What changed in this filing

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Item 9A. Controls and Procedures

2022-03-31 compared with 2021-03-15 · 1466 added, 1771 removed, 56 unchanged (98% of the section changed)

Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures are

controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted

under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information

required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management,

including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15

under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness

of the design and operation of our disclosure controls and procedures as of December 31, 2020.

Based upon their evaluation, our

Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules

13a-15(e) and 15d-15(e) under the Exchange Act) were effective.

Management’s Annual Report on Internal

of Disclosure Controls and Procedures

disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit

under the Securities Exchange Act of 1934 as amended (the “Exchange Act”) is recorded, processed, summarized and reported

within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our

management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness

of our disclosure controls and procedures (as defined in Exchange Act Rule 13a–15(e) and 15d-15(e)) as of December 31,

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure

controls and procedures were not effective as of December 31, 2021 due to the material weaknesses in our internal controls over financial

reporting described below.

Notwithstanding these material weaknesses, management has concluded that our consolidated financial statements

included in this Annual Report on Form 10-K are fairly stated in all material respects in accordance with GAAP for each of the periods

presented therein.

Annual Report on Internal Control over Financial Reporting

of December 31, 2021, our management assessed the effectiveness of our internal control over financial reporting using the criteria

set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013)

(the “2013 Framework”) .

In adopting the 2013 Framework, management assessed the applicability of the principles within

each component of internal control and determined whether or not they have been adequately addressed within the current system of internal

control and adequately documented.

Based on this assessment, management, under the supervision and with the participation of our Chief

Executive Officer and Chief Financial Officer, concluded that, as of December 31, 2021, our internal control over financial reporting

was ineffective due to material weaknesses.

A material 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.

material weaknesses identified are insufficiently designed internal controls over period end financial reporting because

of inadequate accounting expertise and insufficient level of supervision and review of unusual and/or infrequent transactions

with complex or infrequently applied accounting topics due to the experience and limited number of accounting personnel in

the financial reporting function.

are taking steps to remediate the material weaknesses in our internal controls over financial reporting, including hiring a Chief Financial

Officer in February 2021.

Further, we plan to enhance our processes to identify and appropriately apply applicable accounting requirements

to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements.

this time include providing enhanced access to accounting literature, research materials and documents and increased communication among

our personnel and third-party professionals with whom we consult regarding complex accounting applications.

The elements of our remediation

plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

conclusion of the Company’s principal executive officer and principal financial officer is based on the recognition that there

are inherent limitations in all systems of internal control over financial reporting.

Because of its inherent limitations, internal control

over financial reporting may not prevent or detect misstatements, errors or fraud.

Also, projections of any evaluation of effectiveness

to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of

compliance with the policies or procedures may deteriorate.

Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal

control over financial reporting.

As required by SEC rules and regulations

implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate

internal control over financial reporting.

Our internal control over financial reporting is designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes

in accordance with GAAP.

Our internal control over financial reporting includes those policies and procedures that:

pertain to the maintenance

of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our

provide reasonable

assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP,

and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors,

provide reasonable

assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could

have a material effect on the financial statements.

Because of its inherent limitations, internal

control over financial reporting may not prevent or detect errors or misstatements in our financial statements.

Also, projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes

in conditions, or that the degree or compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness

of our internal control over financial reporting at December 31, 2020.

In making these assessments, management used the criteria

set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated

Framework (2013).

Based on our assessments and those criteria, management determined that we maintained effective internal control

over financial reporting as of December 31, 2020.

This Annual Report on Form 10-K does not

include an attestation report of internal controls from our independent registered public accounting firm due to our status as

an emerging growth company under the JOBS Act.

Changes in Internal Control over Financial

There were no changes in our internal

control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most

recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over

financial reporting.

We were not required to have, nor have we, engaged our independent registered public accounting firm

to perform an audit of internal control over financial reporting pursuant to SEC rules that permit us to provide only management’s

report in this Annual Report on Form 10-K.

in Internal Control Over Financial Reporting

were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the

Exchange Act) during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect,

our internal control over financial reporting.

Other Information

Directors, Executive Officers

and Corporate Governance

Directors and Executive Officers

Our current directors and executive officers

as of the date of this Report are as follows:

Executive Chairman

Chief Executive Officer and Director

Chief Financial Officer, Treasurer and Secretary

Senior Vice President — Finance and Business Development

As of March 1, 2021.

Lorne Weil has served as our

Executive Chairman since our formation in September 2017 and has been a principal of Hydra Management, an investment vehicle formed

Weil, since September 2014.

Weil serves as Executive Chairman of Inspired Entertainment, Inc., a position he has held

since December 2016.

Previously, Mr.

Weil served as Chairman and CEO of Inspired’s predecessor, Hydra Industries Acquisition

Corp., since October 2014.

Weil previously served as Chairman of the Board of Scientific Games Corporation (and its predecessor

Autotote Corporation) from October 1991 to November 2013.

Weil also served as the Chief Executive Officer of Scientific Games

Corporation (and its predecessor Autotote Corporation) from 1992 to 2008 and from November 2010 to November 2013 (Mr.

retired in 2008) and as the President from August 1997 to June 2005.

Weil’s stewardship, the company made a number

of significant acquisitions and joint ventures, including the privatization of the off-track betting operations of the State of

Connecticut, and the acquisitions of Scientific Games Holdings Corp., IGT Online Entertainment Systems, Global Draw and WMS Industries,

and the privatization of the Illinois, New Jersey and Italian lotteries.

Prior to joining Scientific Games, Mr.

Weil was President

of Lorne Weil, Inc., a firm he founded which provided strategic planning and corporate development services to technology-based

industries, a role he maintained from 1979 to November 1992.

From 1974 to 1979, Mr.

Weil was Vice President — Corporate Development

at General Instrument Corporation.

From 1970 to 1974, Mr.

Weil was a manager with the Boston Consulting Group.

Weil received

his undergraduate degree from the University of Toronto, an M.S.

degree from the London School of Economics and an M.B.A.

Columbia University, where he served for more than 10 years on the Board of Overseers.

From 2011 to 2013, Mr.

Weil was a director

of Avantair Inc.

Weil was the sponsor and Chairman of the Board of Andina Acquisition Corp., a Nasdaq-listed blank

check company, and currently serves as the Non-Executive Chairman of the Board of the successor entity, Tecnoglass Inc.

We believe Mr.

Weil is well-qualified to

serve as a member of our board of directors due to his extensive business experience in strategic planning and corporate development,

his experience successfully overseeing the IPO of Hydra Industries Acquisition Corp.

and its subsequent merger with Inspired Gaming

Group, the IPO of Andina and its subsequent merger with Tecnoglass, the contacts he has fostered over the course of his extensive

career, as well as his vast operational experience.

Silvers has served as

Chief Executive Officer and a Director of the Company since our formation in September 2017.

Additionally, he has served as Managing

Member of Matthews Lane Capital Partners LLC, an investment firm, since June 2015 and also has served as Executive Vice President

and Chief Strategy Officer of Inspired Entertainment, Inc., a company involved in the gaming equipment supplier industry, since

December 2016.

At Inspired, Mr.

Silvers is also a member of the Office of the Executive Chairman.

He is the former President

of Spring Owl Asset Management LLC, an investment management firm, a position he held from March 2009 to June 2015 (including predecessor

From April 2009 to October 2010, Mr.

Silvers also served as President of Western Liberty Bancorp, an acquisition oriented

holding company that acquired and recapitalized a community bank in Las Vegas, Nevada.

Silvers joined a predecessor of Spring

Owl from Fortress Investment Group, a leading global alternative asset manager, where he worked from 2005 to 2009.

Silvers’ primary focus was to originate and oversee due diligence on

and asset management for real estate and gaming investments in Fortress’ Drawbridge Special Opportunities Fund.

joining Fortress, Mr.

Silvers was a senior member of the real estate, gaming and lodging investment banking group at Bear, Stearns

Silvers serves as a director of Avid Technology, Inc., a global media technology provider.

Silvers previously

served on the board of directors of Forestar Group, Inc., International Game Technology, bwin.party digital entertainment plc,

Universal Health Services, Inc., PICO Holdings, Inc., Ashford Hospitality Prime, Inc.

and India Hospitality Corp.

Silvers holds

in Economics, as well as an M.B.A with a concentration in Finance, from The Wharton School of the University of Pennsylvania.

We believe Mr.

Silvers is well-qualified

to serve as a member of our board of directors due to his extensive experience in corporate finance, capital allocation, capital

markets and public company governance.

Falcone has served as a

member of our board of directors since December 1, 2017.

Falcone has served as the President and Chief Financial Officer of

Sightline Payments LLC, a leading digital commerce platform for the gaming industry, since February 2019.

Falcone is also the

principal of MF Ventures LLC, a diversified investment platform with investments in companies involved in the hospitality, gaming

and leisure industries, including Kentucky Downs located in Franklin, Kentucky, which operates 750 historical horse racing machines.

Falcone served as Executive Vice President, Chief Financial Officer and Treasurer of Red Rock Resorts, Inc.

from October 2015

until May 2017 and as Executive Vice President and Chief Financial Officer of Station Casinos LLC from June 2011 until May 2017.

Falcone served as Treasurer of Station Casinos LLC since January 2013 until May 2017.

Falcone also served as Chief Financial

Officer of Fertitta Entertainment LLC from October 2010 through May 2016.

From June 2008 to October 2010, Mr.

Falcone worked at

Goldman Sachs & Co.

where he focused on restructuring transactions in the hospitality and gaming sectors under that firm’s

Whitehall division.

From May 2006 to June 2008, Mr.

Falcone was a senior analyst at Magnetar Capital, LLC (an alternative asset

management firm), covering the gaming, lodging, leisure, REIT and airline industries.

From May 2002 to June 2006, Mr.

a Managing Director for Deutsche Bank Securities Inc.

covering gaming, lodging and leisure companies and was recognized as one

of the industry’s top analysts.

Prior to joining Deutsche Bank Securities Inc., Mr.

Falcone worked for Bear, Stearns &

Inc., covering the gaming, lodging and leisure industries.

Falcone holds a bachelor’s degree in Real Estate Finance

and Hotel Administration from Cornell University.

We believe Mr.

Falcone is well-qualified

to serve as a member of our board of directors due to his significant experience as an executive officer at a public company in

the leisure sector and investment experience with the leisure sector and leisure-related businesses.

Rittvo has served as a

member of our board of directors since December 1, 2017.

Since February 2017, Mr.

Rittvo serves as Chairman and Chief Executive

Officer of Innovation Project Development, a multi-disciplinary development management services company focused on leisure- and

residential-related developments.

Rittvo has been with Innovation Project Development since November 2005.

In May 1993, Mr.

Rittvo co-founded The Innovation Group, Inc., a gaming, hospitality and leisure sector consulting firm headquartered in Denver

with offices in New Orleans, Atlantic City, Aspen, Minneapolis and Orlando.

Rittvo served as President of Innovation Group

until February 2017.

Rittvo’s various roles with The Innovation Group, he advised and participated in gaming studies

for clients ranging from Caesars Entertainment, MGM Mirage, Pinnacle Entertainment, Mandalay Resort Group, Isle of Capri, Harrah’s

Entertainment, Trump Hotels and Casinos, as well as numerous Native American tribes and government agencies throughout the United

States and the World.

Rittvo holds a bachelor’s degree in Systems Engineering and a master’s degree in Transportation

Engineering and Planning from the Polytechnic Institute of New York.

We believe Mr.

Rittvo is well-qualified

to serve as a member of our board of directors due to his significant experience managing leisure-related developments and advising

owners, operators and other stakeholders in the leisure sector and leisure-related businesses.

Weinstein has served as

a member of the LACQ board of directors since December 1, 2017.

Weinstein is a partner at Belvedere Capital, a real estate

investment firm based in New York, and is primarily focused on Belvedere’s investment in Industry City, a six million square

foot redevelopment project in Sunset Park, Brooklyn.

Weinstein serves as Chief Executive Officer of GreenAcreage Real Estate

Corp., a REIT, a position he assumed in August 2020, and also serves as a director of GreenAcreage.

Weinstein was previously

a partner at Belvedere Capital from September 2008 until October 2013 and rejoined as a partner in 2016.

From February 2015 until

August 2016, Mr.

Weinstein was a member of the

board of directors of Forestar Group, Inc.

Weinstein previously served as President and Chief Executive Officer of MPG Office

Trust, Inc., a publicly traded office REIT, from November 2010 until the sale of the Company in October 2013.

He was a member of

the board of directors of MPG Office Trust, Inc.

from August 2008 until October 2013.

From April 2007 until August 2008, Mr.

was a Managing Director of West bridge Investment Group/Westmont Hospitality Group, a real estate investment fund focused on hospitality.

From 1996 until January 2007, Mr.

Weinstein worked at Goldman, Sachs & Co.

in New York, first as a Vice President in the real

estate investment banking group (focusing on mergers, asset sales and corporate finance) and then, from 2004, as a Vice President

in the Special Situations Group (focused on real estate debt investments).

Weinstein holds a Bachelor of Science degree in

Economics, magna cum laude, from The Wharton School of the University of Pennsylvania and a Juris Doctor, cum laude, from the University

of Pennsylvania Law School.

He is a member of the New York State Bar Association.

We believe Mr.

Weinstein is well-qualified

to serve as a member of our board of directors due to his real estate banking, investment and management experience, including

as a chief executive officer of a publicly traded real estate company, as well as his corporate governance experience through service

as a board member of a public company will be valuable to the Company’s board of directors.

George Peng has served as our Chief

Financial Officer, Treasurer and Secretary since our formation in September 2017.

Additionally, Mr.

Peng has been a Principal of

Hydra Management, LLC, an investment vehicle of Mr.

Weil’s since July 2014 and as Vice President of Finance at Inspired

Entertainment, Inc., since January 2017.

Previously, he was Chief Financial Officer of Hydra Industries Acquisition Corp., a special-purpose

acquisition corporation that acquired Inspired Entertainment, Inc., from August 2015 until January 2017.

Before that, Mr.

was a consultant to Scientific Games Corporation from May 2013 to April 2014, where he assisted in its integration of the acquisition

of WMS Industries.

Peng was focused on the financial and operational impacts of integrating the accounting and finance functions

of both companies, including human resource allocation, budgeting, and cost reductions.

Prior to consulting to Scientific Games,

Peng was a consultant primarily focused on financial planning and analysis for various industries, including retail and financial

Previously, he was an Associate in the Investment Banking division of Credit Suisse, focusing on private equity, high

yield, and leveraged lending products.

Peng holds an A.B.

in Economics from the University of Michigan, Ann Arbor, as well

with a concentration in Finance from the Anderson School at UCLA.

Peng is a CFA Charter holder, which he was awarded

Eric Carrera has served as our Senior

Vice President of Finance and Business Development since September 2017.

Additionally, Mr.

Carrera has served as the Senior Associate

of Hydra Management, LLC, an investment vehicle of Mr.

Weil, since June 2015 and as Manager of Finance/M&A of Inspired Entertainment,

since January 2017.

Carrera was Senior Vice President at Andina Acquisition Corp.

II, a special-purpose acquisition corporation,

from November 2015 to March 2018 when it successfully completed its business combination with Lazydays R.V.

Center, Inc., a premier

RV dealership destination.

From June 2011 to February 2015, Mr.

Carrera was an international business development associate with

Scientific Games Corporation, a supplier of technology-based products, systems and services to gaming markets worldwide.

From September

2011 to December 2013, Mr.

Carrera acted as an advisor to Andina Acquisition Corp.

and was a member of the team that successfully

completed a business transaction with Tecnoglass S.A., a Colombian manufacturer of glass and windows.

Carrera received a B.S.

from Boston University School of Management and is also a CFA Charter holder.

Number and Terms of Office of Officers

and Directors

Our Board is presently comprised of five

(5) members and is divided into three separate classes of directors.

One class of directors is normally elected at each annual

meeting of stockholders for a term of three (3) years.

Falcone, our Class I director, was elected at our first annual meeting

of stockholders in 2018 for a three-year term expiring at our 2021 annual meeting of stockholders.

Rittvo and Weinstein,

our Class II directors, were each elected at our 2019 Special Meeting for a three-year term expiring at our 2022 annual meeting

of stockholders.

Weil and Silvers were each elected at our 2020 Special Meeting for a three-year term expiring at our 2023

annual meeting of stockholders.

Our officers are appointed by the

board of directors and serve at the discretion of the board of directors, rather than for specific terms of office.

of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate.

provide that our officers may consist of a Chairman of the Board, Chief Executive Officer, President, Chief Financial

Officer, Vice Presidents, Secretary, Treasurer and such other offices as may be determined by the board of directors.

Director Independence

Nasdaq listing standards require that a

majority of our board of directors be independent.

An “independent director” is defined generally as a person other

than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion

of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying

out the responsibilities of a director.

Our board of directors has determined that Messrs.

Falcone, Rittvo and Weinstein are “independent

directors” as defined in the Nasdaq listing standards and applicable SEC rules.

Committees of the Board of Directors

Our Board has two standing committees:

an audit committee and a compensation committee.

Our committees are comprised solely of independent directors.

Audit Committee

The members of our audit committee are

Falcone, Rittvo and Weinstein.

Falcone currently serves as Chairman of the audit committee.

All members of the audit

committee qualify as independent directors under applicable rules and regulations of the SEC and Nasdaq.

Each member of the audit committee is financially

literate and our board of directors has determined that Mr.

Falcone qualifies as an “audit committee financial

expert” as defined in applicable SEC rules.

We have adopted an audit committee charter,

which details the principal functions of the audit committee, including:

the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us;

pre-approving all audit and permitted non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;

reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence;

setting clear hiring policies for employees or former employees of the independent auditors;

setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

obtaining and reviewing a report, at least annually, from the independent auditors describing (i) the independent auditor’s internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;

reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction;

reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

Compensation Committee

The members of our compensation committee

Falcone, Rittvo and Weinstein.

Weinstein currently serves as Chairman of the compensation committee.

of the compensation committee qualify as independent directors under applicable rules and regulations of the SEC and Nasdaq.

We have adopted a compensation committee

charter, which details the principal functions of the compensation committee, including:

reviewing and approving the corporate goals and objectives relevant to the compensation of the Chief Executive Officer, evaluating the performance of the Chief Executive Officer in light of such goals and objectives and determining and approving the compensation of the Chief Executive Officer;

reviewing and approving the compensation of the other executive officers;

reviewing executive compensation policies and plans;

administering equity-based compensation plans;

reviewing and approving the terms of employment agreements, severance agreements and similar arrangements for executive officers;

producing a report on executive compensation to be included in the annual proxy statement in accordance with applicable rules and regulations of the SEC in effect from time to time;

reviewing, modifying and approving (or, as it deems appropriate, recommending to the board for determination and approval) the compensation for non-employee directors.

It is likely that prior to the consummation

of a Business Combination, the compensation committee will only be responsible for the review and recommendation of any compensation

arrangements to be entered into in connection with such Business Combination.

The charter also provides that the compensation

committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser

and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser.

However, before

engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee

will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.

Director Nominations

We do not have a standing nominating committee.

In accordance with Rule 5605(e)(2) of the Nasdaq Rules, a majority of the independent directors may recommend a director nominee

for selection by the board of directors.

The board of directors believes that the independent directors can satisfactorily carry

out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee.

As there is no standing nominating committee, we do not have a nominating committee charter in place.

The board of directors will also consider

director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand

for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders).

Our stockholders

that wish to nominate a director for election to the Board should follow the procedures set forth in our bylaws.

Stockholder recommendations

should be submitted in writing to:

Leisure Acquisition Corp., 250 West 57th Street, Suite 415, New York, New York 10107, Attention:

We have not formally established any specific,

minimum qualifications that must be met or skills that are necessary for directors to possess.

In general, in identifying and evaluating

nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge

of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our

stockholders.

Compensation Committee Interlocks and Insider

Participation

None of our officers currently serves,

or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more

officers serving on our board of directors, except that Mr.

Weil, our Executive Chairman, is Executive Chairman of Inspired Entertainment,

Silvers, our Chief Executive Officer and a member of our board of directors, is an executive officer of Inspired Entertainment,

Code of Ethics

We have adopted a Code of Ethics applicable

to our directors, executive officers and employees that complies with the rules and regulations of the Nasdaq.

The Code of Ethics

codifies the business and ethical principles that govern all aspects of our business.

We have previously filed copies of our form

Code of Ethics, our form of Audit Committee Charter and our form of Compensation Committee Charter as exhibits to our registration

statement in connection with our Initial Public Offering.

You may review these documents by accessing our public filings at the

SEC’s web site at www.sec.gov.

Copies of our Code of Ethics and our audit committee and compensation committee charters are

available, without charge, on our website at www.leisureacq.com or upon request from us.

We intend to disclose any amendments to

or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.

Conflicts of Interest

Each of our officers and directors presently

has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which

such officer or director is or will be required to present a business combination opportunity.

Accordingly, if any of our officers

or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current

fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity

to such entity and not to us.

We do not believe, however, that the fiduciary duties or contractual obligations of our officers

or directors will materially affect our ability to complete our Business Combination.

In addition, our amended and restated certificate

of incorporation provides for the waiver of any requirement to present corporate opportunities to us to the extent it would conflict

with competing duties owed to other entities.

Our amended and restated certificate of incorporation provides that we renounce our

interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person

solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually

permitted to undertake and would otherwise be reasonable for us to pursue.

In addition, our sponsors, officers, directors

and director nominees have agreed, pursuant to a written letter agreement, not to participate in the formation of, or become an

officer or director of, any other blank check company until we have entered into a definitive agreement regarding our Business

Combination or we have failed to complete our Business Combination during the Combination Period.

Our management team is not currently

involved in any other blank check offering.

Potential investors should also be aware

of the following other potential conflicts of interest:

None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities.

In the course of their other business activities, our officers and directors may become aware of investment and business opportunities that may be appropriate for presentation to us as well as the other entities with which they are affiliated.

Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

Our initial stockholders have agreed to waive their redemption rights with respect to any founder shares held by them in connection with the consummation of our Business Combination.

Additionally, our initial stockholders have agreed to waive their redemption rights with respect to any founder shares held by them if we fail to consummate our Business Combination during Combination Period.

If we do not complete our Business Combination within such applicable time period, the proceeds from our Initial Public Offering and Concurrent Private Placement held in the trust account will be used to fund the redemption of our public shares, any founder shares will be worthless, and the private placement warrants will expire worthless.

With certain limited exceptions, the founder shares will not be transferable, assignable or salable by our initial stockholders until 180 days after the completion of our Business Combination.

With certain limited exceptions, the private placement warrants and the common stock underlying such warrants, will not be transferable, assignable or salable by the initial purchasers or their permitted transferees until 30 days after the completion of our Business Combination.

Since our sponsors, strategic investor and officers and directors may directly or indirectly own common stock and warrants, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our Business Combination.

Our officers and directors may have a conflict of interest with respect to evaluating a particular Business Combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our Business Combination.

Should one or more member of the management team seek to enter into an employment contract with a target, we would refer such matter of employment to a committee of disinterested directors of our board of directors for consideration.

Lorne Weil, our Executive Chairman, and Daniel B.

Silvers, our Chief Executive Officer, is party to an employment agreement with Inspired.

These agreements contain non-competition provisions that provide that neither Mr.

Silvers shall directly or indirectly engage in any business that is directly competitive with any business conducted by the Inspired Group during his employment, in any geographic area in which such business was so conducted by the Inspired Group.

Weil’s employment agreement with Inspired there are also non-solicitation provisions.

In light of the non-competition agreements, we will not seek a Business Combination with any company with operations in the businesses described above.

In addition, if our Business Combination does not cause Mr.

Silvers to violate the non-competition agreements, no assurance can be given that the combined company would not in the future engage in competitive activities that would cause Mr.

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.

Silvers or us.

This could materially harm our business and the trading prices of our securities.

Even if ultimately resolved in our favor, any litigation associated with the non-competition agreements could be time consuming, costly and distract management’s focus from locating suitable acquisition candidates and operating our business.

Our sponsors, strategic investor, officers or directors may have a conflict of interest with respect to evaluating a Business Combination and financing arrangements as we obtained loans from our sponsors or strategic investor or an affiliate of our sponsors or strategic investor or any of our officers or directors to finance transaction costs in connection with an intended Business Combination.

Up to $460,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender and would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period.

The conflicts described above may not be

resolved in our favor.

In general, officers and directors of a

corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation

the corporation could financially undertake the opportunity;

the opportunity is within the corporation’s line of business;

it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation.

Accordingly, as a result of multiple business

affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting

the above-listed criteria to multiple entities.

Furthermore, our amended and restated certificate of incorporation will provide

that the doctrine of corporate opportunity will not apply with respect to any of our officers or directors in circumstances where

the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have.

Below is a table summarizing the entities

to which our executive officers and directors currently have fiduciary duties or contractual obligations.

Entity’s Business

Hydra Management

Investment Vehicle

Inspired Entertainment

Gaming Technology

Executive Chairman

Manufacturer of glass products for use in high end commercial real estate construction

Non-Executive Chairman

Matthews Lane Capital Partners

Investment Vehicle

Inspired Entertainment

Gaming Technology

Chief Strategy Officer

Avid Technology, Inc.

Global Media Technology Provider

Hydra Management

Investment Vehicle

Inspired Entertainment

Gaming Technology

Vice President Finance

Hydra Management

Investment Vehicle

Senior Associate

Inspired Entertainment

Gaming Technology

Manager, Finance & M&A

ECL Entertainment

Entertainment

Sightline Payments LLC

Gaming Technology

MF Ventures LL

Investment Vehicle

Innovation Project Development

Development Management Services

Chairman and Chief Executive Officer

GreenAcreage Real Estate Corp.

Belvedere Capital

Real Estate Investment Firm

Chief Executive Officer and Director Partner

Accordingly, a scenario could arise whereby

business opportunities may be provided to one of the above-listed entities by our officers or directors instead of us.

if any of our officers or directors becomes aware of a business combination opportunity that is suitable for an entity to which

he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations

to present such opportunity to such entity and not to us.

We do not believe, however, that the fiduciary duties or contractual

obligations of our officers or directors will materially affect our ability to complete our Business Combination.

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.

We are not prohibited from pursuing a Business

Combination with a company that is affiliated with our sponsors, strategic investor, officers or directors.

In the event we seek

to complete our Business Combination with such a company, we, or a committee of independent

directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA, or from an independent

accounting firm, that such a Business Combination is fair to our company from a financial point of view.

In the event that we submit our Business

Combination to our public stockholders for a vote, our initial stockholders have agreed to vote any founder shares held by them

and any public shares purchased during or after the offering in favor of our Business Combination and our officers and directors

have also agreed to vote any public shares purchased during or after the offering in favor of our Business Combination.

Limitation on Liability and Indemnification

of Officers and Directors

Our amended and restated certificate of

incorporation provides that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware law,

as it now exists or may in the future be amended.

In addition, our amended and restated certificate of incorporation provides that

our directors will not be personally liable for monetary damages to us or our stockholders for breaches of their fiduciary duty

as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally

violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper

personal benefit from their actions as directors.

We have entered into agreements with our

officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and

restated certificate of incorporation.

Our bylaws also permit us to secure insurance on behalf of any officer, director or employee

for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification.

obtained a policy of directors’ and officers’ liability insurance that insures our officers and directors against the

cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify

our officers and directors.

These provisions may discourage stockholders

from bringing a lawsuit against our directors for breach of their fiduciary duty.

These provisions also may have the effect of

reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful, might

otherwise benefit us and our stockholders.

Furthermore, a stockholder’s investment may be adversely affected to the extent

we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.

We believe that these provisions of our

amended and restated certificate of incorporation, the directors’ and officers’ liability insurance and the indemnity

agreements are necessary to attract and retain talented and experienced officers and directors.

Executive Compensation

None of our officers or directors has received

any cash (or non-cash) compensation for services rendered to us.

Commencing on December 1, 2017, under an administrative services

agreement, we agreed to pay our Hydra sponsor a total of up to $10,000 per month for office space, utilities and secretarial and

administrative support.

Effective June 30, 2020, our Hydra Sponsor agreed to stop charging the monthly administrative fee and forgave

the $71,000 outstanding balance due under the agreement.

We may pay our sponsors or any of our existing

officers or directors, or any entity with which they are affiliated, a finder’s fee, consulting fee or other compensation

in connection with identifying, investigating and completing our Business Combination.

These individuals will also be reimbursed

for any out of pocket expenses incurred in connection with activities on our behalf, such as identifying potential target businesses

and performing due diligence on suitable Business Combinations.

In addition, to facilitate the Company’s business interests

in identifying potential target businesses, we have reimbursed certain professional networking organization membership fees.

audit committee reviews on a quarterly basis all payments that were made to our sponsors, strategic investor, officers, directors

or our or their affiliates and will determine which fees and expenses and the amount of expenses that will be reimbursed.

After the completion of our Business Combination,

directors or members of our management team who remain with us may be paid consulting or management fees from the combined company.

All of these fees will be fully disclosed to stockholders, to the extent then known,

in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed Business

We have not established any limit on the amount of such fees that may be paid by the combined company to our directors

or members of management.

It is unlikely the amount of such compensation will be known at the time of the proposed Business Combination,

because the directors of the post-combination business will be responsible for determining officer and director compensation.

compensation to be paid to our officers will be determined, or recommended to the board of directors for determination, either

by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board

of directors.

We do not intend to take any action to

ensure that members of our management team maintain their positions with us after the consummation of our Business Combination,

although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain

with us after our Business Combination.

The existence or terms of any such employment or consulting arrangements to retain their

positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe

that the ability of our management to remain with us after the consummation of our Business Combination will be a determining factor

in our decision to proceed with any potential Business Combination.

We are not party to any agreements with our officers and directors

that provide for benefits upon termination of employment.

Security Ownership of Certain

Beneficial Owners and Management and Related Stockholder Matters

We have no compensation plans under which

equity securities are authorized for issuance.

The following table sets forth information

available to us at March 1, 2021 with respect to the beneficial ownership of our Common Stock held by:

each person known by us to be the beneficial owner of more than 5% of our outstanding Common Stock;

each of our directors and executive officers that beneficially own shares of our Common Stock;

all of our directors and executive officers as a group.

Unless otherwise indicated, we believe

that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially

owned by them.

Number of Shares

Name and Address of Beneficial Owner (1)

Lorne Weil and affiliated entities (2)

Silvers and affiliated entities (3)

All executive officers and directors as a group (seven individuals)

Greater than 5% holders

HG Vora Capital Management, LLC (4)

than one percent.

This table is based on 6,224,268 shares of common stock outstanding

as of March 1, 2021.

Beneficial ownership is determined in accordance with the rules of the SEC which generally provide that a

person has beneficial ownership of a security if such person possesses sole or shared voting or investment power over that security,

including options and warrants that are currently exercisable or exercisable within 60 days.

We believe that each person listed

above has sole voting and investment power with respect to the shares listed except as described in the footnotes below and subject

to applicable community property laws and similar laws.

The Company’s warrants are not exercisable currently or within 60

accordingly, any such holdings of the persons listed are not reflected in this table.

Unless otherwise noted, the business

address of each of the following entities or individuals is c/o Leisure Acquisition Corp., 250 West 57th Street, Suite 415, New

York, New York 10107

Represents 266,900 shares held of record by Mr.

Weil and represents 867,842 shares held of record by Hydra LAC, LLC.

Weil is the managing member of Hydra LAC, LLC.

Weil expressly disclaims beneficial ownership of such shares as to which he does not have a pecuniary interest.

Represents 887,127 shares held of record by MLCP GLL Funding, LLC, of which Matthews Lane Capital Partners LLC is the manager, and represents 241,243 shares held of record by Matthews Lane Capital Partners LLC.

Silvers is the managing member of Matthews Lane Capital Partners LLC.

Based on a Schedule 13G/A filed with the SEC on February 14, 2019 and a Form 4 filed with the SEC on January 17, 2018 by HG Vora Capital Management, LLC, the investment manager of HG Vora Special Opportunities Master Fund, Ltd.

The business address of HG Vora Capital Management is 330 Madison Avenue, 20th Floor, New York, New York 10017.

Our directors and officers and other initial

stockholders and their respective affiliates (including the Sponsors) have agreed to vote any shares owned by them in favor of

any proposed Business Combination.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Executive Officers and Directors

required by this item, including information concerning the board of directors of the Company, the members of the Company’s audit

committee, the Company’s audit committee financial expert, compliance with Section 16(a) of the Exchange Act and shareowner proposals,

are incorporated by reference to the Company’s Proxy Statement for the 2022 Annual Meeting of Shareowners, which will be filed

with the SEC pursuant to Regulation 14A within 120 days after December 31, 2021.

The information regarding executive officers is included

in this report as Item 1 under the caption “ Identification of our Executive Officers ” and incorporated herein by reference.

of Business Conduct

adopted a code of business conduct that applies to all of our directors, officers and employees, including our principal executive officer,

principal financial officer and principal accounting officer, which is available on our website.

Our code of business conduct is a “code

of ethics,” as defined in Item 406(b) of Regulation S-K.

We will make any legally required disclosures regarding amendments to,

or waivers of, provisions of our code of ethics on our website.

Executive & Director Compensation

required by this Item is incorporated by reference from the Company’s Proxy Statement.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

required by this Item is incorporated by reference from the Company’s Proxy Statement.

Certain Relationships and Related Transactions and Director Independence

Certain Relationships and Related Transactions

Issuance of Founder Shares

On September 11, 2017, we issued an aggregate

of 7,187,500 founder shares to our sponsors, the strategic investor and certain members of management or their affiliates for an

aggregate purchase price of $25,000 in cash, or approximately $0.003 per share.

The number of founder shares issued was determined

based on the expectation that such founder shares would represent 20% of the outstanding shares upon completion of our Initial

Public Offering.

In October 2017, our Hydra sponsor transferred 203,957 of its founder shares to certain of our officers and professionals.

In October 2017, certain of our initial stockholders transferred 711,250 shares to our strategic investor, with 355,625 shares

subject to return to such stockholders if the if certain specified market price levels for our common stock are exceeded following

the closing of the Business Combination.

In November 2017, Our Hydra sponsor transferred 25,000 founder shares to each of Messrs.

Falcone, Rittvo and Weinstein, our independent directors.

In December 2017, in connection with the completion of our Initial Public

Offering, and on January 16, 2018, following the expiration of the underwriter’s over-allotment option, certain of our initial

stockholders forfeited 1,437,500 and 750,000 shares, respectively.

In each case, our initial stockholders forfeited such founder’s

shares so as to maintain the ownership of our initial stockholders at 20% of our outstanding shares immediately following the consummation

of our Initial Public Offering.

The founder shares may not, subject to certain limited exceptions, be transferred, assigned or

sold by the holder.

Private Placement Warrants

Affiliates of our Hydra Sponsor and Matthews

Lane Sponsor, the Strategic Investor and certain members of management purchased an aggregate of 6,825,000 private placement warrants

for a purchase price of $1.00 per whole warrant in the Concurrent Private Placement.

As such, these related parties’ aggregate

interest in this transaction is valued at approximately $6,825,000.

Each private placement warrant entitles the holder to purchase

one share of our common stock at $11.50 per share.

The private placement warrants (including the common stock issuable upon exercise

thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.

Warrant Surrender Agreement

On January 31, 2021, in connection with

entering into the Merger Agreement, LACQ entered into a Warrant Surrender Agreement, by and among LACQ and our Sponsors, pursuant

to which each of our Sponsors agreed to irrevocably forfeit and surrender 250,000 Private Placement Warrants immediately prior

to, and contingent upon, the Closing.

Contingent Forward Purchase Contract with

Strategic Investor

On December 1, 2017, our strategic investor

entered into a Contingent Forward Purchase Contract with us to purchase, in a private placement for gross proceeds of approximately

$62,500,000 to occur concurrently with the consummation of the business combination, 6,250,000 units on substantially the same

terms as the sale of units in our initial public offering at $10.00 per unit.

27, 2019, in connection with the previously proposed business combination with GTWY Holdings, an amendment to the contingent forward

purchase contract was effected to provide that the contingent forward purchase contract would terminate as of, and contingent upon,

the closing of the transaction with GTWY Holdings such that the strategic investor would instead purchase 3,000,000 units

of GTWY Holdings’ equity securities for a purchase price of $10.00 per unit.

In addition, HG Vora waived its rights

under the Contingent Forward Purchase Contract to purchase private placement units in connection with the proposed Merger with

The original terms of the contingent forward purchase contract remain operative for a business combination with another

Administrative Services Agreement

December 1, 2017, we entered into an administrative services agreement with our Hydra Sponsor under which we agreed to pay our

Hydra Sponsor, or its affiliates or assignees , a total of up to

$10,000 per month for office space, utilities and secretarial and administrative support until completion of our business combination.

Effective June 30, 2020, our Hydra Sponsor agreed to stop charging the monthly administrative fee and forgave the $71,000 outstanding

balance due under the agreement.

Promissory Notes

We entered into promissory notes with our

sponsors whereby they agreed to loan us up to an aggregate of $400,000 to be used for a portion of the expenses of our Initial

Public Offering.

These loans, which were repaid on the IPO Closing Date, were non-interest bearing, unsecured and due at the earlier

of June 30, 2018 or the IPO Closing Date.

Expense Advance Agreement

In order to finance transaction costs in

connection with an intended business combination, we entered into an Expense Advancement Agreement with our Sponsors and Strategic

Investor on December 1, 2017 under which they committed to loan us an aggregate of $1,000,000 pursuant to drawdowns from time to

time in the event that funds held outside of the trust are insufficient to fund our expenses after our IPO and prior to our business

combination (including investigating and selecting a target business and other working capital requirements).

On January 15, 2020,

we issued promissory notes pursuant to drawdowns under the agreement in the aggregate amount of $1,000,000, which the holders elected

to convert on June 25, 2020 in accordance with the terms thereunder into warrants at a price of $1.00 per warrant.

We entered into

amendments to our Expense Advancement Agreement with our sponsors and Strategic Investor dated June 29, 2020, October 26, 2020,

November 30, 2020 and February 23, 2021 which, in the aggregate increased the total amount of advances available to us under the

agreement to $1,460,000.

We issued unsecured promissory notes to such parties on October 26, 2020 and October 27, 2020 which were

amended and restated on November 30, 2020 and February 24, 2021.

Such promissory notes cover outstanding loans in aggregate amount

of $460,000 as of March 10, 2021.

The promissory notes do not bear any interest.

The Company expects to repay any such loaned amounts

out of the proceeds of the trust account released upon completion of a business combination.

Alternatively, the sponsors and Strategic

Investor would have the option to convert the outstanding loaned amounts under the promissory notes to warrants at a price of $1.00

In the event the Company does not complete the business combination, it may use a portion of the working capital held

outside the trust account to repay such loaned amounts but no proceeds from the trust account would be used for such repayment.

Accordingly, if the business combination is not completed, the Company will most likely not be able to repay the loans.

Potential Payments after the Business Combination

our Business Combination, members of our management team who remain with us may be paid consulting, management or other fees from

the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender

offer or proxy solicitation materials, as applicable, furnished to our stockholders.

It is unlikely the amount of such compensation

will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider

our Business Combination, as applicable, as it will be up to the directors of the post-combination business to determine executive

and director compensation.

In connection with the Business Combination with Ensysce, none of our directors, officers or management

team will continue with us, other than two of the directors will

be selected by us, which may include persons who are our officers or directors.

Registration Rights

The holders of the founder shares, private

placement warrants and warrants that may be issued upon conversion of working capital loans (and any shares of common stock issuable

upon the exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans) are

entitled to registration rights pursuant to a registration rights agreement entered into by us on the IPO Closing Date, which requires

us to register such securities for resale.

Each of our sponsors (collectively with their respective affiliates) and strategic investor

is entitled to make up to two demands, excluding short form demands, that we register such securities.

In addition, the holders

have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion

of our Business Combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities

However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities

Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the founder shares,

on the earlier of (A) one year after the completion of our Business Combination or earlier if, subsequent to our Business Combination,

the last sale price of the common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations,

recapitalizations and the like) for any 20 trading days within any 30 trading day period commencing at least 150 days after our

Business Combination, or (B) the date following the completion of our Business Combination on which we complete a liquidation,

merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their

shares of common stock for cash, securities or other property, and (ii) in the case of the private placement warrants and the respective

common stock underlying such warrants, 30 days after the completion of our Business Combination.

We will bear the expenses incurred

in connection with the filing of any such registration statements.

Director Independence

Nasdaq listing standards require that a

majority of our board of directors be independent.

An “independent director” is defined generally as a person other

than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion

of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying

out the responsibilities of a director.

Our board of directors has determined that Messrs.

Falcone, Rittvo

and Weinstein are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules.

independent directors have regularly scheduled meetings at which only independent directors are present.

required by this Item is incorporated by reference from the Company’s Proxy Statement.

Principal Accountant Fees and Services

The following is a summary of fees paid

or to be paid to Marcum LLP, or Marcum, for services rendered for 2020 and 2019.

Audit fees consist

of fees billed for professional services rendered for the audit of our year-end financial statements and services that are

normally provided by Marcum in connection with regulatory filings.

The aggregate fees billed by Marcum for professional

services rendered for the audit of our annual financial statements, review of the financial information included in our Forms

10-Q for the respective periods and other required filings with the SEC and review of proxy and other registration statements

for the year ended December 31, 2020 and 2019 totaled $80,845 and $53,684, respectively.

The above amounts include interim

procedures and audit fees, as well as attendance at audit committee meetings.

Audit-Related Fees .

Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance

of the audit or review of our financial statements and are not reported under “Audit Fees.” These services

include attest services that are not required by statute or regulation and consultations concerning financial accounting and

reporting standards.

We paid Marcum $0 and $4,161 for consultations concerning financial accounting and reporting standards

for the year ended December 31, 2020 and 2019.

We did not pay Marcum

for tax planning and tax advice for the year ended December 31, 2020 and 2019.

All Other Fees .

We did not pay

Marcum for other services for the year ended December 31, 2020 and 2019.

Pre-Approval Policy

Our audit committee was formed upon the

consummation of our Initial Public Offering.

As a result, the audit committee did not pre-approve all of the foregoing services,

although any services rendered prior to the formation of our audit committee were approved by our board of directors.

formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services

and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de

minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the

completion of the audit).

Exhibits, Financial Statement Schedules

The following documents are filed as part

of this Report:

The financial statements listed in the Index to the Financial Statements on page F-1.

No financial statement schedules have been filed as part of this Report because they are not applicable, not required or because the information is otherwise included in the Financial Statements or notes thereto.

Exhibits listed

LEISURE ACQUISITION CORP.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

required by this Item is incorporated by reference from the Company’s Proxy Statement.

Exhibits and Financial Statement Schedules.

BIOSCIENCES, INC.

FINANCIAL STATEMENTS

Balance Sheets

Statements of Operations

Statements of Changes in Stockholders’ Equity

Statements of Cash Flows

Notes to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Stockholders and Board of Directors

Leisure Acquisition Corp.

Opinion on the Financial Statements

We have audited the accompanying balance

sheets of Leisure Acquisition Corp.

(the “Company”) as of December 31, 2020 and 2019, the related statements of

operations, changes in stockholders’ equity and cash flows for each of the years ended December 31, 2020 and 2019, and

the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial

statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019,

and the results of its operations and its cash flows for each of the years ended December 31, 2020 and 2019, in conformity

with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying financial statements have

been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the

Company’s business plan is dependent on the completion of a business combination and the Company’s cash and working

capital as of December 31, 2020 are not sufficient to complete its planned activities.

These conditions raise substantial doubt

about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are also

described in Note 1.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based

on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the

“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

Report of Independent Registered Public Accounting Firm (PCAOB No.

Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Statements of Operations for the years ended December 31, 2021 and 2020

Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2021 and 2020

Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020

Notes to the Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders

BIOSCIENCES, INC.

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheets of Ensysce Biosciences, Inc.

(“Company”) as of December

31, 2021 and 2020, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for

each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the

Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years

in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Concern Uncertainty

The accompanying financial

statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements,

the Company does not have revenue generating activities and is dependent on additional financing to fund operations.

These conditions

raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans regarding those matters

are also described in Note 2 to the financial statements.

The financial statements do not include any adjustments to reflect the possible

future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from

the outcome of this uncertainty.

These financial statements

are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial

statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have,

nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required

to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the

effectiveness of the Company’s internal control over financial reporting.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to

assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable

basis for our opinion.

/s/ Marcum LLP

We have served as the Company’s auditor since 2017 .

West Palm Beach, FL

March 15, 2021

LEISURE ACQUISITION CORP.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

have served as the Company’s auditor since 2017.

Mayer Hoffman McCann P.C.

Diego, California

Biosciences, Inc.

Balance Sheets

Current assets:

Prepaid expenses

Prepaid income taxes

Cash and cash equivalents

Unbilled receivable

Right-of-use asset

Prepaid expenses and other current assets

Total current assets

Cash and marketable securities held in Trust Account

$ 196,511,899

LIABILITIES AND STOCKHOLDERS’ EQUITY

Property and equipment, net

Liabilities and stockholders’ deficit

Current liabilities:

Accounts payable and accrued expenses

Accounts payable

Accrued expenses and other liabilities

Lease liability

Notes payable and accrued interest ($ 12,358,886 and $ 0 at fair value at December

31, 2021 and 2020, respectively)

Embedded derivative on convertible notes

Total current liabilities

Promissory note

Convertible promissory notes - related party

Deferred underwriting fee payable

Long-term liabilities:

Notes payable, net of current portion (at fair value)

Other long term liabilities

Total long-term liabilities

Total liabilities

Common stock subject to possible redemption, 5,094 and 17,501,073 shares at redemption value at value at December 31, 2020 and 2019, respectively

Stockholders’ Equity

Preferred stock, $ 0.0001 par value;

1,000,000 shares authorized;

none issued and outstanding

Common stock, $ 0.0001 par value;

100,000,000 shares authorized;

6,219,174 and 6,375,178 shares issued and outstanding (excluding 5,094 and 17,501,073 shares subject to possible redemption) at December 31, 2020 and 2019, respectively

Commitments and contingencies (Note 6)

Stockholders’ deficit

Preferred stock, $ 0.0001 par value, 1,500,000 shares authorized, no shares issued and outstanding

at December 31, 2021 and December 31, 2020

Common stock, $ 0.0001 par value, 150,000,000 shares authorized;

24,662,904 and 15,768,725

shares issued at December 31, 2021 and December 31, 2020, respectively;

24,643,149 and 15,768,725 shares outstanding at December

31, 2021 and December 31, 2020, respectively

Additional paid-in capital

Retained earnings

Total Stockholders’ Equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

Accumulated deficit

( 85,845,567 )

The accompanying notes are an integral part

of the financial statements.

LEISURE ACQUISITION CORP.

( 55,958,716 )

Total Ensysce Biosciences, Inc.

stockholders’ deficit

( 7,878,243 )

( 6,440,802 )

Noncontrolling interests in stockholders’ deficit

Total stockholders’ deficit

( 8,158,058 )

( 6,658,427 )

Total liabilities and stockholders’ deficit

accompanying notes are an integral part of these consolidated financial statements.

Biosciences, Inc.

Statements of Operations

Year Ended December 31,

Operating costs

Federal grants

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

1 unchanged sentence

( 1,613,287 )

Other income:

Interest income

Forgiveness of accounts payable

Income before provision for income taxes

Provision for income taxes

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

Basic and diluted net income (loss) per share, Common stock subject to possible redemption

Basic and diluted weighted average shares outstanding, Common stock

Basic and diluted net income (loss) per share, Common stock

The accompanying notes are an integral part

of the financial statements.

LEISURE ACQUISITION CORP.

STATEMENTS OF CHANGES IN STOCKHOLDERS’

Total Stockholders’

Balance – January 1, 2019

Change in value of common stock subject to possible redemption

Balance – December 31, 2019

Change in value of common stock subject to possible redemption

Other income (expense):

Change in fair value of derivative liabilities

Issuance costs for convertible notes

( 1,920,158 )

Change in fair value of convertible notes

( 2,993,060 )

Issuance of warrants in connection with conversion of promissory note – related party

Waiver of a portion of deferred underwriting fee

Balance – December 31, 2020

The accompanying notes are an integral part

of the financial statements.

LEISURE ACQUISITION CORP.

Issuance of liability classified warrants

( 1,865,403 )

Change in fair

value of liability classified warrants

( 1,438,186 )

Interest expense

( 1,295,307 )

Other income and expense, net

Total other income (expense), net

( 9,275,470 )

$ ( 29,145,901 )

$ ( 160,875 )

Net loss attributable to noncontrolling interests

Deemed dividend related to warrants down round provision

Net income (loss) attributable to common stockholders

$ ( 29,886,851 )

Net income (loss) per basic share:

Net income (loss) per share attributable to common stockholders, basic

Weighted average common shares outstanding, basic

Net income (loss) per diluted share:

Net income (loss) per share attributable to common stockholders, diluted

Weighted average common shares outstanding, diluted

accompanying notes are an integral part of these consolidated financial statements.

Biosciences, Inc.

Statements of Changes in Stockholders’ Deficit

Noncontrolling

Stockholders’

Equity (Deficit)

Noncontrolling

on December 31, 2019 (as previously reported)

$ ( 56,015,486 )

$ ( 6,676,251 )

application of recapitalization

( 223,696,435 )

on December 31, 2019, effect of reverse recapitalization (Note 2)

$ ( 56,015,486 )

$ ( 6,676,251 )

$ ( 56,015,486 )

$ ( 6,676,251 )

Stock-based compensation

Contribution from noncontrolling interest

Balance on December 31, 2020

$ ( 55,958,716 )

$ ( 217,625 )

$ ( 6,658,427 )

$ ( 55,958,716 )

$ ( 217,625 )

$ ( 6,658,427 )

Exercise of stock options

Settlement of convertible notes in business combination

Conversion of convertible notes

Issuance of common stock for business combination, net of transaction costs

Stock-based compensation

Issuance of warrants

Warrants modification

Deemed dividend related to warrants down round provision

( 29,083,711 )

( 29,145,901 )

Balance on December 31, 2021

$ ( 85,845,567 )

$ ( 279,815 )

$ ( 8,158,058 )

$ ( 85,845,567 )

$ ( 279,815 )

$ ( 8,158,058 )

accompanying notes are an integral part of these consolidated financial statements.

Biosciences, Inc.

Statements of Cash Flows

1 unchanged sentence

Cash flows from operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Interest earned on marketable securities held in Trust Account

$ ( 29,145,901 )

Forgiveness of accounts payable

$ ( 160,875 )

Deferred tax benefit

Adjustments to reconcile net loss to net cash used in operating activities:

Accrued interest

Accretion of discounts on promissory notes

Change in fair value of derivative liability

( 2,447,908 )

Change in fair value of convertible debt

Loss on extinguishment of debt

Stock-based compensation

Issuance of liability classified warrants

Change in fair value of liability classified warrants

Issuance of warrants for share subscription facility

Commitment fee for share subscription facility

Warrant modification

Issuance costs for convertible notes

Debt conversion expense

Changes in operating assets and liabilities:

Prepaid expenses

Prepaid income taxes

Accounts payable and accrued expenses

Unbilled receivable

Prepaid expenses and other assets

( 1,616,019 )

Accounts payable

( 1,423,494 )

Accrued expenses and other liabilities

( 1,146,868 )

Net cash used in operating activities

( 8,242,177 )

Cash Flows from Investing Activities:

Investment of cash in Trust Account

( 1,247,342 )

Cash withdrawn from Trust Account for redemption of common stock

Cash withdrawn from Trust Account for franchise taxes and income taxes

Net cash provided by investing activities

Cash flows from financing activities:

Proceeds from promissory note

Proceeds from convertible promissory notes – related parties

Redemption of common stock

( 184,776,163 )

Proceeds from issuance of convertible notes

Proceeds from issuance of promissory notes to related parties

Repayment of promissory notes

Proceeds from exercise of stock options

Proceeds from issuance of common stock for business combination, net of transaction

Repayment of financed insurance premiums

Contribution from noncontrolling interests

Net cash provided by financing activities

Increase (Decrease) in cash and cash equivalents

Cash and cash equivalents beginning of period

Cash and cash equivalents end of period

Supplemental cash flow information:

Income tax payments

Supplemental disclosure of non-cash investing and financing activities:

Fair value of derivative liability at issuance

Settlement of convertible notes into common stock

Conversion of 2021 Notes

Net assets acquired in business combination

Financed insurance premiums, net

Share subscription facility transaction costs

Deemed dividend related to warrants down round provision

accompanying notes are an integral part of these consolidated financial statements.

Biosciences, Inc.

to the Consolidated Financial Statements

1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

Biosciences, Inc.

(“Ensysce”), along with its subsidiary, Covistat Inc.

(“Covistat”) and its wholly owned subsidiaries

EBI Operating, Inc.

and EBI OpCo.

(collectively, the “Company”), is engaged in the development of drug delivery platforms

targeting pain and cancer markets.

The primary focus of the Company is its program developing abuse and overdose resistant pain technology

with a clinical stage program being the abuse resistant, TAAP (Trypsin Activated Abuse Protection) opioid product candidate, PF614.

addition, the Company is developing its MPAR TM (Multi-Pill Abuse Resistant) technology for overdose protection which will

be applied to the PF614 program.

The Company is also applying its TAAP and MPAR TM technology to a methadone prodrug for use

in the treatment of Opioid Use Disorder.

January 31, 2021, Leisure Acquisition Corp., a Delaware corporation (“LACQ”), entered into an Agreement and Plan of Merger

(as amended, the “Merger Agreement”) with Ensysce Biosciences, Inc., a Delaware corporation (“Former Ensysce”),

and EB Merger Sub, Inc., a Delaware corporation and wholly-owned, direct subsidiary of LACQ (“Merger Sub”).

Pursuant to the

Merger Agreement, on June 30, 2021 (the “Closing Date”), Merger Sub was merged with and into Former Ensysce, with Former

Ensysce surviving the merger (“Merger” and, together with the other transactions contemplated by the Merger Agreement, the

“Business Combination”).

In connection with the closing of the Business Combination on the Closing Date (the “Closing”),

Former Ensysce became a wholly owned subsidiary of LACQ and the stockholders of Former Ensysce, as of immediately prior to the effective

time of the Merger, received shares of LACQ and hold a portion of the shares of Common Stock, par value $ 0.0001 per share (the “Common

Stock”), of LACQ.

the Closing Date, at the effective time of the Merger, LACQ changed its name from “Leisure Acquisition Corp.” to “Ensysce

Biosciences, Inc.” Unless the context otherwise requires, “we,” “us,” “our” and the “Company”

refer to Ensysce and the combined company and its subsidiaries following the Closing.

Unless the context otherwise requires, references

to “LACQ” refer to Leisure Acquisition Corp., a Delaware corporation, prior to the Closing.

connection with the Business Combination, outstanding shares of common stock of Former Ensysce (including shares resulting from the conversion

of Former Ensysce’s convertible debt prior to Closing) were converted into the right to receive shares of Ensysce at an exchange

ratio of 0.06585 .

Immediately following the Business Combination, stockholders of Former Ensysce owned approximately 71.8 % of the outstanding

common stock of the combined company.

In addition, Former Ensysce’s existing options and warrants were exchanged for equivalent

securities in Ensysce on their existing terms (with standard adjustments to exercise price and underlying shares, consistent with the

foregoing exchange ratio).

As of July 2, 2021, Ensysce’s shares of common stock are traded on the Nasdaq Capital Market (“Nasdaq”)

under the new ticker symbol “ENSC”.

June 2020, the Company commenced an initiative to develop a therapeutic for the treatment of certain coronavirus infections through the

formation of a separate entity, Covistat, Inc., a Delaware corporation.

Pursuant to the articles of incorporation, Covistat was authorized

to issue 1,000,000 shares of common stock, $ 0.001 par value per share, and 100,000 shares of preferred stock, $ 0.001 par value per share.

Ensysce is a 79.2 % stockholder in Covistat, with 19.8 % and 1.0 % of the shares held by certain key personnel of the Company and an unrelated

party, respectively.

March 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a new coronavirus as a “pandemic”.

First identified in late 2019 and known now as COVID-19, the outbreak has impacted millions of individuals worldwide.

In response, many

countries have implemented measures to combat the outbreak which have impacted global business operations.

As of the date of issuance

of the consolidated financial statements, the Company’s operations have not been significantly impacted;

however, the Company continues

to monitor the situation.

No impairments were recorded as of the balance sheet date as no triggering events or changes in circumstances

had occurred as of year-end;

however, due to significant uncertainty surrounding the situation, management’s judgment regarding

this could change in the future.

In addition, while the Company’s results of operations, cash flows and financial condition could

be negatively impacted, the extent of the impact cannot be reasonably estimated at this time.

Company currently operates in one business segment, which is pharmaceuticals.

The Company is not organized by market and is managed and

operated as one business.

A single management team reports to the chief operating decision maker, the Chief Executive Officer.

Biosciences, Inc.

to the Consolidated Financial Statements

2 - BASIS OF PRESENTATION

consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States

of America (“GAAP”) and pursuant to the rules and regulations of the United States Securities Exchange Commission (“SEC”).

The consolidated financial statements include the accounts of Ensysce Biosciences, Inc.

and its subsidiaries.

All intercompany balances

and transactions have been eliminated in the consolidation.

Business Combination was accounted for as a reverse recapitalization in accordance with U.S.

Under this method of accounting, LACQ

was identified as the acquired company for financial reporting purposes, primarily because the stockholders of Former Ensysce control

the majority of the voting power of the combined company, Former Ensysce’s board of directors comprise a majority of the governing

body of the combined company, and Former Ensysce’s senior management comprise the leadership of the combined company.

for accounting purposes, the transaction was treated as the equivalent of Former Ensysce issuing shares for the net assets of LACQ, accompanied

by a recapitalization.

The net assets of LACQ, primarily consisting of cash of $ 7.8

million and prepaid expenses of $ 1.1

million, were recorded at historical cost with

goodwill or other intangible assets recorded.

The shares and net loss per share prior to the reverse recapitalization have been retroactively restated to reflect the exchange ratio

The consolidated financial statements reflect the historical operations of Ensysce.

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

of Former Ensysce into common stock.

In connection with the Closing, the 2020 convertible notes were amended to provide for automatic

conversion of the outstanding principal and interest into shares of common stock of Ensysce.

The Company had recorded $ 1.2 million of

deferred transaction costs, consisting of legal and accounting fees directly related to the Business Combination, which were offset against

the proceeds of the Business Combination within additional paid-in capital.

accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates,

among other things, the realization of assets and satisfaction of liabilities in the normal course of business.

Company has not generated any product revenue and had an accumulated deficit of $ 85.8 million at December 31, 2021.

There is no assurance

that profitable operations will ever be achieved, and, if achieved, would be sustained on a continuing basis.

Product development activities,

clinical and pre-clinical testing, and commercialization of the Company’s product candidates are necessary to develop the Company’s

products and will require significant additional financing.

There can be no assurance the Company will be able to obtain such funds.

These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

December 2020, the Company executed a share subscription facility with an investment group.

Under the agreement, the investor agreed

to provide the Company with a share subscription facility of up to $ 60.0 million for a 36-month term following the public listing of

the Company’s common stock.

The Company will control the timing and maximum amount of drawdown under this facility and has no minimum

drawdown obligation.

The investor will pay, in cash, a per-share amount equal to 90% of the average daily closing price of the Company’s

stock during the 30 consecutive trading days prior to the issuance of a draw notice, which shall not exceed 400% of the average trading

volume for the 30 trading days immediately preceding the draw down date.

On June 30, 2021, the Company consummated the Business Combination

with LACQ, resulting in the Company’s shares becoming publicly listed on Nasdaq on July 2, 2021.

Concurrent with the public listing

of the Company’s shares, the Company issued to the investor 1,106,108 warrants with a five-year term to purchase common stock of

Ensysce at an exercise price of $ 10.01 per share (Notes 3 and 8), subject to a down round feature that would adjust the exercise price

if other shares are issued below $ 10.01 per share.

The Company must pay a commitment fee to the investor of $ 1.2 million with $ 800,000

due on the first anniversary of the public listing date and $ 400,000 due on the 18-month anniversary of the public listing date.

commitment fee can be paid from the proceeds of a draw against the facility or in freely tradable common stock of the Company.

Biosciences, Inc.

to the Consolidated Financial Statements

September 2021, the Company entered into a $ 15.9

million convertible note financing agreement

with institutional investors (the “2021 Notes”).

The financing provided for two closings, the first closed in September

million and the second closed in November for

(See Note 7 for additional information.)

The agreement limits the Company’s ability to execute certain debt and equity financings, including its existing $ 60.0

million share subscription facility, while the

convertible notes are outstanding.

Without the availability of proceeds through the share subscription facility, existing cash resources

are not sufficient to fund current planned operations.

While the Company believes in the viability of its strategy to ultimately realize

revenues and in its ability to raise additional funds, management cannot be certain that additional funding will be available on acceptable

terms, or at all.

The Company’s ability to continue as a going concern is dependent upon its ability to obtain adequate financing

and achieve profitable operations.

As a result, these plans do not alleviate substantial doubt about the Company’s ability to continue

as a going concern for a period of 12 months following the date these consolidated financial statements were issued.

consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as

a going concern.

3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Estimates and Assumptions

of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the

amounts reported in the consolidated financial statements and disclosed in the accompanying notes.

Actual results may differ from those

estimates and such differences may be material to the consolidated financial statements.

The more significant estimates and assumptions

by management include, but are not limited to, the expense recognition for certain research and development services, the valuation allowance

of deferred tax assets resulting from net operating losses, the estimated fair values of common stock, warrants and

options to purchase the Company’s common stock, and convertible notes payable.

and Cash Equivalents

purposes of the consolidated balance sheets and consolidated statements of cash flows, the Company considers all highly liquid instruments

with maturity of three months or less at the time of issuance to be cash equivalents.

Concentrations

of Credit Risk and Off-Balance Sheet Risk

and cash equivalents are financial instruments that are potentially subject to concentrations of credit risk.

The Company’s cash

and cash equivalents are deposited in accounts at large financial institutions, and amounts may exceed federally insured limits.

Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the

cash and cash equivalents are held.

The Company has no financial instruments with off-balance sheet risk of loss.

Biosciences, Inc.

to the Consolidated Financial Statements

and Equipment

and equipment include office and laboratory equipment that is recorded at cost and depreciated using the straight-line method over the

estimated useful lives of five to six years.

Depreciation expense of $ 151 and $ 201 was recognized for year ended December 31, 2021 and

2020, respectively.

Depreciation expense is classified in general and administrative expense in the accompanying consolidated statements

of operations.

and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets

might not be recoverable.

Conditions that would necessitate an impairment assessment include a significant decline in the observable

market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that

would indicate that the carrying amount of an asset or group of assets is not recoverable.

For long-lived assets to be held and used,

the Company will recognize an impairment loss only if the carrying amount is not recoverable through its undiscounted cash flows and

measure any impairment loss based on the difference between the carrying amount and estimated fair value.

There were no such losses for

the year ended December 31, 2021 and 2020.

Financial Instruments

Company does not use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks.

The Company evaluates

all of its financial instruments, including notes payable, to determine whether such instruments are derivatives or contain features

that qualify as embedded derivatives.

Embedded derivatives must be separately measured from the host contract if all the requirements

for bifurcation are met.

The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of

the host contract and the features of the derivatives.

Bifurcated embedded derivatives are recognized at fair value, with changes in

fair value recognized in the consolidated statement of operations each period.

Bifurcated embedded derivatives are classified with the

related host contract in the Company’s consolidated balance sheet.

January 2018 and January 2021, the Company entered into a series of notes that were determined to have embedded derivative instruments

in the form of a contingent put option.

The notes were recognized at the value of proceeds received after allocating issuance proceeds

to the bifurcated contingent put option.

The notes were subsequently measured at amortized cost using the effective interest method to

accrete interest over their term to bring the notes’ initial carrying value to their principal balance at maturity.

The bifurcated

put option was initially measured at fair value and subsequently measured at fair value with changes in fair value recognized as a component

of other expenses in the consolidated statements of operations (see Note 7).

The notes and the contingent put option are classified as

either long-term or short-term liabilities based on the maturity date of the related loan.

outstanding derivative liabilities were settled in connection with the conversion of outstanding notes payable on June 30, 2021.

to Note 7 for details of the conversion.

Value Measurement

820, Fair Value Measurements , (“ASC 820”) provides guidance on the development and disclosure of fair value measurements.

Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset

or paid to transfer a liability in an orderly transaction between willing market participants at the measurement date.

As such, fair

value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset

or a liability.

accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes:

prices in active markets for identical assets or liabilities.

other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.

inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies,

or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

Biosciences, Inc.

to the Consolidated Financial Statements

Company evaluates assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at

which to classify them for each reporting period.

This determination requires significant judgments to be made by the Company.

of December 31, 2021 and 2020, the recorded values of cash and cash equivalents, prepaid expenses, accounts payable, and accrued expenses

and other liabilities approximate their fair values due to the short-term nature of these items.

September 24 and November 5, 2021, the Company issued convertible notes with a face value of $ 5.3

million and $ 10.6

million, respectively.

The Company elected the

fair value option to account for the convertible notes as it believes the fair value option provides users of the financial statements

with greater ability to estimate the outcome of future events as facts and circumstances change, particularly with respect to changes

in the fair value of the common stock underlying the conversion option and redemption feature.

The fair value estimate of the 2021

Notes was based on a discounted cash flow model and a Monte Carlo model, which represent Level 3 measurements.

Significant assumptions include the discount rate used in the discounted cash flow model and the expected premium for conversion used

in the Monte Carlo model.

in the fair value of the notes are recognized in other income (expense) for each reporting period.

Refer to Note 7 for details

of the terms and conditions of the 2021 Notes.

Notes Pre Business Combination (Contingent Put Option)

carrying value of outstanding notes payable at December 31, 2020 approximates the estimated aggregate fair value as the embedded contingent

put option is recognized at fair value and classified with the debt host.

The put option allowed for certain notes payable to be converted

into common stock, contingent upon completion of an equity financing transaction with gross proceeds above certain thresholds.

value estimate of the embedded put option was based on the probability-weighted discounted value of the put feature and represents a

Level 3 measurement.

Significant assumptions used to determine the fair value of the put feature include the estimated probability of

exercise of the put option and the discount rate used to calculate fair value.

The estimated probability of exercise is based on management’s

expectation for future equity financing transactions.

The discount rate is based on the weighted average effective yield of notes payable

previously issued by the Company, adjusted for changes in market yields of healthcare sector CCC-rated debt.

As of December 31, 2020,

assumptions included a probability of exercise of the put option of 10 % and a discount rate of 42.9 %.

As noted above, all outstanding

derivative liabilities were settled upon the conversion of outstanding notes payable upon the consummation of the Business Combination.

Refer to Note 7 for details of the conversion.

On September 24 and November 5, 2021, the Company

issued liability classified warrants in connection with the issuance of the 2021 Notes.

The warrants were liability classified

due to certain cash settlement features and included in “Other long-term liabilities” on the consolidated balance sheets.

The Company uses a Black Scholes model to estimate the fair value of the warrants.

Changes in the fair value of the warrants are

recognized in other income (expense) for each reporting period.

Refer to Note 8.

following tables present assets and liabilities measured and recorded at fair value on the Company’s consolidated balance sheet

as of December 31, 2021 and 2020.

As of December 31, 2021, all contingent put options, associated with the pre-combination convertible

notes, were settled upon conversion of the notes at the closing of the Business Combination.

SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE

December 31, 2021

Fair value of convertible note

Liability classified warrants

Contingent put option

Biosciences, Inc.

to the Consolidated Financial Statements

December 31, 2020

Contingent put option

following table summarizes the change in fair value of the Company’s Level 3 assets and liabilities for the year ended December

SCHEDULE OF CHANGE IN FAIR VALUE OF COMPANY’S LEVEL 3

December 31, 2021

Contingent put option

Convertible note

Liability classified warrants

Fair value, December 31, 2020

( 2,093,224 )

Payment of offering costs

Net cash used in financing activities

( 2,093,224 )

Change in fair value

Fair value, December 31, 2021

September 2018, the National Institutes of Health (“NIH”) through the National Institute on Drug Abuse awarded the Company

a research and development grant related to the development of its MPAR TM overdose prevention technology (the “MPAR

The total approved budget for the initial two-year period was approximately $ 5.4 million ($ 3.2 million and $ 2.2 million

in years 1 and 2 respectively) of which the Company must contribute $ 1.1 million in the first year of the grant.

In August 2019, the

grant was amended such that the approved budget for the two-year period decreased to approximately $ 5.1 million ($ 2.1 million and $ 3.0

million in years 1 and 2, respectively).

In June 2021, the Company received a Notice of Award for an additional $ 2.8 million of funding

in year 3 under the MPAR Grant beginning July 1, 2021.

September 2019, the NIH/National Institute on Drug Abuse awarded the Company a second research and development grant related to the development

of its TAAP/MPAR TM abuse deterrent technology for Opioid Use Disorder (the “OUD Grant”).

The total approved budget

for the two-year period was approximately $ 5.4 million.

Company recognizes revenue when costs related to the grants are incurred.

The Company believes this policy is consistent with the overarching

premise in Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), applied

by analogy, to ensure that it recognizes revenues to reflect the transfer of promised goods or services to customers in an amount that

reflects the consideration to which it expects to be entitled in exchange for those goods or services, even though there is no “exchange”

as defined in ASC 606.

The Company believes the recognition of revenue as costs are incurred and amounts become due is analogous to the

concept of transfer of control of a service over time under ASC 606.

revenue recognized under the MPAR Grant and OUD Grant was as follows:

SCHEDULE OF REVENUE RECOGNIZATION UNDER GRANTS

requested or eligible to be requested through the NIH payment management system, but for which cash has not been received, are presented

as an unbilled receivable on the Company’s consolidated balance sheet.

As all amounts are expected to be remitted timely, no valuation

allowances are recorded.

Biosciences, Inc.

to the Consolidated Financial Statements

and Development Costs

Company’s research and development expenses consist primarily of third-party research and development expenses, consulting expenses,

animal and clinical studies, and any allocable direct overhead, including facilities and depreciation costs, as well as salaries, payroll

taxes, and employee benefits for those individuals directly involved in ongoing research and development efforts.

Research and development

expenses are charged to expense as incurred.

Payments made prior to the receipt of goods or services to be used in research and development

are capitalized until the goods or services are received.

and Administrative Expenses

and administrative expenses consist primarily of personnel costs associated with the Company’s executive, finance, human resources,

compliance, and other administrative personnel, as well as accounting and legal professional services fees.

Company expenses stock-based compensation over the requisite service period based on the estimated grant-date fair value of the awards

using a graded amortization approach.

The Company accounts for forfeitures as they occur.

Company estimates the fair value of stock option grants using the Black-Scholes option pricing model.

The assumptions used in calculating

the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application

of management’s judgment.

For the year ended December 31, 2021 and 2020, stock-based compensation costs are recorded in general

and administrative expenses in the consolidated statements of operations.

time-to-time equity classified awards may be modified.

On the modification date, the Company estimates the fair value of the awards immediately

before and immediately after modification.

The incremental increase in fair value is recognized as expense immediately to the extent

the underlying equity awards are vested and on a straight-line basis over the same remaining amortization schedule as the unvested underlying

equity awards.

taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an

asset and liability approach.

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of

events that have been included in the consolidated financial statements or tax returns.

Deferred tax assets and liabilities are determined

based on the difference between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates

in effect for the year in which the differences are expected to reverse.

Valuation allowances are provided if, based upon the weight

of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Company accounts for uncertain tax positions in accordance with the provisions of ASC 740.

When uncertain tax positions exist, the Company

recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination

by the taxing authority.

The determination as to whether the tax benefit will more likely than not be realized is based upon the technical

merits of the tax position as well as consideration of the available facts and circumstances.

The Company recognizes any interest and

penalties accrued related to unrecognized tax benefits as income tax expense.

Biosciences, Inc.

to the Consolidated Financial Statements

basic earnings per share is calculated by dividing the Company’s net income or loss attributable to common stockholders by the

weighted average number of common shares outstanding during the period.

The diluted earnings per share is calculated by dividing the

Company’s net earnings attributable to common stockholders by the diluted weighted average number of common shares outstanding

during the period, determined using the treasury stock method and the average stock price during the period.

A reconciliation of the

numerators and denominators of the basic and diluted earnings per share calculations follows :

SCHEDULE OF EARNINGS PER SHARE RECONCILIATION

Net income (loss) attributable to common stockholders

$ ( 29,886,851 )

Net Change in Cash

Weighted average shares outstanding, basic

Weighted average dilutive stock options

Weighted average shares outstanding, diluted

Net income (loss) per share attributable to common stockholders, basic

Net income (loss) per share attributable to common stockholders, diluted

following weighted average shares have been excluded from the calculations of diluted weighted average common shares outstanding because

they would have been anti-dilutive:

SCHEDULE OF WEIGHTED AVERAGE SHARES OF ANTI-DILUTIVE SECURITIES

Stock options

Issued Accounting Pronouncements

December 2019, the FASB issued ASU No.

2019-12, Income Taxes (“ASU 2019-12”), which simplifies the accounting for income

taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology

for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the

accounting for transactions that result in a step-up in the tax basis of goodwill.

The guidance is effective for fiscal years beginning

after December 31, 2021 and interim periods within that year.

Early adoption is permitted.

The Company is evaluating the impact of ASU

2019-12 on the consolidated financial statements.

August 2020, the FASB issued ASU No.

2020-06, Debt – Debt with Conversion and Other Options (Topic 470) to address issues identified

as a result of the complexity with applying GAAP for certain financial instruments with characteristics of liabilities and equity.

FASB decided to reduce the number of accounting models for convertible debt instruments and convertible preferred stock, resulting in

fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP.

Certain types of

convertible instruments will continue to be subject to separation models:

(a) those with embedded conversion features that are not clearly

and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from

derivative accounting and (b) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in

For convertible instruments, the contracts primarily affected are those with beneficial conversions or cash conversion features

as the accounting models for those specific features have been removed.

For contracts in an entity’s own equity, the contracts

primarily affected are freestanding instruments and embedded features that are accounted for as derivatives due to a failure to meet

the settlement conditions of the derivatives scope exceptions.

The FASB simplified the settlement assessment by removing the requirements

to (a) consider whether the contract would be settled in registered shares, (b) to consider whether collateral is required to be posted,

and (c) assess shareholder rights.

The FASB also decided to enhance information transparency by making targeted improvements to the disclosures

for convertible instruments and earnings-per-share guidance.

ASU 2020-06 is effective for fiscal years beginning after December 15, 2023

and early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020.

Entities must adopt the guidance

as of the beginning of its annual fiscal year and a modified retrospective or fully retrospective transition approach is permitted.

Company is evaluating the impact of ASU 2020-06 on the consolidated financial statements.

Biosciences, Inc.

to the Consolidated Financial Statements

4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

expenses and other current assets consisted of the following:

SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid research and development

Prepaid insurance

Other prepaid expenses

Total prepaid expenses and other current assets

5 – ACCRUED EXPENSES AND OTHER LIABILITIES

expenses and other liabilities consisted of the following:

SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES

Share subscription facility commitment fees

Professional fees

Accrued research and development

Accrued scientific advisory board fees

Consultant compensation expenses

Bonus accrual

Deferred grant revenue

Other accrued liabilities

Total accrued expenses and other liabilities

long-term liabilities consisted of the following:

SCHEDULE OF OTHER LONG-TERM LIABILITIES

Share subscription facility commitment fees

Liability classified warrants

Total other long-term liabilities

Biosciences, Inc.

to the Consolidated Financial Statements

6 - COMMITMENTS AND CONTINGENCIES

of December 31, 2021, the Company’s commitments included an estimated $ 13.0 million related to the Company’s open purchase

orders and contractual obligations that occurred in the ordinary course of business, including commitments with contract research organizations

for multi-year pre-clinical and clinical research studies.

Although open purchase orders are considered enforceable and legally binding,

the terms generally allow the Company the option to cancel, reschedule, and adjust its requirements based on its business needs prior

to the delivery of goods or the performance of services.

of December 31, 2021 and 2020, there were no pending legal proceedings against the Company that are expected to have a material adverse

effect on cash flows, financial condition or results of operations.

From time to time, the Company could become involved in disputes

and various litigation matters that arise in the normal course of business.

These may include disputes and lawsuits related to intellectual

property, licensing, contract law and employee relations matters.

Periodically, the Company reviews the status of significant matters,

if any exist, and assesses its potential financial exposure.

If the potential loss from any claim or legal claim is considered probable

and the amount can be estimated, the Company accrues a liability for the estimated loss.

Legal proceedings are subject to uncertainties,

and the outcomes are difficult to predict.

Because of such uncertainties, accruals are based on the best information available at the

As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation.

July 12, 2021, following the Business Combination with LACQ, the Company’s former financial advisor filed an action against the

Company and its Chief Executive Officer alleging that the common stock and warrants issued to the former advisor in satisfaction of its

advisory fee should have been registered and immediately tradeable.

On August 3, 2021, the parties entered into a settlement agreement

whereby the former advisor would have their common stock and the common stock underlying their warrants registered on the Company’s

resale Registration Statement on Form S-1 that it filed on August 9, 2021 (the “Resale Registration Statement”).

the warrants would be modified to allow for cashless exercise and to reduce the exercise price from $ 11.50 /share to $ 10.00 /share.

consideration for this, both parties agreed to release the other from any past, present, or future claims.

In addition, the former advisor

agreed to immediately stay the proceedings and inform the Superior Court of a conditional settlement and to dismiss the lawsuit with

prejudice five days following the effectiveness of the Resale Registration Statement.

On October 6, 2021, the Superior Court dismissed

with prejudice the case filed on July 12, 2021 by the Company’s former financial advisor, following effectiveness of the Resale

Registration Statement filed on August 9, 2021 and amended on September 22, 2021.

part of the year ended December 31, 2020, the Company leased office space on a month-to-month basis.

In August 2020, the Company entered

into an agreement to lease office space.

The lease commencement date was October 1, 2020 and the lease was scheduled to terminate October

31, 2021 with no option to renew.

August 2021, the Company entered into an amendment of the aforementioned lease, whereby the term of the lease was extended through October

31, 2022 with no option to renew.

The amendment resulted in a modification of the lease under ASC 842 and the Company remeasured the

lease liability as of the amendment date.

of December 31, 2021, the future lease payments totaled $ 24,874 .

Company recognized total rent expense of $ 41,418

in the years ended December 31, 2021,

and 2020, respectively.

Subject to Shareholder Approval

July 2021, the Company engaged two consultants to perform certain public and investor relations services in consideration for

warrants to purchase 500,000 shares

of common stock with a five-year term and an exercise price of $ 6.28 each, 50,000 shares

of common stock each, and 200,000 restricted

stock units each.

The restricted stock units vest over one

year with 50 %

of the vesting contingent upon certain market conditions.

These equity awards are contingent upon shareholder approval of an amended

and restated 2021 Omnibus Plan at a special shareholder meeting in January 2022, whereby the warrants would be replaced by

non-qualified stock options with similar terms.

As the terms of the awards did not satisfy the grant date criteria for an equity

award, as of December 31, 2021, the Company recorded a liability and an expense of $ 1,342,479 (to

general and administrative expense on the consolidated statement of operations)

to reflect the estimated value of services received during the period.

See Note 12 for discussion of the special shareholder meeting

in January 2022.

Biosciences, Inc.

to the Consolidated Financial Statements

7 - NOTES PAYABLE

following table provides a summary of the Company’s outstanding debt as of December 31, 2021:

SCHEDULE OF DEBT

Principal balance

Accrued interest

Fair value adjustment

Net debt balance

Financed insurance

following table provides a summary of the Company’s outstanding debt as of December 31, 2020:

Principal balance

Accrued interest

Unamortized debt discount

Net debt balance

2015 convertible notes

2018 convertible notes

2020 promissory notes

2020 convertible notes

$ ( 942,914 )

Cash – Beginning

Cash – Ending

Supplementary cash flow information:

Cash paid for income taxes

Non-Cash investing and financing activities:

Change in value of common stock subject to possible redemption

Waiver of a portion of deferred underwriting fee payable

Issuance of warrants in connection with conversion of promissory note – related party

The accompanying notes are an integral part

of the financial statements.

— DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Leisure Acquisition Corp.

“Company”) is a blank check company incorporated in Delaware on September 11, 2017.

The Company was formed for the

purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, recapitalization,

exchangeable share transaction or other similar business transaction, with one or more operating businesses or assets (a “Business

Combination”).

At December 31, 2020, the Company

had not yet commenced operations.

All activity through December 31, 2020 relates to the Company’s formation, its initial

public offering (“Initial Public Offering”), which is described below, identifying a target company for a Business

Combination, activities in connection with the proposed acquisition of Ensysce Biosciences, Inc., a Delaware corporation (“Ensysce”)

(see Note 10) and activities in connection with the previously proposed business combination with GTWY Holdings Limited, a Canadian

corporation (“GTWY Holdings”), which was terminated on July 16, 2020.

The registration statement

for the Company’s Initial Public Offering was declared effective on December 1, 2017.

On December 5, 2017, the Company consummated

the Initial Public Offering of 20,000,000 units (“Units” and, with respect to the common stock included in the Units,

the “Public Shares”), generating gross proceeds of $ 200,000,000 , which is described in Note 3.

Simultaneously with the closing

of the Initial Public Offering, the Company consummated the sale of 6,825,000 warrants (the “Private Placement Warrants”)

at a price of $ 1.00 per warrant in a private placement to Hydra LAC, LLC, an affiliate of Hydra Management, LLC (the “Hydra

Sponsor”), MLCP GLL Funding LLC, an affiliate of Matthews Lane Capital Partners, LLC (the “Matthews Lane Sponsor,”

and, together with the Hydra Sponsor, the “Sponsors”), HG Vora Special Opportunities Master Fund, Ltd.

and certain members of the Company’s management team, generating gross proceeds of $ 6,825,000 , which is described in Note

Following the closing of the

Initial Public Offering on December 5, 2017, an amount of $ 200,000,000 ($ 10.00 per Unit) from the net proceeds of the sale of the

Units in the Initial Public Offering and the Private Placement Warrants was placed in a trust account (the “Trust Account”)

and invested in U.S.

government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940,

as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company

that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company

Act, as determined by the Company, until the earlier of:

(i) the consummation of a Business Combination or (ii) the distribution

of the Trust Account, as described below.

Transaction costs amounted

to $ 11,548,735 , consisting of $ 4,000,000 of underwriting fees, $ 7,000,000 of deferred underwriting fees and $ 548,735 of Initial

Public Offering costs.

The Company’s management

has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and Private Placement

Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.

The Company’s initial Business Combination must be with one or more target businesses that together have a fair market value

equal to at least 80 % of the balance in the Trust Account (excluding deferred underwriting commissions and franchise and income

taxes payable on the income earned on the Trust Account) at the time of the signing of an agreement to enter into a Business Combination.

In addition, the Company’s Business Combination must be approved by HG Vora as a condition to the Contingent Forward Purchase

Contract (as described in Note 6).

The Company will only complete a Business Combination if the post-Business Combination company

owns or acquires 50 % or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in

the target sufficient for it not to be required to register as an investment company under the Investment Company Act.

no assurance that the Company will be able to successfully effect a Business Combination.

The Company will provide its

stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination

either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer.

The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will

be made by the Company, solely in its discretion.

The stockholders will be entitled to redeem their shares for a pro rata portion

of the amount then on deposit in the Trust Account ($ 10.00 per share, plus any deposits made to the Trust Account in connection

with extension payments and any pro rata interest earned on the funds held in the Trust Account and not previously released to

the Company to pay franchise and income taxes).

The per share amount to be distributed to stockholders who redeem their shares

will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (see Note 7).

The Company will proceed with

a Business Combination if the Company has net tangible assets of at least $ 5,000,001 upon consummation of a Business Combination

and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination.

If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal

reasons, the Company will, pursuant to its Second Amended and Restated Certificate of Incorporation, conduct the redemptions pursuant

to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents with the

SEC prior to completing a Business Combination.

If, however, a stockholder approval of the transaction is required by law, or the

Company decides to obtain stockholder approval for business or other legal reasons, the Company will offer to redeem shares in

conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules.

If the Company seeks

stockholder approval in connection with a Business Combination, the Sponsors and the Company’s other initial stockholders

(collectively, the “Initial Stockholders”) have agreed to vote their Founder Shares (as defined in Note 5) and any

Public Shares held by them in favor of approving a Business Combination.

Additionally, each public stockholder may elect to redeem

their Public Shares irrespective of whether they vote for or against the proposed transaction.

Notwithstanding the foregoing,

the Company’s Second Amended and Restated Certificate of Incorporation provides that a public stockholder, together with

any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”

(as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted

from redeeming its shares with respect to an aggregate of 20 % or more of the common stock sold in the Initial Public Offering.

The Company has until

June 30, 2021 to consummate a Business Combination (the “Combination Period”).

If the Company is unable to complete

a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding

up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding Public

Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest

earned and not previously released to pay franchise and income taxes (less up to $75,000 of interest to pay dissolution expenses),

divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’

rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law,

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

and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the

Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law.

underwriters have agreed to waive their rights to the deferred underwriting commission held in the Trust Account in the event

the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included

with the funds held in the Trust Account that will be available to fund the redemption of the Company’s Public Shares.

the event of such distribution, it is possible that the per share value of the assets remaining available for distribution (including

Trust Account assets) will be less than the $ 10.00 per Unit in the Initial Public Offering.

On November 26, 2019, the Company

held a special meeting pursuant to which the Company’s stockholders approved extending the Combination Period from December

5, 2019 to April 5, 2020 (the “Initial Extension Date”).

In connection with the approval of the extension, stockholders

elected to redeem an aggregate of 1,123,749 shares of the Company’s common stock.

As a result, an aggregate of $ 11,583,473

(or approximately $ 10.31 per share) was released from the Company’s Trust Account to pay such stockholders.

The Company agreed to contribute

(the “Contribution”) $ 0.03 for each share of the Company’s common stock that did not redeem in connection with

the extension for each of the four monthly periods covered by the extension (commencing on December 6, 2019 through the Initial

Extension Date), subject to certain conditions.

On each of December

5, 2019, January 3, 2020, February 4, 2020 and March 4, 2020, the Company made a Contribution of $ 0.03 for each of the public

shares outstanding, for an aggregate Contribution of $ 2,265,150 , which amounts were deposited into the Trust Account.

On December 5, 2019,

the Company entered into an expense advancement agreement with GTWY Holdings (the “GTWY Expense Advance Agreement”),

pursuant to which GTWY Holdings committed to provide $ 566,288 to fund contributions to the Trust Account.

The Company drew down

the full amount under the GTWY Expense Advance Agreement to fund the required Contribution to the Trust Account for the period

December 6, 2019 to January 5, 2020 by issuing an unsecured promissory note to GTWY Holdings (see Note 6).

The note was converted

into warrants on January 31, 2021.

On January 15, 2020,

the Company drew down $ 1,000,000 under the expense advancement agreement with the Company’s Sponsors and strategic investor

dated December 1, 2017 in exchange for issuing unsecured promissory notes to fund its working capital requirements and to fund

required Contributions to the Trust Account.

The holders had the option to convert the promissory notes into warrants at a price

of $ 1.00 per warrant subject to the same terms and conditions as private placement warrants.

The notes were converted into warrants

on June 25, 2020 (see Note 5).

On March 26, 2020, the Company

held a special meeting pursuant to which the Company’s stockholders approved extending the Combination Period from April

5, 2020 to June 30, 2020 (the “Second Extension Date”).

In connection with the approval of the extension, stockholders

elected to redeem an aggregate of 16,837,678 shares of the Company’s common stock.

As a result, an aggregate of $ 176,283,492

(or approximately $ 10.47 per share) was released from the Company’s Trust Account to pay such stockholders.

Of the amount

paid to redeeming stockholders, $ 136,283,492 was paid as of March 31, 2020 and the balance of $ 40,000,000 was paid on April 1,

On June 25, 2020, the

Company’s Sponsors and HG Vora converted the promissory notes issued to them on January 15, 2020 pursuant to a drawdown by

the Company under the expense advancement agreement in the aggregate amount of $ 1,000,000 into warrants to purchase 1,000,001 shares

of the Company’s common stock at an exercise price of $ 11.50 per share.

interest expense recognized for notes payable (excluding the 2021 Notes) was as follows:

SCHEDULE OF INTEREST EXPENSE DEBT

Stated interest accrual

Debt discount accretion

Convertible Notes Payable

2015, the Company issued certain convertible promissory notes in the aggregate principal amount of $ 873,000 .

During 2017 and 2018, all

but $ 100,000 were converted into common shares of Ensysce.

The remaining convertible promissory note bears interest at 5 % per annum,

is due on demand (principal and interest) and is mandatorily convertible at a variable price per share equal to 80 % of the price received

in certain future equity transactions.

The notes were converted into common stock in June 2021.

Convertible Notes Payable

January 2018 and December 2020, the Company received financing totaling $ 3,500,000 under a series of unsecured promissory notes with

a stockholder and board member ($ 2,500,000 ) and an unrelated party ($ 1,000,000 ).

The promissory notes mature 24 months from the date

of issuance and bear interest at the rate of 10 % per annum.

The promissory notes, together with all interest as accrued, can be converted

into shares of Ensysce’s common stock at the option of the noteholder, at 50 % of the price paid per share for equity securities

by the investors in a subsequent equity financing of no less than $ 5,000,000 gross proceeds (the “contingent put option”).

The contingent put option is required to be bifurcated from the debt host and measured at fair value with changes in fair value recorded

in earnings (see Note 3).

Biosciences, Inc.

to the Consolidated Financial Statements

Additionally,

if there is an initial public offering or reverse merger that results in Ensysce becoming publicly listed, the promissory notes automatically

convert to equity at the lower of $ 0.25 per share or the then-current Enterprise Value per share (the “automatic conversion option”).

Enterprise Value per Share is defined as market capitalization, debt and preferred stock less cash and cash equivalents divided by the

common stock of Ensysce on the measurement date, not to exceed $ 55 million.

The Company assessed whether the automatic conversion option

should be accounted for separately from the debt host and concluded that as the common shares of Ensysce are currently not publicly traded

and thus are not considered readily convertible to cash, the automatic conversion option cannot be net settled.

Further, the conversion

price of the promissory notes exceeded the per share fair value of Ensysce’s common stock on each issuance date and, consequently,

no beneficial conversion feature exists.

2018 convertible notes also include a change in control call option whereby, upon the close of a sale of Ensysce, other than an initial

public offering, Ensysce has the right to prepay the promissory notes at 200% of the principal outstanding plus all accrued and unpaid

This call option is required to be bifurcated because it is considered to not be clearly and closely related to the debt host.

However, the Company has concluded that as of each balance sheet date presented, the exercise of this call option is not probable and

thus the call option has a de minimis value.

June 2020, the board resolved to extend the maturity of all 2018 convertible notes payable issued in 2018 by one year .

The Company did

not incur legal fees or other additional costs to effect the modification.

The modification met the criteria to be classified as a troubled

debt restructuring under ASC 470-50.

The effective interest rate was recalculated to reflect the modified expected term of the notes

and no gain or loss was recognized.

notes were converted into common stock in June 2021.

Convertible Notes Payable

the year ended December 31, 2020, Covistat received financing totaling $ 700,000 under a series of unsecured promissory notes with unrelated

The notes mature in July 2022 and bear interest at a rate of 10 % per annum.

The notes cannot be prepaid without the prior consent

of the holder.

The notes, together with all accrued and unpaid interest, are automatically convertible upon an initial public offering

of Covistat shares or a private sale of a single class of Covistat’s equity securities with gross proceeds of at least $ 2.0 million

within a 12-month period.

The notes are convertible at the option of the holder at maturity.

With respect to an automatic conversion,

the conversion price will be the lesser of (a) 80 % of the per-share price of the equity securities sold or (b) the price equal to $ 10.0

million divided by the aggregate number of shares of Covistat’s common stock immediately prior to the initial closing of such financing.

With respect to an optional conversion, the conversion price will be the price equal to $ 10.0 million divided by the aggregate number

of shares of Covistat’s common stock immediately prior to the initial closing of such financing.

The conversion feature is required

to be bifurcated from the debt host and measured at fair value with changes in fair value recorded in earnings (see Note 3).

were converted into common stock in June 2021.

Promissory Notes Payable

the year ended December 31, 2020, the Company received financing totaling $ 100,000 under a series of unsecured promissory notes with

the Chief Executive Officer and a board member.

The promissory notes bear interest at a rate of 10 % per annum and mature December 31,

2021 or upon certain financing transactions, whichever is earlier.

The notes were repaid in full in July 2021.

Convertible Note Payable

January 2021, the Company received financing totaling $ 50,000 under an unsecured convertible note.

The convertible note bears interest

at a rate of 10 % per annum and matures January 28, 2023 .

The promissory note, together with accrued interest, would be automatically

converted into shares of Ensysce’s common stock at 80 % of the price paid per share for equity securities by investors in an IPO

or equity financing of no less than $ 10.0 million gross proceeds.

The conversion feature is required to be bifurcated from the debt host

and measured at fair value with changes in fair value recorded in earnings (see Note 3).

The note was converted into common stock in

Biosciences, Inc.

to the Consolidated Financial Statements

Promissory Notes

March and May 2021, the Company received financing totaling $ 350,000 under unsecured promissory notes issued to related parties including

the Chief Executive Officer and members of the board of directors.

The notes mature on the earlier of June 30, 2022 or the Company’s

receipt of gross proceeds of at least $ 2.0 million from the sale of common or preferred stock and bear interest at a rate of 10 % per

The notes were repaid in full in July 2021.

of Convertible Notes Payable

June 30, 2021, the Company consummated the Business Combination with LACQ, which triggered the automatic conversion into common stock

of the 2015 convertible notes payable, the 2018 convertible notes payable, and the 2021 convertible note payable.

In connection with

certain closing conditions, the 2020 convertible notes were amended to provide for automatic conversion of the outstanding principal

and interest into common stock.

The modification resulted in a loss on extinguishment of debt of $ 347,566

based on the share price on the date of conversion

and is recorded in other income (expense), net.

Company applied ASC 470-20-40-1 to the accounting of the conversion, which requires the accelerated recognition of unamortized debt discounts

as interest expense upon conversion.

Accordingly, $ 554,911 of unamortized debt discount as of the June 30, 2021 conversion has been recognized

as interest expense within the consolidated statement of operations.

table below summarizes the conversion of each class of notes payable:

SCHEDULE OF CONVERTIBLE DEBT

Immediately prior to merger

Net carrying value of debt converted

Shares of common stock issued

Outstanding debt, June 30, 2021

2015 Convertible Note

2018 Convertible Notes

2020 Convertible Notes

2021 Convertible Note

2021 Convertible Notes Payable

September 24, 2021, the Company entered into an agreement with institutional investors to issue the 2021 Notes.

The agreement

provides for two closings:

the first closing for $ 5.3

million (resulting in net proceeds of $ 4.6

million) which closed on September 24, 2021

(the “First Closing”).

The second closing for $ 10.6

million (resulting in net proceeds of $ 9.4

million) which closed on November 5, 2021

(the “Second Closing”).

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

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

The Company may not issue any additional debt or equity without the prior

written consent of the holders.

2021 Notes mature on June

23, 2023 for the first closing, and August

4, 2023 for the second closing.

The notes bear

interest at a rate of 5 %

per annum, in addition to an original issue discount of 6 %.

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

principal amount of the debt.

Company elected to apply the fair value option to the measurement of the 2021 Notes.

The total initial fair value of the

debt at issuance was $ 15.9

The Company recorded total issuance

costs of $ 1,920,158 ,

representing investment banking and legal fees of $ 1,020,158

and original issue discounts of $ 900,000 .

After several conversions occurring prior to year-end

(discussed below), the Company remeasured the fair value as of December 31, 2021 and recognized an expense of $ 3.0

million as the fair value of the 2021

Notes had increased to $ 16.8

million due to an increase in the value of

the conversion option resulting from a decrease in the price of the Company’s common stock.

The December 31, 2021 fair value measurement

includes the assumption of accrued interest and interest expense (at the stated rate plus an 8 %

cash settlement premium) and thus a separate amount is not reflected on the consolidated statements of operations.

separately, the total amount of interest expense (after consideration of the conversions) at December 31, 2021 would be

Biosciences, Inc.

to the Consolidated Financial Statements

2021 Notes may be converted into the Company’s common stock at the option of the holder in whole or in part at the conversion

price of $ 5.87 ,

subject to a beneficial

ownership limitation of 4.99% (subject to adjustment).

The Company must reserve sufficient shares of authorized common stock to effect the conversion of the 2021 Notes and payment of

The shares were registered for public resale under a registration statement.

December 23, 2021 the Company issued 255,537

shares of common stock in repayment of $ 1.5

million, the shares issued at the stated conversion

price of $ 5.87 .

On December 27, 2021, the Company issued a Letter of Agreement amending the Securities Purchase Agreement to allow for conversion of

the outstanding notes at an exercise price of $ 4.50

per share of the Company’s common stock

for fourteen trading days, commencing December 28, 2021 and ending January 14, 2022.

Following this period, the initial

conversion price of $ 5.87

was restored.

On December 28, 2021 holders delivered separate notices of conversion for a total of $ 593,224

of principal in exchange for shares based on

the amended conversion price of $ 4.50 .

The Company recorded an inducement expense equal to the excess fair value (utilizing the Company policy for conversions of

average of the high and low share prices of the day) of the consideration transferred above the securities that would have been issued

under the original conversion terms.

The total debt conversion expense was $ 154,391

and is reflected in other income (expense),

the Company’s option, the Company may redeem some or all of the then-outstanding principal amount of the 2021 Notes for

cash in an amount equal to 100% of the principal to be redeemed, plus accrued but unpaid interest, plus all other amounts due with

respect to the 2021 Notes.

January 1, 2022 for the First Closing, and

February 1, 2022 for the Second Closing, and the first of each subsequent month, terminating upon the full redemption of the 2021

Notes (each a “Monthly Redemption Date”), the Company shall redeem the Monthly Redemption Amount (defined below), payable

in cash or shares.

The number of shares to be settled shall be based on a conversion price equal to the lesser of (a) $5.87 and (b) 92 %

of the average of the three lowest volume-weighted average prices (“VWAP”) during the 10 consecutive trading days prior to

the applicable Monthly Redemption Date.

The Company may not pay the Monthly Redemption Amount in shares unless the applicable conversion

price is greater than or equal to $ 0.78 and the Company has been in compliance with customary requirements under the agreement, unless

waived in writing by the holder.

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

other amounts due to the holder with respect to the 2021 Notes.

If the Company elects to settle such redemptions in shares, the

Monthly Redemption Amount is calculated based on 92% of the average of the lowest three VWAPs in the ten trading days prior to the Monthly

Redemption Date.

If the Company elects to settle redemptions in cash, the Monthly Redemption Amount shall include an 8% premium of the

Monthly Redemption Amount.

at any time while the 2021 Notes are outstanding, the Company carries out one or more capital raises in excess of $ 5.0

million, the holder has the right to require

the Company to use up to 20 %

of the gross proceeds of such transaction to redeem all or a portion of the convertible notes for an amount in cash equal to the cash

Mandatory Redemption Amount (i.e., 108% of outstanding principal and unpaid interest).

Insurance Premiums

year ended December 31, 2021, the Company financed its directors and officers’ liability insurance in the amount of $ 867,300 ,

of which $ 389,269

remains outstanding at December 31, 2021.

Company will pay a total of $ 12,078

in interest from inception through April 2022 when the

note will be paid in full.

The Company expensed $ 10,513

of interest for the year ended December 31, 2021.

8 - STOCKHOLDERS’ EQUITY

June 2021, in connection with the Business Combination, the Company amended and restated its Certificate of Incorporation to authorize

150,000,000 shares of common stock and 1,500,000 shares of preferred stock, both with par value equal to $ 0.0001 .

As of December 31,

2021 and 2020, there were no shares of preferred stock issued and outstanding.

Biosciences, Inc.

to the Consolidated Financial Statements

June 30, 2021, in connection with the Business Combination, the following common stock activity occurred:

shares of common stock were issued to holders of Former Ensysce common stock.

shares of common stock outstanding were assumed by the Company.

shares of common stock were issued in settlement of $ 5.8 million of convertible debt.

shares of restricted common stock were issued in exchange for previously outstanding warrants to purchase Former Ensysce common stock.

shares of common stock were issued in settlement of a termination agreement with a strategic advisor dated January 2021.

shares of common stock were issued in settlement of deferred underwriting costs.

February 2013, the Company issued 13,170 warrants to purchase common stock, with a ten-year life and an exercise price of $ 6.23 per share.

In August 2019, in connection with the issuance of convertible debt, the Company issued 6,585 warrants to purchase common stock, with

a ten-year life and an exercise price of $ 3.04 .

As of December 31, 2020, the warrants remained outstanding.

On June 30, 2021, the Company

held a special meeting pursuant to which the Company’s stockholders approved extending the Combination Period from June 30,

2020 to December 1, 2020 (the “Third Extension Date”).

In connection with the approval of the extension, stockholders

elected to redeem an aggregate of 776,290 shares of the Company’s common stock.

As a result, an aggregate of $ 8,099,292 (or

approximately $ 10.43 per share) was released from the Company’s Trust Account to pay such stockholders.

On November 24, 2020, the

Company’s stockholders approved extending the Combination Period from December 1, 2020 to June 30, 2021 (the “Fourth

Extension Date”).

In connection with the approval of the extension, stockholders elected to redeem an aggregate of 38,015

shares of the Company’s common stock.

As a result, an aggregate of $ 393,380 (or approximately $ 10.34 per share) was released

from the Company’s Trust Account to pay such stockholders.

The Initial Stockholders have

agreed to (i) waive their redemption rights with respect to their Founder Shares in connection with the completion of a Business

Combination, (ii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares

if the Company fails to complete a Business Combination within the Combination Period and (iii) not to propose an amendment to

the Company’s Second Amended and Restated Certificate of Incorporation that would affect the substance or timing of the Company’s

obligation to redeem 100 % of its Public Shares if the Company does not complete a Business Combination, unless the Company provides

the public stockholders with the opportunity to redeem their shares in conjunction with any such amendment.

In order to protect the amounts

held in the Trust Account, the Sponsors have agreed to be liable to the Company if and to the extent any claims by a vendor for

services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering

into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $ 10.00 per Public Share

or (ii) such lesser amount per share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions

in the value of the trust assets.

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

of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s

indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities

Act of 1933, as amended (the “Securities Act”).

Moreover, in the event that an executed waiver is deemed to be unenforceable

against a third party, the Sponsors will not be responsible to the extent of any liability for such third -party claims.

will seek to reduce the possibility that the Sponsors will have to indemnify the Trust Account due to claims of creditors by endeavoring

to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute

agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

On November 30, 2020, the

Company received a notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC stating that the Company was

not in compliance with Listing Rule IM-5101-2 (the “Rule”), which requires that a special purpose acquisition company

complete one or more business combinations within 36 months of the effectiveness of the registration statement filed in connection

with its initial public offering.

Since the Company’s registration statement became effective on December 1, 2017, it was

required to complete an initial business combination by no later than December 1, 2020.

The Rule also provides that failure to

comply with this requirement will result in the Listing Qualifications Department issuing a Staff Delisting Determination under

Rule 5810 to delist the Company’s securities.

In addition, the Nasdaq Notice states that the Company was not in compliance

with Nasdaq’s minimum publicly held shares requirement under Listing Rule 5550(a)(4), which requires a listed company’s primary

equity security to maintain a minimum of 500,000 publicly held shares.

The Listing Qualifications

Department has advised the Company that its securities would be subject to delisting unless the Company timely requests a hearing

before an independent Hearings Panel (the “Panel”).

Accordingly, the Company intends to timely request a hearing.

hearing request will stay any suspension or delisting action pending the completion of the hearing and the expiration of any additional

extension period granted by the Panel following the hearing.

On January 27, 2021,

the Panel granted the Company’s request for continued listing of the Company’s equity securities on the Nasdaq Capital

Market pursuant to an extension, subject to certain milestones, through June 1, 2021 (see Note 10).

Risk Factors-- The Nasdaq may not continue to list our securities, which could limit investors' ability to make transactions

in our securities and subject us to additional trading restrictions.

Risks and Uncertainties

Management continues to evaluate

the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative

effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact

is not readily determinable as of the date of these financial statements.

The financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

Liquidity and Going Concern

As of December 31, 2020, the

Company had $ 49,202 in its operating bank accounts, $ 12,628,170 in securities held in the Trust Account to be used for a Business

Combination or to repurchase or redeem its common stock in connection therewith and working capital deficit of $ 127,869 , which

excludes $ 93,929 of prepaid income and franchise taxes.

As of December 31, 2020, the

Company had $ 75,000 available for drawdown under the Company’s expense advancement agreement with the Company’s Sponsors

and HG Vora (see “Related Party Loans” in Note 5).

The Company will need to raise

additional capital through loans or additional investments from its Sponsors, HG Vora, stockholders, officers, directors, or third

The Company’s Sponsors and HG Vora may, but are not obligated to, loan the Company funds, from time to time or at

any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs.

Accordingly, the Company may not be able to obtain additional financing.

If the Company is unable to raise additional capital,

it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing

operations, suspending the pursuit of a potential transaction, and reducing overhead expenses.

The Company cannot provide any assurance

that new financing will be available to it on commercially acceptable terms, if at all.

These conditions raise substantial doubt

about the Company’s ability to continue as a going concern through June 30, 2021, the date that the Company will be required

to cease all operations, except for the purpose of winding up, if a Business Combination is not consummated.

These financial statements

do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might

be necessary should the Company be unable to continue as a going concern.

— SUMMARY OF SIGNIFICANT ACCOUNTING

Basis of Presentation

The accompanying financial

statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”)

and pursuant to the rules and regulations of the SEC.

Use of Estimates

The preparation of financial

statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets

and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts

of revenues and expenses during the reporting period.

Making estimates requires management

to exercise significant judgment.

It is at least reasonably possible that the estimate of the effect of a condition, situation

or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate,

could change in the near term due to one or more future events.

Accordingly, the actual results could differ significantly from

the Company’s estimates.

Cash and Cash Equivalents

The Company considers all short-term

investments with an original maturity of three months or less, when purchased, to be cash equivalents.

The Company did not have

any cash equivalents as of December 31, 2020 and 2019.

Marketable Securities Held in Trust Account

At December 31, 2020 and 2019,

the assets held in the Trust Account were substantially held in a money market fund that invests primarily in U.S.

Treasury Bills.

During the year ended December 31, 2020 and 2019, the Company withdrew $ 326,352 and $ 836,205 of interest income from the Trust

Account to pay franchise and income taxes.

Common Stock Subject to Possible Redemption

The Company accounts for its

common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”)

Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a

liability instrument and is measured at fair value.

Conditionally redeemable common stock (including common stock that feature

redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events

not solely within the Company’s control) is classified as temporary equity.

At all other times, common stock is classified

as stockholders’ equity.

The Company’s common stock features certain redemption rights that are considered to be outside

of the Company’s control and subject to occurrence of uncertain future events.

Accordingly, common stock subject to possible

redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s

balance sheets.

The Company complies with the

accounting and reporting requirements of Accounting Standards Codification (“ASC”) Topic 740 “Income Taxes,”

which requires an asset and liability approach to financial accounting and reporting for income taxes.

Deferred income tax assets

and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will

result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences

are expected to affect taxable income.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the

amount expected to be realized.

ASC Topic 740 prescribes a

recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken

or expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more-likely-than-not to be

sustained upon examination by taxing authorities.

The Company recognizes accrued interest and penalties related to unrecognized

tax benefits as income tax expense.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as

of December 31, 2020 and 2019.

The Company is currently not aware of any issues under review that could result in significant payments,

accruals or material deviation from its position.

The Company may be subject

to potential examination by federal, state and city taxing authorities in the areas of income taxes.

These potential examinations

may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance

with federal, state and city tax laws.

The Company’s management does not expect that the total amount of unrecognized tax

benefits will materially change over the next twelve months.

Net Income (Loss) Per Common Share

Net income (loss)

per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period,

excluding shares of common stock subject to forfeiture.

The Company has not considered the effect of the warrants sold in the Initial

Public Offering and private placement to purchase an aggregate of 17,825,001 shares in the calculation of diluted loss per share,

since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would

be anti-dilutive.

issued 19,755 shares of common stock in settlement of the warrants, with such shares subject to restriction until certain conditions

December 31, 2021, outstanding warrants to purchase shares of common stock are as follows:

SCHEDULE OF OUTSTANDING WARRANT

Shares Underlying Outstanding Warrants

Exercise Price

Classification

$ 10.00 - 11.50

LACQ warrants

Share subscription facility

Convertible note

June 30, 2021, as a result of the Closing, the Company assumed a total of 18,901,290 warrants previously issued by LACQ.

provide holders the right to purchase common stock at a strike price of between $ 10.00 and $ 11.50 per share and expire June 30, 2026 ,

five years following the completion of the Business Combination.

A total of 10,000,000 of the outstanding warrants are public warrants

which trade on the OTC Pink Open Market under the ticker symbol ENSCW.

The remaining 8,901,290 warrants are private warrants with

restrictions on transfer and which have the right to a cashless exercise at the option of the holder.

August 3, 2021, the Company entered into an agreement with an existing warrant holder to reduce the price of 500,000 warrants issued

on June 30, 2021 from $ 11.50 to $ 10.00 , resulting in an incremental increase in their fair value of $ 56,591 , recognized in general

and administrative expense.

July 2, 2021, upon public listing of the Company’s shares, the Company issued 1,106,108 warrants to purchase common stock pursuant

to the share subscription facility.

The warrants have a three -year life and an exercise price of $ 10.01 per share.

The grant date

fair value of the warrants, based on the $ 14.49 stock price on the date of issuance, was $ 11.6 million, and was recognized in general

and administrative expense due to the uncertainty of future issuance of shares under the share subscription facility.

Biosciences, Inc.

to the Consolidated Financial Statements

December 28, 2021, the exercise price of the warrants adjusted to $ 4.50

per share, as required by a down round adjustment

feature of the warrant, due to common stock issued at a price below the then current exercise price.

The difference in fair value

of the existing warrant prior to the adjustment and the value of the warrant after (utilizing a “Black-Scholes model”)

is reflected on the consolidated statement of operations as a “deemed dividend”.

September 24, 2021, the Company issued 361,158

warrants in connection

with the issuance of the 2021 Notes.

The warrants were immediately exercisable with an exercise price of $ 7.63

(subject to downward revision protection in the event the Company makes certain issuances of common stock at prices below the

conversion price) and

expire on September

November 5, 2021, the Company issued 722,317

warrants in connection

with the issuance of the 2021 Notes.

The warrants were immediately exercisable with an exercise price of $ 7.63

(subject to downward revision protection in the event the Company makes certain issuances of common stock at prices below the

conversion price) and

expire on November

fair value of each warrant issued has been determined using the Black-Scholes option-pricing model.

The material assumptions used in

the Black-Scholes model in estimating the fair value of the warrants issued for the periods presented were as follows:

SCHEDULE OF WARRANTS FAIR VALUE ESTIMATION ASSUMPTIONS

(a) LACQ warrants

(grant date varies)

(b) Share subscription facility

date 7/2/2021)

(d) Liability classified warrants (grant date 11/5/2021)

(d) Liability classified warrants (remeasured at 12/31/2021)

Exercise price

$ 10.0 - 11.50

Expected term (years)

Risk free rate

9 - STOCK-BASED COMPENSATION

2016, Former Ensysce adopted the Ensysce Biosciences, Inc.

2016 Stock Incentive Plan (the “2016 Plan”).

The 2016 Plan, as

amended, allowed for the issuance of non-statutory stock options, incentive stock options and other equity awards to Former Ensysce’s

employees, directors, and consultants.

March 2019, Former Ensysce adopted the 2019 Directors Plan, which was amended in August 2020.

The 2019 Directors Plan, as amended, allowed

for the issuance of shares of Former Ensysce’s common stock pursuant to the grant of non-statutory stock options.

addition to the 2016 Plan and the 2019 Directors Plan, the Company has two legacy equity incentive plans (the “Legacy Plans”).

No additional equity awards may be made under the Legacy Plans and the outstanding options will expire if unexercised by certain dates

through August 2024.

connection with the Business Combination, the Company assumed the 2021 Omnibus Incentive Plan (the “2021 Omnibus Plan”),

which was approved by LACQ’s board and subsequently LACQ’s stockholders at a special stockholder meeting on June 28, 2021.

The 2021 Omnibus Plan provides for the conversion with existing terms of the 4,444,068 options outstanding under Former Ensysce stock

plans and reserves for issuance an additional 1,000,000 shares for future awards under the 2021 Omnibus Plan.

No further awards may be

made under the Former Ensysce stock plans.

Biosciences, Inc.

to the Consolidated Financial Statements

of December 31, 2021 and 2020, the options outstanding under each plan were as follows:

SCHEDULE OF STOCK OPTION OUTSTANDING

2019 Directors Plan

2021 Omnibus Plan

Total options outstanding

were no stock option grants in 2021.

year ended December 31, 2020, the Company granted stock options to purchase an aggregate of 131,700

shares of common stock to members of the board

of directors under the 2019 Directors Plan.

The options vest over three

years and have an exercise price of $ 3.35

The options were converted with

their existing terms into the 2021 Omnibus Plan in connection with the Business Combination.

Company recognized within general and administrative expense stock-based compensation expense of $ 121,764 and $ 178,679 for the year ended

December 31, 2021 and 2020, respectively.

During the year ended December 31, 2021 and 2020, there was no stock-based compensation allocated

to research and development expense.

following table summarizes the Company’s stock option activity during the year ended December 31, 2021:

SCHEDULE OF STOCK OPTION ACTIVITY

Weighted average

Exercise price

Remaining contractual life

Intrinsic value

Outstanding at December 31, 2020

Expired / Forfeited

Outstanding at December 31, 2021

Exercisable at December 31, 2021

Vested and expected to vest

fair value of each stock option granted has been determined using the Black-Scholes option-pricing model.

The material assumptions used

in the Black-Scholes model in estimating the fair value of the options granted for the periods presented were as follows (there were

no grants issued in 2021):

SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS

December 31, 2020

Exercise price

Expected stock price volatility

Expected term (years)

Risk-free interest rate

Expected dividend yield

Biosciences, Inc.

to the Consolidated Financial Statements

Prior to the Business Combination,

the stock price was determined by third party valuations of the Company’s common stock.

stock-price volatility.

The expected volatility is derived from the historical volatilities of comparable publicly traded

companies within the Company’s industry over a period approximately equal to the expected term.

The comparable companies

were utilized as the Company’s stock does not have sufficient historical trading activity.

The expected term represents the period that the stock-based awards are expected to be outstanding.

The Company’s

statement of operations includes a presentation of income (loss) per share for common shares subject to possible redemption in

a manner similar to the two-class method of income (loss) per share.

Net income (loss) per common share, basic and diluted, for

Common stock subject to possible redemption is calculated by dividing the proportionate share of income or loss on marketable securities

held by the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Common stock subject

to possible redemption outstanding since original issuance.

Net loss per share,

basic and diluted, for non-redeemable common stock is calculated by dividing the net income (loss), adjusted for income or loss

on marketable securities attributable to Common stock subject to possible redemption, by the weighted average number of non-redeemable

common stock outstanding for the period.

Non-redeemable common

stock includes Founder Shares and non-redeemable shares of common stock as these shares do not have any redemption features.

Non-redeemable

common stock participates in the income or loss on marketable securities based on non-redeemable shares’ proportionate interest.

The following table

reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts):

For the year ended December 31,

Common stock subject to possible redemption

Earnings allocable to Common stock subject to possible redemption

Interest earned on marketable securities held in Trust Account

interest available to be withdrawn for payment of taxes

Weighted Average Common stock subject to possible redemption

Basic and diluted weighted average shares outstanding

Basic and diluted net income per share

Non-Redeemable Common Stock

Net Loss minus Net Earnings

Net income allocable to Common stock subject to possible redemption

historical share option exercise experience does not provide a reasonable basis upon which to estimate an expected term due to a

lack of sufficient data.

Therefore, the Company estimates the expected term for employees by using the simplified method provided

by the Securities and Exchange Commission.

The simplified method calculates the expected term as the average of the time-to-vesting

and the contractual life of the options.

interest rate.

The risk-free interest rate is based on the U.S.

Treasury yield in effect at the time of grant for zero coupon

Treasury notes with maturities approximately equal to the expected term.

dividend yield.

The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans

to pay any dividends on the Company’s common stock.

weighted-average grant date fair value of options granted during the year ended December 31, 2020 was $ 2.20 .

There were no options granted

during the year ended December 31, 2021.

of December 31, 2021, the Company had an aggregate of $ 37,690 of unrecognized share-based compensation cost, which is expected to be

recognized over the weighted average period of 1.44 years.

Reserved for Future Issuance

following shares of common stock are reserved for future issuance:

SCHEDULE OF COMMON STOCK FUTURE ISSUANCE

December 31, 2021

Stock options outstanding

Stock options available for future grant under 2021 Omnibus Incentive Plan

Warrants outstanding

Total shares of common stock reserved for future issuance

10 - INCOME TAXES

before provision for income taxes consisted of the

SCHEDULE OF INCOME TAXES BENEFIT

United States

$ ( 29,145,901 )

Non-Redeemable Net Loss

$ ( 159,275 )

Weighted Average Non-Redeemable Common Stock

Basic and diluted weighted average shares outstanding

Basic and diluted net income (loss) per share

Concentration of Credit Risk

Financial instruments that

potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution, which, at

times may exceed the federal depository insurance coverage of $ 250,000 .

The Company has not experienced losses on this account

and management believes the Company is not exposed to significant risks on such account.

Fair Value of Financial Instruments

The fair value of the Company’s

assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement” (“ASC

820”), approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term

Recent Accounting Standards

Management does not believe

that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the

Company’s financial statements.

— INITIAL PUBLIC OFFERING

Pursuant to the Initial Public

Offering, the Company sold 20,000,000 Units at a purchase price of $ 10.00 per Unit.

Each Unit consists of one share of common stock,

and one-half of one warrant (“Public Warrant”).

Each whole Public Warrant entitles the holder to purchase one share

of common stock at an exercise price of $ 11.50 (see Note 7).

— PRIVATE PLACEMENT

Simultaneously with the closing

of the Initial Public Offering, affiliates of the Hydra Sponsor and Matthews Lane Sponsor, HG Vora and certain members of management

purchased an aggregate of 6,825,000 Private Placement Warrants at $ 1.00 per Private Placement Warrant, for an aggregate purchase

price of $ 6,825,000 .

Each Private Placement Warrant entitles the holder to purchase one share of common stock at an exercise price

The proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in

the Trust Account.

If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale

of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable

law) and the Private Placement Warrants will expire worthless.

There will be no redemption rights or liquidating distributions

from the Trust Account with respect to the Private Placement Warrants.

The Private Placement Warrants

are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement

Warrants and the common stock issuable upon the exercise of the Private Placement Warrants are not transferable, assignable or

salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.

Additionally, the

Private Placement Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers

or their permitted transferees.

If the Private Placement Warrants are held by someone other than the initial purchasers or their

permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the

same basis as the Public Warrants.

— RELATED PARTY TRANSACTIONS

Founder Shares

On September 11, 2017, the

Company issued an aggregate of 7,187,500 shares of common stock to the Initial Stockholders (“Founder Shares”) for

an aggregate purchase price of $ 25,000 .

On December 5, 2017, certain of the Initial Stockholders surrendered and returned to the

Company, for nil consideration, an aggregate of 1,437,500 Founder Shares, which were cancelled, leaving an aggregate of 5,750,000

Founder Shares outstanding.

The 5,750,000 Founder Shares included an aggregate of up to 750,000 shares subject to forfeiture by

the Initial Stockholders to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that

the Initial Stockholders would own 20 % of the Company’s issued and outstanding shares after the Initial Public Offering.

The underwriters’ election to exercise their over-allotment option expired unexercised on January 15, 2018 and, as a result,

750,000 Founder Shares were forfeited, resulting in 5,000,000 Founder Shares outstanding.

The Initial Stockholders have

agreed, subject to certain exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier of (i) one year

after the date of the completion of a Business Combination, or (ii) the date on which the last sales price of the Company’s

common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations)

for any 20 trading days within any 30-trading day period commencing 150 days after a Business Combination, or earlier, in each

case, if subsequent to a Business Combination, the Company completes a subsequent liquidation, merger, stock exchange, or other

similar transaction which results in all of the Company’s stockholders having the right to exchange their common stock for

cash, securities or other property.

Administrative Services Agreement

The Company entered into an

agreement whereby, commencing on December 1, 2017 through the earlier of the completion of a Business Combination or the Company’s

liquidation, the Company would pay Hydra Sponsor a monthly fee of up to $ 10,000 for office space, utilities and secretarial and

administrative support.

For the year ended December 31, 2020 and 2019, the Company incurred $ 60,000 and $ 120,000 , respectively,

in fees for these services.

Effective June 30, 2020, Hydra Sponsor agreed to stop charging the Company the monthly administrative

fee and forgave the $ 71,000 outstanding balance due.

Related Party Loans

In order to fund working

capital deficiencies or finance transaction costs in connection with a Business Combination, the Hydra Sponsor, an affiliate of

the Matthews Lane Sponsor and HG Vora (the “Funding Parties”) loaned an aggregate of $ 1,000,000 to the Company, in

accordance with unsecured promissory notes issued on January 15, 2020 to the Funding Parties, pursuant to an expense advancement

agreement dated December 1, 2017 which were subsequently converted by the holders into warrants on June 25, 2020.

The expense advancement

agreement was amended to increase the total amount of advances available to the Company under the agreement by an additional $300,000,

of which the Company drew down $225,000 pursuant to promissory notes issued in October and November 2020 and $75,000 remained available

for drawdown as of December 31, 2020 which was drawn down on February 1, 2021.

On February 23, 2021, the expense advancement agreement

was further amended to increase the loan commitment amount by an additional $ 160,000 which was drawn down on February 24, 2021

(see Note 10).

The Funding Parties may, but are not obligated to, loan the Company additional funds from time to time or at any

time, as may be required (“Working Capital Loans”).

Under the expense advancement agreement, the Working Capital Loans

would either be paid upon completion of a Business Combination, without interest, or, at the holder’s discretion could be

converted into warrants at a price of $ 1.00 per warrant.

The warrants would be identical to the Private Placement Warrants.

the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account

to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.

As of December 31,

2020, there was $ 225,000 outstanding under the Working Capital Loans (the $ 1,000,000 previously loaned by the Funding Parties having

been converted into warrants on June 25, 2020).

The outstanding amount was $ 460,000 as of March 10, 2021 (see Note 10).

— COMMITMENTS

Forgiveness of Accounts Payable

During the year ended December 31, 2020, two of the Company’s

service providers forgave certain amounts due to them in connection with previously provided services.

As a result, the Company

recorded a forgiveness of accounts payable in the amount of $ 3,298,207 .

GTWY Holdings Promissory Note

On December 5, 2019, the Company

entered into the GTWY Expense Advancement Agreement, pursuant to which GTWY Holdings committed to provide $ 566,288 to fund contributions

to the Trust Account.

The Company drew down the full amount under the GTWY Expense Advancement Agreement to fund the required Contribution

to the Trust Account for the period December 6, 2019 to January 5, 2020 by issuing an unsecured promissory note that is non-interest

bearing to GTWY Holdings (the “Gateway Promissory Note”).

The note provided for repayment out of the proceeds of the

Trust Account released to the Company if the Company completes an initial Business Combination and, otherwise, out of funds held

by the Company outside the Trust Account.

At December 31, 2020, there was $ 566,268 outstanding under the note.

On January 31, 2021,

the Company and GTWY Holdings entered into an amendment to the Gateway Promissory Note to permit conversion of the promissory note

into warrants at a price of $ 1.00 per warrant.

In connection with such amendment, GTWY Holdings elected to convert the full principal

balance of the Gateway Promissory Note into 566,288 warrants (see Note 10).

Registration Rights

Pursuant to a registration

rights agreement entered into on December 1, 2017, the holders of the Founder Shares, Private Placement Warrants (and their underlying

securities), Private Placement Units (and their underlying securities) (as defined below) and any warrants that may be issued upon

conversion of the Working Capital Loans (and their underlying securities) are entitled to registration rights.

The holders of these

securities are entitled to make up to two demands, excluding short form demands, that the Company register such securities.

addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent

to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to

Rule 415 under the Securities Act.

However, the registration rights agreement provides that the Company will not permit any registration

statement filed under the Securities Act to become effective until termination of the applicable lock-up period.

The Company will

bear the expenses incurred in connection with the filing of any such registration statements.

Underwriters Agreement

The underwriters of the Initial

Public Offering are entitled to a deferred fee of three and one-half percent ( 3.5 %) of the gross proceeds of the Initial Public

Offering, or $ 7,000,000 .

Up to $ 0.05 per Unit (or up to $ 1,000,000 ) of the deferred fee may be paid to third parties (who are members

of FINRA) that assist the Company in consummating its initial Business Combination.

The election to make such payments to third

parties will be solely at the discretion of the Company’s management team, and such third parties will be selected by the

management team in their sole and absolute discretion.

The deferred fee will be paid in cash upon the closing of a Business Combination

from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.

On November 23, 2020, the underwriters

agreed to waive $ 250,000 of the deferred fee which had been held in the Trust Account and was to be paid upon consummation of the

Business Combination, resulting in an aggregate of $ 6,750,000 deferred underwriting fee payable as of December 31, 2020 (see Note

The Company recorded the waiver of the deferred fee as a credit to retained earnings in the accompanying statement of stockholders’

Contingent Forward Purchase Contract

On December 1, 2017, the strategic

investor entered into a contingent forward purchase contract (the “Contingent Forward Purchase Contract”) with the

Company to purchase, in a private placement for gross proceeds of $ 62,500,000 to occur concurrently with the consummation of the

Business Combination, 6,250,000 Units on substantially the same terms as the sale of Units in the Initial Public Offering at $ 10.00

In connection with previously proposed business combination transaction with GTWY Holdings, an amendment to the Contingent

Forward Purchase Contract was effected on December 27, 2019 to provide that the Contingent Forward Purchase Contract would terminate

as of, and contingent upon, the closing of the transaction with GTWY Holdings such that the strategic investor would instead purchase

3,000,000 units of GTWY Holdings’ equity securities (with each unit consisting of one GTWY Holdings Share and one-half of

one GTWY Holdings Warrant) for a purchase price of $10.00 per unit.

The Contingent Forward Purchase Contract was waived by our

strategic investor in the connection with the proposed Business Combination with Ensysce.

Service Provider Agreement

From time to time the Company

has entered into and may enter into agreements with various services providers and advisors, including investment banks, to

help us identify targets, negotiate terms of potential Business Combinations, consummate a Business Combination and/or

provide other services.

In connection with these agreements, the Company may be required to pay such service providers and

advisors fees in connection with their services to the extent that certain conditions, including the closing of a potential

Business Combination, are met.

If a Business Combination does not occur, the Company would not expect to be

required to pay these contingent fees.

There can be no assurance that the Company will complete a Business

NOTE 7 — STOCKHOLDERS’ EQUITY

Preferred Stock

— The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $ 0.0001 per share with such

designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors.

As of December

31, 2020 and 2019, there were no shares of preferred stock issued or outstanding.

— The Company is authorized to issue 100,000,000 shares of common stock with a par value of $ 0.0001 per share.

the Company’s common stock are entitled to one vote for each share.

The underwriters’ election to exercise their over-allotment

option expired unexercised on January 15, 2018 and, as a result, 750,000 Founder Shares were forfeited.

At December 31, 2020 and

2019, there were 6,219,174 and 6,375,178 shares of common stock issued and outstanding, respectively, excluding 5,094 and 17,501,073

shares of common stock subject to possible redemption, respectively.

Public Warrants may only be exercised for a whole number of shares.

No fractional shares will be issued upon exercise of the Public

The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination

and (b) 12 months from the closing of the Initial Public Offering;

provided in each case that the Company has an effective registration

statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current

prospectus relating to them is available.

The Company has agreed that as soon as practicable, but in no event later than 15 business

days after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement

for the registration, under the Securities Act, of the shares of common stock issuable upon exercise of the Public Warrants.

Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration

statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions

of the warrant agreement.

If any such registration statement has not been declared effective by the 60 th business day

following the closing of the Business Combination, holders of the Public Warrants shall have the right, during the period beginning

on the 61 st business day after the closing of the Business Combination and ending upon such registration statement being

declared effective by the SEC, and during any other period when the Company shall fail to have maintained an effective registration

statement covering the shares of common stock issuable upon exercise of the Public Warrants, to exercise such Public Warrants on

a “cashless basis.” Notwithstanding the above, if the Company’s common stock is at the time of any exercise of

a Public Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security”

under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their

warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event

the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will be required

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

The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

The Company may redeem the

Public Warrants:

● in whole and not in part;

● at a price of $ 0.01 per warrant;

● at any time during the exercise period;

● upon a minimum of 30 days’ prior written notice of redemption;

● if, and only if, the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders;

● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants.

If the Company calls the Public

Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do

so on a “cashless basis,” as described in the warrant agreement.

The exercise price and number

of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event

of a stock dividend, or recapitalization, reorganization, merger or consolidation.

However, the warrants will not be adjusted for

issuance of common stock at a price below its exercise price.

Additionally, in no event will the Company be required to net cash

settle the warrants.

If the Company is unable to complete a Business Combination within the Combination Period and the Company

liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants,

nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such

Accordingly, the warrants may expire worthless.

NOTE 8 — INCOME TAXES

The Company did not have any

deferred tax assets or liabilities at December 31, 2020 and 2019.

The provision for income taxes consists of the following:

State and Local:

federal and state income tax provision (benefit), included in general and administrative expenses in the Consolidated Statement of Operations,

is summarized as follows:

SCHEDULE OF FEDERAL AND STATE INCOME TAX PROVISION (BENEFIT)

Current state provision

Biosciences, Inc.

to the Consolidated Financial Statements

effective tax rate of the Company’s provision (benefit) for income taxes differs from the federal statutory rate for the years

ended December 31, 2021 and 2020 as follows:

SCHEDULE OF FEDERAL INCOME TAX RATE RECONCILIATION

Income (benefit) taxes at statutory rates

$ ( 6,120,640 )

State income tax, net of federal benefit

Warrants and convertible debt

Nondeductible executive compensation

Stock based compensation

Share subscription facility transaction costs

Research and development tax credits

Change in tax rates

Change in valuation allowance

Income tax provision

As of December 31, 2020 and

2019, the Company did not have any of U.S.

federal and state net operating loss carryovers available to offset future taxable income.

In assessing the realization

of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax

assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable

income during the periods in which temporary differences representing net future deductible amounts become deductible.

considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making

this assessment.

After consideration of all of the information available, management determined that a valuation allowance was

not required for the years ended December 31, 2020 and 2019.

A reconciliation of the federal income tax rate

to the Company’s effective tax rate is as follows:

income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial

reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards.

Company’s deferred tax assets were comprised of the following as of December 31, 2021 and 2020:

SCHEDULE OF DEFERRED TAX ASSETS

As of December 31,

Statutory federal income tax rate

Business Combination expenses

Income tax provision

For the year ended December

31, 2020, the effective tax rate differs from the statutory tax rate primarily due to the reversal of previously recorded permanent

differences for transactional expenses incurred in connection with the now terminated GTWY Holdings acquisition.

For the year ended

December 31, 2019, the effective tax rate differs from the statutory tax rate due to the permanent differences recorded for transactional

expenses incurred with the GTWY Holdings acquisition.

The Company files income tax

returns in the U.S.

federal jurisdiction and is subject to examination by the various taxing authorities.

The Company’s tax

returns for the year ended December 31, 2020 and 2019 remain open and subject to examination.

The Company considers New York to

be a significant state tax jurisdiction.

NOTE 9 — FAIR VALUE MEASUREMENTS

The Company follows the guidance

in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and

non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s

financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection

with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market

participants at the measurement date.

In connection with measuring the fair value of its assets and liabilities, the Company seeks

to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable

inputs (internal assumptions about how market participants would price assets and liabilities).

The following fair value hierarchy

is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets

and liabilities:

Quoted prices in active markets for identical assets or liabilities.

An active market for

an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume

to provide pricing information on an ongoing basis.

Observable inputs other than Level 1 inputs.

Examples of Level 2 inputs include quoted prices

in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that

are not active.

Unobservable inputs based on our assessment of the assumptions that market participants would

use in pricing the asset or liability.

The following table presents

information about the Company’s assets that are measured at fair value on a recurring basis at December 31, 2020 and 2019,

and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Marketable securities held in Trust Account

Deferred tax assets:

Net operating loss tax carryforwards

Stock-based compensation

Deferred Tax Assets, Gross

Valuation allowance

( 29,830,534 )

( 27,795,550 )

Total deferred tax assets

Deferred tax liabilities:

Convertible notes:

embedded derivatives

Total deferred tax liabilities

Net deferred tax assets

of December 31, 2021, the Company had federal, California and other state net operating loss (NOL) carryforwards of $ 95.9

million, $ 69.7

million and $ 0.4

million, respectively, net of the NOLs that will

expire due to Internal Revenue Code (IRC) Section 382 limitations.

The federal net operating losses generated in 2018 and after of $ 13.5

million will carryforward

indefinitely and be available to offset up to 80% of future taxable income each year ,

subject to certain modifications made by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) enacted

The federal net operating losses generated prior to 2018 of $ 82.4

million will begin to expire in 2026 unless previously

The California and other state NOL carryforwards will begin to expire in 2028 and 2041, respectively, unless previously utilized.

Biosciences, Inc.

to the Consolidated Financial Statements

addition, as of December 31, 2021, the Company had federal and state research and development (R&D) tax credit carryforwards of $ 3.0

million and $ 1.5 million, respectively.

The federal tax credit carryforwards will begin to expire in 2024 unless previously utilized.

The California research tax credits do not expire.

to the IRC Sections 382 and 383, annual use of the Company’s NOL and R&D credit carryforwards may be limited in the event that

a cumulative change in ownership of more than 50% occurs within a three-year period.

Although the Company has not completed a recent

IRC Section 382/383 analysis, regarding the limitation of NOL and R&D credit carryforwards, the Company estimates

that approximately $ 1.5

million of tax benefits related to NOL and R&D

carryforwards acquired in 2015 will expire unused.

Accordingly, the related NOL and R&D credit carryforwards have been removed

from deferred tax assets accompanied by a corresponding reduction of the valuation allowance.

Due to the existence of the valuation allowance,

limitations created by current and future ownership changes, if any, related to the Company’s operations in the United States will

not impact its effective tax rate.

Any additional ownership changes may further limit the ability to use the NOL and R&D credit carryforwards.

March 27, 2020, the CARES Act was enacted

in response to the COVID-19 pandemic.

The CARES Act, among other things, permits federal NOL carryforwards and carrybacks to offset 100%

of taxable income for taxable years beginning before 2021.

In addition, the CARES Act allows federal NOLs incurred in 2019, 2020 and

2021 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes.

Due to the Company’s history of net operating losses,

the CARES Act is not expected to have a material impact on the Company’s financial statements.

following table summarizes the activity related to the Company’s unrecognized tax benefits:

OF INCOME TAX CONTINGENCIES

Year ending December 31,

Balance at beginning of year

Increases (decreases) related to current year tax positions

Increases (decreases) related to prior year tax positions

Expiration of the statute of limitations for the assessment of taxes

Balance at end of year

of December 31, 2021 and 2020, the Company had unrecognized tax benefits of $ 1.1

million and $ 1.0

million, respectively.

Due to the existence of

the valuation allowance, none of the unrecognized tax benefits would affect the effective tax rate.

The Company’s policy is to

recognize interest and penalties from uncertain tax positions in income tax expense.

The Company did not record any interest or penalties

for the years ended December 31, 2021 or 2020 and had no

accrued interest on the consolidated balance

sheets as of December 31, 2021 or 2020.

The Company does not anticipate that the total amount of unrecognized tax benefits will significantly

increase or decrease within twelve months of the reporting date.

Company and its subsidiaries are subject to U.S.

federal income tax as well as income tax in multiple state jurisdictions.

With few exceptions,

the Company is no longer subject to United States federal income tax examinations for years before 2018 and state and local income tax

examinations before 2017.

However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where

net operating losses were generated and carried forward, and make adjustments up to the amount of the NOL carryforward.

The Company is

not currently under examination by the Internal Revenue Service or any state or local tax authority.

Biosciences, Inc.

to the Consolidated Financial Statements

11 - RELATED PARTIES

Company paid cash compensation during the year ended December 31, 2021 and 2020 of $ 30,909 and $ 129,890 , respectively, to the Chief Executive

Officer through a separate operating company with which the Chief Executive Officer is affiliated.

As of December 31, 2021 and 2020,

the Company owed $ 0 and $ 12,989 , respectively, in accounts payable to the separate operating company.

Company issued a series of convertible notes to the Chairman of the Board as described in Note 7, which totaled $ 2.5

million as of December 31, 2020.

All outstanding

notes and accrued interest converted into common stock upon the closing of the Business Combination on June 30, 2021.

of December 31, 2021 and 2020, the Company had promissory notes outstanding which totaled $ 0 and $ 100,000 , respectively, to three members

of the board of directors, including the Chief Executive Officer and Chairman of the Board, as described in Note 7.

12 - SUBSEQUENT EVENTS

The Company evaluates subsequent

events and transactions that occur after the balance sheet date up to the date that the financial statements were issued.

upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment

or disclosure in the financial statements.

On January 27, 2021, the Panel

granted the Company’s request for continued listing of the Company’s equity securities on the Nasdaq Capital

Market pursuant to an extension, subject to certain milestones, through June 1, 2021 so that the Company may seek to complete an

initial business combination and regain compliance with the listing rules.

If the Company does not regain compliance with the Rule

by the required date, Nasdaq would delist the Company’s equity securities from the Nasdaq Capital Market.

On January 31, 2021, the Company

entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Ensysce, and EB Merger

Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”), relating to a proposed

business combination transaction between the Company and Ensysce.

Pursuant to the Merger Agreement,

Merger Sub will merge with and into Ensysce, with Ensysce surviving such merger as a wholly owned subsidiary of the Company and

the stockholders of Ensysce becoming stockholders of the Company (the “Merger”).

Ensysce’s issued and

outstanding share capital as of immediately prior to the Merger Effective Time will, at the closing (the “Closing”)

of the transactions contemplated by the Merger Agreement (collectively, the “Transaction”), be canceled and converted

into the right to receive the Company’s common stock, par value $.0001 per share (the “LACQ Common Stock”) calculated

based on an exchange ratio of 0.06585 (the “Exchange Ratio”).

The Transaction will be consummated

subject to the deliverables and provisions as further described in the Merger Agreement.

January 31, 2021, the underwriters of the Company’s initial public offering agreed to reduce the total deferred underwriting

fee that is to be paid to such underwriters upon the consummation of the Company’s initial business combination to $ 2,000,000 ,

which may under certain situations be payable in the form of LACQ Common Stock.

On January 31, 2021, the Company

and GTWY Holdings entered into an amendment to the Gateway Promissory Note to permit conversion of all or a portion of the promissory

note into warrants at a price of $ 1.00 per warrant.

In connection with such amendment, GTWY Holdings elected to convert the full

principal balance of the Gateway Promissory Note into 566,288 warrants.

February 23, 2021, the Company entered into a fourth amendment to the Company’s Expense Advancement Agreement with its

sponsors and strategic investor to increase the total amount of advances available to the Company under the agreement by

The promissory notes covering the prior loan balance in the aggregate amount of $300,000 was amended and restated

on February 24, 2021 in order to reflect the incremental increase of the total amount of advances available to the Company

thereunder to $460,000 and all of which increase was drawn on February 24, 2021.

Agreement and Plan of Merger, dated

January 31, 2021, by and among Leisure Acquisition Corp., Ensysce Biosciences, Inc.

January 26, 2022, two proposals were approved at a special meeting of stockholders.

The first proposal approved the issuance of shares

of common stock upon the conversion of the 2021 Notes, as discussed in Note 7, and the exercise of the related warrants, in order

to comply with certain Nasdaq rules.

The second proposal approved an Amended and Restated 2021 Omnibus Incentive Plan, including an additional

shares available for future grant.

this approval, the Company has granted a total of 1,986,000

stock options and 927,358

restricted stock units under the Plan to employees

and consultants in 2022.

the first quarter of 2022, the Company has issued 4,708,525

shares of common stock in repayment of $ 6.4

million in monthly redemptions of the 2021

Notes, as discussed in Note 7.

Agreement and Plan of Merger, dated January 31, 2021, by and among Leisure Acquisition Corp., Ensysce Biosciences, Inc.

and EB Merger Sub, Inc.

(incorporated

by reference to Exhibit 2.1 filed with the Company’s Current Report on Form 8-K on February 2, 2021)

Second Amended and Restated Certificate

of Incorporation (incorporated by reference to Exhibit 3.1 filed with the Company’s Current Report on Form 8-K on December

Amendment to Second Amended and

Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 filed with the Company’s Current Report

on Form 8-K on December 9, 2019)

Amendment No.

2 to Second Amended

and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 filed with the Company’s Current

Report on Form 8-K on March 31, 2020)

Amendment No.

3 to Second Amended

and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 filed with the Company’s Current

Report on Form 8-K on June 30, 2020)

Amendment No.

4 to Second Amended

and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 filed with the Company’s Current

Report on Form 8-K on November 30, 2020)

Bylaws (incorporated by reference

to Exhibit 3.3 filed with the Company’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November

Specimen Unit Certificate (incorporated

by reference to Exhibit 4.1 filed with the Company’s Registration Statement on Form S-1 (File No.333-221330) initially

filed on November 3, 2017)

Specimen Common Stock Certificate

(incorporated by reference to Exhibit 4.2 filed with the Company’s Registration Statement on Form S-1 (File No.333-221330)

initially filed on November 3, 2017)

Specimen Warrant Certificate (incorporated

by reference to Exhibit 4.3 filed with the Company’s Registration Statement on Form S-1 (File No.333-221330) initially

filed on November 3, 2017)

Warrant Agreement, dated December

1, 2017, between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1

filed with the Company’s Current Report on Form 8-K on December 5, 2017)

Description of Registrant’s Securities

Investment Management Trust Agreement,

dated December 1, 2017, between the Company and Continental Stock Transfer & Trust Company (incorporated by reference

to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K on December 5, 2017)

Amendment to Investment Management

Trust Agreement, dated December 5, 2019 (incorporated by reference to Exhibit 10.1(b) filed with the Company’s Annual

Report on Form 10-K on March 10, 2020).

Amendment No.

2 to Investment Management

Trust Agreement, dated March 26, 2020 (incorporated by reference to Exhibit 3.1 filed with the Company’s Current Report

on Form 8-K on March 31, 2020)

Amendment No.

3 to Investment Management

Trust Agreement, dated June 29, 2020 (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report

on Form 8-K on June 30, 2020)

(incorporated by reference to Exhibit 2.1 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Third Amended and Restated Certificate of Incorporation of Ensysce Biosciences, Inc.

(incorporated by reference to Exhibit 3.1 filed with the registrant’s Current Report on Form 8-K on July 7, 2021).

Amended and Restated Bylaws of Ensysce Biosciences, Inc.

(incorporated by reference to Exhibit 3.2 filed with the registrant’s Current Report on Form 8-K on July 7, 2021).

Warrant Agreement, dated December 1, 2017, between the Leisure Acquisition Corp.

and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 filed with the registrant’s Current Report on Form 8-K on December 5, 2017).

Common Stock Purchase Warrant in the amount of 100,000 shares of common stock of Ensysce Biosciences, Inc.

dated as of August 13, 2019 (incorporated by reference to Exhibit 4.5 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Investor Rights Agreement between Ensysce Biosciences, Inc.

and the Investors listed on the signature pages thereto dated as of May 11, 2018 (incorporated by reference to Exhibit 4.6 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Warrant Certificate issued to Gateway Casinos & Entertainment Limited (incorporated by reference to Exhibit 4.7 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Form of Warrant Certificate issued to previous holders of Private Placement Warrants and other private warrants (incorporated by reference to Exhibit 4.8 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Form of Senior Secured Convertible Promissory Note issued by the Company pursuant to and in accordance with the Securities Purchase Agreement (incorporated by reference to Exhibit 4.6 filed with the registrant’s Current Report on Form 8-K initially filed on September 27, 2021).

Form of Common Stock Purchase Warrant to be issued by the Company pursuant to and in accordance with the Securities Purchase Agreement (incorporated by reference to Exhibit 4.7 filed with the registrant’s Current Report on Form 8-K initially filed on September 27, 2021).

Registration Rights Agreement, dated December 1, 2017, among Leisure Acquisition Corp.

and certain securityholders (incorporated by reference to Exhibit 10.2 filed with the registrant’s Current Report on Form 8-K on December 5, 2017).

Warrant Purchase Agreement, dated December 1, 2017, between Leisure Acquisition Corp.

and certain security holders (incorporated by reference to Exhibit 10.3 filed with the registrant’s Current Report on Form 8-K on December 5, 2017).

Administrative Services Agreement, dated December 1, 2017, between Leisure Acquisition Corp.

and Hydra Management, LLC (incorporated by reference to Exhibit 10.4 filed with the registrant’s Current Report on Form 8-K on December 5, 2017).

Amendment to the Administrative Services Agreement, dated August 7, 2020, between Leisure Acquisition Corp.

and Hydra Management, LLC (incorporated by reference to Exhibit 10.1 filed with the registrant’s Quarterly Report on Form 10-Q on November 9, 2020).

Expense Advancement Agreement, dated December 1, 2017, between Leisure Acquisition Corp., HG Vora Special Opportunities Master Fund, Ltd., Hydra Management, LLC and Matthews Lane Capital Partners LLC (incorporated by reference to Exhibit 10.5 filed with the registrant’s Current Report on Form 8-K on December 5, 2017).

Amendment to Expense Advancement Agreement, dated June 29, 2020 (incorporated by reference to Exhibit 10.2 filed with the registrant’s Current Report on Form 8-K on June 30, 2020).

Amendment No.

4 to Investment Management

Trust Agreement, dated November 30, 2020 (incorporated by reference to Exhibit 10.1 filed with the Company’s Current

Report on Form 8-K on November 30, 2020)

Registration Rights Agreement, dated

December 1, 2017, among the Company and certain security holders (incorporated by reference to Exhibit 10.2 filed with the

Company’s Current Report on Form 8-K on December 5, 2017)

Warrant Purchase Agreement, dated

December 1, 2017, between the Company and certain security holders (incorporated by reference to Exhibit 10.3 filed with the

Company’s Current Report on Form 8-K on December 5, 2017)

Administrative Services Agreement,

dated December 1, 2017, between the Company and Hydra Management, LLC (incorporated by reference to Exhibit 10.4 filed with

the Company’s Current Report on Form 8-K on December 5, 2017)

Expense Advancement Agreement, dated

December 1, 2017, between the Company, HG Vora Special Opportunities Master Fund, Ltd., Hydra Management, LLC and Matthews

Lane Capital Partners LLC (incorporated by reference to Exhibit 10.5 filed with the Company’s Current Report on Form

8-K on December 5, 2017)

Amendment to Expense Advancement

Agreement, dated June 29, 2020 (incorporated by reference to Exhibit 10.2 filed with the Company’s Current Report on

Form 8-K on June 30, 2020)

Amendment to Expense Advancement

Agreement, dated October 26, 2020 (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report

on Form 8-K on October 29, 2020)

2 to Expense Advancement Agreement, dated October 26, 2020 (incorporated by reference to Exhibit 10.1 filed with the registrant’s Current Report on Form 8-K on October 29, 2020).

Amendment No.

3 to Expense Advancement

Agreement, dated November 30, 2020 (incorporated by reference to Exhibit 10.2 filed with the Company’s Current Report

on Form 8-K on November 30, 2020)

3 to Expense Advancement Agreement, dated November 30, 2020 (incorporated by reference to Exhibit 10.2 filed with the registrant’s Current Report on Form 8-K on November 30, 2020).

Amendment No.

4 to Expense Advancement

Agreement, dated February 23, 2021 (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report

on Form 8-K on February 25, 2021)

Form of Amended and Restated Promissory

Note relating to Expense Advancement Agreement (5) (incorporated by reference to Exhibit 10.1 filed with the Company’s

Current Report on Form 8-K on February 25, 2021)

Letter Agreement, dated December

1, 2017, among the Company, its officers, directors and security holders (incorporated by reference to Exhibit 10.6 filed

with the Company’s Current Report on Form 8-K on December 5, 2017)

Amendment to Letter Agreement, dated

December 5, 2019 (incorporated by reference to Exhibit 10.6(b) filed with the Company’s Annual Report on Form 10-K on

March 10, 2020).

Contingent Forward Purchase Contract,

dated December 1, 2017, between the Company and HG Vora Special Opportunities Master Fund, Ltd (incorporated by reference

to Exhibit 10.7 filed with the Company’s Current Report on Form 8-K on December 5, 2017)

Form of Director and Officer Indemnity

Agreement (incorporated by reference to Exhibit 10.8 filed with the Company’s Registration Statement on Form S-1 (File

No.333-221330) initially filed on November 3, 2017)

Securities Subscription Agreement,

dated September 11, 2017, between the Registrant and HG Vora Special Opportunities Master Fund, Ltd (incorporated by reference

to Exhibit 10.4 filed with the Company’s Registration Statement on Form S-1 (File No.333-221330) initially filed on

November 3, 2017)

Securities Subscription Agreement,

dated September 11, 2017, between the Registrant and Hydra Management, LLC (incorporated by reference to Exhibit 10.5 filed

with the Company’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3, 2017)

Securities Subscription Agreement,

dated September 11, 2017, between the Registrant and Matthews Lane Capital Partners LLC (incorporated by reference to Exhibit

10.6 filed with the Company’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3,

Expense Advance Agreement, dated

December 5, 2019, between the Company and GTWY Holdings Limited (incorporated by reference to Exhibit 10.12 filed with the

Company’s Annual Report on Form 10-K on March 10, 2020).

Amendment to GTWY Holdings Limited

Promissory Note, dated January 31, 2021 (incorporated by reference to Exhibit 10.3 filed with the Company’s Current

Report on Form 8-K on February 2, 2021)

Fee Waiver Letter, dated November

23, 2020 (incorporated by reference to Exhibit 10.3 filed with the Company’s Current Report on Form 8-K on November

Fee Waiver Letter, dated January

31, 2021 (incorporated by reference to Exhibit 10.2 filed with the Company’s Current Report on Form 8-K on February

Warrant Surrender Agreement, among

MLCP GLL Funding LLC, Hydra LAC, LLC, and Leisure Acquisition Corp., dated January 31, 2021 (incorporated by reference to

Exhibit 10.1 filed with the Company’s Current Report on Form 8-K on February 2, 2021)

Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

4 to Expense Advancement Agreement, dated February 23, 2021 (incorporated by reference to Exhibit 10.2 filed with the registrant’s Current Report on Form 8-K on February 25, 2021).

Form of Amended and Restated Promissory Note relating to Expense Advancement Agreement (incorporated by reference to Exhibit 10.1 filed with the registrant’s Current Report on Form 8-K on February 25, 2021).

Letter Agreement, dated December 1, 2017, among the Leisure Acquisition Corp., its officers, directors and securityholders (incorporated by reference to Exhibit 10.6 filed with the registrant’s Current Report on Form 8-K on December 5, 2017).

Amendment to Letter Agreement, dated December 5, 2019 (incorporated by reference to Exhibit 10.6(b) filed with the registrant’s Annual Report on Form 10-K on March 10, 2020).

Contingent Forward Purchase Contract, dated December 1, 2017, between Leisure Acquisition Corp.

and HG Vora Special Opportunities Master Fund, Ltd (incorporated by reference to Exhibit 10.7 filed with the registrant’s Current Report on Form 8-K on December 5, 2017).

Form of Director and Officer Indemnity Agreement (incorporated by reference to Exhibit 10.8 filed with the registrant’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3, 2017).

Form of Indemnification Agreement executed by each of the Ensysce directors and executive officers (incorporated by reference to Exhibit 10.6 filed with the registrant’s Form 10-Q initially filed on November 15, 2021).

Securities Subscription Agreement, dated September 11, 2017, between LACQ and HG Vora Special Opportunities Master Fund, Ltd (incorporated by reference to Exhibit 10.4 filed with the registrant’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3, 2017).

Securities Subscription Agreement, dated September 11, 2017, between the Leisure Acquisition Corp.

and Hydra Management, LLC (incorporated by reference to Exhibit 10.5 filed with the registrant’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3, 2017).

Securities Subscription Agreement, dated September 11, 2017, between the Leisure Acquisition Corp.

and Matthews Lane Capital Partners LLC (incorporated by reference to Exhibit 10.6 filed with the registrant’s Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3, 2017).

Exchange Agreement, dated June 7, 2021, between Leisure Acquisition Corp.

and Gateway Casinos & Entertainment Limited (incorporated by reference to Exhibit 10.12(d) filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Fee Waiver Letter, dated November 23, 2020 (incorporated by reference to Exhibit 10.3 filed with the registrant’s Current Report on Form 8-K on November 30, 2020).

Fee Waiver Letter, dated January 31, 2021 (incorporated by reference to Exhibit 10.2 filed with the registrant’s Current Report on Form 8-K on February 2, 2021).

Warrant Surrender Agreement, among MLCP GLL Funding LLC, Hydra LAC, LLC, and Leisure Acquisition Corp., dated January 31, 2021 (incorporated by reference to Exhibit 10.1 filed with the registrant’s Current Report on Form 8-K on February 2, 2021).

Form of Lock-up Agreement executed by each of the Ensysce’s directors and executive officers (incorporated by reference to Exhibit 10.16 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Executive Employment Agreement, by and between the Company and Dr.

Lynn Kirkpatrick, dated September 14, 2021 (incorporated by reference to Exhibit 10.44 filed with the registrant’s Amendment Number 1 to its Registration Statement on Form S-1 (File No.333-260478) filed on October 29, 2021).

Agreement and Plan of Merger by and among the Signature Therapeutics, Inc., Signature Acquisition Corp.

and the Company dated December 28, 2015 (incorporated by reference to Exhibit 10.21 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Employment Offer Letter to Richard Wright dated July 31, 2017 (incorporated by reference to Exhibit 10.24 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Executive Employment Agreement, by and between the Company and Geoffrey Birkett, dated August 21, 2021 (incorporated by reference to Exhibit 10.45 filed with the registrant’s Amendment Number 1 to its Registration Statement on Form S-1 (File No.333-260478) filed on October 29, 2021)

Employment Agreement between the Company and David Humphrey dated February 11, 2021 (incorporated by reference to Exhibit 10.26 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Amendment to Offer Letter between the Company and David Humphrey dated February 23, 2021 (incorporated by reference to Exhibit 10.27 filed with the the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Amended and Restated 2021 Omnibus Incentive Plan

Amended and Restated 2021 Omnibus Incentive Plan Form of Stock Option Grant Notice and Award Agreement

Share Purchase Agreement between the Company, GEM Global Yield LLC SCS and GEM Yield Bahamas Limited dated as of December 29, 2020, including a Registration Rights Agreement between the same parties and dated as of the same date and form of Warrant to Purchase Common Shares of Ensysce Biosciences, Inc.

issued by the Company to GEM Yield Bahamas Limited (incorporated by reference to Exhibit 10.29 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Technology Transfer Agreement by and among the Company, Covistat, Inc., Mucokinetica, Ltd., Roderick Hall and Peter Cole dated August 5, 2020 (incorporated by reference to Exhibit 10.30 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Consulting Agreement between Roderick Hall and Covistat, Inc.

dated August 5, 2020 (incorporated by reference to Exhibit 10.31 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Consulting Agreement between Peter Cole and Covistat, Inc.

dated August 5, 2020 (incorporated by reference to Exhibit 10.32 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Manufacturing Agreement between Recro Gaineville LLC and the Company dated September 11, 2019 (incorporated by reference to Exhibit 10.35 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Form of Exchange Agreement between Leisure Acquisition Corp.

and the holders of Private Placement Warrants (incorporated by reference to Exhibit 10.36(a) filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Form of Exchange Agreement to be entered into by the Company with each of the Sponsors and the Strategic Investor (incorporated by reference to Exhibit 10.36(b) filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

10.0% Convertible Promissory Note issued by the Company to Feliciano Global Enterprises Inc.

on January 28, 2021 (incorporated by reference to Exhibit 10.37 filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Email Agreement, dated January 31, 2021, between the Company and DelMorgan Group LLC (incorporated by reference to Exhibit 10.38(a) filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

First Amendment to the Email Agreement, dated June 7, 2021, between the Company and DelMorgan Group LLC (incorporated by reference to Exhibit 10.38(b) filed with the registrant’s Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

Settlement Agreement and Mutual General Release among the Company, Dr.

Lynn Kirkpatrick, DelMorgan Group LLC and Globalist Capital LLC, dated August 3, 2021.

Engagement Agreement with David L.

Kovacs (a portion of Appendix B to the exhibit has been omitted)(incorporated by reference to Exhibit 10.37 filed with Ensysce Biosciences, Inc.’s Registration Statement on Form S-1 (File No.333-258609) initially filed on August 9, 2021.

Stock Option Grant Notice and Award Agreement granted February 14, 2022 to David L.

Engagement Agreement with Mercury FundingCo, LLC (a portion of Appendix B to the exhibit has been omitted) (incorporated by reference to Exhibit 10.38 filed with Ensysce Biosciences, Inc.’s Registration Statement on Form S-1 (File No.333-258609) initially filed on August 9, 2021).

Stock Option Grant Notice and Award Agreement granted February 14, 2022 to David Tanzer.

Securities Purchase Agreement, dated September 24, 2021 by and among the Company and the purchasers signatory thereto (incorporated by reference to Exhibit 10.1 filed with the registrant’s Current Report on Form 8-K initially filed on September 27, 2021).

Registration Rights Agreement, dated September 24, 2021, by and among the Company and the parties signatory thereto (incorporated by reference to Exhibit 10.2 filed with the registrant’s Current Report on Form 8-K initially filed on September 27, 2021).

Subsidiary Guarantee, dated September 24, 2021, by and among the Company and the purchasers signatory thereto (incorporated by reference to Exhibit 10.3 filed with the registrant’s Current Report on Form 8-K initially filed on September 27, 2021).

Security Agreement, dated September 24, 2021, by and among the Company, EBI OpCo, Inc., Covistat, Inc.

and the other parties signatory thereto (incorporated by reference to Exhibit 10.4 filed with the registrant’s Current Report on Form 8-K initially filed on September 27, 2021).

Patent Security Agreement, dated September 24, 2021, by and among the Company, EBI OpCo, Inc., Covistat, Inc.

and the other parties signatory thereto (incorporated by reference to Exhibit 10.5 filed with the registrant’s Current Report on Form 8-K initially filed on September 27, 2021).

Letter Agreement, dated December 27, 2021, by and among the Company and the parties signatory thereto (incorporated by reference to Exhibit 10.6 filed with the registrant’s Current Report on Form 8-K initially filed on December 27, 2021).

Second Letter Agreement, dated January 16, 2022, by and among the Company and the parties signatory thereto (incorporated by reference to Exhibit 10.7 filed with the registrant’s Current Report on Form 8-K initially filed on January 18, 2022).

List of Subsidiaries

Consent of Mayer Hoffman McCann P.C.

Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Executive Officer Pursuant to 18 U.S.C.

2 unchanged sentences

Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

XBRL Instance Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Labels Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith.

Certain schedules to this Exhibit have been omitted

in accordance with Regulation S-K Item 601(b)(2).

LACQ agrees to furnish supplementally a copy of all omitted schedules to

the Securities and Exchange Commission upon its request.

Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

schedules (or similar attachments) to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5) or 601(b)(2),

as applicable.

The registrant agrees to furnish supplementally a copy of all omitted schedules to the Securities and Exchange Commission

upon its request.

Denotes compensatory plans or arrangements or management

certificate accompanies this report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by Ensysce

for purposes of Section 18 or any other provisions of the Exchange Act.

Form 10-K Summary.

Pursuant to the requirements

of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed

on its behalf by the undersigned, thereunto duly authorized.

March 15, 2021

LEISURE ACQUISITION CORP.

/s/ Daniel B, Silvers

Chief Executive Officer

KNOW ALL PERSONS BY THESE PRESENTS,

that each person whose signature appears below constitutes and appoints A.

Lorne Weil and Daniel B.

Silvers and each or any one

of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his

name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file

the same, with all exhibits thereto, and other documents in connection therewith, with the United States Securities and Exchange

Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each

and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he

might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their

or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements

of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf

of the registrant and in the capacities and on the dates indicated.

Executive Chairman

March 15, 2021

/s/ Daniel B.

to the requirements of the Securities Act, the registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized, in San Diego, State of California, on March 31, 2022.

BIOSCIENCES, INC.

Lynn Kirkpatrick

Chief Executive Officer and Director

(Principal Executive Officer)

March 15, 2021

/s/ George Peng

Chief Financial Officer, Treasurer and Secretary

( Principal Financial and Accounting Officer )

March 15, 2021

/s/ Steven M.

March 15, 2021

to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons

in the capacities indicated on March 31, 2022.

Lynn Kirkpatrick

Chief Executive Officer and Director

Lynn Kirkpatrick

Executive Officer)

David Humphrey

Financial Officer, Secretary and Treasurer

Financial and Accounting Officer)

Andrew Benton

William Chang

and Chairman of the Board

Curtis Rosebraugh

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 9A. Controls and Procedures