What changed in this filing

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Item 1A. Risk Factors

2022-05-12 compared with 2021-11-15 · 9 added, 2451 removed, 1 unchanged (100% of the section changed)

Risk Factors.

of Risk Factors

is a summary of material factors that make an investment in our securities speculative or risky.

Importantly, this summary does not address

all of the risks and uncertainties that we face.

Additional discussion of the risks and uncertainties summarized in this risk factor

summary, as well as other risks and uncertainties that we face, can be found in the section below.

The below summary is qualified in

its entirety by that more complete discussion of such risks and uncertainties.

You should consider carefully the risks and uncertainties

described below as part of your evaluation of an investment in our securities:

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

We have incurred significant financial losses since

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

must obtain regulatory approval and fulfill numerous other requirements to be successful.

require substantial additional funding.

may incur additional dilution from repayment of the Investor Notes in Common Stock or re-setting the Conversion Price of the Investor

Notes or reduced proceeds to Ensysce from a reduction in the exercise price of the Investor Warrants;

must obtain stockholder approval of the Securities Purchase Agreement;

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

proceeds under the GEM Agreement may be less than anticipated and issuances of common stock pursuant thereto would result in dilution

of existing stockholders.

depend heavily on the success of PF614 and PF614-MPAR™ product candidates, which are currently in clinical trials, and which

may not be successful.

to the significant resources required for the development of our product pipeline, and depending on our ability to access capital,

we must prioritize the development of certain product candidates over others.

we fail to discover, develop and commercialize other product candidates, we may be unable to grow our business.

we do not achieve our projected development and commercialization goals within the timeframes we expect, the development and commercialization

of our product candidates may be delayed.

products may reduce or eliminate potential commercial opportunity for our product candidates.

business could be harmed if we lose the services of our key personnel or if we are unable to hire additional highly qualified employees.

employees or others on which our business depends may engage in misconduct or other improper activities.

are subject to business interruptions resulting from the COVID-19 pandemic or similar public health crises.

grant awards may not be available to us in the future.

issues around the abuse of opioids could decrease the potential market for our product candidates.

currently rely on, and expect to rely on in the future, third parties to conduct our clinical trials.

expect to be completely dependent on third parties to manufacture our product candidates.

must develop our sales, marketing and distribution capability on our own or through collaborations.

regulatory approval processes is lengthy, time-consuming and inherently unpredictable.

clinical trials my not succeed.

authorities may disagree with our regulatory plan for our product candidates.

topline and preliminary data from our clinical trials may change.

may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, the preclinical and clinical

studies necessary.

if we complete the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time-consuming

and uncertain.

product candidate for which we obtain marketing approval will be subject to ongoing enforcement of post-marketing requirements by

regulatory agencies.

may encounter difficulties enrolling patients in our clinical trials.

track designation by the FDA for PF614 may not lead to a faster development or regulatory review or approval process and does not

assure FDA approval.

the FDA does not conclude that certain of our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval

pathway, or if such requirements are not as we expect, the approval pathway will likely take significantly longer, cost significantly

more and entail significantly greater complications and risks than anticipated, and in either case may not be successful.

are subject to risks if we submit a 505(b)(2) application that references a third-party product.

in methods of product candidate manufacturing or formulation may result in additional costs or delay.

product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval,

limit the commercial profile of an approved label, or result in significant negative consequences following regulatory approval,

if any of our product candidates receives regulatory approval, we may fail to achieve the degree of market acceptance necessary for

commercial success.

are subject to potential product liability lawsuits against us or any of our future collaborators.

is a Schedule II controlled substance under the federal CSA, and we must comply with the CSA or its state equivalents.

Manufacturing

of oxycodone is subject to annual quotas that limit the amount of API and dosage forms that can be produced in any given year.

drug abuse, especially involving opioids, has been declared a national epidemic causing limits in prescribing and adverse publicity

for the entire class of drugs.

we are unable to obtain and maintain patent protection for our products candidates, or if the scope of the patent protection obtained

is not sufficiently broad, our competitors could develop and commercialize product candidates that are similar or identical to our

product candidates.

may face litigation from third parties claiming that our products or business infringe, misappropriate, or otherwise violate their

intellectual property rights, or seeking to challenge the validity of our patents.

may become involved in lawsuits to protect or enforce our patents or other intellectual property.

expiration or loss of patent protection may adversely affect our future revenues and operating earnings.

may not be able to obtain protection under the Hatch-Waxman Amendments by extending the patent term.

may not be able to protect our intellectual property rights throughout the world.

in United States’ patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general,

thereby impairing our ability to protect our products.

may be subject to claims that we infringed, misappropriated or otherwise violated the intellectual property of a third party, or

claiming ownership of what we regard as our own intellectual property.

and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements

imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover

them or that our trade secrets will be misappropriated or disclosed.

may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.

may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent.

intellectual property agreements with third parties may be subject to disagreements.

property rights do not necessarily address all potential threats to our business.

validity, scope and enforceability of any patents listed in the Orange Book that cover our product candidates can be challenged by

third parties.

we do not obtain protection under the Hatch-Waxman Amendments by obtaining data exclusivity, our business may be harmed.

Cyber-attacks

or other failures in our telecommunications or information technology systems, or those of third parties could result in information

theft, data corruption and significant disruption of our business.

do not anticipate paying any cash dividends on our capital stock in the foreseeable future.

additional capital in the public or private equity markets at prices per share below the current market price of our common stock

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

us to relinquish rights to our technologies or product candidates.

internal controls over financial reporting currently do not meet all of the standards contemplated by Section 404 of Sarbanes-Oxley

Act, and failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the

Sarbanes-Oxley Act could impair our ability to produce timely and accurate financial statements or comply with applicable regulations

and have a material adverse effect on our business.

identified material weaknesses in our internal control over financial reporting as of December 31, 2020 and 2019.

predecessor identified material weaknesses in its internal control over financial reporting as of December 31, 2020

are an emerging growth company and a smaller reporting company within the meaning of the Securities Act.

Nasdaq may delist our common stock and/or our Public Warrants may not continue to trade on the OTC Pink Open Market.

to the uncertainty with respect to classification of warrants issued by SPACs as equity or indebtedness, there can be no assurance

that future guidance might not require us to restate our financial statements and have other adverse consequences.

Related to Our Business, Financial Condition and Capital Requirements

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

We have incurred significant financial losses since our

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

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

We have not yet demonstrated an ability to generate revenues,

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

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

activities necessary for successful product commercialization.

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

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

We will continue to incur significant research and development and

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

As a result, we are not

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

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

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

Our net loss was $18.4 million for the nine months

ended September 30, 2021.

As of September 30, 2021, we had an accumulated deficit of $74.3 million.

We expect to continue to incur significant

losses for the foreseeable future, and we expect these losses to increase as we continues our research and development of, and seek regulatory

approvals for, our product candidates.

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

entire investment.

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

company as we:

the requirements and demands of being a public company;

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

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

our clinical-stage product candidate PF614 through clinical development;

our preclinical stage product candidates into clinical development;

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

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

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

expand and protect our intellectual property portfolio;

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

Pharmaceutical

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

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

become commercially viable.

Therefore any investment in us would be highly speculative.

Our prospects are subject to the costs, uncertainties,

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

such as ours.

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

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

We will likely encounter

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

Additionally,

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

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

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

product candidates.

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

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

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

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

commercialize the product candidates we are developing or may develop.

Successful commercialization, to the extent it occurs, will require

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

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

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

private insurance or government payors.

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

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

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

profitability.

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

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

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

require substantial additional funding.

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

our product discovery and development programs or commercialization efforts.

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

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

Our operations have consumed substantial amounts of cash

since inception.

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

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

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

Other unanticipated

costs may arise in the course of our development efforts.

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

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

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

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

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

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

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

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

we may develop and pursue in the future;

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

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

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

distribution and manufacturing capabilities;

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

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

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

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

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

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

enforcing and defending intellectual property related claims;

costs of operating as a public company.

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

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

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

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

approval and achieve product sales.

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

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

We cannot be certain that additional funding

will be available on acceptable terms, or at all.

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

Stock and Financial Reporting .”

believe that the net proceeds from the Merger, together with our existing cash and cash equivalents, net proceeds from the sale of Investor

Notes and possible exercise of Investor Warrants, will enable us to fund our operating expenses and capital expenditure requirements

into the third quarter of 2022, while advancing our main product candidates such as, PF614 and PF614 MPAR™ and nafamostat through

their respective next phases of clinical development.

Our estimate may prove to be wrong, and we could use our available capital resources,

if any, sooner than we currently expect.

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

consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

extent this occurs, it could impose significant dilution on our stockholders.

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

for our current or future operating plans.

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

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

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

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

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

may incur additional dilution upon repayment of the Investor Notes with Common Stock.

the terms of the Securities Purchase Agreement, we are permitted to repay principal and interest on the Investor Notes by issuing additional

shares of Common Stock.

In addition, the Conversion Price of the Investor Notes, and the Exercise Price of the Investor Warrants, are

subject to downward revision in the event we make certain issuances of our Common Stock at prices below the Conversion Price.

registered additional shares of Common Stock under this Registration Statement in the event either of these events occur.

In such case,

stockholders will have dilution in amounts exceeding the straight conversion of the Convertible Notes or, with respect to the Investor

Warrants, the Company will receive a reduced level of proceeds from the exercise of the Investor Warrants.

Company must obtain stockholder approval of the Securities Purchase Agreement to satisfy Nasdaq requirements

the conversion of the Investor Notes and exercise of the Investor Warrants may potentially result in an issuance of greater than 20%

of the currently outstanding Common Stock, the Company is required under Nasdaq rules to obtain stockholder approval from a stockholders

holding a majority of its outstanding shares for approval the Securities Purchase Agreement.

The Company intends to obtain this approval

as soon as practicable pursuant to a proxy solicitation.

As part of the Securities Purchase Agreement, the Company entered into Voting

Agreements with stockholders owning 68.1% of its outstanding common stock to approve the Securities Purchase Agreement, so the Company

believes it has the requisite vote required to approve the transaction.

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

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

in the industries in which we and our customers operate;

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

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

or anticipated fluctuations in our quarterly or annual operating results;

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

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

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

and departures of key personnel;

in laws and regulations affecting our business;

of, or involvement in, litigation involving us;

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

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

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

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

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

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

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

substantially.

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

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

In addition, in the

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

against the company that issued the stock.

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

defending the lawsuit.

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

harm our profitability and reputation.

proceeds under the GEM Agreement may be less than anticipated.

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

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

Additionally, the negative

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

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

a Share Purchase Agreement between us, GEM Global Yield LLC SCS (“ GEM Global ”) and GEM Yield Bahamas Limited (“ GYBL ”),

dated as of December 29, 2020, including a Registration Rights Agreement between the same parties and dated as of the same date (the

“ GEM Agreement ”), we are entitled to draw down up to $60 million of gross proceeds from GEM Global in exchange for

shares of our common stock at a price equal to 90% of the average closing bid price of the shares of our common stock on Nasdaq for a

30 day period, subject to meeting the terms and conditions of the GEM Agreement.

This equity line facility is available for a period

of 36 months from the closing date of the Merger.

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

The limitations on the amount and frequency of the draws that we can make under the GEM facility, which include the requirement that

(i) there be an effective registration statement and (ii) size restrictions relating to our trading volume, may affect the ability to

draw under the GEM Agreement and result in proceeds that are less than anticipated.

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

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

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

The number of shares

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

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

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

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

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

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

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

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

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

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

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

our operating activities.

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

To the extent that

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

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

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

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

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

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

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

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

Issuing any equity securities

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

Moreover, sales of substantial

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

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

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

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

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

encumbering our assets to secure future indebtedness.

Such restrictions could adversely impact our ability to conduct our operations

and execute our business plan.

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

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

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

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

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

that we would otherwise prefer to develop and market ourselves.

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

If we are unable to successfully complete clinical development,

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

will be materially harmed.

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

years, is dependent on our ability to successfully develop, obtain regulatory approval for and commercialize one or more of our product

We completed our Phase 1 clinical study for our most advanced product candidate, PF614, in February 2018.

A Phase 1 study

for nafamostat was completed in December 2020.

A Phase 1 study for PF614-MPAR™ is expected to be initiated during 2021.

our other product candidates are in earlier stages of development and will require substantial additional investment for manufacturing,

preclinical testing, clinical development, regulatory review and approval in one or more jurisdictions.

If any of our product candidates

encounter safety or efficacy problems, development delays or regulatory issues or other problems, our development plans and business

would be materially harmed.

may not have the financial resources to continue development of our product candidates.

Even if clinical trials are completed, we may

experience other issues that may delay or prevent regulatory approval of, or our ability to commercialize, our product candidates, including:

to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and

insufficiency

of our financial and other resources to complete the necessary clinical trials and preclinical studies;

or inconclusive results from our clinical trials, preclinical studies or the clinical trials of others for product candidates that

are similar to ours, leading to a decision or requirement to conduct additional clinical trials or preclinical studies or abandon

product-related

adverse events experienced by subjects in our clinical trials, including unexpected toxicity results, or by individuals using drugs

or therapeutic biologics similar to our product candidates;

in submitting an Investigational New Drug application, or IND, or comparable foreign applications or delays or failure in obtaining

the necessary approvals from regulators to commence a clinical trial or a suspension or termination, or hold, of a clinical trial

once commenced;

imposed by the FDA, the European Medicines Agency, or EMA, or comparable foreign regulatory authorities regarding the scope or design

of our clinical trials;

effectiveness of our product candidates during clinical trials;

than expected performance of control arms, such as placebo groups, which could lead to negative or inconclusive results from our

clinical trials;

in enrolling subjects in clinical trials;

drop-out rates of subjects from clinical trials;

supply or quality of product candidates or other materials necessary for the conduct of our clinical trials;

than anticipated clinical trial or manufacturing costs;

FDA, EMA or comparable regulatory authority inspection and review of a clinical trial site;

of our third-party contractors or investigators to comply with regulatory requirements or the clinical trial protocol or otherwise

meet their contractual obligations in a timely manner, or at all;

FDA, EMA or comparable regulatory authority inspection and review of manufacturing facilities or inability of those facilities to

maintain a compliance status acceptable to the FDA, EMA or comparable regulatory authorities;

and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around

clinical testing generally or with respect to our therapies in particular;

interpretations of data by the FDA, EMA and comparable foreign regulatory authorities.

product candidates will require additional, time-consuming development efforts prior to commercial sale, including preclinical studies,

clinical trials and approval by the FDA and applicable foreign regulatory authorities.

All product candidates are prone to the risks

of failure that are inherent in pharmaceutical product development, including the possibility that such product candidate will not be

shown to be sufficiently safe and effective for approval by regulatory authorities.

In addition, we cannot assure stockholders that any

such products that are approved will be manufactured or produced economically, successfully commercialized or widely accepted in the

marketplace or be more effective than other commercially available alternatives.

depend heavily on the success of our lead product candidate PF614, which is currently in clinical trials.

Our clinical trials of PF614

may not be successful.

If we are unable to commercialize PF614 or experience significant delays in doing so, our business will be materially

have invested a significant portion of our efforts and financial resources in the research and development of our lead product candidate,

PF614 and we expect to continue to do so.

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

not occur at a significant level for several years, will depend heavily on the successful development, regulatory approval and eventual

commercialization of PF614.

cannot commercialize product candidates in the United States without first obtaining regulatory approval for the product from the FDA;

similarly, we cannot commercialize product candidates outside of the United States without obtaining regulatory approval from similar

regulatory authorities outside of the United States.

Even if PF614 or another product candidate were to successfully obtain approval

from the FDA and non-U.S.

regulatory authorities, any approval might contain significant limitations related to use restrictions for

specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management

requirements.

If we are unable to obtain regulatory approval for PF614 in one or more jurisdictions, or any approval contains significant

limitations, we may not be able to obtain sufficient funding or generate sufficient revenue to continue the development, marketing and/or

commercialization of PF614 or any other product candidate that we may discover, in-license, develop or acquire in the future.

even if we obtain regulatory approval for P614, we will still need to develop a commercial organization, or collaborate with third parties

for the commercialization of PF614, establish commercially viable pricing and obtain approval for adequate reimbursement from a third-party

and government payors.

If we or our commercialization collaborators are unable to successfully commercialize PF614, we may not be able

to generate sufficient revenues to continue our business.

to the significant resources required for the development of our product pipeline, and depending on our ability to access capital, we

must prioritize the development of certain product candidates over others.

Moreover, we may fail to expend our limited resources on product

candidates or indications that may have been more profitable or for which there is a greater likelihood of success.

currently have three clinical-stage product candidates as well as certain other product candidates that are at various stages of preclinical

We seek to maintain a process of prioritization and resource allocation to maintain an optimal balance between aggressively

pursuing our more advanced clinical-stage product candidates, such as nafamostat, PF614 and PF614-MPAR™, and ensuring the development

of additional potential product candidates.

to the significant resources required for the development of our product candidates, we must focus on specific diseases and disease pathways

and decide which product candidates to pursue and advance and the amount of resources to allocate to each.

Our decisions concerning the

allocation of research, development, collaboration, management and financial resources toward particular product candidates or therapeutic

areas may not lead to the development of any viable commercial products and may divert resources away from better opportunities.

make incorrect determinations regarding the viability or market potential of any of our product candidates or misinterpret trends in

the pharmaceutical industry, in particular for opioid abuse and drug overdose, our business, financial condition, and results of operations

could be materially adversely affected.

As a result, we may (i) fail to capitalize on viable commercial products or profitable market

opportunities, (ii) be required to forego or delay pursuit of opportunities with other product candidates or other diseases and disease

pathways that may later prove to have greater commercial potential than those we choose to pursue, or (iii) relinquish valuable rights

to such product candidates through collaboration, licensing, or other royalty arrangements in cases in which it would have been advantageous

for us to invest additional resources to retain sole development and commercialization rights.

PF614 and PF614-MPAR™ product candidates may not be successful in limiting or impeding abuse, overdose or misuse or providing additional

safety upon commercialization.

are committing a substantial majority of our resources to the development of products utilizing our TAAP and MPAR TM .

can be no assurance that our products will perform as tested and limit or impede the actual abuse, overdose or misuse of such products

or provide other benefits in commercial settings.

Moreover, there can be no assurance that if our products are approved by the FDA, the

post-approval epidemiological studies required by the FDA as a condition of any such approvals of the products will show a reduction

in the consequences of abuse and misuse by patients for whom the applicable product is prescribed.

The failure of our products to limit

or impede actual abuse, overdose or misuse or provide other safety benefits in practice will have a material adverse impact on market

acceptance for such products and on our financial condition and results of operations.

we fail to discover, develop and commercialize other product candidates, we may be unable to grow our business and our ability to achieve

our strategic objectives would be impaired.

In addition, we may also seek to commercialize certain treatments that may not be proprietary

the development and commercialization of our current product candidates are our initial focus, as part of our long-term growth strategy,

we plan to develop other product candidates.

We may also seek to commercialize treatments that may not be proprietary to us.

to evaluate internal opportunities from our existing product candidates or other potential product candidates.

While our technology platforms

have potential applicability to other uses, we have not conducted any clinical trials on these other uses and we may not be successful

in developing product candidates for other uses.

addition, we intend to devote capital and resources for basic research to discover and identify additional product candidates.

research programs require technical, financial and human resources, whether or not any product candidates are ultimately identified.

Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for

clinical development for many reasons, including the following:

research methodology used may not be successful in identifying potential product candidates;

may develop alternatives that render our product candidates obsolete;

candidates that we develop may nevertheless be covered by third parties’ patents or other exclusive rights;

product candidate may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely

to be effective or otherwise does not meet applicable regulatory criteria;

product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all;

product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors.

the future, we may also seek to in-license or acquire product candidates or the underlying technology.

The process of proposing, negotiating

and implementing a license or acquisition is lengthy and complex.

Other companies, including many with substantially greater financial,

marketing and sales resources, may compete with us for the license or acquisition of product candidates.

We have limited resources to

identify and execute the acquisition or in-licensing of third-party products, businesses and technologies and integrate them into our

current infrastructure.

Moreover, we may devote resources to potential acquisitions or in-licensing opportunities that are never completed,

or we may fail to realize the anticipated benefits of such efforts.

We may not be able to acquire the rights to additional product candidates

on terms that we finds acceptable, or at all.

addition, future acquisitions may entail numerous operational and financial risks, including:

to unknown liabilities;

of our business and diversion of our management’s time and attention to develop acquired products or technologies;

of substantial debt, dilutive issuances of securities or depletion of cash to pay for acquisitions;

than expected acquisition and integration costs;

in combining the operations and personnel of any acquired businesses with our operations and personnel;

amortization expenses;

of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership;

to motivate key employees of any acquired businesses.

we are unsuccessful in identifying and developing additional product candidates, either through internal development or licensing or

acquisition from third parties, our potential for growth and achieving our strategic objectives may be impaired.

we do not achieve our projected development and commercialization goals within the timeframes we expect, the development and commercialization

of our product candidates may be delayed, and our business and results of operations may be harmed.

planning purposes, we seek to estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product

development objectives.

These milestones may include our expectations regarding the commencement or completion of scientific studies

and clinical trials, the submission of regulatory filings, or commercialization objectives.

From time to time, we may publicly announce

the expected timing of some of these milestones, such as the completion of an ongoing clinical trial, the initiation of other clinical

programs, receipt of marketing approval or a commercial launch of a product.

The potential achievement of many of these milestones may

be outside of our control.

Each of these milestones is based on a variety of assumptions which, if not realized as expected, may cause

the timing of such potential achievement of the respective milestones to vary considerably from our estimates, including:

available capital resources or capital constraints we experience;

rate of progress, costs and results of our clinical trials and research and development activities, including the extent of scheduling

conflicts with participating clinicians and collaborators;

ability to identify and enroll patients who meet clinical trial eligibility criteria;

receipt of approvals by the FDA and other regulatory authorities and the timing thereof;

actions, decisions or rules issued by regulators;

ability to access sufficient, reliable and affordable supplies of materials used in the manufacture of our product candidates;

efforts of our collaborators with respect to the commercialization of our product candidates;

securing of, costs related to, and timing issues associated with, product manufacturing as well as sales and marketing activities.

we fail to achieve any announced milestones in the timeframes we expect, the development and commercialization of our product candidates

may be delayed, and our business and results of operations may be harmed and it could negatively impact our share price performance.

Please see “ Business ” for more information.

products may reduce or eliminate commercial opportunity for our product candidates, if approved.

If our competitors develop technologies

or product candidates more rapidly than we do, or their technologies or product candidates are more effective or safer than any such

technologies or product candidate of ours, our ability to develop and successfully commercialize our own technologies or product candidates

may be adversely affected.

clinical and commercial landscapes for the solution of opioid abuse and drug overdose are highly competitive and subject to rapid and

significant technological change.

We face competition with respect to our indications for our product candidates and will face competition

with respect to any other product candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies,

specialty pharmaceutical companies and biotechnology companies worldwide.

There are a number of large pharmaceutical and biotechnology

companies that currently market and sell drugs or are pursuing the development of product candidates for the treatment of the indications

that we are pursuing.

These companies include, but are not limited to, Purdue Pharma, LP, and Collegium Pharmaceutical, Inc.

competitors include not only pharmaceutical companies but also academic institutions, government agencies and other public and private

research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development,

manufacturing and commercialization.

believe that a significant number of product candidates are currently under development for the same indications that we are currently

pursuing, and some or all may become commercially available in the future for the treatment of conditions for which we are trying or

may try to develop product candidates.

Our potential competitors include large pharmaceutical and biotechnology companies, specialty

pharmaceutical and generic drug companies, academic institutions, government agencies and research institutions.

See the section entitled

“ Business — Competition ” for examples of the competition that our product candidates face.

competitors may have significantly greater financial resources, established presence in the market, expertise in research and development,

manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing approved products than

Accordingly, our competitors may be more successful than we may be in obtaining regulatory approval for therapies and achieving widespread

market acceptance.

Our competitors’ products may be more effective, or more effectively marketed and sold, than any product candidate

we may commercialize and may render our therapies obsolete or non-competitive before we can recover development and commercialization

If any of our product candidates, including PF614, is approved, these product candidates could compete with a range of therapeutic

treatments that are in development.

In addition, our competitors may succeed in developing, acquiring or licensing technologies and products

that are more effective or less costly than PF614, our other product candidates or any other product candidates that we may develop,

which could render our product candidates obsolete and noncompetitive.

we obtain approval for any of our product candidates, we may face competition based on many different factors, including the efficacy,

safety and tolerability of our products, the ease with which our products can be administered, the timing and scope of regulatory approvals

for these products, the availability and cost of manufacturing, marketing and sales capabilities, price, reimbursement coverage and patent

Existing and future competing products could present superior treatment alternatives, including being more effective, safer,

less expensive or marketed and sold more effectively than any products we may develop.

products may make any products we develop obsolete or noncompetitive before we are able to recover the expense of developing and commercializing

our product candidates.

Such competitors could also recruit our employees, which could negatively impact our level of expertise and our

ability to execute our business plan.

addition, our competitors may obtain patent protection, regulatory exclusivities or FDA approval and commercialize products more rapidly

than we do, if we are successful at all, which may impact future approvals or sales of any of our product candidates that receive regulatory

If the FDA approves the commercial sale of PF614 or any other product candidate, we will also be competing with respect to

marketing capabilities and manufacturing efficiency.

We expect any such competition among products will be based on product efficacy

and safety, the timing and scope of regulatory approvals, availability of supply, marketing and sales capabilities, product price, reimbursement

coverage by government and private third-party payors, regulatory exclusivities and patent position.

Our profitability and financial

position will suffer if our product candidates receive regulatory approval but cannot compete effectively in the marketplace.

and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller

number of our competitors.

Smaller and other early-stage companies may also prove to be significant competitors, particularly through

collaborative arrangements with large and established companies.

These third parties compete with us in recruiting and retaining qualified

scientific and management personnel and establishing clinical trial sites, as well as in acquiring technologies complementary to, or

necessary for, our programs.

business could be harmed if we lose the services of our key personnel or if we are unable to hire additional highly qualified employees.

business depends upon our ability to attract and retain highly qualified personnel, including managerial, sales and technical personnel.

We compete for key personnel with other companies, healthcare institutions, academic institutions, government entities and other organizations.

We do not have written employment agreements with our Chief Executive Officer.

Our ability to maintain and expand our business may be

impaired if we are unable to retain our current key personnel or hire or retain other qualified personnel in the future.

currently only have four full-time employees and three consultants and we expect to add additional employees.

Our future success also

depends on our ability to identify, attract, hire or engage, retain and motivate other well-qualified managerial, technical, clinical

and regulatory personnel.

for such individuals, particularly in the United States, is intense, and we may not be able to hire sufficient personnel to support our

There can be no assurance that such professionals will be available in the market, or that we will be able to retain existing

professionals or to meet or to continue to meet their compensation requirements.

Furthermore, our cost base with respect to such compensation,

which may include equity compensation, may increase significantly, which could have a material adverse effect on our financial results,

including the potential for additional dilution to our stockholders.

Failure to establish and maintain an effective management team and

work force could adversely affect our ability to operate, grow and manage our business.

employees, independent contractors, principal investigators, consultants, commercial collaborators, service providers and other vendors

may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could

have an adverse effect on our results of operations.

are exposed to the risk that we and our contract research organizations’ (“ CROs ”) employees and contractors,

including principal investigators, consultants, commercial collaborators, service providers and other vendors may engage in fraudulent

or other illegal activity.

Misconduct by these parties could include intentional, reckless and/or negligent conduct or other unauthorized

activities that violate the laws and regulations of the FDA and other similar regulatory bodies, including those laws that require the

reporting of true, complete and accurate information to such regulatory bodies;

manufacturing standards;

federal and state healthcare

fraud and abuse and health regulatory laws and other similar foreign fraudulent misconduct laws;

or laws that require the true, complete

and accurate reporting of financial information or data.

Activities subject to these laws also involve the improper use or misrepresentation

of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation.

It is not always possible to identify and deter third-party misconduct, and the precautions we take to detect and prevent this activity

may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other

actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.

If any such actions are instituted against

us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business

and financial results, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines,

possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, reputational harm, diminished profits

and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our

results of operations.

interruptions resulting from the COVID-19 pandemic or similar public health crises could cause a disruption of the development of our

product candidates and adversely impact our business and our results of operations.

health crises such as pandemics or similar outbreaks could adversely impact Ensysce’s business.

In December 2019, a novel strain

of a virus named SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), or coronavirus, which causes coronavirus disease (COVID-19),

was reported to have surfaced in Wuhan, China and has since reached multiple other regions and countries worldwide.

The COVID-19 pandemic

is evolving, and to date has led to the implementation of various responses, including government-imposed quarantines, travel restrictions

and other public health safety measures.

continued spread of COVID-19 or other global health matters, such as pandemics, could adversely impact our clinical trials or preclinical

For instance, the COVID-19 pandemic could impair our ability to recruit and retain patients and principal investigators and

site staff who, as healthcare providers, may have heightened exposure to COVID-19 if a pandemic occurs in their geography or due to prioritization

of hospital resources toward the pandemic and restrictions on travel.

Furthermore, some patients may be unwilling to enroll in our trials

or be unable to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare

COVID-19 may also negatively affect the operations of third-party contract research organizations that we rely upon to carry

out our clinical trials or the operations of our third-party manufacturers, which could result in delays or disruptions in the supply

of our product candidates.

For instance, while we have taken measures to revise clinical trial protocols in our Phase 2 program of nafamostat,

including home delivery of study medication, home health care visits to collect safety data and telemedicine visits to collect clinician-based

trial assessments, such measures may not be sufficient to prevent missing data from impacting trial outcomes or delays in enrollment

and trial completion caused by COVID-19.

If patients are reluctant to participate in these trials due to fears of COVID-19 infection

resulting from regular visits to a healthcare facility, we may not be able to meet our current trial completion timelines.

impact COVID-19 has to patient enrollment or treatment or the timing and execution of our clinical trials could cause costly delays to

our clinical trial activities, which could adversely affect our ability to obtain regulatory approval for the commercialization of our

product candidates, increase our operating expenses, and have a material adverse effect on our business and results of operations.

may also take temporary precautionary measures intended to help minimize the risk of COVID-19 to our employees, including temporarily

requiring all employees to work remotely, suspending all non-essential travel worldwide for our employees and discouraging employee attendance

at industry events and in-person work-related meetings.

These measures could negatively affect our business.

COVID-19 has also caused

volatility in the global financial markets and threatened a slowdown in the global economy, which may negatively affect our ability to

raise additional capital on attractive terms or at all.

extent to which the ongoing COVID-19 pandemic impacts our business, results of operation and financial condition will depend on future

developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, new information

that may emerge concerning the severity of COVID-19, or the effectiveness of actions to contain COVID-19 or treat its impact, among others.

We cannot presently predict the scope and severity of any potential business shutdowns or disruptions, if any.

If we or any of the third

parties with whom we engage, however, were to experience shutdowns or other business disruptions, our ability to conduct our business

in the manner and on the timelines presently planned could be materially and negatively affected, which could have a material adverse

impact on our business, results of operation and financial condition.

of our programs are partially supported by government grant awards, which may not be available to us in the future.

have received funding under grant award programs funded by governmental agencies, such as the NIH and NIDA.

To fund a portion of our

future research and development programs, we may apply for additional grant funding from these or similar governmental agencies in the

However, funding by these, and other, governmental agencies may be significantly reduced or eliminated in the future for a number

For example, some programs are subject to a yearly appropriations process in Congress.

In addition, we may not receive full

funding under current or future grants because of budgeting constraints of the agency administering the program or unsatisfactory progress

on the study being funded.

Also, the continued spread of COVID-19 could affect governmental priorities in the future or prospective funding

for our product candidates.

Therefore, we cannot provide any assurance that we will receive any future grant funding from any government

agencies, or, that if received, we will receive the full amount of the particular grant award.

Any such reductions could delay the development

of our product candidates and the introduction of new products.

issues around the abuse of opioids, including law enforcement concerns over diversion of opioid and regulatory efforts to combat abuse,

could decrease the potential market for our product candidates.

stories regarding prescription drug abuse and the diversion of opioids and other controlled substances have become commonplace.

Law enforcement

and regulatory agencies may apply additional policies that further seek to limit the availability of opioids.

Such efforts may inhibit

our ability to commercialize our product candidates.

Aggressive enforcement and unfavorable publicity regarding, for example, the use

or misuse of oxycodone or other opioid drugs, the limitations of abuse resistant formulations, public inquiries and investigations into

prescription drug abuse, litigation or regulatory activity, sales, marketing, distribution or storage of our drug products could harm

our reputation.

Such negative publicity could reduce the potential size of the market for our product candidates and decrease the revenues

and royalties, if any, we are able to generate from their sale.

Similarly, to the extent opioid abuse becomes less prevalent or a less

urgent public health issue, regulators and third-party payers may not be willing to pay a premium for abuse deterrent formulations of

addition, efforts by the FDA and other regulatory bodies to combat abuse of opioids may negatively impact the market for our product

For example, in February 2016, as part of a broader initiative led by United States Department of Health and Human Services

(the “ HHS ”) to address opioid-related overdose, death and dependence, the FDA released an action plan to address the

opioid abuse epidemic and reassess the FDA’s approach to opioid medications.

The plan identifies the FDA’s focus on implementing

policies to reverse the opioid abuse epidemic, while maintaining access to effective treatments.

The actions set forth in the FDA’s

plan include strengthening post marketing study requirements to evaluate the benefit of long-term opioid use, changing the Risk Evaluation

and Mitigation Strategy (“ REMS ”) requirements to provide additional funding for physician education courses, releasing

a draft guidance setting forth approval standards for generic abuse-deterrent opioid formulations, and seeking input from the FDA’s

Scientific Board to broaden the understanding of the public risks of opioid abuse.

Many of these changes could require us to expend additional

resources in developing and commercializing our product candidates to meet additional requirements.

In October 2017, the acting director

of HHS under the directive of former President Trump, declared the opioid crisis a national health emergency and initiated a five point

plan including (i) improving access to prevention, treatment, and recovery support services;

(ii) targeting the availability and distribution

of overdose-reversing drugs;

(iii) strengthening public health data reporting and collection;

(iv) supporting cutting-edge research on

addiction and pain;

and (v) advancing the practice of pain management.

The impact that this five-point plan will have on us is unclear

at this time, especially after the change in administrations following the 2020 presidential elections.

expect to expand our organization, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

expect to experience growth in the number of our employees and the scope of our operations.

To manage these growth activities, we must

continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and

train additional qualified personnel.

Our management may need to devote a significant amount of their attention to managing these growth

Due to our limited financial resources and the limited experience of our management team in managing a company with such

anticipated growth, we may not be able to effectively manage the expansion of our operations, retain key employees, or identify, recruit

and train additional qualified personnel.

Our inability to manage the expansion of our operations effectively may result in weaknesses

in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity

among remaining employees.

Our expected growth could also require significant capital expenditures and may divert financial resources

from other projects, such as the development of additional product candidates.

If we are unable to effectively manage our expected growth,

our expenses may increase more than expected, our ability to generate revenues could be reduced and we may not be able to implement our

business strategy, including the successful commercialization of our product candidates.

Related to Our Dependence on Third-Party Providers

currently rely on, and expect to rely on in the future, third parties to conduct our clinical trials, and those third parties may not

perform satisfactorily, including failing to meet deadlines for completing such trials, failing to satisfy legal or regulatory requirements

or terminating the relationship.

currently rely on, and expect to rely on in the future, third-party CROs to conduct research and development activities and our clinical

trials for our product candidates.

Agreements with these CROs might terminate for a variety of reasons, including for their failure to

Entry into alternative arrangements, if necessary, could significantly delay our product development activities.

reliance on these CROs for research and development activities and clinical trials will reduce our control over these activities but

will not relieve us of any of our responsibilities.

For example, we will remain responsible for ensuring that each of our clinical trials

is conducted in accordance with the general investigational plan and protocols in the applicable IND.

Moreover, the FDA requires compliance

with standards, commonly referred to as good clinical practices, or GCPs, for conducting, recording and reporting the results of clinical

trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial

participants are protected.

these CROs do not successfully carry out their contractual duties, meet expected deadlines or conduct the clinical trials in accordance

with regulatory requirements or our stated protocols, it could adversely affect the development of our product candidates and it could

result in us not being able to obtain, or being delayed in obtaining, marketing approvals for our product candidates and it could adversely

affect our efforts to successfully commercialize our product candidates.

expect to be completely dependent on third parties to manufacture our product candidates, and our commercialization of our product candidates

could be halted, delayed or made less profitable if those third parties fail to maintain a compliance status acceptable to the FDA or

comparable foreign regulatory authorities, fail to provide to us with sufficient quantities of our product candidates or fail to do so

at acceptable quality levels or prices.

do not currently have, nor do we plan to acquire, the capability or infrastructure to manufacture the ingredients in our product candidates

for use in our clinical trials or for commercial product, if any.

We have entered into a Manufacturing Agreement (the “ Recro

Agreement ”) with Recro Gainesville LLC (“ Recro ”) for the production of PF614 capsules and other materials

and services with respect to our clinical studies.

In addition, we do not have the capability to encapsulate any of our product candidates

as a finished product for commercial distribution.

As a result, we expect to be obligated to rely on contract manufacturers, like Recro,

if and when any of our product candidates are approved for commercialization.

In the event that Recro is unable to perform its obligations

under the Recro Agreement, we may be unable to replace the Recro Agreement on terms as favorable to us.

We have not entered into an agreement

with any contract manufacturers for commercial supply and may not be able to engage a contract manufacturer for commercial supply of

any of our product candidates on favorable terms to us, or at all.

processes used by our contract manufacturers to manufacture our product candidates must be approved by the FDA or comparable foreign

regulatory authorities and the facilities at which the product candidates are manufactured must maintain a compliance status acceptable

to the FDA and foreign regulatory authorities.

FDA and foreign regulatory authorities will conduct inspections after we submit a new

drug application, or NDA, to the FDA or its equivalent to other relevant regulatory authorities.

We will not control the manufacturing

process of, and will be completely dependent on, its contract manufacturing partners for compliance with cGMPs for manufacture of both

active drug substances and finished products.

These cGMP regulations cover all aspects of the manufacturing, testing, quality control

and record keeping relating to our product candidates.

If our contract manufacturers, including Recro, do not successfully manufacture

material that conforms to our specifications and the strict regulatory requirements of the FDA or others, our product candidates may

not be approved.

If these facilities do not maintain a compliance status acceptable to the FDA, Drug Enforcement Agency, or DEA, or comparable

regulatory authorities, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop,

obtain regulatory approval for or market our product candidates, if approved.

contract manufacturers, including Recro, will be subject to ongoing periodic unannounced inspections by the FDA, DEA and corresponding

state and foreign agencies for compliance with cGMPs, security, recordkeeping and similar regulatory requirements.

Although we will not

have control over our contract manufacturers’ compliance with these regulations and standards, we are nonetheless responsible for

assuring such compliance.

Failure by any of our contract manufacturers to comply with applicable regulations could result in sanctions

being imposed on us, including fines, injunctions, civil penalties, failure to grant approval to market any of our product candidates,

delays, suspensions or withdrawals of approvals, operating restrictions and criminal prosecutions, any of which could significantly and

adversely affect our business and results of operations.

Failure by our contract manufacturers to comply with or maintain any of these

standards could adversely affect our ability to develop, obtain regulatory approval for or market any of our product candidates.

for any reason, these third parties, including Recro, are unable or unwilling to perform, we may not be able to terminate our agreements

with them, and we may not be able to locate alternative manufacturers or formulators or enter into favorable agreements with them and

we cannot be certain that any such third parties will have the manufacturing capacity to meet future requirements.

If these manufacturers

or any alternate manufacturer of finished drug product experiences any significant difficulties in its respective manufacturing processes

for our ingredients or finished products or should cease doing business with us, we could experience significant interruptions in the

supply of any of our product candidates or may not be able to create a supply of our product candidates at all.

Our inability to coordinate

the efforts of our third-party manufacturing partners, or the lack of capacity available at our third-party manufacturing partners, could

impair our ability to supply any of our product candidates at required levels.

Because of the significant regulatory requirements that

we would need to satisfy in order to qualify a new bulk or finished product manufacturer, if we face these or other difficulties with

our current manufacturing partners, we could experience significant interruptions in the supply of any of our product candidates if we

decide to transfer the manufacture of any of our product candidates to one or more alternative manufacturers in an effort to deal with

the difficulties.

manufacturing problem or the loss of a contract manufacturer, including Recro, could be disruptive to our operations and delay development

of our investigational products.

Additionally, we rely on third parties to supply the raw materials needed to manufacture our potential

Any reliance on suppliers may involve several risks, including a potential inability to obtain critical materials and reduced

control over production costs, delivery schedules, reliability and quality.

Any unanticipated disruption to a future contract manufacturer

caused by problems at suppliers could delay shipment of any of our investigational products and, if approved, product candidates.

cannot guarantee that our future manufacturing and supply partners will be able to reduce the costs of commercial scale manufacturing

of any of our product candidates over time.

If the commercial-scale manufacturing costs of any of our product candidates are higher than

expected, these costs may significantly impact our operating results.

In order to reduce costs, we may need to develop and implement

process improvements.

However, in order to do so, we will need, from time to time, to notify or make submissions with regulatory authorities,

and the improvements may be subject to approval by such regulatory authorities.

cannot be sure that we will receive these necessary approvals or that these approvals will be granted in a timely fashion.

We also cannot

guarantee that we will be able to enhance and optimize output in our commercial manufacturing process.

If we cannot enhance and optimize

output, we may not be able to reduce our costs over time.

we are unable to develop our sales, marketing and distribution capability on our own or through collaborations with marketing partners,

we will not be successful in commercializing our product candidates.

currently have no marketing, sales or distribution capabilities.

We intend to establish a sales and marketing organization, either on

our own or in collaboration with third parties, with technical expertise and supporting distribution capabilities to commercialize PF614

or one or more of our other product candidates that may receive regulatory approval in key territories.

These efforts will require substantial

additional resources, some or all of which may be incurred in advance of any approval of the product candidate.

Any failure or delay

in the development of our or third parties’ internal sales, marketing and distribution capabilities would adversely impact the

commercialization of PF614, our other product candidates and other future product candidates.

that may inhibit our efforts to commercialize our product candidates on our own include:

inability to recruit and retain effective sales and marketing personnel;

inability of sales personnel to obtain access to or persuade physicians to prescribe any future products;

lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies

with more extensive product lines;

costs and expenses associated with creating an independent sales and marketing organization.

respect to our existing and future product candidates, we may choose to collaborate with third parties that have direct sales forces

and established distribution systems to serve as an alternative to our own sales force and distribution systems.

Our future product revenue

may be lower than if we directly marketed or sold our product candidates, if approved.

In addition, any revenue we receive will depend

in whole or in part upon the efforts of these third parties, which may not be successful and are generally not within our control.

we are not successful in commercializing any approved products, our future product revenue will suffer and we may incur significant additional

we do not establish sales and marketing capabilities successfully, either on our own or in collaboration with third parties, we will

not be successful in commercializing our product candidates.

Related to Product Development, Regulatory Approval, Manufacturing and Commercialization

regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming and inherently unpredictable,

and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.

are not permitted to commercialize, market, promote or sell any product candidate in the United States without obtaining regulatory approval

from the FDA.

Foreign regulatory authorities, such as the EMA, impose similar requirements.

The time required to obtain approval by the

FDA and comparable foreign authorities is inherently unpredictable, but typically takes many years following the commencement of clinical

trials and depends upon numerous factors, including substantial discretion of the regulatory authorities.

In addition, approval policies,

regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s

clinical development and may vary among jurisdictions.

To date, we have not submitted an NDA to the FDA or similar drug approval submissions

to comparable foreign regulatory authorities for our most advanced product candidate, PF614, or any other product candidate.

complete additional preclinical studies and clinical trials to demonstrate the safety and efficacy of our product candidates in humans

before we will be able to obtain these approvals.

testing is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome.

cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all.

The clinical development

of our initial and potential additional product candidates is susceptible to the risk of failure inherent at any stage of development,

including failure to demonstrate efficacy in a clinical trial or across a broad population of patients, the occurrence of adverse events

that are severe or medically or commercially unacceptable, failure to comply with protocols or applicable regulatory requirements, and

determination by the FDA or any comparable foreign regulatory authority that a product candidate may not continue development or is not

It is possible that even if any of our product candidates has a beneficial effect, that effect will not be detected during

clinical evaluation as a result of one or more of a variety of factors, including the size, duration, design, measurements, conduct or

analysis of our clinical trials.

Conversely, as a result of the same factors, our clinical trials may indicate an apparent positive effect

of such product candidate that is greater than the actual positive effect, if any.

Similarly, in our clinical trials, we may fail to

detect toxicity of, or intolerability caused by, such product candidate, or mistakenly believe that our product candidates are toxic

or not well tolerated when that is not in fact the case.

Serious adverse events, or SAEs, or other adverse effects, as well as tolerability

issues, could hinder or prevent market acceptance of the product candidate at issue.

current and future product candidates could fail to receive regulatory approval for many reasons, including the following:

FDA or comparable foreign regulatory authorities may disagree as to the design or implementation of our clinical trials;

may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate

is safe and effective for our proposed indication;

results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory

authorities for approval;

may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from clinical trials or preclinical

data collected from clinical trials of our product candidates may not be sufficient to support the submission of an NDA to the FDA

or other submission or to obtain regulatory approval in the United States, the European Union or elsewhere;

FDA or comparable foreign regulatory authorities may find deficiencies with the manufacturing processes of third-party manufacturers

with which we contract for clinical and commercial supplies;

approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering

our clinical data insufficient for approval.

lengthy approval process as well as the unpredictability of clinical trial results may result in us failing to obtain regulatory approval

to market any product candidate we develop, which would substantially harm our business, results of operations and prospects.

and other comparable foreign authorities have substantial discretion in the approval process and determining when or whether regulatory

approval will be granted for any product candidate that we develop.

Even if we believe the data collected from future clinical trials

of our product candidates are promising, such data may not be sufficient to support approval by the FDA or any other regulatory authority.

addition, even if we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited

indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance

of costly post-marketing clinical trials, or may approve a product candidate with labeling that does not include the claims necessary

or desirable for the successful commercialization of that product candidate.

Any of the foregoing scenarios could materially harm the

commercial prospects for our product candidates.

FDA may recommend scheduling with respect to any of our current or future product candidates.

In such event, prior to a product launch,

the DEA will need to determine the controlled substance schedule of the product, taking into account the recommendation of the FDA.

timing of the scheduling process is uncertain and may delay our ability to market any product candidate that we successfully developed

and approved.

FDA has the authority to grant an Emergency Use Authorization (“ EUA ”) to allow unapproved medical products to be used

in an emergency to diagnose, treat, or prevent serious or life-threatening diseases or conditions when, based on the totality of scientific

evidence, there is evidence of effectiveness of the medical product, and there are no adequate, approved, and available alternatives.

Based on the outcomes of our clinical testing for nafamostat, Ensysce expects to apply for an EUA for use against coronaviral infections,

which would permit us to commercialize nafamostat prior to FDA approval of an NDA.

However, commercialization under an EUA is permitted

only during the period of time that FDA determines that the statutory criteria for EUA are met, meaning that we would be required to

obtain NDA approval to continue marketing the product.

Furthermore, the FDA may revoke an EUA based on a determination that the product

no longer satisfies the criteria for issuance of an EUA—for example, if there is no longer evidence of effectiveness of the product

or there are other adequate, approved alternatives.

Accordingly, we cannot predict how long, if at all, an EUA for nafamostat or any

other product candidates may remain in place.

Any termination or revocation of an EUA (if any) for nafamostat or any other product candidates

could adversely impact our business in a variety of ways, including if nafamostat is not yet approved by the FDA and if we and our manufacturing

partners have invested in the supply chain to provide nafamostat under an EUA.

our clinical trials fail to replicate positive results from earlier preclinical studies or clinical trials conducted by us or third parties,

we may be unable to successfully develop, obtain regulatory approval for, or commercialize our product candidates.

results observed from preclinical studies or early-stage clinical trials of our product candidates may not necessarily be predictive

of the results of later-stage clinical trials that we conduct.

Similarly, positive results from such preclinical studies or early-stage

clinical trials may not be replicated in our subsequent preclinical studies or clinical trials.

For example, preclinical studies showed

that PF614 does not readily convert into oxycodone in the blood stream and the Phase 1 trial we have conducted with TAAP prodrug (a medication

or compound that, after administration, is metabolized (i.e., converted within the body) into a pharmacologically active drug, or “prodrug”)

PF614, demonstrated that, after oral administration of the TAAP prodrug, the corresponding opioid was measured in the subjects’

Furthermore, our product candidates may not be able to demonstrate similar activity or adverse event profiles as other product

candidates that we believe may have similar profiles.

can be no assurance that any of our clinical trials will ultimately be successful or support further clinical development of any of our

product candidates.

There is a high failure rate for drugs proceeding through clinical trials.

Many companies in the pharmaceutical and

biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage

development, and we cannot be certain that we will not face similar setbacks.

These setbacks have been caused by, among other things,

preclinical findings made while clinical trials were underway or safety or efficacy observations made in preclinical studies and clinical

trials, including previously unreported adverse events.

preclinical and clinical data are often susceptible to varying interpretations and analyses and many companies that believed their product

candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA, EMA or comparable foreign

regulatory authority approval.

FDA, EMA or comparable foreign regulatory authorities may disagree with our regulatory plan for our product candidates.

have submitted IND applications for PF614 and nafamostat and completed a Phase 1 trial for each product candidate.

We have applied for

and received fast track designation for PF614.

However, fast track designation does not guaranty a faster development or regulatory review

or approval process and does not assure FDA approval.

We have received feedback from the FDA on requirements to achieve abuse deterrent

labeling claims for PF614.

We have submitted an IND for PF614-MPAR™ and have received feedback on required pre-clinical, manufacturing

and clinical studies that will be required for an NDA.

clinical trial results may not support approval of our product candidates.

The general approach for FDA approval of a new drug is dispositive

data from two or more well-controlled Phase 3 clinical trials of the product candidate in the relevant patient population.

Phase 3 clinical

trials typically involve a large number of patients, have significant costs, and take years to complete.

In addition, there is no assurance

that the endpoints and trial designs that we intend to use for our planned clinical trials, including those that we have developed based

on feedback from regulatory agencies or those that have been used for the approval of similar drugs, will be acceptable for future approvals.

For example, while we have designed our Phase 2 clinical trials of nafamostat for coronaviral infections after receiving input and feedback

from the FDA, there can be no assurance that the design of our planned clinical trials will be satisfactory to the FDA, the FDA will

not require us to modify our trials, these trials will enable us to conduct the required Phase 3 studies or other testing or that completing

these trials will result in regulatory approval.

topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become

available and are subject to audit and verification procedures that could result in material changes in the final data.

time to time, we may publish interim topline or preliminary data from our clinical trials.

Interim data from clinical trials that we

may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues

and more patient data become available.

Preliminary or topline data also remain subject to audit and verification procedures that may

result in the final data being materially different from the preliminary data we previously published.

As a result, interim and preliminary

data should be viewed with caution until the final data is available.

Adverse differences between preliminary or interim data and final

data could significantly harm our reputation and business prospects.

if we complete the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time-consuming and

uncertain and may prevent us from obtaining approvals for the commercialization of our product candidates.

product candidate we develop and the activities associated with such development and commercialization, including our design, testing,

manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale, and distribution, are subject

to comprehensive regulation by the FDA and other regulatory authorities in the United States and by comparable authorities in other countries.

Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate in a given jurisdiction.

We have not received approval to market any product candidates from regulatory authorities in any jurisdiction and it is possible that

none of the product candidates we are developing or may seek to develop in the future will ever obtain regulatory approval.

no experience in submitting and supporting the applications necessary to gain marketing approvals and we expect to rely on third-party

CROs or regulatory consultants to assist us in this process.

Securing regulatory approval requires the submission of extensive preclinical

and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the product

candidate’s safety and efficacy.

Securing regulatory approval also requires the submission of information about the product manufacturing

process to, and inspection of manufacturing facilities by, the relevant regulatory authority.

Any product candidates we develop may not

be effective, may be only moderately effective, or may prove to have undesirable or unintended side effects, toxicities or other characteristics

that may preclude us from obtaining marketing approval or prevent or limit commercial use.

process of obtaining marketing approvals, both in the United States and abroad, is expensive, may take many years if additional clinical

trials are required, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type,

complexity, and novelty of the product candidates involved.

Changes in marketing approval policies during the development period, changes

in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may

cause delays in the approval or rejection of an application.

The FDA and comparable authorities in other countries have substantial discretion

in the approval process and may refuse to accept any application or may decide that our data is insufficient for approval and requires

additional preclinical, clinical or other studies.

In addition, varying interpretations of the data obtained from preclinical and clinical

testing could delay, limit, or prevent marketing approval of a product candidate.

Any marketing approval that we may ultimately obtain

could be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.

example, during the product approval process, the FDA will determine whether a REMS plan is necessary to assure the safe use of the product.

All opioid analgesic products currently on the market in the United States are subject to a REMS.

A REMS may be required to include various

elements, such as a medication guide or patient package insert, a communication plan to educate health care providers of the risks, limitations

on who may prescribe or dispense the drug or other measures that the FDA deems necessary to assure the safe use of the drug.

the REMS plan must include a timetable to assess the strategy at eighteen months, three years and seven years after approval.

be required to develop a REMS for the product, or participate in a REMS with other manufacturers, or to develop a similar strategy as

required by a regulatory authority.

if approved, our contract manufacturers will need to obtain quota from DEA to manufacture sufficient quantities and maintain inventories

of product to be commercially distributed.

we experience delays in obtaining manufacturing approval or if we fail to obtain manufacturing approval of any product candidates we

may develop, the commercial prospects for those product candidates may be harmed, and our ability to generate revenues will be materially

product candidate for which we obtain marketing approval will be subject to ongoing enforcement of post-marketing requirements by regulatory

agencies, and we could be subject to substantial penalties, including withdrawal of our product from the market, if we fail to comply

with all regulatory requirements or if we experience unanticipated problems with our products, when and if any of them are approved.

product candidate for which we obtain marketing approval, as well as the manufacturing processes, post-approval clinical data, labeling,

advertising and promotional activities for such product, will be subject to continual requirements of and review by the FDA and other

regulatory authorities.

These requirements include, but are not limited to, restrictions governing promotion of an approved product,

submissions of safety and other post-marketing information and reports, registration and listing requirements, cGMP requirements relating

to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, and requirements regarding

drug distribution and the distribution of samples to physicians and recordkeeping.

FDA also may impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy

of a product, including the adoption and implementation of risk evaluation and mitigation strategies.

The FDA and other federal and state

agencies, including the Department of Justice, closely regulate compliance with all requirements governing drug products, including requirements

pertaining to marketing and promotion of drugs in accordance with the provisions of the approved labeling and manufacturing of products

in accordance with cGMP requirements.

For example, the FDA and other agencies actively enforce the laws and regulations prohibiting the

promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

Violations of such requirements may lead to investigations alleging violations of the Federal Food, Drug, and Cosmetic Act and other

statutes, including the False Claims Act and other federal and state healthcare fraud and abuse laws as well as state consumer protection

Our failure to comply with all regulatory requirements, and later discovery of previously unknown adverse events or other problems

with our products, manufacturers or manufacturing processes, may yield various results, including:

involving patients using our products;

on such products, manufacturers or manufacturing processes;

on the labeling or marketing of a product;

on distribution or use;

to conduct post-marketing studies or clinical trials;

or untitled letters;

or recall of the product from the market;

to approve pending applications or supplements to approved applications that Ensysce submits;

restitution or disgorgement of profits or revenues;

or withdrawal of marketing approvals;

to relationships with any potential collaborators;

press coverage and damage to our reputation;

to permit the import or export of our products;

or the imposition of civil or criminal penalties.

Non-compliance

by us or any future collaborator with regulatory requirements, including safety monitoring or pharmacovigilance, and with requirements

related to the development of our products can also result in significant financial penalties.

employees, independent contractors, principal investigators, consultants, commercial collaborators, service providers and other vendors

may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could

have an adverse effect on our results of operations.

are exposed to the risk that our employees and contractors, including principal investigators, consultants, commercial collaborators,

service providers and other vendors may engage in fraudulent or other illegal activity.

Misconduct by these parties could include intentional,

reckless and/or negligent conduct or other unauthorized activities that violate the laws and regulations of the FDA and other similar

regulatory bodies, including those laws that require the reporting of true, complete and accurate information to such regulatory bodies;

manufacturing standards;

federal and state healthcare fraud and abuse and health regulatory laws and other similar foreign fraudulent

misconduct laws;

or laws that require the true, complete and accurate reporting of financial information or data.

Activities subject

to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials, which could

result in regulatory sanctions and serious harm to our reputation.

It is not always possible to identify and deter third-party misconduct,

and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses

or in protecting Ensysce from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with

such laws or regulations.

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting

our rights, those actions could have a significant impact on our business and financial results, including the imposition of significant

civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and

other federal healthcare programs, reputational harm, diminished profits and future earnings, and curtailment of our operations, any

of which could adversely affect our ability to operate our business and our results of operations.

may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, the preclinical and clinical studies

necessary for development and commercialization of our product candidates.

obtain the requisite regulatory approvals to commercialize any of our product candidates, we must demonstrate through extensive preclinical

studies and clinical trials that our product candidates are safe and effective in humans.

We may experience delays in completing our

clinical trials or preclinical studies and initiating or completing additional clinical trials or preclinical studies, including as a

result of regulators not allowing or delay in allowing clinical trials to proceed under an IND, or not approving or delaying approval

for any clinical trial grant or similar approval that we need to initiate a clinical trial.

We may also experience numerous unforeseen

events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize the product

candidates we develop, including:

or institutional review boards, or IRBs, or other reviewing bodies may not authorize us or our investigators to commence a clinical

trial, or to conduct or continue a clinical trial at a prospective or specific trial site;

may not reach agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to

extensive negotiation and may vary significantly among different CROs and trial sites;

may experience challenges or delays in recruiting principal investigators or study sites to lead our clinical trials;

number of subjects or patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment

in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any

given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical

trials at a higher rate than we anticipates;

third-party contractors, including those manufacturing our product candidates or conducting clinical trials on our behalf, may fail

to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

may have to amend clinical trial protocols submitted to regulatory authorities or conduct additional studies to reflect changes in

regulatory requirements or guidance, which we may be required to resubmit to an IRB and regulatory authorities for re-examination;

or other reviewing bodies may find deficiencies with or subsequently find fault with the manufacturing processes or facilities of

third-party manufacturers with which we enter into agreement for clinical and commercial supplies, or the supply or quality of any

product candidate or other materials necessary to conduct clinical trials of our product candidates may be insufficient, inadequate

or not available at an acceptable cost, or we may experience interruptions in supply;

potential for approval policies or regulations of the FDA or the applicable foreign regulatory agencies to significantly change in

a manner rendering our clinical data insufficient for approval.

or IRBs of the institutions in which clinical trials are being conducted may suspend, limit or terminate a clinical trial, or data monitoring

committees may recommend that we suspend or terminate a clinical trial, due to a number of factors, including failure to conduct the

clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial

site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, safety issues or adverse side effects,

failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions, or lack of adequate

funding to continue the clinical trial.

Negative or inconclusive results from our clinical trials or preclinical studies could mandate

repeated or additional clinical trials and, to the extent we choose to conduct clinical trials in other indications, could result in

changes to or delays in clinical trials of our product candidates in such other indications.

We do not know whether any clinical trials

that we conduct will demonstrate adequate efficacy and safety to result in regulatory approval to market our product candidates for the

indications that we are pursuing.

If later-stage clinical trials do not produce favorable results, our ability to obtain regulatory approval

for our product candidates will be adversely impacted.

failure to successfully initiate and complete clinical trials and to demonstrate the efficacy and safety necessary to obtain regulatory

approval to market our product candidates would significantly harm its business.

The development costs of our product candidates will

also increase if we experience delays in testing or regulatory approvals and we may be required to obtain additional funds to complete

clinical trials.

We cannot assure stockholders that our clinical trials will begin as planned or be completed on schedule, if at all,

or that we will not need to restructure or otherwise modify our trials after they have begun.

Significant clinical trial delays could

also shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors

to bring products to market before we do and impair our ability to successfully commercialize our product candidates, which may harm

our business and results of operations.

In addition, many of the factors that cause, or lead to, delays of clinical trials may ultimately

lead to the denial of regulatory approval of our product candidates.

we encounters difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise

adversely affected.

timely completion of clinical trials in accordance with our protocols depends on, among other things, our ability to enroll a sufficient

number of patients who remain in the study until its conclusion.

may experience difficulties in patient enrollment in our clinical trials for a variety of factors, including:

effects of COVID-19 on our ability to recruit and retain patients, including as a result of potential heightened exposure to COVID-19,

prioritization of hospital resources toward the pandemic and unwillingness by patients to enroll or comply with clinical trial protocols

if quarantines or travel restrictions impede patient movement or interrupt healthcare services;

patient eligibility criteria defined in the protocol;

size of the patient population required for analysis of the trial’s primary endpoints;

proximity of patients to study sites;

design of the trial;

ability to recruit clinical trial investigators with the appropriate competencies and experience;

clinical trials and clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate

being studied in relation to other available therapies, including any new drugs that may be approved for the indications that we

are investigating;

ability to obtain and maintain patient consents;

risk that patients enrolled in clinical trials will drop out of the trials before completion.

addition, our clinical trials may compete with other clinical trials for product candidates that are in the same therapeutic areas as

our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who

might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.

Since the number

of qualified clinical investigators is limited, we may conduct some of our clinical trials at the same clinical trial sites that some

of our competitors use, which will reduce the number of patients who are available for our clinical trials in such clinical trial site.

Furthermore, if significant adverse events or other side effects are observed in any of our clinical trials, we may have difficulty recruiting

patients to our trials and patients may drop out of our trials.

inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or might require us to

abandon one or more clinical trials or our development efforts altogether.

Delays in patient enrollment may result in increased costs,

negatively affect the timing or outcome of the planned clinical trials, delay the product candidate development and approval process

and jeopardize our ability to seek and obtain the regulatory approval required to commence product sales and generate revenue, which

could cause our value to decline and limit our ability to obtain additional financing if needed.

track designation by the FDA for PF614 may not lead to a faster development or regulatory review or approval process and does not assure

FDA approval.

have obtained fast track designation for PF614 that will enable us to facilitate the development and expedite the review of PF614.

track designation does not ensure that PF614 will receive marketing approval or that approval will be granted within any particular timeframe.

As a result, we may not experience a faster development process, review or approval compared to conventional FDA procedures.

the FDA may withdraw fast track designation if it believes that the designation is no longer supported by data from our clinical development

Fast track designation does not guarantee that an NDA will obtain priority review designation.

If any of these events occur,

it could require us to conduct more extensive clinical trials and go through more extensive FDA review, which could substantially increase

expenses and delay the time for commercializing our products.

the FDA does not conclude that certain of our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval

pathway, or if the requirements for such product candidates under Section 505(b)(2) are not as we expect, the approval pathway for those

product candidates will likely take significantly longer, cost significantly more and entail significantly greater complications and

risks than anticipated, and in either case may not be successful.

may seek FDA approval through the Section 505(b)(2) regulatory pathway for our product candidate PF614.

Section 505(b)(2) of the Federal

Food, Drug and Cosmetic Act, or FDC Act, permits the submission of an NDA where at least some of the information required for approval

comes from studies that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference.

Section 505(b)(2), if applicable to us under the FDC Act, would allow an NDA we submit to FDA to rely in part on data in the public domain

or on the FDA’s prior conclusions regarding the safety and effectiveness of an approved product, or listed drug, which could expedite

the development program for our product candidates by potentially decreasing the amount of data that we would need to generate in order

to obtain FDA approval.

If the FDA does not agree that the 505(b)(2) regulatory pathway is appropriate or scientifically justified for

PF614, we may need to conduct additional preclinical and clinical trials, provide additional data and information, and meet additional

standards for regulatory approval.

For example, the FDA may not agree that we have provided a scientific bridge, through, for example,

comparative bioavailability data, to demonstrate that reliance on the prior findings of safety or efficacy for a listed drug is justified.

If this were to occur, the time and financial resources required to obtain FDA approval for this product candidate, and complications

and risks associated with this product candidate, would likely substantially increase.

We could need to obtain additional funding, which

could result in significant dilution to the ownership interests of our then existing stockholders to the extent we issue equity securities

or convertible debt.

We cannot assure you that we would be able to obtain such additional financing on terms acceptable to us, if at

Moreover, the inability to pursue the Section 505(b)(2) regulatory pathway would likely result in new competitive products reaching

the market more quickly than our product candidates, which would likely materially adversely impact of our competitive position and prospects.

Even if we are allowed to pursue the Section 505(b)(2) regulatory pathway, we cannot assure our stockholders that our product candidates

will receive the requisite approvals for commercialization.

addition, notwithstanding the approval of a number of products by the FDA under Section 505(b)(2) over the last few years, certain brand-name

pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505(b)(2).

If the FDA’s interpretation

of Section 505(b)(2) is successfully challenged, the FDA may change its 505(b)(2) policies and practices, which could delay or even prevent

the FDA from approving any NDA that we submit under Section 505(b)(2).

In addition, the pharmaceutical industry is highly competitive,

and Section 505(b)(2) NDAs are subject to special requirements designed to protect the patent rights of sponsors of previously approved

drugs that are referenced in a Section 505(b)(2) NDA.

These requirements may give rise to patent litigation and mandatory delays in approval

of our NDAs for up to 30 months or longer depending on the outcome of any litigation.

It is not uncommon for a manufacturer of an approved

product to file a citizen petition with the FDA seeking to delay approval of, or impose additional approval requirements for, pending

competing products.

If successful, such petitions can significantly delay, or even prevent, the approval of the new product.

the FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers and responds to the petition.

In addition, even if we are able to utilize the Section 505(b)(2) regulatory pathway, there is no guarantee this would ultimately lead

to accelerated product development or earlier approval.

even if our product candidates are approved under Section 505(b)(2), the approval may be subject to limitations on the indicated uses

for which the products may be marketed or to other conditions of approval, or may contain requirements for costly post-marketing testing

and surveillance to monitor the safety or efficacy of the products.

we submit a 505(b)(2) application that references a third-party product, we may be subject to a patent infringement suit and the approval

of our product may be delayed.

we submit a 505(b)(2) application that relies in whole or in FDA’s findings for a listed drug, we will be required to certify to

the FDA that either:

(1) there is no patent information listed in the FDA’s publication Approved Drug Products with Therapeutic

Equivalence Evaluations, which we refer to as the Orange Book, with respect to the listed drug;

(2) the patents listed in the Orange

Book have expired;

(3) the listed patents have not expired, but will expire on a particular date and approval is sought after patent

or (4) the listed patents are invalid or will not be infringed by the manufacture, use or sale of our product.

A certification

that our new drug will not infringe the Orange Book-listed patents for the applicable listed drug, or that such patents are invalid,

is called a paragraph IV certification.

If we submit a paragraph IV certification to the FDA, a notice of the paragraph IV certification

must also be sent to the NDA holder once our 505(b)(2) application is filed by the FDA.

The third party may then initiate a lawsuit to

defend the patents identified in the notice.

The filing of a patent infringement lawsuit within 45 days of receipt of the notice automatically

prevents the FDA from approving our 505(b)(2) application until the earliest of 30 months or the date on which the patent expires, the

lawsuit is settled, or the court reaches a decision in the infringement lawsuit in our favor.

If the third party does not file a patent

infringement lawsuit within the required 45-day period, our 505(b)(2) application will not be subject to the 30-month stay of FDA approval.

in methods of product candidate manufacturing or formulation may result in additional costs or delay.

product candidates proceed through preclinical studies to late-stage clinical trials towards potential approval and commercialization,

it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way

in an effort to optimize processes and results.

Such changes carry the risk that they will not achieve these intended objectives.

of these changes could cause our product candidates to perform differently and affect the results of planned clinical trials or other

future clinical trials conducted with the materials manufactured using altered processes.

Such changes may also require additional testing,

FDA notification or FDA approval.

This could delay or prevent completion of clinical trials, require conducting bridging clinical trials

or repeating one or more clinical trials, increase clinical trial costs, delay or prevent approval of our product candidates and jeopardize

our ability to commence sales and generate revenue.

product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval,

limit the commercial profile of an approved label, or result in significant negative consequences following regulatory approval, if obtained.

side effects caused by any of our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials

and could result in restrictive warnings or contraindication or the delay or denial of regulatory approval by the FDA or comparable foreign

regulatory authorities.

In our planned and future clinical trials of our product candidates, we may observe a less favorable safety and

tolerability profile than was observed in earlier-stage testing of these candidates.

side effects have been observed in our product candidates to date.

For example, in clinical trials of PF614, opioid side effects were

Many compounds that initially showed promise in clinical or earlier-stage testing are later found to cause undesirable or unexpected

side effects that prevented further development of the compound.

Results of future clinical trials of our product candidates could reveal

a high and unacceptable severity and prevalence of side effects or unexpected characteristics, despite a favorable tolerability profile

observed in earlier-stage testing.

If unacceptable side effects arise in the development of our product candidates, we, the FDA or comparable

foreign regulatory authorities, the IRBs, or independent ethics committees at the institutions in which its trials are conducted, could

suspend, limit or terminate our clinical trials, or the independent safety monitoring committee could recommend that we suspend, limit

or terminate our trials, or the FDA or comparable foreign regulatory authorities could order us to cease clinical trials or deny approval

of our product candidates for any or all targeted indications.

Treatment-emergent side effects that are deemed to be drug-related could

delay recruitment of clinical trial subjects or may cause subjects that enroll in our clinical trials to discontinue participation in

our clinical trials.

In addition, these side effects may not be appropriately recognized or managed by the treating medical staff.

may need to train medical personnel using our product candidates to understand the side effect profiles for our clinical trials and upon

any commercialization of any of our product candidates.

Inadequate training in recognizing or managing the potential side effects of

our product candidates could result in harm to patients that are administered our product candidates.

Any of these occurrences may adversely

affect our business, financial condition and prospects significantly.

clinical trials of our product candidates are conducted in carefully defined sets of patients who have agreed to enter into clinical

Consequently, it is possible that our clinical trials may indicate an apparent positive effect of a product candidate that is

greater than the actual positive effect, if any, or alternatively fail to identify undesirable side effects.

if any of our product candidates receives regulatory approval, we may fail to achieve the degree of market acceptance by physicians,

patients, third-party payors and others in the medical community necessary for commercial success, in which case we may not generate

significant revenues, if any, or become profitable.

have never commercialized a product, and even if any of our product candidates is approved by the appropriate regulatory authorities

for marketing and sale, it may nonetheless fail to achieve sufficient market acceptance by physicians, patients, third-party payors and

others in the medical community.

Many of the indications for our product candidates have well-established standards of care that physicians,

patients and payors are familiar with and, in some cases, are available generically.

Even if our product candidates are successful in

clinical trials, they may not be successful in displacing these current standards of care if we are unable to demonstrate superior efficacy,

safety, ease of administration and/or cost-effectiveness.

For example, physicians may be reluctant to take their patients off their current

medications and switch their treatment regimen to our product candidates.

Further, patients often acclimate to the treatment regimen

that they are currently taking and do not want to switch unless their physicians recommend switching products or they are required to

switch due to lack of coverage and adequate reimbursement.

Even if we are able to demonstrate our product candidates’ safety and

efficacy to the FDA and other regulators, safety or efficacy concerns in the medical community may hinder market acceptance.

have not commercialized any products and therefore we are not known in the medical community or to third-party payors.

Efforts to educate

the medical community and third-party payors on the benefits of our product candidates may require significant resources, including management

time and financial resources, and may not be successful.

If any product candidate is approved but does not achieve an adequate level

of market acceptance, we may not generate significant revenues and we may not become profitable.

The degree of market acceptance of our

product candidates, if approved for commercial sale, will depend on a number of factors, including:

efficacy and safety of the product;

potential advantages of the product compared to competitive therapies;

prevalence and severity of any side effects;

the product is designated under physician treatment guidelines as a first-, second- or third-line therapy;

ability, or the ability of any future collaborators, to offer the product for sale at competitive prices;

product’s convenience and ease of administration compared to alternative treatments;

willingness of the target patient population to try, and of physicians to prescribe, the product;

or warnings, including distribution or use restrictions contained in the product’s approved labeling;

strength of sales, marketing and distribution support;

in the standard of care for the targeted indications for the product;

and adequacy of coverage and reimbursement from government payors, managed care plans and other third-party payors.

failure by one or more of our product candidates that obtains regulatory approval to achieve market acceptance or commercial success

would adversely affect our business prospects.

liability lawsuits against us or any of our future collaborators could divert our resources and attention, cause us to incur substantial

liabilities and limit commercialization of our product candidates.

are exposed to potential product liability and professional indemnity risks that are inherent in the research, development, manufacturing,

marketing and use of pharmaceutical products.

Currently, we have no products that have been approved for commercial sale;

use of our product candidates by us and any collaborators in clinical trials, and the sale of these product candidates, if approved,

in the future, may expose us to liability claims.

We face an inherent risk of product liability lawsuits related to the use of our product

candidates in patients and will face an even greater risk if product candidates are approved by regulatory authorities and introduced

commercially.

Product liability claims may be brought against us by participants enrolled in our clinical trials, patients, health care

providers, pharmaceutical companies, our collaborators or others using, administering or selling any of our future approved products.

If we cannot successfully defend ourselves against any such claims, we may incur substantial liabilities or be required to limit commercialization

of our product candidates.

Regardless of the merits or eventual outcome, liability claims may result in:

demand for any of our future approved products;

to our reputation;

of clinical trial participants;

of clinical trial sites or entire trial programs;

litigation costs;

monetary awards to, or costly settlements with, patients or other claimants;

recalls or a change in the indications for which they may be used;

of management and scientific resources from our business operations;

inability to commercialize our product candidates.

the clinical trial process is designed to identify and assess potential side effects, clinical development does not always fully characterize

the safety and efficacy profile of a new medicine, and it is always possible that a drug, even after regulatory approval, may exhibit

unforeseen side effects.

If our product candidates were to cause adverse side effects during clinical trials or after approval, we may

be exposed to substantial liabilities.

Physicians and patients may not comply with any warnings that identify known potential adverse

effects and patients who should not use our product candidates.

If any of our product candidates are approved for commercial sale, we

will be highly dependent upon consumer perceptions of us and the safety and quality of our products.

We could be adversely affected if

we are subject to negative publicity associated with illness or other adverse effects resulting from patients’ use or misuse of

our products or any similar products distributed by other companies.

we maintain product liability insurance coverage consistent with industry norms, including clinical trial liability, this insurance may

not fully cover potential liabilities that we may incur.

The cost of any product liability litigation or other proceeding, even if resolved

in our favor, could be substantial.

We will need to increase our insurance coverage if we commercialize any product that receives regulatory

In addition, insurance coverage is becoming increasingly expensive.

If we are unable to maintain sufficient insurance coverage

at an acceptable cost or to otherwise protect against potential product liability claims, it could prevent or inhibit the development

and commercial production and sale of our product candidates, which could harm our business, financial condition, results of operations

and prospects.

is a Schedule II controlled substance under the federal CSA, and any failure to comply with the CSA or its state equivalents would have

a negative impact on our business.

the ingredient in PF614, is classified as a Schedule II controlled substance under the Controlled Substances Act, or CSA and regulations

promulgated by the DEA.

The law and regulations classify substances as Schedule I, II, III, IV or V controlled substances, with Schedule

I controlled substances considered to present the highest risk of substance abuse and Schedule V controlled substances the lowest risk.

Scheduled controlled substances are subject to DEA regulations relating to supply, procurement, manufacturing, storage, shipment, sale,

use, distribution and physician prescription procedures.

For example, Schedule II controlled substances are subject to various restrictions,

including, but not limited to, mandatory written prescriptions and the prohibition of refills.

In addition to federal scheduling, oxycodone

is subject to state-controlled substance laws and regulations, and in some cases, with additional requirements than those imposed by

federal law and regulations.

Though state controlled substances laws often mirror federal law, because the states are separate jurisdictions,

they may schedule products separately.

must register annually with the DEA to manufacture, distribute, dispense, import, export and conduct research using controlled substances.

In addition, the DEA requires entities handling controlled substances to maintain complete and accurate records and file reports, including

reports related to thefts or losses of any controlled substances, and to obtain authorization to destroy any controlled substances.

entities also must follow specific labeling and packaging requirements.

Facilities must maintain appropriate security measures to control

against diversion of controlled substances.

Security requirements vary by controlled substance schedule with the most stringent requirements

applying to Schedule I and Schedule II controlled substances.

Required security measures include background checks on employees and physical

control of inventory through measures such as vaults and inventory reconciliations.

contract manufacturing organizations, or CMOs, who manufacture and distribute PF614 are required to be registered with DEA and relevant

state authorities and comply with all security, recordkeeping and reporting requirements.

Manufacturers and distributors are subject

to routine inspections and audits by the DEA related to compliance with security, recordkeeping and reporting requirements.

maintain the required registrations or to comply and follow these requirements can lead to significant civil and/or criminal penalties

and possibly even lead to a revocation of a DEA registration to manufacture or distribute such products.

Manufacturing

of oxycodone is subject to annual quotas that limit the amount of API and dosage forms that can be produced in any given year;

of our CMOs to obtain the necessary manufacturing and/or procurement quota would have a negative impact on our business.

CSA and DEA regulations establish an annual aggregate production quota for Schedule I and II controlled substances, including oxycodone

and other narcotic drugs.

In addition, each manufacturer of active pharmaceutical ingredient, or API or dosage forms must obtain an individual

manufacturing or production quota that limits the amount of product that a company can produce and/or distribute in a given year.

DEA allocates manufacturing quota issued to companies so as to not exceed the aggregate quota established for a given year.

companies must demonstrate the need for procurement quota based on expected demand and sales of the controlled substance the DEA requires

the submission of substantial evidence of expected legitimate medical and scientific need for the drug product before assigning its aggregate

production quotas, or manufacturing and procurement quotas to manufacturers.

The DEA has decreased the aggregate quota for certain narcotic

drugs, including oxycodone over the last five years.

Also, in October 2018, Congress passed the SUPPORT Act which requires the DEA to

consider potential diversion in establishing quotas for narcotic drugs which could lead to continued decreases in quota available to

API manufacturers and dosage form manufacturers of these substances.

future years, we may need greater amounts of controlled substances that are subject to the DEA’s quota system to sustain our development

We may also need significantly greater amounts to implement our commercialization plans if the FDA approves our proposed formulations.

If any of our manufacturers of API or dosage forms are unable to obtain the necessary annual quota to meet the research and development

or commercial demand for PF614, our business would be negatively impacted.

Any delay or refusal by the DEA in establishing a quota, a

reduction in quota, or a failure to increase quota over time could delay or stop the clinical development or commercial sale of some

of our products or product candidates.

This could have a material adverse effect on our business, results of operations, financial condition

and prospects.

drug abuse, especially involving opioids, has been declared a national epidemic causing limits in prescribing and adverse publicity for

the entire class of drugs.

and state authorities, including the HHS, the Centers of Disease Control and Prevention and the DEA have identified opioid and narcotic

prescription drug abuse as a national epidemic.

Products containing narcotic controlled substances may generate public controversy.

a result, these products may have their marketing approvals withdrawn.

Also, federal and state authorities have recommended limitations

on prescribing and dispensing of such products.

Regulatory action, political pressures and adverse publicity could lead to delays in,

and increased expenses for, and limit or restrict, the introduction and marketing of our product candidates.

Related to our Intellectual Property

we are unable to obtain and maintain patent protection for our products candidates, or if the scope of the patent protection obtained

is not sufficiently broad, our competitors could develop and commercialize product candidates that are similar or identical to our product

candidates, and our ability to successfully commercialize our product candidates may be adversely affected.

commercial success will depend, in part, on our ability to obtain and maintain patent protection in the United States and other countries

with significant commercial markets with respect to our product candidates.

We seek to protect our proprietary position by filing patent

applications in the United States and abroad related to our product candidates that are important to our business, as appropriate.

cannot be certain that patents will be issued or granted with respect to applications that are currently pending or that we may apply

for in the future with respect to one or more of our product candidates, or that issued or granted patents will not later be found to

be invalid and/or unenforceable.

patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent

applications at a reasonable cost or in a timely manner.

It is also possible that we will fail to identify patentable aspects of our

research and development output before it is too late to obtain patent protection.

Although we may enter into non-disclosure and confidentiality

agreements with parties who have access to patentable aspects of our research and development output, such as our employees, distribution

partners, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such output before

a patent application is filed, thereby jeopardizing our ability to seek patent protection.

currently owns patents in the United States and other countries that are directed to PF614, PF614-MPAR™ and uses thereof that would

expire between 2030 and 2032, subject to any potential patent term extension that may be available in a jurisdiction.

We also own a pending

provisional application directed to oral formulations of PF614-MPAR™, which if pursued and issued, would expire in 2042, subject

to any potential patent term adjustment or extension that may be available in a jurisdiction.

currently own a patent in Europe that is directed to the use of nafamostat for treating respiratory diseases, which will expire in 2028,

subject to any potential patent term extension that might be available.

We do not own or license any pending patent applications or issued

patents outside of Europe for this use.

We also owns pending provisional applications directed to methods of treating COVID-19 with orally-administered

nafamostat and oral formulations of nafamostat, which if pursued and issued, would expire in 2041 and 2042, respectively, subject to

any potential patent term adjustment or extension that may be available in a jurisdiction.

Currently, we do not have any issued patent

or pending application directed to methods of treating infections caused by coronaviruses, including COVID-19, with inhaled nafamostat,

but intends to file patent applications upon development of a suitable inhalation formulation of nafamostat.

patent position of pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent

years been the subject of much litigation.

As a result, the issuance, scope, validity, enforceability and commercial value of our patent

rights are highly uncertain.

Our pending and future patent applications may not result in patents being issued, and even if issued, the

patents may not meaningfully protect our product candidates, effectively prevent competitors and third parties from commercializing competitive

products or otherwise provide us with any competitive advantage.

Even if the patent applications that we own or licenses issue as patents,

they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise

provide us with any competitive advantage.

For product candidates for which we do not hold or do not obtain composition of matter patents,

competitors who obtain the requisite regulatory approval can offer products with the same composition as our product candidate so long

as the competitors do not infringe any method patents that we may hold.

Method patents protect the product when used or sold for the

specified method.

However, this type of patent protection can be more difficult to enforce and does not limit a competitor from making

and marketing a product that is identical to our product candidate that is either labeled or marketed for an indication that is outside

of the patented method, or for which there is a substantial use in commerce outside the patented method.

Our competitors or other third

parties may be able to circumvent our patents by developing similar or alternative products in a non-infringing manner.

in either the patent laws, implementing regulations or interpretation of the patent laws in the United States and other countries may

also diminish the value of our patents or narrow the scope of our patent protection.

The laws of foreign countries may not protect our

rights to the same extent as the laws of the United States, and many companies have encountered significant difficulties in protecting

and defending such rights in foreign jurisdictions.

cannot be certain that our patents and patent rights will be effective in protecting our product candidates and technologies.

to protect such assets may have a material adverse effect on our business, operations, financial condition and prospects.

may face litigation from third parties claiming that our products or business infringe, misappropriate, or otherwise violate their intellectual

property rights, or seeking to challenge the validity of our patents.

future success is also dependent in part on the strength of our intellectual property, trade secrets and know-how, which have been developed

from years of research and development, and on our ability, and the ability of our future collaborators, to develop, manufacture, market

and sell our product candidates, if approved, and use our proprietary technologies without alleged or actual infringement, misappropriation

or other violation of the patents and other intellectual property rights of third parties.

may be exposed to, or be threatened with, adversarial proceedings or additional future litigation by third parties regarding intellectual

property rights with respect to our current and any future product candidates and technology, including interference or derivation proceedings,

post grant review and inter partes review before the United States Patent and Trademark Office, or USPTO, or similar adversarial proceedings

or litigation in other jurisdictions seeking to challenge the validity of our intellectual property rights, claiming that we have misappropriated

the trade secrets of others, or claiming that our technologies, products or activities infringe the intellectual property rights of others.

have been many lawsuits and other proceedings involving patent and other intellectual property rights in the biotechnology and pharmaceutical

industries, including patent infringement lawsuits, interferences, oppositions, post grant review, inter partes review and reexamination

proceedings before the USPTO, and corresponding foreign patent offices.

Numerous United States and foreign issued patents and pending

patent applications, which are owned by third parties, exist in the fields in which we are developing product candidates.

As the biotechnology

and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims

of infringement of the intellectual property rights of third parties.

are aware of patents owned by third parties, including potential competitors, that are directed to compositions comprising a chemically

modified opioid, such as oxycodone, which decreases the potential of the opioid to be abused or cause overdose and related methods of

Third parties, including potential competitors, may assert infringement claims against us based on existing patents or patents that

may be granted in the future including, perhaps, the aforementioned patents, regardless of their merit.

There is a risk that third parties

may choose to engage in litigation with us to enforce or to otherwise assert their patent rights against us.

if we believe such claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable

and infringed, and the holders of any such patents may be able to block our ability to commercialize such product candidate unless we

obtain a license under the applicable patents, or until such patents expire or are finally determined to be invalid or unenforceable.

Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of our compositions, formulations,

or methods of treatment, prevention or use, the holders of any such patents may be able to block our ability to develop and commercialize

the applicable product candidate unless we obtain a license or until such patent expires or is finally determined to be invalid or unenforceable.

In either case, such a license may not be available on commercially reasonable terms, or at all.

Even if we were able to obtain a license,

it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.

Some claimants may have substantially

greater resources than we do and may be able to sustain the costs of complex intellectual property litigation to a greater degree and

for longer periods of time than we could.

In addition, patent holding companies that focus solely on extracting royalties and settlements

by enforcing patent rights may target us.

even in the absence of litigation, we may need to obtain licenses from third parties to advance our research or to enable the commercialization

of our product candidates.

We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all.

an event, we would be unable to further practice our technologies or develop and commercialize any of our product candidates at issue,

which could harm our business and financial condition significantly.

making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop

and commercialize one or more of our product candidates, if approved.

Defense of these claims, regardless of their merit, would involve

substantial litigation expense and would be a substantial diversion of management and employee time and resources from our business.

Third parties making such claims may have the ability to dedicate substantially greater resources to these legal actions than us or our

licensors or collaborators can.

In the event of a successful claim of infringement, misappropriation or other violation against us, we

may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign

our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary

litigation and other proceedings may also absorb significant management time.

The cost to us of any patent litigation or other proceeding,

even if resolved in our favor, could be substantial.

During the course of any patent or other intellectual property litigation or other

proceeding, there could be public announcements of the results of hearings, rulings on motions, and other interim proceedings or developments

and if securities analysts or investors regard these announcements as negative, the perceived value of our product candidates or intellectual

property could be diminished.

Accordingly, the market price of our common stock may decline.

Uncertainties resulting from the initiation

and continuation of patent litigation or other proceedings could have a material adverse effect on our business, ability to compete in

the marketplace, financial condition, results of operations and growth prospects.

may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming

and unsuccessful.

may infringe, misappropriate or otherwise violate our patents, trademarks, copyrights or other intellectual property, or those of our

To counter infringement, misappropriation, unauthorized use or other violations, we may be required to file legal claims,

which can be expensive and time consuming and divert the time and attention of our management and scientific personnel.

can be no assurances that we will be successful with respect to any litigation matters which may arise in the ordinary course of our

Such a failure may have a material impact on our business, results of operations and financial condition in the future.

may not be able to prevent, alone or with any future licensors, infringement, misappropriation or other violations of our intellectual

property rights, particularly in countries where the laws may not protect those rights as fully as in the United States.

Any claims we

assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents.

In addition, in a patent infringement proceeding, there is a risk that a court will decide that a patent of ours is invalid or unenforceable,

in whole or in part, and that we do not have the right to stop the other party from using the invention at issue.

There is also a risk

that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do

not have the right to stop the other party from using the invention at issue on the grounds that our patents do not cover the invention.

An adverse outcome in a litigation or proceeding involving our patents could limit our ability to assert our patents against those parties

or other competitors, and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive

Any of these occurrences could adversely affect our competitive business position, business prospects and financial condition.

Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable,

or that the party against whom we have asserted trademark infringement has superior rights to the marks in question.

In this case, we

could ultimately be forced to cease use of such trademarks.

any infringement, misappropriation or other intellectual property litigation, any award of monetary damages we receive may not be commercially

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there

is a risk that some of our confidential information could be compromised by disclosure during litigation.

Moreover, there can be no assurance

that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years

before they are concluded.

Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the

attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings.

expiration or loss of patent protection may adversely affect our future revenues and operating earnings.

rely on patent, trademark, trade secret and other intellectual property protection in the discovery, development, manufacturing and sale

of our product candidates.

In particular, patent protection is important in the development and eventual commercialization of our product

Patents covering our product candidates normally provide market exclusivity, which is important in order to improve the probability

that our product candidates are able to become profitable.

of our patents relating to PF614 will expire in the next nine years.

In addition, certain of our patents relating to the use of nafamostat

for treating respiratory diseases will expire in the next seven years.

While we are seeking additional patent coverage which may protect

the technology underlying these patents, there can be no assurances that such additional patent protection will be granted, or if granted,

that these patents will not be infringed upon or otherwise held enforceable.

Even if we are successful in obtaining a patent, patents

have a limited lifespan.

In the United States, the natural expiration of a utility patent is generally 20 years after it is filed.

extensions may be available;

however, the life of a patent, and the protection it affords, is limited.

Without patent protection of our

product candidates, we may be open to competition from generic versions of such methods and compositions.

we do not obtain protection under the Hatch-Waxman Amendments by extending the patent term, our business may be harmed.

commercial success will largely depend on our ability to obtain and maintain patent and other intellectual property in the United States

and other countries with respect to our product candidates.

Given the amount of time required for the development, testing and regulatory

review of new product candidates, patents protecting our product candidates might expire before or shortly after such candidates begin

to be commercialized.

We expect to seek extensions of patent terms in the United States and, if available, in other countries where we

are prosecuting patents.

upon the timing, duration and specifics of FDA marketing approval of our product candidates, one or more of our United States patents

may be eligible for limited patent term extension, or PTE, under the Drug Price Competition and Patent Term Restoration Act of 1984,

referred to as the Hatch-Waxman Amendments.

The Hatch-Waxman Amendments permit a patent restoration term of up to five years beyond the

normal expiration of the patent as compensation for patent term lost during development and the FDA regulatory review process, which

is limited to the approved indication (and potentially additional indications approved during the period of extension) covered by the

This extension is limited to only one patent that covers the approved product, the approved use of the product, or a method of

manufacturing the product.

However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent

regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to

grant extensions to our patents, or may grant more limited extensions than we request.

We may not be granted an extension because of,

for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing

to satisfy applicable requirements.

Moreover, the applicable time-period or the scope of patent protection afforded could be less than

Even if we are able to obtain an extension, the patent term may still expire before or shortly after we receive FDA marketing

If we are unable to extend the expiration date of our existing patents or obtain new patents with longer expiry dates, our

competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical

data to obtain approval of competing products following our patent expiration and launch their product earlier than might otherwise be

may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business.

prosecuting and defending patents covering our product candidates in all countries throughout the world would be prohibitively expensive,

and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.

In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws

in the United States.

Further, licensing partners may not prosecute patents in certain jurisdictions in which we may obtain commercial

rights, thereby precluding the possibility of later obtaining patent protection in these countries.

Consequently, we may not be able

to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products

made using our inventions in and into the United States or other jurisdictions.

Competitors may use our technologies in jurisdictions

where we have not obtained patent protection to develop our own products and may also export infringing products to territories where

we have patent protection, but enforcement is not as strong as that in the United States.

These products may compete with our product

candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets

and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for

us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.

to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts

and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our

patent applications at risk of not issuing, and could provoke third parties to assert claims against us.

We may not prevail in any lawsuits

that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful.

Accordingly, our efforts to enforce

our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual

property that we develop or license.

Furthermore, while we intend to protect our intellectual property rights in our expected significant

markets, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market

our product candidates.

Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate, which

may have an adverse effect on our ability to successfully commercialize our product candidates in all of our expected significant foreign

Additionally,

the requirements for patentability may differ in certain countries, particularly developing countries.

For example, unlike other countries,

China has a heightened requirement for patentability, and specifically requires a detailed description of medical uses of a claimed drug.

In India, unlike the United States, there is no link between regulatory approval of a drug and our patent status.

Furthermore, generic

or biosimilar drug manufacturers or other competitors may challenge the scope, validity or enforceability of us or our licensors’

patents, requiring us or our licensees or any future licensors to engage in complex, lengthy and costly litigation or other proceedings.

In addition, certain countries in Europe and developing countries, including China and India, have compulsory licensing laws under which

a patent owner may be compelled to grant licenses to third parties.

In those countries, We and our licensees or any future licensors

may have limited remedies if patents are infringed or if we or our licensees or any future licensors are compelled to grant a license

to a third party, which could materially diminish the value of those patents.

This could limit our potential revenue opportunities.

we and our licensees’ or any future licensors’ efforts to enforce intellectual property rights around the world may be inadequate

to obtain a significant commercial advantage from the intellectual property that we own or license.

in United States’ patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general,

thereby impairing our ability to protect our products.

United States has enacted and implemented wide-ranging patent reform legislation, and that legislation could increase the uncertainties

and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.

On September 16,

2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law.

The Leahy-Smith Act includes a number of significant

changes to United States patent law.

These include provisions that affect the way patent applications are prosecuted and may also affect

patent litigation.

The USPTO recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many

of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became

effective on March 16, 2013.

Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our

However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution

of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on

our business and financial condition.

In addition, patent reform legislation may pass in the future that could lead to additional uncertainties

and increased costs surrounding the prosecution, enforcement and defense of our patents and pending patent applications.

United States Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available

in certain circumstances or weakening the rights of patent owners in certain situations.

For example, the Federal Circuit has recently

expanded its doctrine of obviousness-type double patenting by holding that a later-granted patent (which may expire earlier) can, in

some circumstances, render an earlier-granted patent invalid under the doctrine unless a terminal disclaimer is timely filed in the earlier

granted patent over the later-granted patent.

While issued patents are generally granted a term of 20 years from the earliest claimed

non-provisional filing date, in certain instances, patent term can be adjusted to recapture a portion of delay by the USPTO in examining

the patent application (patent term adjustment).

The expansion of this doctrine could result in the loss of patent term adjustment and

ultimately result in the loss of patent term.

In addition to increasing uncertainty with regard to our ability to obtain patents in the

future, this combination of events has created uncertainty with respect to the value of patents, once obtained.

Depending on actions

by the United States Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable

ways that would weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain in the future.

Similarly, changes in patent law and regulations in other countries or jurisdictions or changes in the governmental bodies that enforce

them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents

or to enforce patents that we may obtain in the future.

We cannot predict future changes in the interpretation of patent laws or changes

to patent laws that might be enacted into law by United States and foreign legislative bodies.

Those changes may materially affect our

patents or patent applications and our ability to obtain additional patent protection in the future.

United States federal government retains certain rights in inventions produced with its financial assistance under the Bayh-Dole Act.

The federal government retains a “nonexclusive, nontransferable, irrevocable, paid-up license” for its own benefit.

The Bayh-Dole

Act also provides federal agencies with “march-in rights.” March-in rights allow the government, in specified circumstances,

to require the contractor or successors in title to the patent to grant a “nonexclusive, partially exclusive, or exclusive license”

to a “responsible applicant or applicants.” If the patent owner refuses to do so, the government may grant the license itself.

Having a mandatory non-exclusive license grant may diminish the value of our patents as well as making it more difficult to protect our

product candidates.

may be subject to claims that we or our employees, consultants, contractors or advisors have infringed, misappropriated or otherwise

violated the intellectual property of a third party, or claiming ownership of what we regard as our own intellectual property.

of the contributors to our intellectual property, including patents and applications, were previously employed at universities or other

biotechnology or pharmaceutical companies, including our competitors or potential competitors.

Although we try to ensure that our employees

do not use the intellectual property and other proprietary information, know-how or trade secrets of others in their work for us, we

may be subject to claims that we or these employees have used or disclosed such intellectual property or other proprietary information.

Litigation may be necessary to defend against these claims.

addition, while we typically require our employees, consultants and contractors who may be involved in the development of intellectual

property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with

each party who in fact develops intellectual property that we regard as our own.

For example, we have not obtained assignments for certain

patent applications relating to abuse-resistant amphetamines.

To the extent that we fail to obtain such assignments, such assignments

do not contain a self-executing assignment of intellectual property rights or such assignments are breached, we may be forced to bring

claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual

If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual

property rights or personnel.

Such intellectual property rights could be awarded to a third party, and we could be required to obtain

a license from such third party to commercialize our technology or products.

Such a license may not be available on commercially reasonable

terms or at all.

Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs

and be a distraction to our management and scientific personnel.

and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements

imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

maintenance and annuity fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over

the lifetime of the patent.

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural,

documentary, fee payment and other similar provisions during the patent application process.

While an inadvertent lapse can in many cases

be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance

can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the

relevant jurisdiction.

Non-compliance events that could result in abandonment or lapse of a patent or patent application include failure

to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal

If we or our future collaborators fail to maintain the patents and patent applications covering our products, our competitors

might be able to enter the market, which would have a material adverse effect on our business, financial conditions, results of operations

and growth prospects.

reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them

or that our trade secrets will be misappropriated or disclosed and if we are unable to protect the confidentiality of our trade secrets,

the value of our technology could be materially adversely affected and our business would be harmed.

addition to seeking patents for some of our technology and products, we also rely on trade secrets, including unpatented know-how, technology

and other proprietary information, in seeking to develop and maintain a competitive position.

Because we expect to rely on third parties

to manufacture our product candidates and we expect to collaborate with third parties on the development of our product candidates, we

must, at times, share trade secrets with them.

We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality

agreements with parties who have access to them, such as our employees, consultants, independent contractors, advisors, corporate collaborators,

outside scientific collaborators, contract manufacturers, suppliers and other third parties.

We also enter into confidentiality and invention

or patent assignment agreements with employees and certain consultants.

We also seeks to preserve the integrity and confidentiality of

our data, trade secrets and know-how by maintaining physical security of our premises and physical and electronic security of our information

technology systems.

Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to

protect our proprietary technologies will be effective.

our inception, we have sought to contract with manufacturers to supply commercial quantities of pharmaceutical formulations and products.

As a result, we have disclosed, under confidentiality agreements, various aspects of our technology with potential manufacturers and

We believe that these disclosures, while necessary for our business, may have resulted and may result in the attempt by potential

manufacturers and suppliers to improperly assert ownership claims to our technology in an attempt to gain an advantage in negotiating

manufacturing and supplier rights.

cannot guarantee that our trade secrets and other proprietary and confidential information will not be disclosed or that competitors

will not otherwise gain access to our trade secrets.

Any party with whom we have executed such an agreement may breach that agreement

and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.

Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and

the outcome is unpredictable.

In addition, some courts both within and outside the United States may be less willing or unwilling to

protect trade secrets.

Further, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor,

we would have no right to prevent such third party, or those to whom they communicate such technology or information, from using that

technology or information to compete with us.

If any of our trade secrets were to be disclosed to or independently developed by a competitor,

our business and competitive position could be harmed.

secrets and know-how can be difficult to protect as trade secrets and know-how will over time be disseminated within the industry through

independent development, the publication of journal articles, and the movement of personnel skilled in the art from company to company

or academic to industry scientific positions.

If we fail to prevent material disclosure of the know-how, trade secrets and other intellectual

property related to our technologies to third parties, we will not be able to establish or maintain a competitive advantage in our market,

which could materially adversely affect our business, results of operations and financial condition.

Even if we are able to adequately

protect our trade secrets and proprietary information, our trade secrets could otherwise become known or could be independently discovered

by our competitors.

For example, we are aware that certain of our former employees founded Elysium Therapeutics, which appears to be

developing orally administered abuse deterrent opioids.

Additionally, competitors could purchase our products and attempt to replicate

some or all of the competitive advantages we derive from our development efforts, design around our protected technology or develop their

own competitive technologies that fall outside of our intellectual property rights.

If any of our trade secrets were to be lawfully obtained

or independently developed by a competitor, in the absence of patent protection, we would have no right to prevent them, or those to

whom they communicate, from using that technology or information to compete with us.

may not be able to prevent misappropriation of our intellectual property, trade secrets or confidential information, particularly in

countries where the laws may not protect those rights as fully as in the United States.

Furthermore, because of the substantial amount

of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information

could be compromised by disclosure during this type of litigation.

may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.

may be subject to claims that former employees, collaborators or other third parties have an ownership interest in the patents and intellectual

property that we own or that we may own or license in the future.

While it is our policy to require our employees and contractors who

may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may

be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own;

our licensors may face similar obstacles.

In addition, we have not updated the records in the patent offices to reflect our ownership

of our patent filings relating to PF614 and other technologies.

Failure to update such ownership may result in an innocent purchaser

potentially acquiring rights in such patents that are adverse to our interests.

Furthermore, as noted above, we have not obtained assignments

for certain patent applications relating to abuse-resistant amphetamines.

We could be subject to ownership disputes arising, for example,

from conflicting obligations of consultants or others who are involved in developing our product candidates.

Litigation may be necessary

to defend against any claims challenging inventorship or ownership.

If we fail in defending any such claims, we may have to pay monetary

damages and may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property, which

could adversely impact our business, results of operations and financial condition.

may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent,

which might adversely affect our ability to develop and market our product candidates.

the extent undertaken, we cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents,

the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified

each and every third-party patent and pending application in the United States and abroad that is or may be relevant to or necessary

for the commercialization of our product candidates in any jurisdiction.

Patent applications in the United States and elsewhere are not

published until approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being

commonly referred to as the priority date.

In addition, certain United States patent applications can remain confidential until patents

Therefore, patent applications covering our products could have been filed by others without our knowledge.

Additionally, pending

patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our product

candidates or the use of our product candidates.

scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution

Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect, which may negatively

impact our ability to market our product candidates.

We may incorrectly determine that our product candidates are not covered by a third-party

patent or may incorrectly predict whether a third party’s pending application will issue with claims of relevant scope.

Our determination

of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, and our failure to identify

and correctly interpret relevant patents may negatively impact our ability to develop and market our product candidates.

we fail to identify and correctly interpret relevant patents, we may be subject to infringement claims.

We cannot guarantee that we will

be able to successfully settle or otherwise resolve such infringement claims.

If we fail in any such dispute, in addition to being forced

to pay damages, we may be temporarily or permanently prohibited from commercializing any of our product candidates that are held to be

We might, if possible, also be forced to redesign product candidates or services so that we no longer infringe the third-party

intellectual property rights.

Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial

and management resources that we would otherwise be able to devote to our business.

intellectual property agreements with third parties may be subject to disagreements over contract interpretation, which could narrow

the scope of our rights to the relevant intellectual property or technology or increase our financial or other obligations to our licensors.

provisions in our intellectual property agreements may be susceptible to multiple interpretations.

Disputes may arise between us and

any of these counterparties regarding intellectual property rights that are subject to such agreements, including, but not limited to:

scope of rights granted under the agreement and other interpretation-related issues;

and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the

right to sublicense patent and other rights to third parties;

diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of

our product candidates, and what activities satisfy those diligence obligations;

ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and

our partners;

right to transfer or assign our license;

effects of termination.

resolution of any contract interpretation disagreement that may arise could affect the scope of our rights to the relevant intellectual

property or technology, or affect financial or other obligations under the relevant agreement, either of which could have a material

adverse effect on our business, financial condition, results of operations and prospects.

we fail to comply with our obligations under any agreements, we may be required to pay damages and could lose intellectual property rights

that are necessary or useful for developing and protecting our product candidates.

have acquired all intellectual property rights from Signature and Mucokinetica, Ltd.

(“ Mucokinetica ”), with the exception

of our pending application directed to the use of orally administered nafamostat to treat coronaviruses.

Any future collaboration agreements

or license agreements we enter into are likely to impose various development, commercialization, funding, milestone, royalty, diligence,

sublicensing, insurance, patent prosecution and enforcement or other obligations on us.

If we breach any such material obligations, or

use the intellectual property licensed to us in an unauthorized manner, we may be required to pay damages and the licensor may have the

right to terminate the license, which could result in us being unable to develop, manufacture and sell products that are covered by the

licensed technology, or having to negotiate new or reinstated licenses on less favorable terms, or enable a competitor to gain access

to the licensed technology.

property rights do not necessarily address all potential threats to our business.

granted, patents may remain open to opposition, interference, re-examination, post-grant review, inter partes review, nullification or

derivation action in court or before patent offices or similar proceedings for a given period after allowance or grant, during which

time third parties can raise objections against such grant.

In the course of such proceedings, which may continue for a protracted period

of time, the patent owner may be compelled to limit the scope of the allowed or granted claims thus attacked, or may lose the allowed

or granted claims altogether.

In addition, the degree of future protection afforded by our intellectual property rights is uncertain

because even granted intellectual property rights have limitations, and may not adequately protect our business.

The following examples

are illustrative:

may be able to make formulations that are similar to our product candidates or other formulations but that are not covered by the

claims of our patent rights;

patents of third parties may have an adverse effect on our business;

or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued

patent or pending patent application that we own;

or any future strategic partners might not have been the first to file patent applications covering certain of our inventions;

may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual

property rights;

is possible that our pending patent applications will not lead to issued patents;

patents that we may own or that we exclusively license in the future may not provide us with any competitive advantage, or may be

held invalid or unenforceable, as a result of legal challenges by our competitors;

competitors might conduct research and development activities in countries where we do not have patent rights and then use the information

learned from such activities to develop competitive products for sale in our major commercial markets;

parties performing manufacturing or testing for us using our product candidates or technologies could use the intellectual property

of others without obtaining a proper license;

may not develop additional proprietary technologies that are patentable;

patents of others may have an adverse effect on our business.

any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and

validity, scope and enforceability of any patents listed in the Orange Book that cover our product candidates can be challenged by third

one of our product candidates is approved by the FDA, one or more third parties may challenge the current patents, or patents that may

issue in the future, within our portfolio which could result in the invalidation of, or render unenforceable, some or all of the relevant

patent claims or a finding of non-infringement.

For example, if a third party submits an application under Section 505(b)(2) or an abbreviated

new drug application, or ANDA, for a generic drug containing any of our product candidates, and relies in whole or in part on studies

conducted by or for us, the third party will be required to certify to the FDA that either:

(1) there is no patent information listed

in the Orange Book with respect to our NDA for the applicable approved drug candidate;

(2) the patents listed in the Orange Book have

(3) the listed patents have not expired, but will expire on a particular date and approval is sought after patent expiration;

or (4) the listed patents are invalid or will not be infringed by the manufacture, use or sale of the third party’s generic drug.

A certification that the new drug will not infringe the Orange Book-listed patents for the applicable approved drug candidate, or that

such patents are invalid, is called a paragraph IV certification.

If the third party submits a paragraph IV certification to the FDA,

a notice of the paragraph IV certification must also be sent to us once the third party’s ANDA is accepted for filing by the FDA.

We may then initiate a lawsuit to defend the patents identified in the notice.

The filing of a patent infringement lawsuit within 45

days of receipt of the notice automatically prevents the FDA from approving the third party’s ANDA until the earliest of 30 months

or the date on which the patent expires, the lawsuit is settled, or the court reaches a decision in the infringement lawsuit in favor

of the third party.

If we do not file a patent infringement lawsuit within the required 45-day period, the third party’s ANDA will

not be subject to the 30-month stay of FDA approval.

a third party may challenge the current patents, or patents that may be issued in the future, within our portfolio which could result

in the invalidation of some or all of the patents that might otherwise be eligible for listing in the Orange Book for one of our products.

If a third party successfully challenges all of the patents that might otherwise be eligible for listing in the Orange Book for one of

our products, we will not be entitled to the 30-month stay of FDA approval upon the filing of an ANDA for a generic drug containing any

of our product candidates, and relies in whole or in part on studies conducted by or for us.

Litigation or other proceedings to enforce

or defend intellectual property rights are often very complex in nature, may be very expensive and time-consuming, may divert our management’s

attention from our core business, and may result in unfavorable results that could limit our ability to prevent third parties from competing

with our product candidates.

we do not obtain protection under the Hatch-Waxman Amendments by obtaining data exclusivity, our business may be harmed.

commercial success will largely depend on our ability to obtain and market exclusivity in the United States and other countries with

respect to our product candidates.

Depending upon the timing, duration and specifics of FDA marketing approval of our product candidates,

certain of our product candidates may be eligible for marketing exclusivity.

FDC Act provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to obtain approval

of an NDA or Section 505(b)(2) NDA for a new chemical entity, or NCE.

A drug is an NCE if the FDA has not previously approved any other

new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance.

exclusivity is granted for an NCE, during the exclusivity period, the FDA may not accept for review or approve an abbreviated new drug

application, or ANDA, or a Section 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does

not own or have a legal right of reference to all the data required for approval.

However, an application may be submitted after four

years if it contains a certification of patent invalidity or non-infringement to one of the patents listed in the FDA’s publication

Approved Drug Products with Therapeutic Equivalence Evaluations, which we refer to as the Orange Book, with the FDA by the innovator

FDC Act also provides three years of marketing exclusivity for an NDA, or supplement to an existing NDA if new clinical investigations,

other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval

of the application, for example new indications, dosages, dosage forms or strengths of an existing drug.

This three-year exclusivity

covers only the conditions associated with the new clinical investigations and prohibits the FDA from approving an ANDA, or a Section

505(b)(2) NDA submitted by another company with overlapping conditions associated with the new clinical investigations for the three-year

Three-year exclusivity does not prohibit the FDA from approving ANDAs for drugs containing the original conditions of use.

and three-year exclusivity will not delay the submission or approval of an NDA for the same drug.

However, an applicant submitting an

NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical

trials necessary to demonstrate safety and effectiveness.

we are unable to obtain such marketing exclusivity for our product candidates, our competitors may be able to take advantage of our investment

in development and clinical trials by referencing our approval to obtain approval of competing products and launch their product earlier

than might otherwise be the case.

Cyber-attacks

or other failures in our telecommunications or information technology systems, or those of our collaborators, CROs, third-party logistics

providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption

of our business operations.

our collaborators, CROs, third-party logistics providers, distributors and other contractors and consultants utilize information technology,

or IT, systems and networks to process, transmit and store electronic information in connection with our business activities.

of digital technologies has increased, cyber incidents, including third parties gaining access to employee accounts using stolen or inferred

credentials, computer malware, viruses, spamming, phishing attacks or other means, and deliberate attacks and attempts to gain unauthorized

access to computer systems and networks, have increased in frequency and sophistication.

These threats pose a risk to the security of

us, our collaborators’, CROs’, third-party logistics providers’, distributors’ and other contractors’ and

consultants’ systems and networks, and the confidentiality, availability and integrity of our data.

There can be no assurance that

we will be successful in preventing cyber-attacks or successfully mitigating their effects.

Similarly, there can be no assurance that

our collaborators, CROs, third-party logistics providers, distributors and other contractors and consultants will be successful in protecting

our clinical and other data that is stored on their systems.

Like other companies, we have on occasion experienced, and will continue

to experience, threats to our data and systems, including malicious codes and viruses, phishing, business email compromise attacks or

other cyber-attacks.

Any cyber-attack, data breach or destruction or loss of data could result in a violation of applicable United States

and international privacy, data protection and other laws and subject us to litigation and governmental investigations and proceedings

by federal, state and local regulatory entities in the United States and by international regulatory entities, resulting in exposure

to material civil and/or criminal liability.

Further, our general liability insurance and corporate risk program may not cover all potential

claims to which we are exposed and may not be adequate to indemnify us for all liability that may be imposed, which could have a material

adverse effect on our business and prospects.

For example, the loss of clinical trial data from completed or ongoing clinical trials

for any of our product candidates could result in delays in our development and regulatory approval efforts and significantly increase

our costs to recover or reproduce the data.

In addition, we may suffer reputational harm or face litigation or adverse regulatory action

as a result of cyber-attacks or other data security breaches and may incur significant additional expense to implement further data protection

Related to the Ownership of Common Stock and Financial Reporting

do not anticipate paying any cash dividends on our capital stock in the foreseeable future.

Accordingly, stockholders must rely on capital

appreciation, if any, for any return on their investment.

have never declared nor paid cash dividends on our capital stock.

We currently plan to retain all of our future earnings, if any, to

finance the operation, development and growth of our business.

In addition, the terms of any future debt or credit agreements may preclude

us from paying dividends.

As a result, capital appreciation, if any, of our common stock will be the stockholders’ sole source

of gain for the foreseeable future.

additional capital could cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies

or product candidates.

expect our expenses to increase in connection with our planned operations.

Unless and until we can generate a substantial amount of revenue

from our product candidates, we expect to finance our future cash needs through public or private equity offerings, debt financings,

collaborations, licensing arrangements or other sources, or any combination of the foregoing.

In addition, we may seek additional capital

due to favorable market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future

operating plans.

the extent that we raise additional capital through the sale of common stock, convertible securities or other equity securities, our

stockholders’ ownership interest may be diluted.

In addition, debt financing, if available, may result in fixed payment obligations

and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional

debt, making capital expenditures, creating liens, redeeming stock or declaring dividends, that could adversely impact our ability to

conduct our business.

In addition, securing financing could require a substantial amount of time and attention from our management and

may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management’s

ability to oversee the development of our product candidates.

Further, we may incur additional dilution from repayment of the Investor

Notes in Common Stock or re-setting the Conversion Price of the Investor Notes if we issue equity at a price below the Conversion Price

of the Investor Notes.

Also, we will receive reduced proceeds if the exercise price of the Investor Warrants is reduced.

we raise additional capital through collaborations or marketing, distribution or licensing arrangements with third parties, we may have

to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not

be favorable to us.

If we are unable to raise additional capital when needed, we may be required to grant to third parties rights to

develop and market our product candidates that we would otherwise prefer to develop and market ourselves.

addition, any issuances of common stock pursuant to the GEM Agreement would result in dilution of the ownership interest of our stockholders.

Any such issuances may also have a negative impact on the market price of our common stock because of the discount at issuance.

require substantial additional funding.

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

our product discovery and development programs or commercialization efforts ” for description of risks related to additional

internal controls over financial reporting currently do not meet all of the standards contemplated by Section 404 of Sarbanes-Oxley Act,

and failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley

Act could impair our ability to produce timely and accurate financial statements or comply with applicable regulations and have a material

adverse effect on our business.

previously operated as a private company.

In connection with the preparation of our consolidated financial statements for the years ended

December 31, 2020 and 2019, we concluded that there were material weaknesses in our internal controls over financial reporting.

weakness is a significant deficiency, or a combination of significant deficiencies, in internal controls over financial reporting such

that it is reasonably possible that a material misstatement of the annual or interim financial statements will not be prevented or detected

on a timely basis.

The material weaknesses identified are insufficient internal controls because of inadequate technical accounting expertise

and inappropriate level of supervision and review due to the limited number of accounting personnel.

While we are taking steps to remediate

the material weaknesses in our internal controls over financial reporting, including hiring a Chief Financial Officer in February 2021,

we may not be successful in remediating such weaknesses.

the Business Combination, our management has significant requirements for enhanced financial reporting and internal controls as a public

The process of designing and implementing effective internal controls is a continuous effort that will require us to anticipate

and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system

of internal controls that is adequate to satisfy our reporting obligations as a public company.

If we are unable to establish or maintain

appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely

basis or result in material misstatements in our consolidated financial statements, which could harm our operating results.

we are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness

of our internal controls over financial reporting.

This assessment needs to include disclosure of any material weaknesses identified

by our management in our internal control over financial reporting.

The rules governing the standards that must be met for our management

to assess our internal control over financial reporting are complex and require significant documentation, testing, and possible remediation.

Testing and maintaining internal controls may divert management’s attention from other matters that are important to our business.

Our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting

on an annual basis.

However, while we remain an emerging growth company, we are not be required to include an attestation report on internal

control over financial reporting issued by our independent registered public accounting firm.

If we are not able to complete an initial

assessment of our internal controls and otherwise implement the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner

or with adequate compliance, our independent registered public accounting firm may not be able to certify as to the adequacy of our internal

controls over financial reporting.

impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us

to adverse regulatory consequences, including sanctions by the Securities and Exchange Commission, or SEC, or violations of applicable

stock exchange listing rules, which may result in a breach of the covenants under existing or future financing arrangements.

could be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial

Confidence in the reliability of our financial statements also could suffer if we or our independent registered public accounting

firm continue to report a material weakness in our internal controls over financial reporting.

This could materially adversely affect

us and lead to a decline in the market price of our common stock.

Related to Tax Matters

tax legislation could adversely affect our business and financial condition.

United States government in the future may enact additional legislation that affects the taxation of business entities, including with

respect to the treatment of net operating losses.

This registration statement/prospectus does not discuss any such tax legislation or

the manner in which it might affect holders of our common stock.

Holders of our common stock are urged to consult with their legal and

tax advisors with respect to any such legislation and the potential tax consequences of holding our common stock.

Unanticipated

changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect

our financial condition and results of operations.

are subject to income taxes in the United States, and our tax liabilities will be subject to the allocation of expenses in differing

jurisdictions.

Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

effects of stock-based compensation;

related to intercompany restructurings;

in tax laws, regulations or interpretations thereof;

than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings

in jurisdictions where we have higher statutory tax rates.

Related to Our Securities and to Being a Public Company

are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of

certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,”

this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public

are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage

of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging

growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section

404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,

and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any

golden parachute payments not previously approved.

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

deem important.

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

earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million as of the end of any second quarter

of a fiscal year, in which case we would no longer be an emerging growth company as of the last day of such fiscal year.

We cannot predict

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

If some investors find our securities

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

would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting

standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective

or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements

that apply to non-emerging growth companies but any such election to opt out is irrevocable.

We have elected not to opt out of such extended

transition period, which means that when a standard is issued or revised and it has different application dates for public or private

companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised

This may make comparison of our financial statements with another public company that is not an emerging growth company or

is an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential

differences in accounting standards used.

Additionally,

we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

Smaller reporting companies may take

advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.

We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held

by non-affiliates is greater than or equal to $250 million as of the end of that fiscal year’s second fiscal quarter, and (ii)

our annual revenues are greater than or equal to $100 million during the last completed fiscal year and the market value of our common

stock held by non-affiliates exceeds $700 million as of the end of that fiscal year’s second fiscal quarter.

To the extent we take

advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies

difficult or impossible.

amount of our future losses is uncertain and our quarterly and annual operating results may fluctuate significantly or fall below the

expectations of investors or securities analysts, each of which may cause our stock price to fluctuate or decline.

quarterly and annual operating results may fluctuate significantly in the future due to a variety of factors, many of which are outside

of our control and may be difficult to predict, including the following:

timing and success or failure of clinical trials for our product candidates or competing product candidates, or any other change

in the competitive landscape of our industry,

ability to successfully recruit and retain subjects for clinical trials, and any delays caused by difficulties in such efforts, including

as a result of COVID-19;

risk/benefit profile, cost and reimbursement policies with respect to our product candidates, if approved, and existing and potential

future therapeutics that compete with our product candidates;

ability to obtain marketing approval for our product candidates and the timing and scope of any such approvals we may receive;

timing and cost of, and level of investment in, research and development activities relating to our product candidates, which may

change from time to time;

cost of manufacturing our product candidates, which may vary depending on the quantity of production and the terms of our agreements

with manufacturers;

ability to attract, hire and retain qualified personnel;

that we will or may incur to develop additional product candidates;

level of demand for our product candidates should they receive approval, which may vary significantly;

changing and volatile U.S.

and global economic environments;

accounting pronouncements or changes in our accounting policies.

cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results.

As a result, comparing our operating results on a period-to-period basis may not be meaningful.

This variability and unpredictability

could also result in our failing to meet the expectations of industry or financial analysts or investors for any period.

If our operating

results or revenue fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the

forecasts we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially.

Such a stock price decline could occur even when we have met any previously publicly stated guidance we may provide, if any.

the Nasdaq delists our Common Stock and/or our Public Warrants do not continue to trade on the OTC Pink Open Market, this could limit

investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

Nasdaq delists our common stock and/or our Public Warrants do not continue to trade on the OTC Pink Open Market, as applicable, from

trading on their exchanges for failure to meet the listing standards, our stockholders could face significant material adverse consequences

limited availability of market quotations for our securities;

liquidity for our securities;

determination that the our common stock is a “penny stock” which will require brokers trading in such securities to adhere

to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

limited amount of news and analyst coverage;

decreased ability to issue additional securities or obtain additional financing in the future, including our inability to obtain

financing under the GEM Agreement.

for shares of our common stock, if exercised, will increase the number of shares eligible for future resale in the public market and

result in dilution to our stockholders.

are Public Warrants exercisable for an aggregate of approximately 10,000,000 shares of our common stock currently exercisable.

there are Private Warrants exercisable for an aggregate of 9,351,289 shares of our common stock, of which Private Placement Warrants

to purchase an aggregate of 6,325,000 shares of our common stock become exercisable on July 30, 2021, in accordance with the terms of

the warrant agreements governing those securities.

The exercise price of these Warrants is $11.50 per share.

To the extent such Warrants

are exercised, additional shares of our common stock will be issued, which will result in dilution to the holders of shares of our common

stock and increase the number of shares of common stock eligible for resale in the public market.

Sales of substantial numbers of such

shares of common stock in the public market or the fact that such Warrants may be exercised could adversely affect the market price of

our common stock.

blocks of our total outstanding shares may be sold into the market.

If there are substantial sales of shares of our common stock, the

price of our common stock could decline.

price of our common stock could decline if there are substantial sales of shares of our common stock by our directors, executive officers,

or significant stockholders, if there is a large number of shares of our common stock available for sale, or if there is the perception

that these sales could occur.

Immediately after the Merger, a significant portion of our shares of common stock or Warrants exercisable

for our shares of common stock were held by persons who had been affiliated with LACQ prior to the Merger but did not remain so with

respect to us after the Merger.

In addition, we may soon register shares of common stock that we may issue under our 2021 Omnibus Incentive

Shares held by our directors, executive officers and other affiliates are subject to restrictions on resale under the Securities

Act and may be subject to various vesting agreements.

of our initial stockholders have agreed, subject to certain exceptions, not to transfer, pledge, assign, sell or otherwise dispose of

any of our common stock held by them immediately after the Merger until the earlier to occur of (a) one year after the Merger and (b)

the date on which we complete a liquidation, merger, share exchange or other similar transaction after closing that results in all of

our stockholders having the right to exchange their common shares for cash, securities or other property.

However, if the closing price

of our common shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations

and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Merger, the shares of those

initial stockholders will be released from the lock-up.

market price of the shares of our common stock could decline as a result of the sale of a substantial number of our shares of common

stock in the public market or the perception in the market that the holders of a large number of such shares intend to sell their shares.

issuance of additional capital stock in connection with financings, acquisitions, investments, our 2021 Omnibus Incentive Plan and to

repay interest or principal on the Investor Notes or otherwise will dilute all other stockholders.

expect to issue additional capital stock in the future that will result in dilution to all other stockholders.

We expect to grant equity

awards to employees, directors, and consultants under our 2021 Omnibus Incentive Plan.

We may use our common stock to make repayment

of some or all of the principal and interest on the Investor Notes.

We may also raise capital through equity financings in the future.

As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies and issue

equity securities to pay for any such acquisition or investment.

Any such issuances of additional capital stock may cause stockholders

to experience significant dilution of their ownership interests and the per share value of our common stock to decline.

on the OTC Pink Open Market is volatile and sporadic, which could depress the market price of the Public Warrants and make it difficult

for the Public Warrant holders to resell their Public Warrants.

Public Warrants are quoted on the OTC Pink Open Market.

Trading in securities quoted on the OTC Pink Open Market is often thin and characterized

by wide fluctuations in trading prices, due to many factors, some of which may have little to do with our operations or business prospects.

This volatility could depress the market price of the Public Warrants for reasons unrelated to operating performance.

Moreover, the OTC

Pink Open Market is not a stock exchange, and trading of securities on the OTC Pink Open Market is often more sporadic than the trading

of securities listed on Nasdaq.

These factors may result in investors having difficulty reselling any Public Warrants.

predecessor identified material weakness in its internal control over financial reporting as of December 31, 2020.

We may face litigation

and other risks as a result of the material weakness in our internal control over financial reporting.

this issuance of the SEC Statement, on May 13, 2021, after consultation with its independent registered public accounting firm, our predecessor’s

management and audit committee concluded that, in light of the SEC Statement, it was appropriate to restate its previously issued audited

financial statements as of and for the period ended December 31, 2020 (the “ Restatement ”).

See “ —Certain

of our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial

” As part of such process, it identified a material weakness in its internal controls over financial reporting.

material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is

a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected

and corrected on a timely basis.

a result of such material weakness, the Restatement, the change in accounting for the warrants, and other matters raised or that may

in the future be raised by the SEC, we face the potential for litigation or other disputes which may include, among others, claims invoking

the federal and state securities laws, contractual claims or other claims arising from the Restatement and material weaknesses in our

internal control over financial reporting and the preparation of our financial statements.

As of the date of this registration statement/prospectus,

we have no knowledge of any such litigation or dispute.

However, we can provide no assurance that such litigation or dispute will not

arise in the future.

Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business,

results of operations and financial condition.

LACQ determined that its Public Warrants should be classified as equity and its private warrants will be treated as equity on a pro forma

basis, due to the uncertainty with respect to classification of warrants issued by SPACs as equity or indebtedness, there can be no assurance

that future guidance might not require us to change its position and restate our financial statements and have other adverse consequences.

LACQ’s financial statements have been restated to classify its private warrants as liabilities, we have determined that it is appropriate

to continue to classify its Public Warrants as equity.

LACQ reviewed the terms of the warrant agreement related to its Public Warrants

and concluded that they do not include any provision requiring the Public Warrants to be classified as liabilities.

In this respect,

it should be noted that the warrant agreement included a provision that in the event of a tender or exchange offer made to and accepted

by holders of more than 50% of the outstanding shares of a single class of common shares, all holders of the warrants could be entitled

to receive cash for their warrants (the “ tender offer provision ”).

This tender offer provision was similar to one

of the examples referred to in the SEC Statement as a basis for concluding that warrants issued by a SPAC should be classified as liabilities

and not equity.

LACQ concluded that, while the SEC Statement did not expressly refer to a multi-class structure (such as a structure

where a SPAC had two classes of common stock), the SEC Statement with respect to a tender offer provision in a warrant agreement applied

to a multi-class structure (such as a Class A and Class B structure) and not a single class structure like LACQ’s.

Certain other

SPACs, including those with single class structures, have taken different approaches in their recent public filings with the SEC and

have classified similar warrants as liabilities.

classified its private warrants as liabilities because they provided for potential changes to the settlement amounts dependent upon the

characteristics of the holder of the warrant (i.e., certain rights differ if the warrants are held by the original holder and its permitted

transferees or by a subsequent transferee).

LACQ entered into agreements with the holders of its private warrants under which each holder

will exchange its private warrants for warrants on the same terms as the private warrants, except that they are non-transferable except

to certain permitted transferees.

LACQ believed that as a result of the exchange, the private warrants would be appropriately classified

as equity and not liabilities subsequent to the date of such agreements.

accounting treatment of warrants issued by SPACs is subject to substantial uncertainty and there can be no assurance that future guidance

might not require us to change LACQ’s position and restate our financial statements or treat private warrants as liabilities, which

could have a material adverse effect us.

Common Stock could be delisted from Nasdaq and may become subject to “penny stock” rules, which could damage our reputation

and the ability of investors to sell their shares.

can be no assurance that our common stock will maintain our listing on Nasdaq which could have a material adverse effect on us.

any delisting, our common stock could become subject to the regulations of the SEC relating to the market for penny stocks.

are securities with a price of less than $5.00 per share unless (i) the securities are traded on a “recognized” national

exchange or (ii) the issuer has Net Tangible Assets less than $2,000,000 (if the issuer has been in continuous operation for at least

three years) or $5,000,000 (if in continuous operation for less than three years), or with average annual revenues of less than $6,000,000

for the last three years.

procedures applicable to penny stocks requires a broker-dealer to (i) obtain from the investor information concerning his financial situation,

investment experience and investment objectives;

(ii) reasonably determine, based on that information, that transactions in penny stocks

are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating

the risks of penny stock transactions;

(iii) provide the investor with a written statement setting forth the basis on which the broker-dealer

made the determination in (ii) above;

and (iv) receive a signed and dated copy of such statement from the investor, confirming that it

accurately reflects the investor’s financial situation, investment experience and investment objectives.

The regulations applicable

to penny stocks may severely affect the market liquidity for our common stock and could limit the ability of stockholders to sell their

common stock in the secondary market.

directors and executive officers own a significant percentage of our Common Stock and will be able to exert significant control over

matters subject to stockholder approval.

of October 28, 2021, our executive officers and directors beneficially owned approximately 52.7% of our common stock.

These stockholders,

acting together, may be able to control matters requiring stockholder approval.

For example, they may be able to control elections of

directors, changes to equity incentive plans, amendments of our organizational documents or approval of any merger, sale of assets or

other major corporate transactions.

This concentration of ownership control may delay, discourage or prevent a change of control, including

unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders,

entrench our management and board of directors or delay or prevent a merger, consolidation, takeover or other business combination involving

us that other stockholders may desire.

The interests of this group of stockholders may not always coincide with your interests or the

interests of other stockholders and they may act in a manner that advances their best interests and not necessarily those of other stockholders,

including seeking a premium value for their common stock, and might affect the prevailing market price for our common stock.

law and provisions in our certificate of incorporation and bylaws could make a takeover proposal more difficult.

organizational documents are governed by Delaware law.

Certain provisions of Delaware law and of our charter and bylaws could discourage,

delay, defer or prevent a merger, tender offer, proxy contest or other change of control transaction that a stockholder might consider

in its best interest, including those attempts that might result in a premium over the market price for the shares of our common stock

held by our stockholders.

These provisions provide for, among other things:

ability of our board of directors to issue one or more series of preferred stock;

stockholder action by written consent;

of stockholders to call a special stockholder meetings;

classified board of directors;

notice for nominations of directors by stockholders and for stockholders to include matters to be considered before any meeting.

anti-takeover provisions as well as certain provisions of Delaware law could make it more difficult for a third party to acquire the

Company, even if the third party’s offer may be considered beneficial by many of our stockholders.

As a result, our stockholders

may be limited in their ability to obtain a premium for their shares.

If prospective takeovers are not consummated for any reason, we

may experience negative reactions from the financial markets, including negative impacts on the price of our common stock.

These provisions

could also discourage proxy contests and make it more difficult for our stockholders to elect directors of their choosing and to cause

the Company to take other corporate actions that our stockholders desire.

certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types

of actions and proceedings and the federal district courts as the sole and exclusive forum for other types of actions and proceedings,

in each case, that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain what such stockholders

believe to be a favorable judicial forum for disputes with the Company or our directors, officers or other employees.

charters provides that, unless we consent in writing to the selection of an alternative forum, subject to certain limitation, the sole

and exclusive forum will be the Court of Chancery of the State of Delaware (or, if such court does not have jurisdiction, the Superior

Court of the State of Delaware, or, if the Superior Court of the State of Delaware also does not have jurisdiction, the United States

District Court for the District of Delaware) for:

derivative action or proceeding brought on behalf of us;

action asserting a claim of breach of a fiduciary duty owed by any of our director, officer or other employee to us or our stockholders;

action asserting a claim against us arising pursuant to any provision of the DGCL, our charter or the bylaws (as either may be amended,

restated, modified, supplemented or waived from time to time);

action to interpret, apply, enforce or determine the validity of our charter or the bylaws;

action asserting a claim against us governed by the internal affairs doctrine.

the avoidance of doubt, the foregoing provisions of our charter will not apply to any action or proceeding asserting a claim under the

Securities Act or the Exchange Act.

These provisions of the our charter could limit the ability of our stockholders to obtain a favorable

judicial forum for certain disputes with us or with our current or former directors, officers or other employees, which may discourage

such lawsuits against us and our current or former directors, officers and employees.

Alternatively, if a court were to find these provisions

of the our charter inapplicable to, or unenforceable in respect of, one or more of the types of actions or proceedings listed above,

we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business,

financial condition and results of operations.

we attempt to identify, manage and mitigate risks and uncertainties associated with our business to the extent practical, under the circumstances,

some level of risk and uncertainty will always be present.

Part I, Item 1A.

Risk Factors of our 2021 Annual Report on Form 10-K includes

a detailed discussion of our risk factors.

Those risks and uncertainties have the potential to materially affect our financial condition

and results of operations.

There have been no material changes in our risk factors from those previously disclosed in Part I, Item 1A,

of our 2021 Annual Report on Form 10-K.

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

What changed 10-Q

Item 1A. Risk Factors