What changed in this filing

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Item 9A. Controls and Procedures

2024-03-15 compared with 2023-03-30 · 1324 added, 681 removed, 746 unchanged (73% of the section changed)

8 unchanged sentences

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

procedures were not effective as of December 31, 2022, due to the material weaknesses in our internal controls over financial reporting

described below.

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

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

procedures were effective as of December 31, 2023.

Annual Report on Internal Control over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over our financial reporting.

Internal control over

financial reporting is defined in Rule 13a-15(f) under the Exchange Act as a process designed by, or under the supervision of, the company’s

executive and financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable

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

those policies and procedures that (a) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect

the transactions and dispositions of the assets of the company;

(b) provide reasonable assurance that transactions are recorded as necessary

to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures

of the company are being made only in accordance with authorizations of management and directors of the company;

and (c) provide reasonable

assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that

could have a material effect on the financial statements.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements, errors, or fraud.

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

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

of December 31, 2023, our management assessed the effectiveness of our internal control over financial reporting using the criteria set

1 unchanged sentence

(the “2013 Framework”).

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

each component of internal control and determined whether they have been adequately addressed within the current system of internal control

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

component of internal control and determined whether they have been adequately addressed within the current system of internal control

and adequately documented.

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

Officer and Chief Financial Officer, concluded that, as of December 31, 2022, our internal control over financial reporting was

ineffective due to material weaknesses.

A material weakness

is a significant deficiency, or a combination of significant deficiencies, in internal controls over financial reporting such that it

is reasonably possible that a material misstatement of the annual or interim financial statements will not be prevented or detected on

a timely basis.

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

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

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

reporting function.

are continuing to take steps to remediate the material weaknesses in our internal controls over financial reporting, including hiring

a Chief Financial Officer in February 2021.

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

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

Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased

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

of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have

the intended effects.

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

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

Because of its inherent limitations, internal control

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

Also, projections of any evaluation of effectiveness

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

compliance with the policies or procedures may deteriorate.

Officer and Chief Financial Officer, concluded that, as of December 31, 2023, our internal control over financial reporting was effective

based on these criteria.

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

control over financial reporting.

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

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

report in this Annual Report on Form 10-K.

As a smaller reporting company, we were not required to have, nor have we, engaged our independent

registered public accounting firm to perform an audit of internal control over financial reporting pursuant to SEC rules that permit

us to provide only management’s report in this Annual Report on Form 10-K.

in Internal Control Over Financial Reporting

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

Exchange Act) during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect,

our internal control over financial reporting.

worked with third-party accounting consultants to develop a control structure that can be consistently applied to period-end financial

reporting as well as to unusual and infrequent complex accounting transactions.

Testing of these remediations was satisfactorily completed

during the quarter ended December 31, 2023.

There were no other changes in our internal control over financial reporting (as such term

is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2023 that have materially affected,

or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

1 unchanged sentence

Executive Officers and Directors

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

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

are incorporated by reference to the Company’s Proxy Statement for the 2023 Annual Meeting of Shareowners, which will be filed

with the SEC pursuant to Regulation 14A within 120 days after December 31, 2022.

The information regarding executive officers is included

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

following persons are our executive officers and directors:

Executive Officers

Lynn Kirkpatrick, Ph.D.**

President, Chief Executive Officer

and Class III Director

Geoffrey Birkett

Chief Commercial Officer

David Humphrey

Chief Financial Officer, Secretary and Treasurer

Jeffrey Millard, Ph.D.

Chief Operating Officer (consultant)

Linda Pestano, Ph.D.

Chief Development Officer

William Schmidt, Ph.D.

Chief Medical Officer

Andrew Benton, J.D.

Class I Director

William Chang

Class I Director

Bob Gower, Ph.D.

Class II Director and Chairman of the Board

Class III Director

Class I Director

Curtis Rosebraugh, M.D., MPH

Class II Director

presented as of December 31, 2023

Information about Dr.

Kirkpatrick is set forth under “Executive Officers”

about our Executive Officers and Directors

Kirkpatrick, Ph.D.

has served as our Chief Executive Officer since January 2009.

Kirkpatrick has spent over 30 years in drug

discovery and development, has initiated the clinical development of four novel drug candidates and now strives to bring highly novel

and safe pain therapies to commercialization.

She received a Doctor of Philosophy (“ Ph.D.

”) degree in Medicinal and

Biomedicinal Chemistry at the University of Saskatchewan, completed a Post-Doctoral Fellowship at the Yale University School of Medicine,

and became a tenured full professor in the Department of Chemistry at the University of Regina.

She co-founded ProlX Pharmaceuticals,

(“ ProlX ”) an oncology discovery company, becoming Chief Executive Officer and successfully bringing three small

molecules from discovery into clinical development, two of these her own discoveries from academia.

ProlX was acquired by Biomira Inc.,

Kirkpatrick became the Chief Scientific Officer of the merged company to focus on the development of oncology products and vaccines.

In 2009, she co-founded PHusis Therapeutics, developing targeted small molecule precision medicines for oncology.

At the same time, she

became our Chief Executive Officer.

Kirkpatrick has published extensively in the area of targeted drug discovery, abuse deterrent

pain products and holds numerous patents for novel drugs and modalities.

We believe Dr.

Kirkpatrick is qualified to serve on our Board

because of her extensive executive experience in our industry and her service as our Chief Executive Officer.

Birkett has served as our Chief Commercial Officer since October 2018.

He has over 30 years of experience in the Pharmaceutical

and Biotechnology area.

He started his career as a biochemist at the Royal Victoria Infirmary in Newcastle-upon-Tyne, England.

moved into the pharmaceutical industry, where he focused on pain/addiction and neuroscience throughout his career.

He has developed and

launched several groundbreaking therapies, including Nicorette (POM) and (OTC), Lexapro and several other psychiatry agents with Lundbeck.

Birkett assisted on the launch of Prozac and Humatrope (human growth hormone) with Eli Lilly.

He assisted in moving Seroquel from

Phase 2 to global market leader with multi-billion dollar sales and he also participated in the launch of Zomig for migraines, which

became a European market leader.

He worked for most of his pharmaceutical career at AstraZeneca plc in both the United Kingdom and the

United States, where he held many roles including overseeing the global oncology division.

When the AstraZeneca merger took place, Mr.

Birkett ran the merger process outside the United States across all markets, and ran a corporate change program to streamline research

and development involving 67,000 staff.

Since leaving AstraZeneca, Mr.

Birkett has held multiple roles in biotech companies as senior

officer or as a consultant.

He is co-founder of a novel drug delivery company and has consulted for IPSOS, a large global research and

consulting firm.

He also served as president for North America/Canada of INDIVIOR, a large company producing addiction treatment drugs.

Birkett joined us in 2018 and is focused on building a world class commercial team.

Birkett attended Henley Business College

in London and INSEAD Business School in France where he studied general management and a global leadership.

Humphrey has served as our Chief Financial Officer since February 2021.

Prior to joining the Company, Mr.

Humphrey was most recently

Chief Financial Officer of Senomyx, Inc.

(“Senomyx”), a publicly held biotechnology company focused on taste science.

his previous employment, he guided public company financial reporting, including Forms 10-K, 10-Q, 8-K, S-3, S-8, proxy statements and

SOX internal controls compliance, and acted as primary liaison with the audit committee and external auditors.

Humphrey advised Senomyx’s

board of directors, as part of core executive management team, in a $75 million acquisition by Firmenich SA, a private Swiss multinational

flavor and fragrance company.

Previously, he held finance and accounting leadership positions and consulted at numerous life sciences

companies, including ActivX Biosciences, Aurora Biosciences and Gensia.

Humphrey started his career as an accountant at Price Waterhouse.

He holds a Bachelor of Science with Honors in Accountancy from the University of Illinois at Urbana-Champaign and is a Certified Public

Accountant (inactive) in California.

Millard, Ph.D.

has served as our Chief Operating Officer since January 2019.

Millard has both academic and industrial experience

in chemistry and pharmaceutical sciences covering all aspects of chemistry, manufacturing, and controls, or CMC.

He has been involved

in both start-up biotech as well as small and mid-sized public biopharmaceutical companies.

Millard has been directly responsible

for research and development activities and writing of more than seven IND submissions and Investigational Medicinal Product Dossiers,

He has directed the CMC efforts from discovery and in-licensing through commercial launch activities.

His experience covers

the application programming interface, or API, lifecycle (from synthetic route scouting, process chemistry, analytical chemistry development

and validation, cGMP production and release of API, to QbD and process validation), and drug product development through manufacture.

Millard received a Bachelor of Arts from Rice University and a Ph.D.

in Pharmaceutical Sciences from the University of Arizona.

Pestano, Ph.D.

joined Ensysce in October 2021, as Chief Development Officer.

Pestano has worked throughout her career to

guide the development of novel therapeutics to improve patient outcomes and quality of life.

She has 20 years of experience developing

vaccines, drugs and novel biologics for a diverse range of indications.

She has been instrumental in guiding new therapies, including

small molecules, nucleic acids, and biologicals through development into clinical trials.

Pestano’s expertise spans lead development,

pre-clinical and translational studies, and interacting with multiple regulatory agencies.

Pestano received her PhD from Tufts University

and undertook a Post-Doctoral Fellowship with Dana Farber Cancer Institute at the Harvard Medical School in Boston.

Schmidt, Ph.D ., has served as our Chief Medical Officer since January 2016.

He is also the Head of NorthStar Consulting, the

Parliamentarian and a former president of the Eastern Pain Association, the largest regional affiliate of the American Pain Society.

He has over 25 years of pharmaceutical industry experience with a special emphasis on the discovery and development of novel analgesic

and narcotic antagonist drugs.

He was previously Vice President of Clinical Development for CrystalGenomics (Seoul, South Korea) and

its United States subsidiary, CG Pharmaceuticals (Emeryville, CA);

Senior Vice President of Development at Limerick BioPharma;

Vice President,

Clinical Research, for Renovis, Inc.;

and Vice President, Scientific Affairs and acting Vice President, Clinical Research and Development,

at Adolor Corporation.

At Adolor Corporation, Dr.

Schmidt was a key member of the team leading to the clinical development, NDA filing,

and FDA approval of Entereg® (alvimopan), a peripherally acting opioid antagonist.

Currently Dr.

Schmidt serves as an expert on pain

medicine pharmaceutical development with pharmaceutical and biotech companies throughout North America, Europe, Asia, Latin America,

and Australia.

Schmidt received a Bachelor of Arts degree from the University of California Berkeley and his Ph.D.

University of

California-San Francisco.

has served as a member of our Board since December 2, 2019.

Benton was the President, Chief Executive Officer

and Trustee of Pepperdine University from June 2000 to July 2019.

Benton was the former chairman of both the American Council of

Education, the major coordinating body for all of the nation’s higher education institutions, and the National Association of Independent

Colleges and Universities.

Benton is also past chair of the Association of Independent California Colleges and Universities and a

member of the American Bar Association, the Council for Higher Education Accreditation, the President’s Cabinet of the West Coast

Conference, the Association of Presidents of Independent Colleges and Universities, and the Los Angeles World Affairs Council.

holds an undergraduate degree in American studies from Oklahoma Christian University and a J.D.

from Oklahoma University.

Benton’s experience governing academic and other institutions qualifies him to serve on our Board.

Chang serves as Chief Executive Officer of Westlake Realty Group and Chairman of Westlake International Group where he has worked

for more than 40 years.

Chang is an investor in the San Francisco Giants of Major League Baseball.

Chang was the former Chairman

Rugby Football Union.

He also served on the Board of the Asia Foundation and San Francisco Port and Social Services Commissions.

Chang holds a Bachelor’s degree in Economics from Harvard University.

We believe that Mr.

Chang’s extensive business

experience and expertise in corporate governance qualifies him to serve on our Board.

has served as our Chairman since 2008.

Gower was Chief Executive Officer of Lyondell Petrochemical from 1985

through his retirement at the end of 1996.

In 1997, he acquired businesses from Howell Corporation that became Specified Fuels and Chemicals.

Gower sold Specified in 2000 and, with Dr.

Richard Smalley, founded Carbon Nanotechnologies, Inc.

(“ CNI ”) that

same year to develop production capabilities and applications for single wall carbon nanotubes.

CNI was acquired by Unidym in 2007.

Gower founded Ensysce in 2008 with the focus of using single wall carbon nanotubes in therapeutic areas.

Ensysce subsequently merged

with Signature Therapeutics, Inc.

and changed its focus to developing safe opioid pain drugs.

He has served on the Board of Directors

of several public companies, including Kirby Corporation, OmNova and Keystone.

He also has been and continues to be involved with several

not-for-profit organizations and has especially focused on Communities In Schools Houston, a leading dropout prevention and mental health

program, and on Southern Illinois University with focus on the chemistry department.

Gower received his B.S.

from SIU and his Ph.D.

from the University of Minnesota.

We believe that Mr.

Gower’s previous board and industry experience qualifies him to serve on

Levin, MD joined the Board in June 2021 and is the Vice Chair of Clinical Operations for the Department of Orthopaedic Surgery

at Johns Hopkins University, where he has been on faculty since 2014.

He is an Associate Professor of Orthopaedic Surgery and Associate

Professor of Oncology, researching treatments related to musculoskeletal oncology, while also maintaining an active clinical practice.

Levin holds the Virginia M.

Percy and William Algernon Percy Chair in Orthopaedic Surgery at Johns Hopkins University.

in additional leadership roles related to billing, coding, and practice management for the Musculoskeletal Tumor Society, the American

Academy of Orthopaedic Surgeons, and the American Medical Association.

Prior to joining Johns Hopkins University, Dr.

Levin was an Assistant

Professor of Orthopaedic Surgery at the Zucker School of Medicine at Hofstra University in New York between 2012 and 2014.

to 2012, he was a fellow of musculoskeletal oncology and Clinical Instructor at Memorial Sloan-Kettering Cancer Center, following his

residency training at the North Shore/LIJ Health System (now Northwell Health) from 2005 to 2010.

He has been a member of leadership

fellows programs through the North Shore/LIJ Physician High Potential Program, the American Academy of Orthopaedic Surgeons, and the

American Orthopaedic Association.

Levin has also continued to serve as Associate Editor for CME for the Journal of Bone and Joint

Surgery since 2016, and is on the Steering Committee for the Musculoskeletal Tumor Registry.

Levin served as a subject-matter consultant

to our predecessor, LACQ, during their initial review of our preclinical and Phase I clinical trial results.

Levin holds a B.S.

Biology with a concentration in Animal Physiology from Cornell University, an M.D.

from New York Medical College, and is currently studying

at the Johns Hopkins University Carey School of Business for an M.B.A.

with a specialization in Healthcare Management, Innovation, and

We believe that Dr.

Levin is qualified to serve as a member of our Board based on his academic and practice experience and

his detailed knowledge of value-based care, acute and chronic pain management, novel drug design, and health care operations and management.

Martin has served as a member of our Board since August 2020.

Martin was formerly Senior Vice President and Chief Financial

Officer of Armata Pharmaceuticals, Inc., a clinical development stage biotechnology company listed on New York Stock Exchange, from January

2016 until his retirement from the position on June 30, 2022.

Previously, Mr.

Martin served as Senior Vice President and Chief Financial

Officer of Applied Proteomics, Inc., a molecular diagnostics company, from December 2014 to August 2015.

From June 2011 to December 2014,

Martin served as Senior Vice President and Chief Financial Officer of Apricus Biosciences, Inc.

(“Apricus”), a publicly

traded pharmaceutical company, and served as the Interim Chief Executive Officer of Apricus from November 2012 through March 2013.

2008 to January 2011, Mr.

Martin served as Senior Vice President and Chief Financial Officer of BakBone Software (“BakBone”),

a publicly traded software company.

During his final 10 months with BakBone until the company’s acquisition in January 2011, Mr.

Martin also served as BakBone’s Interim Chief Executive Officer.

From 2005 to 2007, Mr.

Martin served as Chief Financial Officer

of Stratagene Corporation, a publicly traded research products and clinical diagnostics company.

Martin’s previous experience

also includes serving as Controller with Gen-Probe Incorporated, a publicly traded molecular diagnostics company, as well as 10 years

with Deloitte & Touche LLP, a public accounting firm.

Martin holds a Bachelor in Science in Accounting from San Diego State University

and is a certified public accountant (inactive).

We believe that Mr.

Martin’s expertise in biopharmaceutical industry and accounting

expertise qualifies him to serve on our Board.

Rauch has served on our Board since February 2022.

She is an experienced Chief Executive Officer and Strategy Advisor, has served

both public and private companies.

During her near 40-year career, Ms.

Rauch successful built companies ranging in focus from pre-clinical

research to advanced clinical development, took the lead in mergers and acquisitions and used her experience to secure financing for

public and private biotech companies.

Among her many leadership roles, Ms.

Rauch, was notably a founding member of McKinsey & Co.’s

International Pharmaceutical Practice and the Executive Chairman of Springboard Enterprises Health Innovation Hub.

Most recently, Ms.

Rauch, served as President and CEO of Viridian Therapeutics, Inc.

Rauch received a B.S.

in Chemistry from Arizona State University

and an M.B.A.

in Finance from the University of Chicago.

We believe that Ms.

Rauch’s biopharmaceutical industry experience and

expertise qualifies her to serve on our Board.

Rosebraugh, M.D., MPH has served on our Board since 2021.

He is a member of Griebel and Rosebraugh Consulting LLC since May 2018,

where he is a regulatory consultant for small molecule and biological drug development.

Prior to forming a consulting firm, he was employed

by the Food and Drug Administration since 2000, holding the position of Director of the Office of Drug Evaluation II (“ODEII”)

within the Center for Drug Evaluation and Research (“ CDER ”) from 2007 until his retirement in 2018, with supervisory

responsibility for the evaluation of all drug products within 3 divisions:

the Division of Pulmonary, Allergy and Rheumatology Products,

the Division of Metabolism and Endocrinology Products and the Division of Anesthesia, Analgesia, and Addiction Products.

In this position,

he has overseen the development and approval of over 50 new drugs, was responsible for the planning of over 100 advisory committee meetings,

led ODE II through several controversial safety issues and has received many honors and awards.

Rosebraugh has been involved in the

development of abuse deterrent opioid formulations and has also been involved in the development of the biosimilar program as well as

many other CDER initiatives.

Rosebraugh received his undergraduate degree in pharmacy in 1981, his Medical Degree in 1986 and completed

a residency in Internal Medicine in 1989, all at the University of Kansas.

He completed a Masters of Public Health at Johns Hopkins School

of Public Health in 1999 and a Clinical Pharmacology Fellowship at Georgetown University in 2000.

We believe that Dr.

regulatory experience in the biopharmaceutical industry qualifies him to serve on our Board.

of Board in Risk Oversight

Board has extensive involvement in the oversight of risk management related to us and our business and accomplishes this oversight through

the regular reporting to the Board by the audit committee.

The audit committee represents the Board by periodically reviewing our accounting,

reporting and financial practices, including the integrity of our financial statements, the surveillance of administrative and financial

controls and our compliance with legal and regulatory requirements.

Through its regular meetings with management, including the finance,

legal, internal audit and information technology functions, the audit committee reviews and discuss all significant areas of our business

and summarize for the Board all areas of risk and the appropriate mitigating factors.

In addition, our Board receives periodic detailed

operating performance reviews from management.

business and affairs are managed under the direction of the Board.

Our Board consists of eight directors, which are divided into three

classes (Class I, II and III) with Class I and III each consisting of three directors and Class II consisting of two directors.

standing committees of our Board consist of an audit committee, a compensation committee and a nominating and corporate governance committee.

Our Board may from time to time establish other committees.

Each of the committees reports to the Board.

president and chief executive officer and other executive officers regularly report to the non-executive directors and the audit, the

compensation and the nominating and corporate governance committees to ensure effective and efficient oversight of our activities and

to assist in proper risk management and the ongoing evaluation of management controls.

have an audit committee consisting of Steve R.

Martin, who serves as the chairperson, Bob Gower and Andrew Benton.

Each member of the

audit committee qualifies as an independent director under the Nasdaq corporate governance standards and the independence requirements

of Rule 10A-3 of the Exchange Act.

Our Board has determined that Steve R.

Martin qualifies as an “ audit committee financial

expert ” as such term is defined in Item 407(d)(5) of Regulation S-K and possesses financial sophistication, as defined under

the rules of Nasdaq.

purpose of the audit committee is to prepare the audit committee report required by the SEC to be included in our proxy statement and

to assist our Board in overseeing and monitoring (1) the quality and integrity of our financial statements, (2) our compliance with legal

and regulatory requirements, (3) our independent registered public accounting firm’s qualifications and independence, (4) the performance

of our internal audit function and (5) the performance of our independent registered public accounting firm.

Board adopted a written charter for the audit committee, which is available on our website.

have a compensation committee consisting of Adam Levin, who serves as the chairperson, Bob Gower, William Chang, and Lee Rauch.

purpose of the compensation committee is to assist our Board in discharging its responsibilities relating to (1) setting our compensation

program and compensation of our executive officers and directors, (2) monitoring our incentive and equity-based compensation plans and

(3) preparing the compensation committee report, if required to be included in our proxy statement under the rules and regulations of

Board adopted a written charter for the compensation committee, which is available on our website.

and Corporate Governance Committee

have a nominating and corporate governance committee, consisting of Lee Rauch, who serves as chairperson, Bob Gower, Steve R.

and Curtis Rosebraugh.

The purpose of our nominating and corporate governance committee is to assist our Board in discharging its responsibilities

relating to (1) identifying individuals qualified to become new Board members, consistent with criteria approved by the Board, (2) reviewing

the qualifications of incumbent directors to determine whether to recommend them for re-election and selecting, or recommending that the

Board select, the director nominees for the next annual meeting of stockholders, (3) identifying Board members qualified to fill vacancies

on any Board committee and recommending that the Board appoint the identified member or members to the applicable committee, (4) reviewing

and recommending to the Board corporate governance principles applicable to us, (5) overseeing the evaluation of the Board and management

and (6) handling such other matters that are specifically delegated to the committee by the Board from time to time.

Board adopted a written charter for the nominating and corporate governance committee, which is available on our website.

Section 16(a) Reports

2022, Bob Gower, our chairman, filed one Form 4 late to report one transaction.

of Business Conduct

5 unchanged sentences

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

We will provide a copy of our code of business conduct to any person

without charge, upon written request sent to our chief financial officer at 7946 Ivanhoe Avenue, Suite 201, La Jolla, California 92037.

Executive & Director Compensation

Information required by this

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

section discusses the material components of the executive compensation program for our named executive officers.

Our named executive

officers, consisting of our principal executive officer and the next two most highly compensated executive officers, for the year ended

December 31, 2023, were:

Lynn Kirkpatrick, Ph.D.,

Chief Executive Officer;

David Humphrey, Chief Financial

Geoff Birkett, Chief Commercial

discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations

regarding future compensation programs.

Actual compensation programs that we adopt in the future may differ materially from the currently

planned programs summarized in this discussion.

Compensation Table

following table sets forth information concerning the compensation earned by our NEOs in respect of our fiscal years ended December 31,

2023 and December 31, 2022.

Name and Principal

Stock and Option

Awards ($) (1)

Compensation ($)

Compensation ($) (2)

Lynn Kirkpatrick, PhD.

Chief Executive Officer

Dave Humphrey

Chief Financial Officer

Geoff Birkett

Chief Commercial Officer

In accordance

with SEC rules, this column reflects the aggregate grant date fair value of the restricted stock awards and stock option awards granted.

This amount has been computed in accordance with Financial Accounting Standards Board (“FASB”), Accounting Standards

Codification (“ASC”) Topic 718.

This amount does not reflect the actual economic value that will be realized by a named

executive officer upon the vesting of the stock awards or stock options, the exercise of the stock options, or the sale of the common

stock underlying such awards.

Amounts shown represent

401(k) matching contributions.

Disclosure to Summary Compensation Table

of Compensation in 2023

compensation of our NEOs generally consists of base salary, annual cash bonus opportunities and long-term incentive compensation in the

form of equity awards, as described below.

base salary payable to each NEO is intended to provide a fixed component of compensation reflecting the executive’s skill set,

experience, role, responsibilities, and contributions.

Base salaries were initially set at the time each NEO commenced employment with

us, are reviewed annually and may be increased based on the individual performance of the NEO, company performance, any change in the

executive’s position within our business, the scope of the executive’s responsibilities and any changes thereto.

July 1, 2023, the NEO’s annual base salary rates were $414,750 for Dr.

Kirkpatrick, $346,500 for Mr.

Humphrey and $320,250 for

A five percent (5%) cost of living increase was approved for executive officers, effective March 1, 2024.

Performance-Based Bonuses

of our NEOs’ performance-based cash bonus opportunity is expressed as a percentage of base salary that can be achieved at a target

level by meeting predetermined Company performance objectives established by the Board or the Compensation Committee.

The annual bonus

Kirkpatrick is targeted at 50% of her base salary, and Mr.

Humphrey and Mr.

Birkett’s annual bonuses are targeted at 30%

of their respective base salary.

There are no amounts accrued for bonuses as of December 31, 2023.

Equity Incentives

2021, the Company maintained the Ensysce Biosciences, Inc.

2021 Omnibus Incentive Plan to provide equity-based incentive awards, designed

to align our interests and the interests of our stockholders with those of our employees and consultants, including our NEOs.

26, 2022, our stockholders approved the 2021 Amended and Restated Plan.

All grants effectuated under predecessor equity plans were converted

to grants outstanding under the 2021 Amended and Restated Plan.

In August 2023, the 2021 Amended and Restated Plan was amended to increase

the number of awards that may be granted from 31,296 to 617,092.

Agreements with our NEOs

Lynn Kirkpatrick, Ph.D.

September 2021, we entered into an employment offer letter with Dr.

The offer letter provides for Dr.

Kirkpatrick’s

at-will employment as our Chief Executive Officer and sets forth her annual base salary of $380,000.

Additionally, the letter provides

for her initial target annual bonus opportunity of up to 50% of base salary.

The offer letter also indicates that Dr.

Kirkpatrick is

eligible to be granted certain stock awards under our equity incentive plan.

Kirkpatrick’s offer letter provides for severance benefits upon a termination of her employment by the Company without “ cause ”,

or upon her resignation for “ good reason ”, in an amount equal to twelve (12) months of her then current base salary

(ignoring any decrease in base salary that forms the basis for good reason);

provided, however, that the payment of such benefits is

subject to Dr.

Kirkpatrick’s continued compliance with her obligations under her “ At-Will, Confidential Information and

Assignment of Inventions Agreement ” and her execution of a general release of claims.

Additionally, if such termination without

cause or for good reason occurs within the one (1) month prior to, or during the twelve (12) month period immediately following a change

in control, then all outstanding equity awards subject to time-based vesting will become fully vested on the later of Dr.

Kirkpatrick’s

termination date and the change in control.

Cause and good reason are as defined in Dr.

Kirkpatrick’s offer letter.

February 2021, we entered into an employment offer letter with Mr.

The offer letter provided for Mr.

Humphrey’s at-will

employment as our Chief Financial Officer at an initial annual base salary of $320,000.

Additionally, the letter provided for his initial

target annual bonus opportunity of up to 30% of base salary.

The offer letter also indicates that Mr.

Humphrey is eligible to be granted

certain stock awards under our equity incentive plan.

Humphrey’s offer letter provides for severance benefits upon a termination of his employment by the Company without “ cause ”,

or upon his resignation for “ good reason ”, in an amount equal to six (6) months of his then current base salary (ignoring

any decrease in base salary that forms the basis for good reason);

provided, however, that the payment of such benefits is subject to

Humphrey’s continued compliance with his obligations under his “ Confidential Information and Assignment Agreement ”

and his execution of a general release of claims.

Additionally, if such termination without cause or for good reason occurs within the

one (1) month prior to, or during the twelve (12) month period immediately following a change in control, then all outstanding equity

awards subject to time-based vesting will become fully vested on the later of Mr.

Humphrey’s termination date and the change in

Cause and good reason are as defined in Mr.

Humphrey’s offer letter.

July 2021, we entered into an employment offer letter with Mr.

The offer letter provides for Mr.

Birkett’s at-will employment

as our Chief Commercial Officer and sets forth his annual base salary of $300,000.

Additionally, the letter provides for his initial

target annual bonus opportunity of up to 30% of base salary.

The offer letter also indicates that Mr.

Birkett is eligible to be granted

certain stock awards under our equity incentive plan.

Birkett’s offer letter provides for severance benefits upon a termination of his employment by the Company without “cause”,

or upon his resignation for “good reason”, in an amount equal to three (3) months of his then current base salary (ignoring

any decrease in base salary that forms the basis for good reason);

provided, however, that the payment of such benefits is subject to

Birkett’s continued compliance with his obligations under his “ Confidential Information and Assignment Agreement ”

and his execution of a general release of claims.

Additionally, if such termination without cause or for good reason occurs within the

one (1) month prior to, or the twelve (12) month period immediately following a change in control, then all outstanding equity awards

subject to time-based vesting will become fully vested on the later of Mr.

Birkett’s termination date and the change in control.

Cause and good reason are as defined in the offer letter.

Confidential Information and Assignment of Inventions Agreement

connection with each respective offer letter, Dr.

Kirkpatrick, Mr.

Birkett and Mr.

Humphrey entered into an “At-Will, Confidential

Information and Assignment of Inventions Agreement” (the “Confidentiality Agreement”).

The Confidentiality Agreements

include customary prohibitions against solicitation of our customers and employees, both during employment and for two (2) years following

any cessation of employment.

The Confidentiality Agreements also include standard provisions relating to the Company’s intellectual

property rights and prohibit the executive from disclosing confidential information.

The Confidentiality Agreements are incorporated

by reference into the offer letters and payment of any severance benefits under each executive’s offer letter is conditioned on

continued compliance with his or her Confidentiality Agreement.

currently provide welfare benefits that are available to all of our employees, including our NEOs, including health, dental, vision and

group life insurance.

January 1, 2022, we put into place the Ensysce Biosciences, Inc.

401(k) Plan” (the “ 401(k) Plan ”).

Plan provides eligible employees with an opportunity to save for retirement on a tax-advantaged basis and under which we are permitted

to make safe harbor employer contributions.

Employees’ pre-tax contributions are allocated to each participant’s individual

account and are then invested in selected investment alternatives according to the participants’ directions.

The 401(k) Plan is

intended to be qualified under Section 401(a) of the Code, with the related trust intended to be tax exempt under Section 501(a) of the

Under the 401(k) Plan, we make employer contributions to all employees – regardless of an employee’s contributions

(or lack thereof) – in an amount equal to 3% of the employee’s eligible compensation.

do not maintain any defined benefit pension plans or nonqualified deferred compensation plans.

Equity Awards at Fiscal Year-End

following table provides information regarding outstanding equity awards held by our NEOs as of December 31, 2023.

Option Awards

Number of Securities Underlying Unexercised Options Exercisable (#)

Number of Securities Underlying Unexercised Options Unexercisable (#)

Option Exercise Price ($)

Option Expiration Date

Number of Shares of Stock That Have Not Vested (#)

Market Value of Shares of Stock That Have Not Vested ($)

Lynn Kirkpatrick, PhD.

Dave Humphrey

Geoff Birkett

Versus Performance

In August 2022, the SEC adopted additional disclosure

requirements regarding the relationship between a registrant’s executive compensation and its financial performance.

Item 402(v) of Regulation S-K require certain adjustments be made to the Summary Compensation Table totals to determine Compensation

Actually Paid as reported in the Pay Versus Performance Table.

Compensation Actually Paid does not necessarily represent cash and/or equity

value earned by or paid to the applicable named executive officer without restriction, but rather is a valuation calculated under applicable

For further information concerning our executive compensation program and our pay-for-performance philosophy, refer to

the preceding compensation discussion.

The following table sets forth specified executive

compensation and financial performance measures for our two most recently completed fiscal years, as required under transitional guidance

for Smaller Reporting Companies provided by the SEC.

We have not paid dividends and do not sponsor any pension arrangements;

adjustments are made for these items.

Summary Compensation Table Total for PEO (1)

Compensation Actually Paid to PEO (2)

Average Summary Compensation Table Total for Non-PEO NEOs (3)

Average Compensation Actually Paid to Non-PEO NEOs (4)

Value of Initial Fixed $100 Investment Based on Total Shareholder Return (5)

Net Income (Loss)

($ 10,626,011 )

($ 25,085,496 )

For fiscal years 2023 and 2022, the principal executive officer (“PEO”) was our Chief Executive Officer, Dr.

Lynn Kirkpatrick.

The amounts disclosed reflect the following adjustments to the amounts reported in the Summary Compensation Table for the PEO:

Grant Date Value of Equity Awards

Fair Value as of Year End of Awards Granted in the Year and Outstanding and Unvested as of Year End

Change in Fair Value of Awards Granted in Prior Years and Outstanding and Unvested as of Year End

Fair Value as of Vesting Date of Awards Granted and Vested in the Year

Change in Fair Value of Awards Granted in Prior Years that Vested in the Year

Fair Value as of Prior Year End of Awards Forfeited in the Year

Total Adjustments

For fiscal years 2023 and 2022, the Non-PEO NEOs were Dave Humphrey and Geoff Birkett.

The amounts disclosed reflect the following adjustments to the amounts reported in the Summary Compensation Table for the Non-PEO NEOs:

Grant Date Value of Equity Awards

Fair Value as of Year End of Awards Granted in the Year and Outstanding and Unvested as of Year End

Change in Fair Value of Awards Granted in Prior Years and Outstanding and Unvested as of Year End

Fair Value as of Vesting Date of Awards Granted and Vested in the Year

Change in Fair Value of Awards Granted in Prior Years that Vested in the Year

Fair Value as of Prior Year End of Awards Forfeited in the Year

Total Adjustments

Total Shareholder Return

is calculated as the sum of (i) the cumulative amount of dividends for the measurement period, assuming reinvestment of all

dividends, if any, plus (ii) the cumulative increase or decrease in the price of our common stock each respective year, divided

by the price of our common stock at the beginning of the measurement period.

Relationship Between Compensation Actually Paid

and Company Total Shareholder Return (“TSR”)

Relationship Between Compensation Actually Paid and Net Income (Loss)

following table provides summary information concerning compensation paid or accrued by us to or on behalf of our non-employee directors

for services rendered to us as of December 31, 2023.

Fees Earned or Paid in Cash ($)

Option Awards

William Chang

Andrew Benton

Curt Rosebraugh

October 2023, each Board member was granted 20,000 restricted stock units or a stock option to purchase 20,000 shares of our common stock

at an exercise price of $1.13 per share.

The awards were fully vested and have a ten (10) year term.

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

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

following table sets forth information with respect to the beneficial ownership of shares of our common stock by (i) each director, (ii)

each named executive officer, (iii) all directors and executive officers as a group, and (iv) each person who we know beneficially owns

more than 5% of our common stock as of March 8, 2024, unless otherwise indicated below.

ownership is determined in accordance with the rules of the SEC.

These rules generally attribute beneficial ownership of securities to

persons who possess sole or shared voting power or investment power with respect to those securities and include shares of common stock

issuable upon the exercise of stock options that are immediately exercisable or exercisable within 60 days after March 8, 2024 but excludes

unvested stock options.

Except as otherwise indicated, all of the shares reflected in the table are shares of common stock and all persons

listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community

property laws.

The information is not necessarily indicative of beneficial ownership for any other purpose.

computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed

outstanding shares of common stock subject to options or warrants held by that person that are currently exercisable or exercisable within

60 days of March 8, 2024.

We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of

any other person.

ownership calculations for beneficial ownership for each person or entity are based on 7,329,172 shares outstanding as of March 8, 2024.

Except as otherwise indicated in the table below, addresses of named beneficial owners are in care of Ensysce Biosciences, Inc., 7946

Ivanhoe Avenue, Suite 201, La Jolla, California 92037.

All share amounts have been adjusted for prior reverse stock splits.

Ownership Table

Name and Address of Beneficial Owners

Number of Shares

Officers and Directors

Lynn Kirkpatrick (1)

Geoff Birkett (2)

David Humphrey (3)

Linda Pestano (4)

Andrew Benton (5)

William Chang (6)

Bob Gower (7)

Adam Levin (8)

Lee Rauch (10)

Curtis Rosebraugh (11)

All directors and named executive officers as a group (eleven individuals)

Greater than 5% Holders

Bob Gower (7)

Indicates less than 1%.

Includes 109,644 shares

subject to options.

Consists of shares subject

Consists of 101,086 shares

subject to options.

Consists of shares subject

Consists of 419 shares

subject to options and 20,025 shares owned directly.

Includes 145 shares subject

to options, 23,126 shares owned directly by Mr.

Chang and his wife and 7,689 shares owned through trusts in which Mr.

Chang has sole

or shared voting and dispositive power.

Does not include 416 shares held by trusts for family members in which Mr.

Chang does not

have beneficial ownership.

The business address for Mr.

Chang is 520 El Camino Real, 9th Floor, San Mateo, CA 94402.

Includes 172 shares subject

to options, 121,890 shares held directly and 257,200 shares that may be acquired through the exercise of (i) warrants acquired in

connection with the October 2023 Securities Purchase Agreement and (ii) warrants acquired in 2022.

The business address for Mr.

is 101 Westcott, Unit 303, Houston, Texas 77007.

Consists of shares subject

Certain Relationships and Related Transactions and Director Independence

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

than the agreements and arrangements described under the section entitled “ Executive & Director Compensation ”

and the transactions described below, since January 1, 2023, there has not been and there is not currently proposed, any transaction

or series of similar transactions to which (i) we were, or will be, a participant;

(ii) the amount involved exceeded, or will exceed,

$120,000 or 1% of the average of our total assets at December 31, 2022 and 2023;

and (iii) in which any director, executive officer,

holder of 5% or more of any class of our capital stock or any member of the immediate family of, or entities affiliated with, any of

the foregoing persons, had, or will have, a direct or indirect material interest.

own 79.2% of the issued and outstanding shares of EBIR, a clinical stage pharmaceutical company that is developing a compound utilized

in our overdose protection program for the treatment of COVID-19.

The other 20.8% is owned by two affiliates of Ensysce and Mucokinetica.

Specifically, our Chief Executive Officer and Director, Dr.

Lynn Kirkpatrick, owns 9.9%, our former Chief Business Officer owns 9.9%

and Mucokinetica owns 1.0%.

Kirkpatrick is also Chief Executive Officer of EBIR.

There is no revenue sharing agreement between us

the 2023 Notes offering, Bob Gower, our Chairman, purchased an aggregate principal amount of Investor Notes of $216,000 for a purchase

price of $200,000 and Investor Warrants that may be exercised for an aggregate of 443,187 shares of common stock.

The per share conversion

price of the Investor Notes and the per share exercise price of the Investor Warrants is $1.5675.

Millard is an executive officer of the Company.

Millard’s spouse is also employed by the Company.

Party Transaction Policy

Board previously adopted a written related person transaction policy that sets forth the following policies and procedures for the review

and approval or ratification of related person transactions.

“ Immediate Family Member ” means a child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law,

son-in-law, daughter-in-law, brother-in-law, sister-in-law, or any person sharing the household (other than a tenant or employee).

“ Related Party ” means any (a) person who is or was (since the beginning of the last fiscal year for which we have

filed a Form 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for

election as a director of the Company, (b) greater than 5% beneficial owner of the Company’s outstanding common stock, or (c) Immediate

Family Member of any of the foregoing.

“ Related Person Transaction ” is any Transaction involving the Company in which a Related Party has or will have a

direct or indirect material interest, as determined by the Audit Committee.

“ Transaction ” means any financial transaction, arrangement or relationship or any series of similar transactions,

arrangements or relationships, including indebtedness and guarantees of indebtedness and transactions involving employment and similar

relationships.

the policy, the following types of Transactions are deemed not to create or involve a material interest on the part of the Related Party,

nor will they require approval or ratification, under the policy:

involving the purchase or sale of products or services in the ordinary course of business, not exceeding $50,000 or, if the Company

is a “ smaller reporting company ” as defined under the Securities Act, if less, one percent of the average of the

Company’s total assets as of December 31st for the last two completed fiscal years.

in which the Related Party’s interest derives solely from his or her service as a director of another corporation or organization

that is a party to the Transaction.

in which the Related Party’s interest derives solely from his or her ownership of less than 5% of the equity interest in another

person (other than a general partnership interest) which is a party to the Transaction.

in which the Related Party’s interest derives solely from his or her ownership of a class of equity securities of the Company

and all holders of that class of equity securities received the same benefit on a pro rata basis (e.g., dividends).

in which the Related Party’s interest derives solely from his or her service as a director, trustee or officer (or similar

position) of a not-for-profit organization or charity that receives donations from the Company, which donations are made pursuant

to the Company’s matching program, as a result of contributions by employees, that is available on the same terms to all employees

of the Company.

arrangements of any executive officer, other than an individual who is an Immediate Family Member of a Related Party, if such arrangements

have been approved or recommended to the Board for approval by the Compensation Committee.

compensation arrangements, if such arrangements have been approved by the Board or the Compensation Committee of the Board.

with a Related Party in which the rates or charges involved in the Transaction are determined by competitive bids, or the Transaction

involves the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with

law or governmental authority.

payments made to directors and executive officers in accordance with the Company’s then existing certificate of incorporation,

bylaws and applicable laws.

with a Related Party involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture

or similar services.

to its Audit Committee charter, the Audit Committee will have the responsibility to review, approve or ratify any Related Person Transactions.

listing rules require that a majority of the board of directors of a company listed on Nasdaq be composed of “ independent directors ,”

which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having

a relationship that, in the opinion of the company’s board of directors, would interfere with the director’s exercise of

independent judgment in carrying out the responsibilities of a director.

Based on information provided by each director concerning his

or her background, employment and affiliations, including family relationships, the Board determined that each of Bob Gower, William

Chang, Andrew Benton, Steve R.

Martin, Adam S.

Levin, Lee Rauch and Curtis Rosebraugh is an independent director under the Nasdaq listing

rules and Rule 10A-3 of the Exchange Act.

In making these determinations, the Board considered the current and prior relationships that

each non-employee director has and will have with us and all other facts and circumstances that the Board deems relevant in determining

independence, including the beneficial ownership of our common stock by each non- employee director (and related entities) and the transactions

involving them described in the section entitled “ Certain Relationships and Related Party Transactions.”

Principal Accountant Fees and Services

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

April 10, 2023, the Audit Committee of our Board appointed Moss Adams LLP (“ Moss Adams ”) as our independent registered

public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2023.

During fiscal year

2022, Mayer Hoffman McCann P.C.

(“ Mayer Hoffman ”) served as our independent auditor and reported on our consolidated

financial statements for that year.

Mayer Hoffman had been our independent auditor between 2017 and our dismissal of that firm on April

following table sets forth the aggregate fees incurred for our independent registered accounting firm for the fiscal years ended December

31, 2023 and 2022.

These fees are categorized as audit fees, audit-related fees, tax fees, and all other fees.

The nature of the services

provided in each category is described below the table.

Audit-Related Fees

Consist of fees incurred for professional services rendered for the audit of the consolidated financial statements and review

of the quarterly interim consolidated financial statements.

These fees also include the review of registration statements and the delivery

of consents in connection with registration statements.

The amount for fiscal year 2023 includes $89,250 for the audit of the year ended

December 31, 2022, completed in conjunction with the audit of the year ended December 31, 2023.

Amounts for fiscal year 2023 reflect

services performed by Moss Adams and amounts for fiscal year 2022 reflect services performed by Mayer Hoffman.

Audit-related

Consist of fees incurred for professional services rendered for the compliance audit in accordance with the audit requirements of Title

Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal

Awards related to funding under federal government grants.

There were no fees billed for tax fees for the fiscal years ended December 31, 2023 and 2022.

There were no fees billed for professional services rendered for other compliance purposes for the fiscal years ended

December 31, 2023 and 2022.

audit-related and other non-audit services were pre-approved by the Audit Committee, which concluded that the provision of such services

was compatible with the maintenance of the respective firm’s independence in the conduct of its auditing functions.

Exhibits and Financial Statement Schedules.

8 unchanged sentences

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of Ensysce Biosciences, Inc.

on the Consolidated Financial Statements

the Shareholders and the Board of Directors of

Biosciences Inc.

on the Financial Statements

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

(“Company”) as of December 31, 2022

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

two years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

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

31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022,

(the “Company”) as of December 31,

2023 and 2022, the related consolidated statements of operations and comprehensive income (loss), stockholders’ deficit, and cash

flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

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

the Company as of December 31, 2023 and 2022, and the consolidated results of its operations and its cash flows for the years then ended,

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

2 unchanged sentences

As discussed in Note

2 to the financial statements, the Company does not have revenue generating activities and is dependent on additional financing to fund

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

plans regarding those matters are also described in Note 2 to the financial statements.

The financial statements do not include any adjustments

to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities

that may result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

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

financial statements based on our audits.

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

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

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

2 to the financial statements, the Company has incurred recurring losses from operations and has an accumulated deficit that raise substantial

doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note

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

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

with the U.S.

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

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

Those standards require that we plan and perform the audits to obtain

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

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

As part of our audits

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

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

Those standards require that we plan and perform the audit to obtain

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

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

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

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

Accordingly, we express no such opinion.

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

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

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

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

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

We believe that our audits

provide a reasonable basis for our opinion.

have served as the Company’s auditor since 2017.

Mayer Hoffman McCann P.C .

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

due to error or fraud, and performing procedures to respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Audit Matters

audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required

to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements

and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

Moss Adams LLP

Diego, California

have served as the Company’s auditor since 2023.

Biosciences, Inc.

12 unchanged sentences

Lease liability

Notes payable and accrued interest ($ 4,063,431 and $ 12,358,886 at fair value at December 31, 2022 and 2021, respectively)

Notes payable and accrued interest

Total current liabilities

7 unchanged sentences

Preferred stock, $ 0.0001 par value, 1,500,000 shares authorized, no shares issued and outstanding at December 31, 2023 and December 31, 2022

Common stock, $ 0.0001 par value, 250,000,000 and 150,000,000 shares authorized at December 31, 2022 and December 31, 2021;

Common stock, $ 0.0001 par value, 250,000,000 shares authorized at December 31, 2023 and December 31, 2022;

3,146,157 and 534,571 shares issued at December 31, 2023 and December 31, 2022, respectively;

7 unchanged sentences

( 3,714,444 )

( 7,878,243 )

Noncontrolling interests in stockholders’ deficit

1 unchanged sentence

( 4,029,652 )

( 8,158,058 )

Total liabilities and stockholders’ deficit

12 unchanged sentences

Other income (expense):

Change in fair value of derivative liabilities

Loss on issuance of convertible notes

2 unchanged sentences

( 1,137,740 )

( 1,920,158 )

Change in fair value of convertible notes

( 2,993,060 )

Loss on conversions and change in fair value of convertible notes

Issuance of liability classified warrants

( 3,737,371 )

( 1,865,403 )

Change in fair value of liability classified warrants

( 1,438,186 )

Loss on debt conversions

( 3,964,633 )

Interest expense, net

( 1,295,307 )

Other income and expense, net

2 unchanged sentences

$ ( 24,207,685 )

$ ( 29,145,901 )

Net loss attributable to noncontrolling interests

9 unchanged sentences

Statements of Changes in Stockholders’ Deficit

Paid-In Capital

Number of Shares

Noncontrolling

Stockholders’

Equity (Deficit)

Paid-In Capital

Stockholders’ Equity (Deficit)

Number of Shares

Noncontrolling

on December 31, 2020

Balance on December 31, 2021

$ ( 85,845,567 )

$ ( 279,815 )

of stock options

of convertible notes in business combination

of convertible notes

of common stock for business combination, net of transaction costs

dividend related to warrants down round provision

$ ( 8,158,058 )

Consultant compensation

Settlement of restricted stock units

Conversion of convertible notes

Settlement of payable to related parties

Capital contribution from related parties

Public offering, net

Stock-based compensation

Transaction costs associated with public offering

Reverse split fractional shares

Deemed dividend related to warrants down round provision

( 24,172,292 )

on December 31, 2021

( 24,207,685 )

Balance on December 31, 2022

$ 107,216,566

3 unchanged sentences

$ 107,216,566

of restricted stock units

of convertible notes

of payable to related parties

contribution from related parties

offering, net

costs associated with public offering

split fractional shares

dividend related to warrants down round provision

$ ( 110,931,063 )

$ ( 315,208 )

on December 31, 2022

$ ( 4,029,652 )

Settlement of restricted stock units

Settlement of commitment fee

Conversion of convertible notes

Public offering, net

Stock-based compensation

Issuance of warrants - debt discount

Transaction costs associated with public offering

Issuance of common stock upon exercise of warrants

Reverse split fractional shares

Deemed dividend related to warrants down round provision

( 10,613,074 )

( 10,626,275 )

Balance on December 31, 2023

$ 121,233,901

3 unchanged sentences

$ 121,233,901

$ ( 121,557,074 )

$ ( 328,409 )

$ ( 651,267 )

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

Biosciences, Inc.

Statements of Cash Flows

Statements of Cash Flow s

Year Ended December 31,

5 unchanged sentences

Accrued interest

Accretion of discounts on promissory notes

Change in fair value of derivative liability

Change in fair value of convertible notes

Amortization of original issue discount and debt issuance costs

Loss on conversions and change in fair value of convertible notes

( 1,792,154 )

Loss on issuance of convertible notes

Loss on extinguishment of debt

Stock-based compensation

Issuance costs for convertible notes

Issuance of liability classified warrants

1 unchanged sentence

( 6,730,613 )

Issuance of warrants for share subscription facility

Commitment fee for share subscription facility

Warrant modification

Issuance costs for convertible notes

Loss on debt conversions

Changes in operating assets and liabilities:

Stock-based compensation

Unbilled receivable

Prepaid expenses and other assets

( 1,616,019 )

Accounts payable

1 unchanged sentence

Accrued expenses and other liabilities

( 1,284,233 )

Net cash used in operating activities

5 unchanged sentences

Cash flows from financing activities:

Proceeds from public offering, net

Proceeds from public offerings, net

Proceeds from issuance of convertible notes, net

Proceeds from issuance of promissory notes to related parties

Repayment of convertible notes

( 1,000,208 )

Repayment of promissory notes

Transaction costs from public offering

Proceeds from exercise of stock options

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

( 1,408,364 )

Transaction costs from public offerings

Repayment of financed insurance premiums

Net cash provided by financing activities

Decrease (increase) in cash and cash equivalents

Decrease in cash and cash equivalents

( 2,024,098 )

( 9,117,034 )

Cash and cash equivalents beginning of period

4 unchanged sentences

Stock-based compensation

Fair value of derivative liability at issuance

Settlement of convertible notes into common stock

Conversion of convertible notes into common stock

Payable to related parties settled in shares

Capital contribution from related parties

Net assets acquired in business combination

Original debt discount from convertible notes

Debt discount from warrants issuance

Issuance cost from convertible notes

Financed insurance premiums

Share subscription facility transaction costs

Settlement of commitment fee in shares

Deemed dividend related to warrants down round provision

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Biosciences, Inc.

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

(“EBIR”, formerly known as Covistat, Inc.)

and its wholly owned subsidiaries EBI Operating, Inc.

and EBI OpCo.

(collectively, the “Company”) is engaged in the

development of drug delivery platforms targeting pain and cancer markets.

The primary focus of the Company is its program developing

abuse and overdose resistant pain technology with a clinical stage program being the abuse resistant, TAAP (Trypsin Activated Abuse Protection)

opioid product candidate, PF614.

In addition, the Company is developing its MPAR TM (Multi-Pill Abuse Resistant) technology

for overdose protection which will be applied to the PF614 program.

The Company is also applying its TAAP and MPAR TM technology

(“Ensysce”), along with its 79.2 %-owned subsidiary, EBIR, Inc.

(“EBIR”, formerly known as Covistat,

Inc.) and its wholly-owned subsidiaries EBI Operating, Inc.

and EBI OpCo, Inc.

(collectively, the “Company”), is a clinical-stage

biotech company using its proprietary technology platforms to develop safer prescription drugs.

The primary focus of the Company is its

program developing abuse and overdose resistant pain technology with a clinical stage program being the abuse resistant, TAAP (Trypsin

Activated Abuse Protection) opioid product candidate, PF614.

In addition, the Company is developing its MPAR® (Multi-Pill Abuse Resistant)

technology for overdose protection which will be applied to the PF614 program.

The Company is also applying its TAAP and MPAR® technology

to a methadone prodrug for use in the treatment of Opioid Use Disorder.

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

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

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

Pursuant to the

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

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

“Business Combination”).

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

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

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

Stock”), of LACQ.

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

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

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

Unless the context otherwise requires, references

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

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

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

ratio of 0.06585 .

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

common stock of the combined company.

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

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

foregoing exchange ratio).

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

under the new ticker symbol “ENSC”.

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

formation of a separate entity, EBIR, a Delaware corporation.

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

of a separate entity, EBIR, a Delaware corporation.

Pursuant to the articles of incorporation, EBIR was authorized to issue 1,000,000

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

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

respectively.

Ensysce is a 79.2 %

stockholder in EBIR, with 19.8 % and 1.0 % of the shares held by certain key personnel of the Company and an unrelated party, respectively.

The non-Ensysce owned shares and the activity are reflected on the financial statements as noncontrolling interests.

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

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and transactions have been eliminated in the consolidation.

October 2022, the Company completed a 1-for-20 reverse split of its outstanding common stock.

March 2023, the Company completed a 1-for-12 reverse split of its outstanding common stock.

All references in these consolidated financial

statements to shares and per share amounts in all periods have been retroactively restated to reflect the split.

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

Under this method of accounting, LACQ

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

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

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

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

by a recapitalization.

The net assets of LACQ, primarily consisting of cash of $ 7.8 million and prepaid expenses of $ 1.1 million, were

recorded at historical cost with no goodwill or other intangible assets recorded.

The shares and net loss per share prior to the reverse

recapitalization have been retroactively restated to reflect the exchange ratio of 0.06585 .

The consolidated financial statements reflect

the historical operations of Ensysce.

The number of authorized

shares and the par value of the shares did not change as a result of the reverse stock split.

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

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

Company has not generated any product revenue and had an accumulated deficit of $ 110.9 million at December 31, 2022.

There is no assurance

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

Product development activities,

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

products and will require significant additional financing.

Company has not generated any product revenue.

There is no assurance that profitable operations will ever be achieved, and, if achieved,

would be sustained on a continuing basis.

Product development activities, clinical and pre-clinical testing, and commercialization of

the Company’s product candidates are necessary to develop the Company’s products and will require significant additional

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

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

December 2020, the Company executed the GEM Agreement.

Under the agreement, the investor agreed to provide the Company with a share subscription

facility of up to $ 60.0 million for a 36-month term following the public listing of the Company’s common stock.

The Company controls

the timing and maximum amount of drawdown under this facility and has no minimum drawdown obligation.

The investor will pay, in cash,

a per-share amount equal to 90% of the average daily closing price of the Company’s stock during the 30 consecutive trading days

prior to the issuance of a draw notice, which shall not exceed 400% of the average trading volume for the 30 trading days immediately

preceding the draw down date.

On June 30, 2021, the Company consummated the Business Combination, resulting in the Company’s shares

becoming publicly listed on Nasdaq on July 2, 2021.

Concurrent with the public listing of the Company’s shares, the Company issued

to the investor 55,306 warrants with a five-year term to purchase common stock of Ensysce at an exercise price of $ 200.20 per share,

subsequently reduced to $ 1.40 at December 31, 2022 (Note 8).

The Company is required to pay a commitment fee to the investor of $ 1.2

million with $ 0.8 million due on the first anniversary of the public listing date and $ 0.4 million due on the 18-month anniversary of

the public listing date.

The first $ 0.8 million of the commitment fee was paid in July 2022 in freely tradable common stock of the Company

(Note 10) and the remaining $ 0.4 million due in January 2023 was paid in freely tradable common stock of the Company.

Biosciences, Inc.

to the Consolidated Financial Statements

July and August 2022, the Company received funding under a $ 8.48

million convertible note financing agreement

with the same institutional investors (the “2022 Notes”) (See Note 7 for additional information).

The agreement limits the Company’s ability to execute

certain debt and equity financings, including under the GEM Agreement, while the convertible notes are outstanding.

Without the availability

of proceeds through the GEM Agreement, existing cash resources are not sufficient to fund current planned operations.

These matters, among others, raise substantial doubt

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

the Company believes in the viability of its strategy to ultimately realize revenues and in its ability to raise additional funds, management

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a going concern.

Biosciences, Inc.

to the Consolidated Financial Statements

3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Estimates and Assumptions

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

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

Actual results may differ

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

The more significant estimates

and assumptions by management include, but are not limited to, the expense recognition for certain accrued research and development

services, the valuation allowance of deferred tax assets resulting from net operating losses, and the fair value of warrants and

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

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

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

Actual results may differ from those

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

The more significant estimates and assumptions

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

and Cash Equivalents

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

The Company’s

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

The Company’s cash

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

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

Additionally, the Company had a concentration in accounts payable, as two research and development vendors made up

greater than 10% individually, and 38% and 65% in aggregate , of the outstanding accounts payable balance as of December 31, 2023 and 2022,

respectively.

Biosciences, Inc.

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estimated useful lives of five to six years .

Depreciation expense of $ 0 and $ 151 was recognized for year ended December 31, 2022 and

2021, respectively.

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

of operations.

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

might not be recoverable.

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

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

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

For long-lived assets to be held and used,

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

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

There were no such losses for

the year ended December 31, 2022 and 2021.

Financial Instruments

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

The Company evaluates

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

that qualify as embedded derivatives.

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

for bifurcation are met.

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

the host contract and the features of the derivatives.

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

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

Bifurcated embedded derivatives are classified with the

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

Property and equipment are fully depreciated as such there is no depreciation recognized

in the years ended December 31, 2023 and 2022.

Value Measurement

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

prices in active markets for identical assets or liabilities.

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

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

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

Quoted prices in active

markets for identical assets or liabilities.

Inputs other than Level

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

Unobservable inputs which

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

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

Biosciences, Inc.

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for each reporting period.

Refer to Note 8 for details of the warrants.

Refer to Note 8 for additional details of the warrants.

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

as of December 31, 2023 and 2022.

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

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

SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE

OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE

December 31, 2023

1 unchanged sentence

Liability classified warrants

Biosciences, Inc.

to the Consolidated Financial Statements

December 31, 2022

1 unchanged sentence

Liability classified warrants

Biosciences, Inc.

to the Consolidated Financial Statements

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

4 unchanged sentences

Fair value, December 31, 2022

Additions, net

Conversions/payments

( 3,056,892 )

Loss on issuance of convertible notes

Cash payments

Cash true up liability

Change in fair value

( 12,487,400 )

( 5,756,787 )

( 6,730,613 )

Fair value, December 31, 2023

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

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

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

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

In August 2019, the

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

million in years 1 and 2, respectively).

a research and development grant related to the development of its MPAR® overdose prevention technology (the “MPAR Grant”).

The total approved budget for the initial two-year period was approximately $ 5.4 million ($ 3.2 million and $ 2.2 million in years 1 and

2 respectively) of which the Company would contribute $ 1.1 million in the first year of the grant.

In August 2019, the grant was amended

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

1 and 2, respectively).

In June 2021, the Company received a Notice of Award for an additional $ 2.8 million of funding in year 3 under

the MPAR Grant beginning July 1, 2021.

In June 2022, the Company received a Notice of Award for an additional $ 2.8 million of funding

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

In June 2022, the Company received a Notice of Award for an additional $ 2.8 million

of funding in year 4 under the MPAR Grant from July 1, 2022 through June 30, 2023.

in year 4 under the MPAR Grant from July 1, 2022 through June 30, 2023.

This brings total funding under this grant to approximately $ 10.7

$ 10.7 million.

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

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

The total approved budget

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

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

The Company believes this policy is consistent with the overarching

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

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

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

as defined in ASC 606.

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

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

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

The total approved budget for

the grant was approximately $ 5.4 million, and the current grant period ends in August of 2024.

As of December 31, 2023, the remaining

funding under the grant is $ 2.2 million

Company recognizes revenue when costs related to the grants are incurred and assessed as reimbursable.

The Company believes this policy

is consistent with the overarching premise in Accounting Standards Codification Topic 606, Revenue from Contracts with Customers

(“ASC 606”), applied by analogy, to ensure that it recognizes revenues to reflect the transfer of promised goods or services

to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services,

even though there is no “exchange” as defined in ASC 606.

The Company believes the recognition of revenue as costs are incurred

and reimbursable amounts become due is analogous to the concept of transfer of control of a service over time under ASC 606.

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

SCHEDULE OF REVENUE RECOGNIZATION UNDER GRANTS

OF REVENUE RECOGNIZATION UNDER GRANTS

Year Ended December 31,

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to the Consolidated Financial Statements

Correction of an Error

In August 2022, the Company concluded that there was an error in the measurement of the unbilled receivable as of

December 31, 2021.

The error was corrected in the second quarter of 2022.

The change resulted in a decrease in the balance of the unbilled

receivable of $ 214,308 and a corresponding increase in general and administrative expense presented in the consolidated statement of operations

for the year ended December 31, 2022.

Company, in consultation with the Audit Committee of the Board of Directors, evaluated the effect of these adjustments on the Company’s

consolidated financial statements under ASC 250, Accounting Changes and Error Corrections and Staff Accounting Bulletin No.

108, Considering

the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements and determined it was not

necessary to recall its previously issued consolidated financial statements as the errors did not materially misstate any previously

issued consolidated financial statements and the correction of the error in the current fiscal year is also not material.

looked at both quantitative and qualitative characteristics of the required corrections in making the determination.

and Development Costs

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

The assumptions used in

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

the application of management’s judgment.

For the year ended December 31, 2022 and 2021, stock-based compensation costs are

recorded in research and development and general and administrative expenses in the consolidated statements of

The assumptions used in calculating

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

of management’s judgment.

Stock-based compensation costs are recorded in research and development and general and administrative

expenses in the consolidated statements of operations.

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

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

A reconciliation of the

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

SCHEDULE OF EARNINGS PER SHARE RECONCILIATION

Year Ended December 31,

Net income (loss) attributable to common stockholders

$ ( 25,085,496 )

$ ( 29,886,851 )

Weighted average shares outstanding, basic and diluted

Net loss per share attributable to common stockholders, basic and diluted

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

they would have been anti-dilutive (the Company has utilized the principal balance outstanding and the end of period conversion price for the Convertible

Notes for the purposes of the weighted average share calculation below):

SCHEDULE OF WEIGHTED AVERAGE SHARES OF ANTI-DILUTIVE SECURITIES

they would have been anti-dilutive (the Company has utilized the principal balance outstanding and the end of period conversion price

for the Convertible Notes for the purposes of the weighted average share calculation below):

OF WEIGHTED AVERAGE SHARES OF ANTI-DILUTIVE SECURITIES

Year Ended December 31,

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Anti-dilutive weighted average shares

Issued Accounting Pronouncements

December 2019, the FASB issued ASU No.

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

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

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

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

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

The guidance is effective for fiscal years beginning

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

Early adoption is permitted.

The Company adopted the guidance in 2022 and

it did not have a material impact on the financial statements due to their current tax position.

Adopted Accounting Pronouncements

August 2020, the FASB issued ASU No.

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

The Company will adopt the standard

with an effective date of January 1, 2023 and it is not expected to have a material impact on currently recorded transactions.

May 2021, the FASB issued ASU No.

2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified

Written Call Options (A Consensus of the FASB Emerging Issues Task Force (the “EITF”)) – to clarify and reduce diversity

in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants)

that remain equity classified after modification or exchange.

The guidance in the ASU requires the issuer to treat a modification of

an equity-classified warrant that does not cause the warrant to become liability-classified as an exchange of the original warrant for

a new warrant.

This guidance applies whether the modification is structured as an amendment to the terms and conditions of the warrant

or as termination of the original warrant and issuance of a new warrant.

Under the amendments, an issuer should measure the effect of

a modification as the difference between the fair value of the modified warrant and the fair value of that warrant immediately before

modification.

The EITF concluded that the recognition of the modification depends on the nature of the transaction in which a warrant

If there is more than one element in a transaction (for example, if the modification involves both a debt modification and

an equity issuance), then the guidance requires the issuer to allocate the effect of the option modification to each element.

1, 2022, the Company adopted ASU 2021-04 and the adoption did not have a significant impact on the consolidated financial statements.

Reclassification of prior year presentation

Certain prior year amounts have been reclassified

for consistency with the current year presentation.

These reclassifications had no effect on the reported results of operations.

An adjustment

has been made to the consolidated statement of operations for the year ended December 31, 2021, to reclassify the loss on debt conversions.

The Company adopted the standard

with an effective date of January 1, 2023 and the adoption did not have a significant impact on the consolidated financial statements.

Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures”,

which sets forth improvements to the current segment disclosure requirements in accordance with Topic 280 “Segment Reporting,” including

clarifying that entities with a single reportable segment are subject to both new and existing segment reporting requirements.

will be effective retrospectively for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15,

Adoption of this ASU is currently being evaluated by the Company.

December 2023, the FASB issued ASU No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” ASU 2023-09

requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income

ASU 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

Biosciences, Inc.

2 unchanged sentences

expenses and other current assets consisted of the following:

SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid research and development

1 unchanged sentence

Other prepaid expenses

Other current assets

Total prepaid expenses and other current assets

1 unchanged sentence

expenses and other liabilities consisted of the following:

SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES

OF ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued research and development

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Other accrued liabilities

Accrued scientific advisory board fees

Consultant fees

Bonus Accrual

Total accrued expenses and other liabilities

long-term liabilities consisted of the following:

SCHEDULE OF OTHER LONG-TERM LIABILITIES

Share subscription facility commitment fees

Liability classified warrants

Total other long-term liabilities

long-term liabilities

Biosciences, Inc.

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December 31, 2023, the future lease payments totaled $ 31,249 .

The Company recognized total rent expense of $ 31,756 and

the years ended December 31, 2022, and 2021, respectively.

Compensation Commitments

In assessing performance for 2022 annual bonuses, the Board of Directors

established achievement of 2022 goals at 75 % of target but specified that payment of the resulting $ 0.4 million in annual bonuses is dependent

upon future achievement of specified financing activities.

As such future achievement is uncertain, no accrual has been recorded as of

The Company recognized total rent expense of $ 33,747 and $ 31,756 in the

year ended December 31, 2023, and 2022, respectively.

Subscription Facility

December 2020, the Company executed the GEM Agreement, under which an investor agreed to provide the Company with a share subscription

facility of up to $ 60.0 million for a 36-month term following the public listing of the Company’s common stock.

The Company controls

the timing and maximum amount of drawdown under this facility and has no minimum drawdown obligation.

The investor will pay, in cash,

a per-share amount equal to 90% of the average daily closing price of the Company’s stock during the 30 consecutive trading days

prior to the issuance of a draw notice, which shall not exceed 400% of the average trading volume for the 30 trading days immediately

preceding the draw down date.

Concurrent with the public listing of the Company’s shares on July 2, 2021, the Company issued to

the investor 4,608 warrants with a three-year term to purchase common stock of Ensysce at an exercise price of $ 2,402.40 per share, subsequently

reduced to $ 1.5675 at December 31, 2023 (Note 8).

The Company was required to pay a commitment fee to the investor of $ 1.2 million with

$ 0.8 million due on the first anniversary of the public listing date and $ 0.4 million due on the 18-month anniversary of the public listing

The first $ 0.8 million of the commitment fee was paid in July 2022 in common stock of the Company and the remaining $ 0.4 million

was paid in January 2023 in common stock of the Company.

Usage of the GEM facility is limited by other agreements of the Company.

Company has not raised any capital to date pursuant to the GEM facility.

Subject to Shareholder Approval

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original terms of the awards did not satisfy the grant date criteria for an equity award, as of December 31, 2021, the Company recorded

a liability $ 1,342,479 to reflect the estimated value of services received during the period.

a liability of $ 1,342,479 to reflect the estimated value of services received during the period.

On February 14, 2022, the equity awards

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following table provides a summary of the Company’s outstanding debt as of December 31, 2023:

SCHEDULE OF DEBT

Principal balance

Accrued interest

Fair value adjustment

Net debt balance

Unamortized Debt

Discount & Issuance Costs

$ ( 1,197,200 )

Financed insurance

$ ( 1,197,200 )

following table provides a summary of the Company’s outstanding debt as of December 31, 2022:

Principal balance

Accrued interest

Unamortized debt discount

Net debt balance

Financed insurance

interest expense recognized for notes payable (excluding the 2022 and 2021 Notes) was as follows:

SCHEDULE OF INTEREST EXPENSE DEBT

Year Ended December 31,

Stated interest accrual

Debt discount amortization

interest expense recognized for financed insurance was $ 14,716 and $ 9,909 for the year ended December 31, 2023 and 2022, respectively.

Interest expense recognized for the 2023 Notes was $ 339,230 for the year-ended December 31, 2023, which consists of amortization of the

debt discount and debt issuance costs and accrued interest.

September 24, 2021, the Company entered into an agreement with institutional investors to issue the 2021 Notes.

The agreement provides

The agreement provided

for two closings:

the first closing for $ 5.3 million (resulting in net proceeds of $ 4.6 million) which closed on September 24, 2021 (the

“First Closing”).

the first closing for $ 5.3 million (resulting in net proceeds of $ 4.6 million) which closed on September 24, 2021.

The second closing for $ 10.6 million (resulting in net proceeds of $ 9.4 million) which closed on November 5, 2021.

5, 2021 (the “Second Closing”).

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

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

The Company may not issue any additional debt or equity without the prior

written consent of the holders.

2021 Notes mature on June 23, 2023 for the first closing, and August 4, 2023 for the second closing.

The notes bear interest at a rate

of 5 % per annum, in addition to an original issue discount of 6 %.

The interest may be settled in cash or shares at the option of the

Company and is payable together with monthly redemptions of the outstanding principal amount of the debt.

2021 Notes included a stated rate of interest of 5 % per annum, in addition to an original issue discount of 6 %.

The interest could be

settled in cash or shares at the option of the Company and was payable together with monthly redemptions of the outstanding principal

amount of the debt.

Company elected to apply the fair value option to the measurement of the 2021 Notes.

1 unchanged sentence

was $ 15.9 million.

The Company recorded total issuance costs of $ 1.9 million representing investment banking and legal fees of $ 1.0 million

and original issue discounts of $ 0.9 million.

The fair value measurement includes the assumption of accrued interest and interest expense

(at the stated rate plus an 8 % cash settlement premium) and thus a separate amount is not reflected on the consolidated statements of

If presented separately, the total amount of interest expense (after consideration of the conversions) for the year-ended

December 31, 2022 would be $ 0.2 million.

multiple conversions (at original contract terms and at amended reduced conversion prices) since issuance the Company recognized a change in

fair value of convertible notes of $ 2.7

million (gain) for the period ended December

31, 2022 primarily due to reductions in the Company’s stock price.

Biosciences, Inc.

to the Consolidated Financial Statements

following table provides a summary of the Company’s 2021 Note conversions during the year ended December 31, 2022:

SCHEDULE OF CONVERSION DEBT

the year ended December

August 8, 2022, the parties agreed to modify the conversion price of the remaining 2021 Notes from $ 15.60

until October 1, 2022, with any remaining balance payable in cash on October 10, 2022.

On September 20, 2022, the parties agreed to

modify the conversion price of the remaining 2021 notes from $ 7.00

for the period from September 20, 2022 until September 30, 2022.

The Company recorded an inducement expense equal to the excess fair

value of the consideration transferred (utilizing the number of shares transferred multiplied by the average of the high/low price

on the conversion date) above the securities that would have been issued under the original conversion terms.

The total loss on debt

conversions was $ 4.0

million, for the period ended December 31, 2022, and is reflected in other income (expense), net.

Included in the loss on debt

conversions was $ 1.0

million related to the inducement expense for the period ended December 31, 2022.

The remaining 2021 Notes became due and payable on

October 10, 2022, at which time they were satisfied with cash ($ 0.4

The fair value measurement included the assumption of accrued interest and interest expense (at the stated rate plus

an 8 % cash settlement premium).

If presented separately, the total amount of interest expense (after consideration of the conversions)

for the year-ended December 31, 2022 would be $ 0.2 million.

connection with the issuance of the 2021 Notes the Company also issued 1,507 and 3,011 warrants on the respective closing dates.

warrants were immediately exercisable with an exercise price of $ 1,831.20 (subject to downward revision protection in the event the Company

makes certain issuances of common stock at prices below the conversion price) and expire on September 23, 2026 and November 4, 2026 ,

respectively.

As a result of the issuance of the 2022 Notes in July 2022, the exercise price of these warrants was adjusted down to $ 187.20 .

On May 12, 2023, in exchange for $ 0.125 per outstanding warrant, the Company amended the warrants to reduce their exercise price to $ 3.64 .

2021 Notes were settled on October 11, 2022 and were not outstanding as of December 31, 2023 and 2022.

June 30, 2022, the Company entered into an $ 8.0 million convertible financing agreement with institutional investors.

The agreement provided

for two closings, each for notes payable of $ 4.24 million (resulting in gross cash proceeds of $ 4.0 million).

Funds were received for

the first closing on July 1, 2022 and for the second closing on August 9, 2022.

for two closings, each for notes payable of $ 4.24 million (resulting in gross cash proceeds of $ 4.0 million per closing).

received for the first closing on July 1, 2022 and for the second closing on August 9, 2022.

the issuance date, the Company assessed the probability of the potential settlement scenarios under the terms of the 2022 Notes and determined

5 unchanged sentences

Accordingly, the Company determined that the 2022 Notes should be recorded

at estimated fair value on its issuance date and adjusted to its estimated fair value as of each reporting date with the change in estimated

fair value recorded as a component other income (expense) in the Company’s consolidated statements of operations.

Company recorded the 2022 Notes at an initial fair value of $ 12.09 million which included a loss upon issuance of $ 3.6 million due to the current share price at issuance exceeding the conversion price.

Additionally, the Company recorded issuance

costs of $ 1.1 million representing a 6 % original issue discount of $ 0.5 million, $ 0.6 million of legal and investment banking fees, which

are included in other income (expense) on the consolidated statement of operations.

After several conversions since issuance, the Company

reflected the remaining balance due as of December 31, 2022 at fair value and recognized a change in fair value of convertible notes

of $ 3.1 million (gain) for the period ended December 31, 2022 primarily due to reductions in the Company’s stock price since issuance.

at fair value on its issuance date and remeasured as of each reporting date with the change in fair value recorded as a component of

other income (expense) in the Company’s consolidated statements of operations.

Company initially recorded the 2022 Notes at a fair value of $ 12.09 million which included a loss upon issuance of $ 3.6 million due to

the current share price at issuance exceeding the conversion price.

Additionally, the Company recorded issuance costs of $ 1.1 million

representing a 6 % original issue discount of $ 0.5 million and $ 0.6 million of legal and investment banking fees, which are included in

other income (expense) on the consolidated statement of operations.

After several conversions, the Company reflected the remaining balance

due as of December 31, 2022 at fair value and recognized a change in fair value of convertible notes of $ 3.1 million (gain) for the period

ended December 31, 2022 also in other income (expense) on the consolidated statements of operations.

December 31, 2022 fair value measurement includes the assumption of accrued interest and interest expense (at the stated rate plus an

2 unchanged sentences

the amount of interest expense after consideration of the conversions would be $ 0.2 million for the year ended December 31, 2022.

2022 Notes are convertible into common stock, at a per share conversion price equal to $ 10.90 , a 10 % premium to the average price of

the common stock for the three trading days prior to the first closing.

Under the Notes, commencing on September 29, 2022 and continuing

monthly on the first day of each month beginning November 1, 2022, the Company is obligated to redeem one fifteenth (1/15 th )

of the original principal amount under the applicable Note, plus accrued but unpaid interest.

The Company may elect to pay all or part

of the redemption amount in cash with a premium of 8% or in conversion shares of common stock based on a conversion price

equal to the lesser of (i) the conversion price and (ii) 92% of the average of the three lowest VWAPs (as defined) during the ten consecutive

trading days ending on the trading day that is immediately prior to the applicable redemption date, but in no event may the Company pay

the redemption amount in conversion shares of common stock unless the conversion price is at least equal to $2.006 and the Company has

been in compliance with customary requirements under the agreement, unless waived in writing by the holder.

connection with each of the first and second closings of the 2022 Notes, the Company also issued warrants to purchase 38,900 shares of

the Company’s common stock.

The warrants have an exercise price of $ 14.17 , a 30 % premium to the conversion price, and are exercisable

for five years following issuance of the 2022 Notes.

The issuance of these warrants required the Company to reduce the conversion price

of the 2021 Notes and the exercise price of the outstanding warrants associated with the 2021 Notes to $ 15.60 .

proceeds of the 2022 Notes will be used for working capital purposes subject to certain customary restrictions are secured by the Company’s

The warrants had an original exercise price of $ 170.04 and are exercisable for five years following

issuance of the 2022 Notes.

The issuance of these warrants required the Company to reduce the conversion price of the 2021 Notes and

the exercise price of the outstanding warrants associated with the 2021 Notes to $ 187.20 .

In connection with 2023 May Offering, and in

exchange for $ 0.125 per outstanding warrant, the exercise prices of the 2022 Notes warrants and 2021 Notes warrants were reduced to $ 3.64

proceeds of the 2022 Notes were used for working capital purposes subject to certain customary restrictions and are secured by the Company’s

rights to its patents and licenses.

The Company is restricted from issuing certain additional debt or equity without the prior written

The Company was restricted from issuing certain additional debt or equity without the prior written

consent of the holders for certain specified periods set forth in the 2022 Notes.

If, at any time while the 2022 Notes are outstanding,

the Company carries out one or more capital raises in excess of $ 5.0 million, the holder has the right to require the Company to use

the Company carried out one or more capital raises in excess of $ 5.0 million, the holder had the right to require the Company to use

up to 20 % of the gross proceeds of such transaction to redeem all or a portion of the convertible notes for an amount in cash equal to

3 unchanged sentences

as a reduction to the outstanding balance of the 2022 Notes.

The 8 % premium was paid in cash and is reflected as interest expense within

The 8 % premium was paid in cash and was reflected as interest expense within

the consolidated statement of operations.

2022 Notes mature on December 29, 2023 and February 7, 2024 , for the first and second closings, respectively.

The notes bear interest

at a rate of 6 % per annum, in addition to an original issue discount of 6 %.

The interest may be settled in cash or shares at the option

of the Company and is payable together with monthly redemptions of the outstanding principal amount of the debt.

following table provides a summary of the Company’s 2022 Notes conversions during the year ended December 31, 2022:

SCHEDULE OF CONVERSION DEBT

the year ended December

2022 Notes were scheduled to mature on December 29, 2023 and February 7, 2024 , for the first and second closings, respectively.

bear interest at a rate of 6 % per annum, in addition to an original issue discount of 6 %.

The interest may be settled in cash or shares

at the option of the Company and is payable together with monthly redemptions of the outstanding principal amount of the debt.

The outstanding

principal and interest balances were satisfied in March 2023.

January 2023, the Company entered into a letter agreement to reduce the conversion price for the remaining balance of the Company’s

outstanding 2022 Notes from $ 24.07 to $ 9.01 for the period from January 12, 2023 until May 12, 2023.The holders converted $ 3.1 million

of the outstanding balance of the 2022 Notes during 2023 and received cash true-up payments totaling $ 0.4 million for conversions executed

before the letter agreement.

Additional cash true-up payments totaling $ 0.6 million for conversions below the adjusted price were due

to be paid within 120 days from January 12, 2023, in accordance with the Letter Agreement.

On May 12, 2023, the Company paid $ 0.6 million

of cash for the additional true-up payments to the holders of the 2022 Notes.

October 23, 2023, the Company entered into a Securities Purchase Agreement (“SPA”) for an aggregate financing of $ 1.8 million

with investors, including $ 0.2 million with a board member.

At the first closing under the SPA, which occurred on October 25, 2023, the

Company issued to the investors (i) senior secured convertible promissory notes in the aggregate principal amount of $ 612,000 for an

aggregate purchase price of $ 566,667 and (ii) warrants to purchase 1,255,697 shares of the Company’s common stock, par value $ 0.0001

per share in the aggregate.

At the second closing under the SPA, which occurred on November 29, 2023, the Company issued to the investors

referenced above, (i) additional notes in the aggregate principal amount of $ 1,224,000 for an aggregate purchase price of $ 1,133,333

and (i) additional warrants to purchase 2,511,394 shares of the common stock in the aggregate.

The notes mature on April 25, 2024 and

May 28, 2024 respectively.

combined notes are subject to an original issue discount of 8 %,

have a term of six months from their respective date of issuance and accrue interest at the rate of 6.0 %

The notes are convertible into common stock, at a per share conversion price equal to $ 1.5675 .

Beginning ninety days following issuance of the respective notes, the Company is obligated to redeem monthly one third of the

original principal amount under the applicable note, plus accrued but unpaid interest, liquidated damages and any other amounts then

owing to the holder of such note.

The Company is required to pay the redemption amount in cash with a premium of 10 %

or, at the election of the purchaser at any time, some or all of the principal amount and interest may be paid by conversion of

shares under the note into common stock based on a conversion price equal to $ 1.5675 .

The Company determined the 2023 Notes are to be accounted for as conventional convertible debt as they provide for the holder an

option to convert the outstanding balances into a fixed number of shares (or an equivalent amount of cash at the discretion of the

Company) and the option to convert meets the definition of an exception from derivative accounting.

As a result, the Company has

reflected the outstanding principal amount, the remaining unamortized discount (both original issue discount and the relative fair

value discount associated with the warrants discussed below) and the remaining debt issuance costs as net amount on the face of the

balance sheet.

The amortization of the original debt discount (approximately $ 0.1

million) and issuance costs (approximately $ 0.3

million) will be recorded as interest expense within the consolidated statements of operations.

As of December 31, 2023,

approximately $ 0.1

million of the original debt discount and issuance costs was amortized to interest expense.

warrants have an exercise price of $ 1.5675 , the same as the conversion price, and are exercisable for five years following the issuance

The warrants were equity classified as they are indexed to the Company’s stock and only settleable in shares.

were initially measured at fair value using a Black-Scholes valuation model and were allocated along with the 2023 Notes using the relative

fair value method.

The initial fair value of $ 1.1 million allocated to the warrants was considered a debt discount and will be amortized

to interest expense over the remaining term of the notes.

As of December 31, 2023, approximately $ 0.2 million of the discount associated

with the warrants was amortized to interest expense.

Insurance Premiums

the year ended December 31, 2022, the Company financed its directors’ and officers’ liability insurance in the amount of $ 399,949 ,

of which $ 203,179

remains outstanding at December 31, 2022.

The Company will pay a total of $ 9,402

in interest from inception through March 2023 when the note will be paid in full.

The Company expensed $ 7,905

of interest for the year ended December 31, 2022.

June 2023, the Company renewed and financed its directors’ and officers’ liability insurance in the amount of $ 0.4 million.

Monthly payments commenced in July 2023 and are scheduled through March 2024.

During the year ended December 31, 2022, the Company financed

its directors’ and officers’ liability insurance in the amount of $ 0.4 million and the liability was paid in full by March

The Company paid a total of $ 9,402 in interest from inception through March 2023 when the note was paid in full.

incurred $ 14,715 and $ 9,909 of interest expense associated with the financed insurance premiums for the years ended December 31, 2023

8 - STOCKHOLDERS’ EQUITY

6 unchanged sentences

to the Consolidated Financial Statements

June 30, 2021, in connection with the Business Combination, the following common stock activity occurred:

shares of common stock were issued to holders of Former Ensysce common stock.

shares of common stock outstanding were assumed by the Company.

shares of common stock were issued in settlement of $ 5.8 million of convertible debt.

shares of restricted common stock were issued in exchange for previously outstanding warrants to purchase Former Ensysce common stock.

shares of common stock were issued in settlement of a termination agreement with a strategic advisor dated January 2021.

shares of common stock were issued in settlement of deferred underwriting costs.

December 9, 2022, the Company completed a public offering for the sale of 2.9

million shares of common stock at $ 1.40

per share for gross proceeds of $ 4.1

million, net of $ 0.3 million in underwriting fees.

In addition, the Company issued 6.6

million warrants with an exercise price of $ 1.40

per share that expire five

years following the date of issuance.

In connection with the public offering, the Company incurred approximately $ 0.5 million in transaction costs that

are recognized in the consolidated statement of changes in stockholders’ deficit.

December Offering

December 7, 2022, we entered into an underwriting agreement with an underwriter, pursuant to which we agreed to issue and sell (i) 190,000

shares of the Company’s common stock, par value $ 0.0001 per share, (ii) pre-funded warrants to purchase 51,666 shares of common

stock and (iii) warrants to purchase 483,333 shares of common stock to the underwriter in a public offering.

In addition, the Company

granted the underwriter the option, for 45 days from the closing of the offering, to purchase up to 28,500 additional shares of common

stock and common warrants to purchase up to an additional 72,500 shares of common stock.

The Underwriter agreed to purchase the shares

from the Company pursuant to at a price of $ 15.62 per share.

lieu of a purchase of common stock that would otherwise result in an investor’s beneficial ownership exceeding 4.99 % (or, at the

election of the investor, 9.99 %) of the outstanding common stock, a pre-funded warrant was offered, each of which enables the investor

to purchase one share of common stock at an exercise price of $ 0.0001 .

Each pre-funded warrant was exercisable upon issuance and will

expire when exercised in full (all pre-funded warrants were exercised immediately upon issuance).

Each pre-funded warrant was sold with

a common warrant to purchase two shares of common stock.

The public purchase price of one share of common stock and accompanying common

warrant to purchase two shares of Common Stock is $ 16.80 and the combined purchase price of one pre-funded warrant and accompanying common

warrant to purchase two shares of common stock is $ 16.80 .

common warrant is exercisable immediately at an exercise price of $ 16.80 per share and will expire five years following the date of issuance.

The offering closed on December 9, 2022 and we received aggregate gross proceeds of approximately $ 4.1 million from the Offering.

February Offering

February 2, 2023, the Company agreed to issue and sell in a registered direct offering an aggregate of 297,619 shares of common stock

of the Company, par value $ 0.0001 per share, at an offering price of $ 10.08 per share, for gross proceeds of approximately $ 3.0 million

before the deduction of placement agent fees and related costs of $ 0.3 million.

The closing occurred on February 6, 2023.

issued in connection with the 2023 February Offering are described further below.

May 12, 2023, the Company completed a public offering of an aggregate of 1,800,876 shares of its common stock at par value $ 0.0001 per

share (including pre-funded warrants in lieu thereof) at a combined offering price of $ 3.887 per share, gross proceeds from this offering

were approximately $ 7.0 million before the deduction of placement agent fees and related costs of $ 0.7 million.

The warrants issued in

connection with the 2023 May Offering are described further below.

connection with the offering, the Company also agreed to amend certain existing warrants to purchase up to an aggregate of 210,085 shares

of the Company’s common stock that were previously issued in September 2021 through December 2022 to purchasers in the offering

at exercise prices ranging from $ 16.80 to $ 187.20 per share, such that effective upon the closing of the offering, the amended warrants

had a reduced exercise price of $ 3.64 per share at an additional offering price of $ 0.125 per amended warrant.

December 31, 2023, outstanding warrants to purchase shares of common stock are as follows:

SCHEDULE OF OUTSTANDING WARRANT

Shares Underlying Outstanding Warrants

OF OUTSTANDING WARRANT

Exercise Price

3 unchanged sentences

Share subscription facility

$ 3.64 - 16.80

Public offering

June 30, 2021, as a result of the Closing, the Company assumed a total of 945,063 warrants previously issued by LACQ (subsequently

in December 2022, 93,400 warrants were cancelled).

The warrants provide holders the right to purchase common stock at a strike price

of between $ 200.00 and $ 230.00 per share and expire June 30, 2026 , five years following the completion of the Business Combination.

A total of 500,000 of the outstanding warrants are public warrants which trade on the OTC Pink Open Market under the ticker symbol

The remaining 445,063 warrants are private warrants with restrictions on transfer and which have the right to a cashless exercise

at the option of the holder.

August 3, 2021, the Company entered into an agreement with an existing warrant holder to reduce the price of 25,000 warrants issued

on June 30, 2021 from $ 230.00 to $ 200.00 , resulting in an incremental increase in their fair value of $ 56,590 , recognized in general

and administrative expense.

July 2, 2021, upon public listing of the Company’s shares, the Company issued 55,306 warrants to purchase common stock pursuant

to the share subscription facility.

The warrants have a three -year life and an exercise price of $ 200.20 per share.

The grant date

fair value of the warrants, based on the $ 289.80 stock price on the date of issuance, was $ 11.6 million, and was recognized in general

and administrative expense due to the uncertainty of future issuance of shares under the share subscription facility.

$ 8.58 - 12.60

Public offering

$ 3.64 - 4.86

Public offering

On June 30, 2021, the Company

assumed a total of 78,751 warrants previously issued by LACQ (subsequently in December 2022 and August 2023, 7,782 and 7,310 warrants,

respectively, were cancelled).

The warrants provide holders the right to purchase common stock at a strike price of between $ 2,400.00

and $ 2,760.00 per share and expire June 30, 2026 , five years following the completion of the Business Combination.

A total of 41,666

of the outstanding warrants are public warrants which trade on the OTC Pink Open Market under the ticker symbol ENSCW.

The remaining

21,993 warrants are private warrants with restrictions on transfer and which have the right to a cashless exercise at the option

of the holder.

On August 3, 2021, the

Company entered into an agreement with an existing warrant holder to reduce the price of 2,083 warrants issued on June 30, 2021 from

$ 2,760.00 to $ 2,400.00 .

On July 2, 2021, upon public

listing of the Company’s shares, the Company issued 4,608 three-year warrants to purchase common stock pursuant to the share

subscription facility.

The warrants have a three -year life and an initial exercise price of $ 2,402.40 per share.

Biosciences, Inc.

to the Consolidated Financial Statements

warrants have been subject to multiple exercise price reductions as required by a down round adjustment feature of the warrant, due

to common stock issued at a price below the then current exercise price (primarily the result of the conversions of the 2021 Notes

and the 2022 Notes).

The adjustments have progressed from the original exercise price of $ 200.20 per share to the current exercise

price at December 31, 2022 of $ 1.40 per share.

The difference in fair value of the existing warrant prior to the adjustment and the

value of the warrant after (utilizing a Black-Scholes model) is reflected on the consolidated statement of operations

as a deemed dividend.

September 24, 2021 and November 5, 2021, the Company issued 18,058 and 36,116 warrants in connection with the issuance of the 2021

The warrants were immediately exercisable with an exercise price of $ 152.60 (subject to downward revision protection in the

event the Company makes certain issuances of common stock at prices below the conversion price) and expire on September 23, 2026 .

The warrants have been

subject to multiple exercise price reductions as required by a down round adjustment feature of the warrant, due to common stock

issued at prices below the then current exercise price.

The adjustments have progressed from the original exercise price of $ 2,402.40

per share to the current exercise price at December 31, 2023 of $ 1.5675 per share.

The difference in fair value of the existing warrant

prior to the adjustment and the value of the warrant after (utilizing a Black-Scholes model) is reflected on the consolidated statement

of operations as a deemed dividend.

On September 24, 2021 and

November 5, 2021, the Company issued 1,507 and 3,011 warrants in connection with the issuance of the 2021 Notes.

The warrants were

immediately exercisable with an exercise price of $ 1,831.20 (subject to downward revision protection in the event the Company makes

certain issuances of common stock at prices below the conversion price) and expire on September 23, 2026 and November 4, 2026 , respectively.

As a result of the issuance of the 2022 Notes in July 2022, the exercise price of these warrants was adjusted down to $ 187.20 .

July 1, 2022 and August 9, 2022, the Company issued 233,394 warrants each in connection with

the issuance of the 2022 Notes.

The warrants were immediately exercisable with an exercise

price of $ 14.17 (subject to downward revision protection in the event the Company makes certain

issuance of common stock at prices below the conversion price) and expire on June 29, 2027

and August 8, 2027 , respectively.

December 9, 2022, the Company issued 6,600,000 equity classified warrants in connection with the public offering.

May 12, 2023, in exchange for $ 0.125 per outstanding warrant, the Company amended the warrants to reduce their exercise price to

On July 1, 2022 and August

9, 2022, the Company issued 19,450 warrants each in connection with the issuance of the 2022 Notes.

The warrants were immediately

exercisable with an exercise price of $ 170.04 (subject to downward revision protection in the event the Company makes certain issuance

of common stock at prices below the conversion price) and expire on June 29, 2027 and August 8, 2027 , respectively.

As a result of

the issuance of shares and warrants in connection with the December public offering, the exercise price of these warrants was adjusted

down to $ 24.07 .

On May 12, 2023, in exchange for $ 0.125 per outstanding warrant, the Company amended the warrants to reduce their

exercise price to $ 3.64 .

On December 9, 2022, the

Company issued 549,993 equity classified warrants in connection with a public offering.

The warrants were immediately exercisable

with an exercise price of $ 16.80 (subject to downward revision protection in the event the Company makes certain issuance of common

stock at prices below the conversion price) and expire on December 9, 2027 .

On May 12, 2023, in exchange for $ 0.125 per applicable

warrant, the Company amended 166,667 of these warrants to reduce their exercise price to $ 3.64 .

6, 2023, the Company issued 318,451 equity classified warrants in connection with a public offering.

The warrants were immediately

exercisable with an exercise price of $ 8.58 - $ 12.60 and expire on February 2, 2028 , and August 7, 2028 .

On May 12, 2023, the Company

issued 3,727,813 equity classified warrants (series A-1, A-2 and placement agent warrants) in connection with a public offering.

The warrants were immediately exercisable with an exercise price of $ 3.64 - $ 4.86 and expire on November 12, 2024 , May 10, 2028 ,

and May 12, 2028 .

The Company also issued 1,451,876 pre-funded warrants, 735,000 pre-funded warrants were exercised in connection

with the closing of the public offering, 716,876 were exercised between the closing date and December 31, 2023.

The pre-funded warrants

were immediately exercisable with an exercise price of $ 0.0001 .

On October 25, 2023 and

November 28, 2023, the Company issued warrants to purchase 1,255,697 shares and 2,511,394 shares, respectively.

The warrants were

immediately exercisable with an exercise price of $ 1.40 (subject to downward revision protection in the event the Company makes certain

issuance of common stock at prices below the conversion price) and expire on December 9, 2027 .

immediately exercisable with an exercise price of $ 1.5675 and expire on October 25, 2028 and November 28, 2028 , respectively.

fair value of each warrant issued has been determined using the Black-Scholes option-pricing model.

1 unchanged sentence

the Black-Scholes model in estimating the fair value of the warrants issued for the periods presented were as follows:

SCHEDULE OF WARRANTS FAIR VALUE ESTIMATION ASSUMPTIONS

OF WARRANTS FAIR VALUE ESTIMATION ASSUMPTIONS

Exercise price

2 unchanged sentences

(a) LACQ warrants (grant date varies)

2,400.00 - 2,760.00

(b) Share subscription facility (grant date 7/2/21)

2 unchanged sentences

1.57 - 680.23

91.3 % - 117.2 %

1.04 % - 5.43 %

7 unchanged sentences

9 - STOCK-BASED COMPENSATION

2016, Former Ensysce adopted the Ensysce Biosciences, Inc.

2016 Stock Incentive Plan (the “2016 Plan”).

The 2016 Plan, as

amended, allowed for the issuance of non-statutory stock options, incentive stock options and other equity awards to Former Ensysce’s

employees, directors, and consultants.

March 2019, Former Ensysce adopted the 2019 Directors Plan, which was amended in August 2020.

The 2019 Directors Plan, as amended, allowed

for the issuance of shares of Former Ensysce’s common stock pursuant to the grant of non-statutory stock options.

addition to the 2016 Plan and the 2019 Directors Plan, the Company has two legacy equity incentive plans (the “Legacy Plans”).

No additional equity awards may be made under the Legacy Plans and the outstanding options will expire if unexercised by certain dates

through August 2024.

connection with the Business Combination, the Company assumed the 2021 Omnibus Incentive Plan (the “2021 Omnibus Plan”),

2 unchanged sentences

and reserves for issuance an additional 4,166 shares for future awards under the 2021 Omnibus Plan.

On January 26, 2022, the 2021 Omnibus

Plan was amended and restated to include an additional 150,000 shares available for future grant and to provide for future annual increases.

No further awards may be made under the Former Ensysce stock plans.

No further awards may be made under

the Former Ensysce stock plans.

January, 2022, the 2021 Omnibus Plan was amended and restated to include an additional 12,500 shares available for future grant and to

provide for future annual increases.

In February 2023, the Company’s Board of Directors approved an annual increase of 26,725 shares

available for future grant.

In August 2023, the Company’s stockholders approved a proposal for an increase of 585,796 shares available

for future grant.

Company recognized within general and administrative expense stock-based compensation expense of $ 627,406 and $ 919,056 for the year ended

5 unchanged sentences

the year ended December 31, 2023, the Company granted stock options to purchase an aggregate of 555,000 shares of common stock to employees

consultants and members of the board of directors.

The options vest over periods between zero and four years and have an exercise price

of between $ 8.50 and $ 125.60 per share.

There were no stock option grants in 2021.

and members of the board of directors.

The options vested immediately and have an exercise price of between $ 1.13 and $ 1.18 per share.

During the year ended December 31, 2022, the Company granted stock options to purchase an aggregate of 9,535 shares of common stock to

employees, consultants and members of the board of directors.

The options vest over periods between zero and four years and have an exercise

price of between $ 102 and $ 1,507.20 per share.

following table summarizes the Company’s stock option activity during the year ended December 31, 2023:

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Weighted average

Exercise price

Remaining contractual life

Intrinsic value

Outstanding at December 31, 2022

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The material assumptions used

in the Black-Scholes model in estimating the fair value of the options granted for the periods presented were as follows (there were

no grants issued in 2021):

in the Black-Scholes model in estimating the fair value of the options granted for the periods presented were as follows:

SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS

December 31, 2023

December 31, 2022

Exercise price

$ 1.13 - 1.18

$ 103.20 - 1,507.20

Expected stock price volatility

106.77 % - 106.82 %

76.61 % - 95.87 %

Expected term (years)

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4.62 % - 4.89 %

1.52 % - 3.14 %

Expected dividend yield

stock-price volatility.

The expected volatility is derived from the historical volatilities of comparable publicly traded companies

within the Company’s industry over a period approximately equal to the expected term.

The comparable companies were utilized

as the Company’s stock does not have sufficient historical trading activity.

The expected term represents the period that the stock-based awards are expected to be outstanding.

The Company’s

historical share option exercise experience does not provide a reasonable basis upon which to estimate an expected term due to a

lack of sufficient data.

Therefore, the Company estimates the expected term for employees by using the simplified method provided

by the Securities and Exchange Commission.

The simplified method calculates the expected term as the average of the time-to-vesting

and the contractual life of the options.

interest rate.

Expected stock-price

The expected volatility is derived from the historical volatilities of comparable publicly traded companies within

the Company’s industry over a period approximately equal to the expected term.

The comparable companies were utilized as the

Company’s stock does not have sufficient historical trading activity.

Expected term.

expected term represents the period that the stock-based awards are expected to be outstanding.

The Company’s historical share

option exercise experience does not provide a reasonable basis upon which to estimate an expected term due to a lack of sufficient

Therefore, the Company estimates the expected term for employees by using the simplified method provided by the Securities

and Exchange Commission.

The simplified method calculates the expected term as the average of the time-to-vesting and the contractual

life of the options.

Risk-free interest rate.

The risk-free interest rate is based on the U.S.

Treasury yield in effect at the time of grant for zero coupon

Treasury notes with maturities approximately equal to the expected term.

dividend yield.

The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans

to pay any dividends on the Company’s common stock.

Treasury yield in effect at the time of grant for zero coupon U.S.

notes with maturities approximately equal to the expected term.

Expected dividend yield.

The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends

on the Company’s common stock.

Biosciences, Inc.

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weighted-average grant date fair value of options granted during the year ended December 31, 2023 was $ 0.93 .

There were no options granted

during the year ended December 31, 2021.

The weighted-average grant

date fair value of options granted during the year ended December 31, 2022 was $ 230.89 .

of December 31, 2023, the Company had an aggregate of $ 119,848 of unrecognized share-based compensation cost, which is expected to be

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SCHEDULE OF RESTRICTED STOCK UNITS

Restricted Stock Units

Weighted average fair value

Outstanding at December 31, 2022

Outstanding at December 31, 2023

remaining awards outstanding are subject to time-based vesting conditions and are scheduled to vest by December 2023.

The estimated

fair value of each of the Company’s restricted stock unit awards was determined on the date of grant based on the closing

price of the Company’s common stock on the previous trading date.

estimated fair value of each of the Company’s restricted stock unit awards granted in 2023 was determined on the date of grant

based on the closing price of the Company’s common stock on the previous trading date.

The restricted stock unit awards granted

in 2023 were immediately vested and there were no other valuation inputs used for the estimated fair value.

Reserved for Future Issuance

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Awards available for future grant under 2021 Omnibus Incentive Plan

2022 Notes outstanding

Warrants outstanding

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Stock-based compensation

Deferred Tax Assets, Gross

Gross deferred tax assets

Valuation allowance

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Deferred tax liabilities:

Convertible notes:

embedded derivatives

Total deferred tax liabilities

Net deferred tax assets

of December 31, 2022, the Company had federal and California net operating loss (NOL) carryforwards of $ 102.9

million and $ 73.2

million, respectively, net of the NOLs that will

expire due to Internal Revenue Code (IRC) Section 382 limitations.

The federal net operating losses generated in 2018 and after of $ 20.5

million will carryforward

indefinitely and be available to offset up to 80% of future taxable income each year.

federal net operating losses generated prior to 2018 of $ 82.4

million will begin to expire in 2026 unless previously

of December 31, 2023, the Company had federal and California net operating loss (NOL) carryforwards of $ 110.8 million and $ 74.6 million,

respectively, net of the NOLs that will expire due to Internal Revenue Code (IRC) Section 382 limitations.

The federal net operating

losses generated in 2018 and after of $ 28.4 million will carryforward indefinitely and be available to offset up to 80% of future taxable

income each year .

The federal net operating losses generated prior to 2018 of $ 82.4 million will begin to expire in 2024 unless previously

The California NOL carryforwards will begin to expire in 2028, unless previously utilized.

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a cumulative change in ownership of more than 50% occurs within a three-year period.

Although the Company has not completed an IRC

Section 382/383 analysis regarding the limitation of NOL and R&D credit carryforwards as of December 31, 2022, the Company estimates that approximately

million of tax benefits related to NOL and R&D carryforwards acquired in 2015 will expire unused.

Accordingly, the related NOL

and R&D credit carryforwards have been removed from deferred tax assets accompanied by a corresponding reduction of the

valuation allowance.

Although the Company has not completed an IRC Section

382/383 analysis regarding the limitation of NOL and R&D credit carryforwards as of December 31, 2023, the Company estimates that

approximately $ 1.5 million of tax benefits related to NOL and R&D carryforwards acquired in 2015 will expire unused.

the related NOL and R&D credit carryforwards have been removed from deferred tax assets accompanied by a corresponding reduction

of the valuation allowance.

Due to the existence of the valuation allowance, limitations created by current and future ownership changes,

if any, related to the Company’s operations in the United States will not impact its effective tax rate.

Any additional

ownership changes may further limit the ability to use the NOL and R&D credit carryforwards.

Any additional ownership

changes may further limit the ability to use the NOL and R&D credit carryforwards.

following table summarizes the activity related to the Company’s unrecognized tax benefits:

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Increases related to current year tax positions

Increases related to prior year tax positions

Decreases related to prior year tax positions

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11 - RELATED PARTIES

Company paid cash compensation during the year ended December 31, 2022 and 2021 of $ 0 and $ 30,909 , respectively, to the Chief Executive

Officer through a separate operating company with which the Chief Executive Officer is affiliated.

As of December 31, 2022 and 2021,

the Company owed $ 0 and $ 12,989 , respectively, in accounts payable to the separate operating company.

Company issued a series of convertible notes to the Chairman of the Board as described in Note 7, which totaled $ 2.5

million as of December 31, 2020.

All outstanding

notes and accrued interest converted into common stock upon the closing of the Business Combination on June 30, 2021.

July 2022, the Chief Executive Officer and a Board member transferred 3,838 shares of registered common stock to GYBL to settle $ 0.8

3 unchanged sentences

of changes in stockholders’ deficit.

On December 9, 2022, the Company completed a public offering for the sale of 2.9 million shares of common stock at

$ 1.40 per share and issued 6.6 million warrants with an exercise price of $ 1.40 per share that expire five years following the date of

A Board member purchased 357,143 shares of common stock and was issued 714,286 warrants in the public offering.

connection with the issuance of the 2023 Notes, the Company issued to a board member a $ 0.2 million senior secured convertible promissory

note and 0.4 million warrants exercisable for common stock at $ 1.5675 per share.

12 - SUBSEQUENT EVENTS

January 3, 2023, the Company issued 522,094 shares to satisfy the remaining $ 400,000 commitment fee payable to GYBL.

January 12, 2023, the Company entered into a Letter Agreement to reduce the conversion price for the remaining balance of the Company’s

outstanding 2022 Notes from $ 2.006 to $ 0.7512 for the period from January 12, 2023 until May 12, 2023.

In the first quarter of 2023,

the Company issued 4.9 million shares of common stock in repayment of $ 3.1 million of the 2022 Notes, as discussed in Note 7.

also paid cash of $ 0.4 million in repayment of the 2022 Notes.

As of the date of issuance of these financial statements, cash true-up

payments totaling $ 0.6 million for conversions below the adjusted price are due to be paid within 120 days from January 12, 2023 in accordance

with the Letter Agreement.

January 31, 2023, the Board of Directors declared a dividend of 0.001 of a share of Series A Preferred Stock, par value $0.0001 per share,

for each outstanding share of the Company’s common stock to stockholders of record on February 13, 2023.

Each full share of the

Series A Preferred Stock entitles holders to 1,000,000 votes per share with respect to the reverse stock split proposal and the adjournment

proposal at the Company’s special meeting of stockholders on March 23, 2023.

The Series A Preferred Stock has no dividend rights

and is subject to full redemption following the effectiveness of a reverse stock split.

The Series A Preferred Stock was registered through

a Certificate of Designation filed with the State of Delaware on February 1, 2023.

February 2, 2023, the Company agreed to issue and sell in a registered direct offering an aggregate of 3,571,431 shares of common stock

of the Company at an offering price of $ 0.84 per share, for gross proceeds of approximately $ 3.0 million before the deduction of placement

agent fees and offering expenses.

The closing of the offering occurred on February 6, 2023 .

Concurrent with the offering, the Company

issued to the purchasers, for each share of common stock purchased in the offering, a common warrant to purchase a share of common stock.

The common warrants are exercisable immediately upon issuance and terminate five and one-half years following issuance.

The common warrants

have an exercise price of $ 0.715 per share and are exercisable to purchase an aggregate of up to 3,571,431 shares of common stock.

Company also issued warrants to the placement agent to purchase up to 250,000 shares of common stock at an exercise price equal to $ 1.05

per share and are exercisable for five years from the commencement of sales in the offering.

March 23, 2023, at a special meeting of stockholders, the Company’s stockholders approved a proposal to authorize the Company’s

Board of Directors to complete a reverse stock split at a ratio of not less than one-for-five and not more than one-for-twelve.

January and February 2024, the Company issued 0.7 million shares of common stock in repayment of $ 1.2 million of the 2023 Notes, paid

cash of $ 1.0 million in repayment of the 2023 Notes and issued 1.3 million shares of common stock for $ 2.1 million upon exercise of warrants

issued in conjunction with the 2023 Notes, as discussed in Note 7.

February 2024, the Company entered into definitive agreements for the immediate exercise of certain outstanding warrants to purchase

up to an aggregate of 3,601,752 shares of common stock of the Company originally issued in May 2023, having an exercise price of $ 3.637

per share, at a reduced exercise price of $ 1.31 per share.

The gross proceeds to the Company from the exercise of the warrants was approximately

$ 4.7 million, prior to deducting placement agent fees and offering expenses.

In connection with the exercise of the warrants, new warrants

were issued that are immediately exercisable for an aggregate of up to 7,203,504 shares of common stock, at an exercise price of $ 1.06

3,601,752 of the new warrants will expire on May 12, 2028 , and 3,601,752 of the new warrants will have a term of eighteen

months from the issuance date.

The Company also issued to the placement agent warrants to purchase up to 252,123 shares of common stock

at an exercise price of $ 1.6375 per share;

these warrants will expire on May 12, 2028 .

Agreement and Plan of Merger, dated January 31, 2021, by and among Leisure Acquisition Corp., Ensysce Biosciences, Inc.

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Form of warrant issued to a placement agent or its designees in connection with a private placement conducted concurrently with a public offering (incorporated by reference to Exhibit 4.2 filed with the registrant’s Current Report on Form 8-K on February 7, 2023)

Form of common warrant (incorporated by reference to Exhibit 4.12 filed with the registrant’s Post-Effective Amendment No.

1 to the Registration Statement on Form S-1 (File No.

333-271480) on May 17, 2023)

Form of pre-funded warrant (incorporated by reference to Exhibit 4.13 filed with the registrant’s Post-Effective Amendment No.

1 to the Registration Statement on Form S-1 (File No.

333-271480) on May 17, 2023)

Form of placement agent warrant (incorporated by reference to Exhibit 4.14 filed with the registrant’s Post-Effective Amendment on Form S-1 (File No.

333-271480) on May 17, 2023)

Form of warrants amended in connection with the execution of a Securities Purchase Agreement on May 10, 2023 (incorporated by reference to Exhibit 4.15 filed with the registrant’s Post-Effective Amendment No.

1 to the Registration Statement on Form S-1 (File No.

333-271480) on May 17, 2023)

Form of common warrant issued in October 2023 and November 2023 (incorporated by reference to Exhibit 4.16 filed with the registrant’s Registration Statement on Form S-1 (File No.

333-275456) on November 9, 2023)

Form of October 2023 Secured Convertible Promissory Note (incorporated by reference to Exhibit 4.6 filed with the registrant’s Current Report on Form 8-K (File No.

001-38306) on October 24, 2023).

Form of Series A/B common stock purchase warrant issued February 14, 2024 (incorporated by reference to Exhibit 4.1 filed with the registrant’s Current Report on Form 8-K (File No.

001-38306) on February 14, 2024)

Form of placement agent warrant issued February 14, 2024 (incorporated by reference to Exhibit 4.2 filed with the registrant’s Current Report on Form 8-K (File No.

001-38306) on February 14, 2024)

Registration Rights Agreement, dated December 1, 2017, among Leisure Acquisition Corp.

37 unchanged sentences

Letter Agreement, dated January 12, 2023, by and among the Company and the parties signatory thereto (incorporated by reference to Exhibit 10.6 filed with the registrant’s Current Report on Form 8-K on January 13, 2023)

Company’s Code of Business Conduct

October 2023 Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 filed with the registrant’s Current Report on Form 8-K (File No.

001-38306) on October 24, 2023)

Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 filed with the registrant’s Current Report on Form 8-K (File No.

001-38306) on October 24, 2023)

Form of Subsidiary Guaranty (incorporated by reference to Exhibit 10.3 filed with the registrant’s Current Report on Form 8-K (File No.

001-38306) on October 24, 2023)

Form of Security Agreement (incorporated by reference to Exhibit 10.4 filed with the registrant’s Current Report on Form 8-K (File No.

001-38306) on October 24, 2023)

Form of Patent Security Agreement (incorporated by reference to Exhibit 10.5 filed with the registrant’s Current Report on Form 8-K (File No.

001-38306) on October 24, 2023)

Form of Inducement Letter Agreement, dated as of February 12, 2024 (incorporated by reference to Exhibit 10.1 filed with the registrant’s Current Report on Form 8-K (File No.

001-38306) on February 14, 2024)

Form of Waiver, dated February 12, 2024, under the Securities Purchase Agreement dated October 23, 2023 ((incorporated by reference to Exhibit 10.2 filed with the registrant’s Current Report on Form 8-K (File No.

001-38306) on February 14, 2024)

Company’s Code of Business Conduct (incorporated by reference to Exhibit 14 filed with the registrant’s Annual Report on Form 10-K (File No.

001-38306) on March 30, 2023)

List of Subsidiaries (incorporated by reference to Exhibit 21 filed with the Registration Statement on Form S-1 (333-268038) filed on October 28, 2022)

Consent of Mayer Hoffman McCann P.C.

Consent of Moss Adams LLP, Independent Registered Public Accounting Firm

Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Policy relating to recovery of erroneously awarded compensation

Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

schedules (or similar attachments) to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5) or 601(b)(2),

as applicable.

The registrant agrees to furnish supplementally a copy of all omitted schedules to the Securities and Exchange Commission

upon its request.

compensatory plans or arrangements or management contracts.

certificate accompanies this report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by Ensysce

for purposes of Section 18 or any other provisions of the Exchange Act.

Filed herewith.

Certain schedules (or similar

attachments) to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5) or 601(b)(2), as applicable.

registrant agrees to furnish supplementally a copy of all omitted schedules to the Securities and Exchange Commission upon its request.

Denotes compensatory plans

or arrangements or management contracts.

This certificate accompanies

this report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by Ensysce for purposes of Section

18 or any other provisions of the Exchange Act.

Form 10-K Summary.

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thereunto duly authorized, in San Diego, State of California, on March 14, 2024.

BIOSCIENCES, INC.

ENSYSCE BIOSCIENCES, INC.

Lynn Kirkpatrick

Chief Executive Officer and Director

President, Chief Executive

Officer and Director

to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities indicated

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Lynn Kirkpatrick

Chief Executive Officer and Director

President, Chief Executive Officer

Lynn Kirkpatrick

Executive Officer)

(Principal Executive Officer)

Chief Financial Officer, Secretary and Treasurer

David Humphrey

Financial Officer, Secretary and Treasurer

Financial and Accounting Officer)

(Principal Financial and Accounting Officer)

Andrew Benton

William Chang

and Chairman of the Board

Director and Chairman of the Board

Curtis Rosebraugh

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

What changed 10-K

Item 9A. Controls and Procedures