What changed in this filing

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Item 1. Financial Statements

2024-11-12 compared with 2024-08-14 · 251 added, 293 removed, 450 unchanged (55% of the section changed)

2 unchanged sentences

Balance Sheets

June 30, 2024

December 31, 2023

Current assets:

15 unchanged sentences

Stockholders’ equity (deficit)

Preferred stock, $ 0.0001 par value, 1,500,000 shares authorized, no shares issued and outstanding at June 30, 2024 (unaudited) and December 31, 2023

Common stock, $ 0.0001 par value, 250,000,000 shares authorized at June 30, 2024 (unaudited) and December 31, 2023;

8,151,253 and 3,146,157 shares issued at June 30, 2024 (unaudited) and December 31, 2023, respectively;

8,151,172 and 3,146,076 shares outstanding at June 30, 2024 (unaudited) and December 31, 2023, respectively

Preferred stock, $ 0.0001 par value, 1,500,000 shares authorized, no shares issued and outstanding at September 30, 2024 (unaudited) and December 31, 2023

Common stock, $ 0.0001 par value, 250,000,000 shares authorized at September 30, 2024 (unaudited) and December 31, 2023;

13,870,591 and 3,146,157 shares issued at September 30, 2024 (unaudited) and December 31, 2023, respectively;

13,870,510 and 3,146,076 shares outstanding at September 30, 2024 (unaudited) and December 31, 2023, respectively

Additional paid-in capital

10 unchanged sentences

Statements of Operations

Three Months Ended June 30,

Six Months Ended June 30,

September 30,

Federal grants

3 unchanged sentences

Total operating expenses

Loss from operations

( 1,955,442 )

Income (loss) from operations

( 2,707,314 )

6 unchanged sentences

( 1,279,691 )

Other income, net

Other income (expense), net

Total other income (expense), net

( 1,268,929 )

$ ( 1,967,793 )

Net income (loss)

$ ( 2,690,806 )

3 unchanged sentences

Deemed dividend related to warrants down round provision

Net loss attributable to common stockholders

$ ( 1,967,793 )

Net income (loss) attributable to common stockholders

$ ( 2,689,571 )

1 unchanged sentence

$ ( 7,121,716 )

Net loss per basic and diluted share:

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

Net income (loss) per basic and diluted share:

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

Weighted average common shares outstanding, basic and diluted

2 unchanged sentences

Statements of Changes in Stockholders’ EQUITY (Deficit)

Number of Shares

Noncontrolling

Stockholders’ Equity (Deficit)

Number of Shares

Noncontrolling

Balance on March 31, 2023

$ 113,293,834

Balance on June 30, 2023

$ 119,481,957

2 unchanged sentences

Settlement of restricted stock units

Public offering, net

Transaction costs associated with public offering

Issuance of common stock upon exercise of warrants

Stock-based compensation

Deemed dividend related to warrants down round provision

( 2,689,571 )

( 2,690,806 )

Balance on June 30, 2023

Balance on September 30, 2023

$ 119,537,611

1 unchanged sentence

$ ( 327,444 )

Balance on March 31, 2024

Balance on June 30, 2024

$ 128,448,699

1 unchanged sentence

$ ( 328,483 )

Public offering

Issuance of common stock upon warrant inducement

Transaction costs associated with public offering and warrant inducement

Stock-based compensation

( 1,967,793 )

Balance on June 30, 2024

Balance on September 30, 2024

$ 132,886,700

17 unchanged sentences

( 7,121,914 )

Balance on June 30, 2023

Balance on September 30, 2023

$ 119,537,611

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Conversion of convertible notes

Public offering

Public offering, net

Issuance of common stock upon exercise of warrants

Issuance of common stock upon warrant inducement, net of issuance costs

Transaction costs associated with warrant inducement

Issuance of common stock upon warrant inducements

Transaction costs associated with public offering and warrant inducements

( 1,444,756 )

Stock-based compensation

2 unchanged sentences

( 4,422,587 )

Balance on June 30, 2024

Net income (loss)

( 4,422,513 )

( 4,422,587 )

Balance on September 30, 2024

$ 132,886,700

2 unchanged sentences

$ 132,886,700

$ ( 125,979,877 )

$ ( 328,483 )

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

2 unchanged sentences

(U naudited )

Months Ended June 30,

Cash flows from operating

Nine Months Ended

September 30,

Cash flows from operating activities:

$ ( 4,422,587 )

$ ( 7,121,914 )

Adjustments to reconcile net loss to net cash

used in operating activities:

Accrued interest and interest

expense related to note conversions

Amortization of original

issue discount and debt issuance costs

Change in fair value of

convertible notes

Change in fair value of

liability classified warrants

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

Accrued interest and interest expense related to note conversions

Amortization of original issue discount and debt issuance costs

Change in fair value of liability classified warrants

Change in fair value of convertible notes

Stock-based compensation

1 unchanged sentence

Unbilled receivable

Prepaid expenses and other

Accounts payable

( 1,685,244 )

Prepaid expenses and other assets

( 1,729,252 )

expenses and other liabilities

Accounts payable

( 2,027,375 )

Net cash used in operating

Accrued expenses and other liabilities

( 1,066,036 )

Net cash used in operating activities

( 6,738,610 )

Cash flows from financing

Proceeds public offering,

( 8,978,107 )

Cash flows from financing activities:

Proceeds public offerings, net

Proceeds from warrant exercises

Proceeds from warrant inducement,

net of issuance costs

Transaction costs associated

with public offering

Transaction costs associated

with warrant inducement

Repayment of convertible

Proceeds from warrant inducement, net of issuance costs

Transaction costs associated with public offerings

Transaction costs associated with public offering and warrant inducements

( 1,319,115 )

of financed insurance premiums

Net cash provided by

financing activities

Repayments of convertible notes

( 1,000,208 )

Repayment of financed insurance premiums

Net cash provided by financing activities

Increase (decrease) in cash and cash equivalents

and cash equivalents beginning of period

and cash equivalents end of period

Supplemental disclosure

of non-cash investing and financing activities:

( 1,683,321 )

Cash and cash equivalents beginning of period

Cash and cash equivalents end of period

Supplemental disclosure of non-cash investing and financing activities:

Incremental fair value of August 2024 Warrant Inducement

Incremental fair value of February 2024 Warrant Inducement

Conversions of convertible

notes into common stock

Transaction costs from

warrant inducement

Deemed dividend related

to warrants down round provision

Financed insurance premiums

Settlement of commitment

fee in shares

Conversions of convertible notes into common stock

Proceeds from financed insurance premiums, net

Transaction costs from warrant inducement and public offering included in accounts payable

Deemed dividend related to warrants down round provision

Settlement of commitment fee in shares

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

8 unchanged sentences

(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.

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

The primary focus of the Company

is developing abuse- and overdose-resistant pain technology, with a lead product candidate in the abuse-resistant, TAAP (Trypsin-Activated

Abuse Protection) opioid, PF614.

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

for overdose protection, which is being applied to the PF614 program with a second product candidate, PF614-MPAR.

The Company is also

applying its TAAP and MPAR ® technology to a methadone prodrug for use in the treatment of Opioid Use Disorder.

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

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the opinion of management, all adjustments considered necessary for a fair presentation have been included in the consolidated financial

Operating results for the six months ended June 30, 2024, are not necessarily indicative of the results that may be expected

for the year ending December 31, 2024.

The interim unaudited consolidated financial statements have been prepared under the presumption

that users of the interim financial information have either read or have access to the audited consolidated financial statements for

the fiscal year ended December 31, 2023, which may be found in the Company’s Form 10-K filed with the SEC on March 15, 2024.

Operating results for the nine months ended September 30, 2024, are not necessarily indicative of the results that may be

expected for the year ending December 31, 2024.

The interim unaudited consolidated financial statements have been prepared under the

presumption that users of the interim financial information have either read or have access to the audited consolidated financial statements

for the fiscal year ended December 31, 2023, which may be found in the Company’s Form 10-K filed with the SEC on March 15, 2024.

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

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Additionally, the Company had concentration in accounts

payable, as two research and development vendors made up greater than 10% individually, and 31 % and 38 % in aggregate , of the outstanding

accounts payable balance as of June 30, 2024 and December 31, 2023, respectively.

payable, as one and two research and development vendors, respectively, made up greater than 10% individually, and 72 % and 38 % in aggregate ,

of the outstanding accounts payable balance as of September 30, 2024, and December 31, 2023, respectively.

and equipment

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

of June 30, 2024, and December 31, 2023, the recorded values of cash and cash equivalents, prepaid expenses, accounts payable, and accrued

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

of September 30, 2024, and December 31, 2023, the recorded values of cash and cash equivalents, prepaid expenses, accounts payable, and

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

Company issued liability-classified warrants in connection with the issuance of the 2021 Notes and the 2022 Notes.

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balance sheets.

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

Changes in the fair value of the warrants

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

The Company uses a Black-Scholes model to estimate the fair value of the warrants by using assumptions within the model

for the expected volatility, expected term, risk-free interest rate and dividend yield.

Changes in the fair value of the warrants are

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

Refer to Note 8 for details of the warrants.

following tables present liabilities measured and recorded at fair value on the Company’s consolidated balance sheets as of June

following tables present liabilities measured and recorded at fair value on the Company’s consolidated balance sheets as of September

30, 2024, and December 31, 2023.

SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE

June 30, 2024

September 30, 2024

Liability classified warrants

1 unchanged sentence

Liability classified warrants

following table summarizes the change in fair value of the Company’s Level 3 liabilities for the six months ended June 30, 2024

(no level 3 assets as of the six months ended June 30, 2024):

following table summarizes the change in fair value of the Company’s Level 3 liabilities for the nine months ended September 30,

2024 (no level 3 assets as of the nine months ended September 30, 2024):

OF CHANGE IN FAIR VALUE OF COMPANY’S LEVEL 3

Liability classified warrants

Fair value, December 31, 2023

Change in fair value

Fair value, June 30, 2024

Fair value, September 30, 2024

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

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$ 10.7 million was completed in December 2023.

A new multi-year MPAR Grant was awarded by NIH through NIDA in August 2024, providing funding

of $ 14 million through May 2027.

September 2019, the NIH/NIDA awarded the Company a second research and development grant related to the development of its TAAP/MPAR

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The total approved budget was approximately $ 5.4 million,

and the current grant period ends August 31, 2024.

As of June 30, 2024, the remaining cash funding under the grant is $ 1.9 million.

and the grant period ended August 31, 2024.

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

8 unchanged sentences

OF REVENUE RECOGNITION UNDER GRANTS

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

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

44 unchanged sentences

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

loss per share

income (loss) per share

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

3 unchanged sentences

of common stock.

Diluted net loss per share is calculated by adjusting basic shares outstanding for the dilutive effect of common share

equivalents outstanding for the period.

Diluted net income (loss) per share is calculated by adjusting basic shares outstanding for the dilutive effect of common

share equivalents outstanding for the period.

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

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OF WEIGHTED AVERAGE SHARES OF ANTI-DILUTIVE SECURITIES

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

Nine Months Ended

September 30,

Stock options

17 unchanged sentences

OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

September 30,

Prepaid research and development

6 unchanged sentences

OF ACCRUED EXPENSES AND OTHER LIABILITIES

September 30,

Accrued research and development

3 unchanged sentences

6 – COMMITMENTS AND CONTINGENCIES

of June 30, 2024, the Company’s commitments included approximately $ 16 million related to the Company’s open purchase orders

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

of September 30, 2024, the Company’s commitments included approximately $ 13.3 million related to the Company’s open purchase

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

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

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to the delivery of goods or the performance of services.

of June 30, 2024, and December 31, 2023, there were no pending legal proceedings against the Company that are expected to have a material

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

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

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

These may include disputes and lawsuits related to intellectual

property, licensing, contract law and employee relations matters.

Periodically, the Company reviews the status of significant matters,

if any exist, and assesses its potential financial exposure.

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

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

of September 30, 2024, and December 31, 2023, there were no pending legal proceedings against the Company that are expected to have a

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

From time to time, the Company could become involved

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

These may include disputes and lawsuits related

to intellectual property, licensing, contract law and employee relations matters.

Periodically, the Company reviews the status of significant

matters, if any exist, and assesses its potential financial exposure.

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

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

Legal proceedings are subject to uncertainties,

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Company’s current lease agreement (as amended) has a term that extends through October 31, 2025, with no contracted option to renew.

As of June 30, 2024, the future lease payments totaled $ 11,363 .

The Company recognized total rent expense of $ 8,747 and $ 17,495 in the

three and six months ended June 30, 2024 and $ 8,375 and $ 16,749 in the three and six-months ended June 30, 2023.

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 $ 1.06 at February 12, 2024 (Note 8).

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

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

As of September 30, 2024, the future lease payments totaled $ 38,294 .

The Company recognized total rent expense of $ 8,747 and $ 26,242

in the three and nine months ended September 30, 2024, and $ 8,375 and $ 25,124 in the three and nine months ended September 30, 2023.

7 – NOTES PAYABLE

following table provides a summary of the Company’s outstanding debt as of June 30, 2024:

following table provides a summary of the Company’s outstanding debt as of September 30, 2024:

Financed insurance

1 unchanged sentence

December 31, 2023

Unamortized Debt

Issuance Costs

2 unchanged sentences

$ ( 1,197,200 )

interest expense recognized for financed insurance was $ 148 and $ 2,092 for the three and six months ended June 30, 2024 and $ 0 and $ 1,497

for the three and six months ended June 30, 2023.

Interest expense recognized for the 2023 Notes was $ 27,563 and $ 1.3 million for the

three and six months ended June 30, 2024, which consists of amortization of the debt discount and debt issuance costs and incurred and

accrued interest.

interest expense recognized for notes payable was as follows:

OF INTEREST EXPENSE FOR NOTES PAYABLE

Three months ended

September 30,

Nine months ended

September 30,

Stated interest accrual

October 23, 2023, the Company entered into a Securities Purchase Agreement (“SPA”) for an aggregate financing of $ 1.8 million

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and (ii) additional warrants to purchase 2,511,394 shares of the common stock in the aggregate.

The notes were scheduled to mature on

April 25, 2024 and May 28, 2024 , respectively.

combined notes are subject to an original issue discount of 8 %, have an original term of six months from their respective date of issuance

and accrue interest at the rate of 6.0 % per annum.

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 was 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 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 a net amount

on the face of the balance sheet.

Company 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 a 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

$ 0.3 million) was recorded as interest expense within the consolidated statements of operations.

As of June 30, 2024, the original debt

million) were recorded as interest expense within the consolidated statements of operations.

As of September 30, 2024, the original debt

discount and issuance costs were fully amortized to interest expense.

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fair value method.

The initial fair value of $ 1.1 million allocated to the warrants was considered a debt discount and will be amortized

The initial fair value of $ 1.1 million allocated to the warrants was considered a debt discount and was amortized

to interest expense over the remaining term of the notes.

As of June 30, 2024, the discount associated with the warrants was fully amortized

to interest expense.

As of September 30, 2024, the discount associated with the warrants was fully

amortized to interest expense.

2024, the Company converted 745,521 shares of common stock with a conversion value of $ 1.2 million related to the 2023 Notes.

in connection with the SPA, the Company incurred a $ 1.0 million waiver fee in connection to the 2024 Warrant Inducement (see Note 8)

to pay down $ 0.5 million of 2023 Notes and $ 0.5 million in transaction costs recorded as such in the consolidated statement of stockholders’

As of June 30, 2024, the remaining amount of the 2023 Notes relates to senior secured convertible promissory notes held with

a Company board member (see Note 10).

in connection with the SPA, the Company incurred a $ 1.0 million waiver fee as a result of the 2024 February Warrant Inducement (see Note

8) to pay down $ 0.5 million of the 2023 Notes and incurred $ 0.5 million in transaction costs recorded as such in the consolidated statement

of stockholders’ equity.

As of September 30, 2024, the remaining amount of the 2023 Notes relates to senior secured convertible

promissory notes held by a Company board member (see Note 10).

insurance premiums

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stock, both with par value equal to $ 0.0001 .

As of June 30, 2024, and December 31, 2023, there were no shares of preferred stock issued

and outstanding.

Warrant Inducement

February 12, 2024, the Company executed an Inducement Letter with certain holders of existing warrants to purchase up to an aggregate

of 3,601,752 shares of the Company’s common stock issued to the holders in connection with the 2023 May Offering.

As of September 30, 2024, and December 31, 2023, there were no shares of preferred stock

issued and outstanding.

February Warrant Inducement

February 2024, the Company executed an Inducement Letter with certain holders of existing warrants to purchase up to an aggregate of

3,601,752 shares of the Company’s common stock issued to the holders in connection with the 2023 May Offering.

Pursuant to the

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The Waiver permitted the Company to execute the Inducement Letter but required repayment of the

certain investor held notes issued under the SPA with a premium following closing of the transaction contemplated thereby.

Refer to Note

7 for the details of the waiver fee and the application of the amounts to the outstanding notes and as a transaction cost of the warrant

Company utilized an exclusive placement agent for the 2024 Warrant Inducement and incurred approximately $ 0.3 million in legal fees and

other closing costs.

Additionally, the Company issued to the placement agent as compensation unregistered warrants to purchase up to

252,123 shares of Common Stock, equal to 7.0% of the aggregate number of shares of Common Stock (or warrants) placed in the transaction.

certain investor held notes issued under the SPA with a premium following closing of the transaction.

Refer to Note 7 for the details

of the waiver fee and the application of the amounts to the outstanding 2023 Notes and as a transaction cost of the warrant inducement.

Company utilized an exclusive placement agent for the 2024 February Warrant Inducement and incurred approximately $ 0.3 million in legal

fees and other closing costs.

Additionally, the Company issued to the placement agent as compensation unregistered warrants to purchase

up to 252,123 shares of Common Stock, equal to 7.0% of the aggregate number of shares of Common Stock (or warrants) placed in the transaction .

The placement agent warrants expire on May 12, 2028 , and have an exercise price of $ 1.6375 per share of Common Stock (equal to 125% of

the reduced exercise price per Existing Warrant).

closing of the offering occurred on February 14, 2024.

to the 2024 Warrant Inducement, a holder left 1,488,144 shares in abeyance at the Company’s transfer agent to be delivered to the

holder at their request.

During the quarter ended June 30, 2024, 822,000 shares held in abeyance were delivered to the holder and the

remaining shares are held in abeyance.

Accordingly, as of June 30, 2024, 666,144 shares were held in abeyance, have not been issued and

are not outstanding.

following table provides a summary of outstanding warrants to purchase shares of common stock as of June 30, 2024:

Registered Direct Offering and 2024 August Warrant Inducement

August 2024, the Company entered into a definitive Securities Purchase Agreement with certain institutional investors, pursuant to which

the Company agreed to issue and sell in a registered direct offering, (i) an aggregate of 2,490,798 shares of common stock, par value

$ 0.0001 per share at an offering price of $ 0.47 per share, (ii) pre-funded warrants to purchase up to 1,062,396 shares of common stock,

at a price per pre-funded warrant equal to $ 0.4699 , the price per share less $ 0.0001 , for gross proceeds of approximately $ 1.67 million

before the deduction of placement agent fees and offering expenses.

The pre-funded warrants were subsequently exercised in full and were

not outstanding as of September 30, 2024.

Company also entered into the August Inducement Letter with certain warrant holders for the exercise of certain outstanding warrants

to purchase up to an aggregate of 7,203,504 shares of common stock of the Company originally issued in February 2024, having an exercise

price of $ 1.06 per share, at a reduced exercise price of $ 0.47 per share.

The Company also agreed to amend certain existing warrants

to purchase up to an aggregate of 2,000,000 shares of common stock that were previously issued in November 2023 and have an exercise

price of $ 1.5675 per share such that the amended warrants will have a reduced exercise price of $ 0.47 per share effective upon the closing

of the offering and will be exercisable from the date on which stockholder approval is received with respect to the issuance of the shares

of common stock issuable upon exercise of such warrants.

As the existing November 2023 and February 2024 warrants and their related newly

issued warrants upon inducement were equity classified before and after the exchange, and as the exchange is directly attributable to

an equity offering, the Company recognized the effect of the modification of approximately $ 10.2 million as an equity issuance cost.

a concurrent private placement, pursuant to the terms of the August Inducement Letter and Securities Purchase Agreement, the Company

utilized an exclusive placement agent for the 2024 Registered Direct Offering and 2024 August Warrant Inducement and incurred approximately

$ 0.6 million in legal fees and other closing costs.

Additionally, the Company issued to the placement agent as compensation unregistered

warrants to purchase up to 752,969 shares of Common Stock .

The placement agent warrants expire on August 28, 2029 , and have an exercise

price of $ 0.5875 per share of Common Stock.

The warrants will become exercisable upon stockholder approval and contain customary anti-dilution

adjustments to the exercise price, including for share splits, share dividends, rights offering and pro rata distributions.

to the 2024 February Warrant Inducement, a holder left 1,488,144 shares in abeyance at the Company’s transfer agent to be delivered

to the holder at their request.

During the quarter ended September 30, 2024, all remaining shares held in abeyance were delivered to

to the 2024 August Warrant Inducement, four holders left 7,203,504 shares in abeyance at the Company’s transfer agent to be delivered

to the holder at their request.

During the quarter ended September 30, 2024, 1,500,000 shares held in abeyance were delivered to the

Accordingly, as of September 30, 2024, 5,703,504 shares were held in abeyance, had not been issued and were not outstanding.

Subsequent to September 30, 2024, the remaining shares were delivered to the holders.

following table provides a summary of outstanding warrants to purchase shares of common stock as of September 30, 2024:

OF OUTSTANDING WARRANT

Shares Underlying

Outstanding Warrants

Classification

$ 0.47 - $ 0.5875

LACQ warrants

Share subscription facility

$ 3.64 - 16.80

Public offering

August 2024 Warrants

February 2024 Warrants

$ 0.47 - $ 1.5675

Public offering

2023 Notes Warrants

$ 3.64 - $ 2,760

2024 Warrants

June 30, 2021, as a result of the Closing of the Business Combination, 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).

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.

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 per share.

July 2, 2021, upon public listing of the Company’s shares, the Company issued 4,608 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.

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 June 30, 2024 of $ 1.06 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 1,507 and 3,011 warrants in connection with the issuance of the 2021

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 .

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 .

July 1, 2022 and August 9, 2022, the Company issued 19,450 warrants each in connection with the issuance of the 2022 Notes.

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 2022 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 .

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 .

February 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.

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 .

In connection to the Inducement Letter entered into February 12, 2024, certain existing

warrant holders agreed to exercise 3,601,752 Series A-1 and A-2 warrants at a reduced exercise price of $ 1.31 .

The placement agent

warrants remain outstanding as of June 30, 2024.

Other Warrants

Equity & Liability

August 29, 2024, in connection with the 2024 Registered Direct Offering and 2024 August Warrant Inducement , the Company

issued equity classified warrants to purchase 29,469,869 shares to certain institutional investors and the placement agent.

were issued in connection with the 2024 Registered Direct Offering and the 2024 August Warrant Inducement.

The 28,716,900 investor

warrants have an exercise price of $ 0.47 per share, and are exercisable from the date on which stockholder approval is received.

One half of the warrants will expire eighteen months after they are exercisable, and the other half will expire five years after

they are exercisable.

The 752,969 placement agent warrants have an exercise price of $ 0.5875 per share, are exercisable upon stockholder

approval and expire August 28, 2029.

February 12, 2024, the Company issued 7,455,627 equity classified warrants (Series A Warrants,

Series B Warrants and placement agent warrants) in connection with the Inducement Letter

for the 2024 February warrant inducement and related warrant restructuring.

and Series B Warrants were immediately exercisable with an exercise price of $ 1.06 per share

and expire on August 14, 2025 and May 12, 2028 , respectively.

The placement agent warrants

were immediately exercisable with an exercise price of $ 1.6375 per share and expire on May

In connection with the 2024 August Warrant Inducement, 7,203,504 warrants were

As of September 30, 2024, the placement agents remain outstanding.

October 25, 2023, and November 28, 2023, the Company issued warrants to purchase 1,255,697

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The warrants were immediately exercisable with

an exercise price of $ 1.5675 and expire on October 25, 2028 and November 28, 2028 , respectively.

In January 2024, a holder of the warrants exercised 1,323,904 warrants at an exercise price

of $ 1.5675 .

February 12, 2024, the Company issued 7,455,627 equity classified warrants (Series A Warrants, Series B Warrants and placement agent

warrants) in connection with the Inducement Letter for the 2024 warrant inducement and related warrant restructuring.

A and Series B Warrants were immediately exercisable with an exercise price of $ 1.06 and expire on August 14, 2025 and May 12, 2028 ,

an exercise price of $ 1.5675 per share and expire on October 25, 2028 , and November 28, 2028 ,

respectively.

The placement agent warrants were immediately exercisable with an exercise price of $ 1.6375 and expire on May 12, 2028 .

fair value of each warrant issued has been determined using the Black-Scholes option-pricing model.

The material assumptions used in

the Black-Scholes model in estimating the fair value of the warrants issued for the periods presented were as follows:

OF WARRANTS FAIR VALUE ESTIMATION ASSUMPTIONS

Exercise price

Expected term (years)

Risk free rate

(a) LACQ warrants (grant date varies)

$ 2,400.00 - $ 2,760.00

(b) Share subscription facility (grant date 7/2/21)

(b) Share subscription facility (remeasurement date varies)

$ 1.13 - $ 1,029.60

$ 1.06 - $ 680.23

91.3 % - 140.5 %

1.04 % - 5.43 %

133.7 % - 135.4 %

(d) Liability classified warrants (grant date 7/1/22)

(d) Liability classified warrants (grant date 8/9/22)

(d) Liability classified warrants (remeasured at 6/30/24)

126.7 % - 128.6 %

In January 2024, a holder of the warrants exercised 1,323,904 warrants at an

exercise price of $ 1.5675 per share.

In August 2024, an inducement letter was issued to a

holder of 2,000,000 warrants to reduce the exercise price from $ 1.5675 to $ 0.47 per share,

subject to the receipt of stockholder approval.

various dates from the Closing of the Business Combination through September 30, 2023, the

Company assumed or issued a total of 1,101,582 warrants to provide holders the right to purchase

common stock at exercise prices ranging from $ 3.64 - $ 2,760 per share.

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.

A total of 43,418 outstanding warrants (issued in connection with

the 2021 and 2022 Notes) are liability-classified due to certain cash settlement features

embedded within the warrant agreements.

The remaining warrants are equity classified.

warrants expire beginning June 30, 2026 , through August 7, 2028 .

9 - STOCK-BASED COMPENSATION

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In February 2024, the Company’s

Board approved an annual increase of 26,725 shares and in August 2023, the Company’s stockholders approved a proposal for an increase

of 585,796 shares available for future grant under the 2021 Omnibus Plan.

Board approved an annual increase of 157,304 shares available for future grant under the 2021 Omnibus Plan.

Company recognized stock-based compensation expense within general and administrative expense of $ 14,497 and $ 56,643 for the three and

six months ended June 30, 2024 and $ 60,394 and $ 156,663 for the three and six months ended June 30, 2023.

The Company recognized stock-based

compensation expense within research and development expense of $ 7,891 and $ 17,610 for the three and six months ended June 30, 2024 and

$ 17,023 and $ 37,887 for the three and six months ended June 30, 2023.

were no stock options granted during the six months ended June 30, 2024 and June 30, 2023.

following table summarizes the Company’s stock option activity during the six months ended June 30, 2024:

nine months ended September 30, 2024, and $ 41,336 and $ 198,000 for the three and nine months ended September 30, 2023.

The Company recognized

stock-based compensation expense within research and development expense of $ 6,322 and $ 23,931 for the three and nine months ended September

30, 2024, and $ 14,338 and $ 52,224 for the three and nine months ended September 30, 2023.

were no stock options granted during the nine months ended September 30, 2024.

following table summarizes the Company’s stock option activity during the nine months ended September 30, 2024:

SCHEDULE OF STOCK OPTION ACTIVITY

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Expired / Forfeited

Outstanding at June 30, 2024

Exercisable at June 30, 2024

Outstanding at September 30, 2024

Exercisable at September 30, 2024

Vested and expected to vest

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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 during the six months ended June 30, 2024 and 2023):

no grants issued in during the nine months ended September 30, 2024 and 2023):

stock-price volatility.

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to pay any dividends on the Company’s common stock.

of June 30, 2024, the Company had an aggregate of $ 60,092 of unrecognized share-based compensation cost, which is expected to be recognized

over the weighted average period of 0.95 years.

of September 30, 2024, the Company had an aggregate of $ 39,273 of unrecognized share-based compensation cost, which is expected to be

recognized over the weighted average period of 0.83 years.

Reserved for Future Issuance

1 unchanged sentence

SCHEDULE OF COMMON STOCK FUTURE ISSUANCE

June 30, 2024

September 30, 2024

Awards outstanding under the 2021 Omnibus Incentive Plan

3 unchanged sentences

10 - RELATED PARTIES

of June 30, 2024, the Company held a $ 0.2 million senior secured convertible promissory note plus accrued interest and 0.4 million warrants

exercisable for common stock at $ 1.5675 per share issued from a board member in connection to the issuance of the 2023 Notes.

25, 2024, the Company and the board member entered into a forbearance agreement that will expire on April 25, 2025.

of September 30, 2024, the Company held a $ 0.2 million senior secured convertible promissory note plus accrued interest and 0.4 million

warrants exercisable for common stock at $ 1.5675 per share issued to a board member in connection to the issuance of the 2023 Notes.

On April 25, 2024, the Company and the board member entered into a forbearance agreement that will expire on April 25, 2025 .

Upon termination

2 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements