

These stockholders,

acting together, may be able to control matters requiring stockholder approval.

For example, they may be able to control elections of

directors, changes to equity incentive plans, amendments of our organizational documents or approval of any merger, sale of assets or

other major corporate transactions.

This concentration of ownership control may delay, discourage or prevent a change of control, including

unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders,

entrench our management and board of directors or delay or prevent a merger, consolidation, takeover or other business combination involving

us that other stockholders may desire.

The interests of this group of stockholders may not always coincide with your interests or the

interests of other stockholders and they may act in a manner that advances their best interests and not necessarily those of other stockholders,

including seeking a premium value for their common stock, and might affect the prevailing market price for our common stock.

Unresolved Staff Comments

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-K

Item 1A. Risk Factors