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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 WASHINGTON,
D.C. 20549

 Form

 ANNUAL
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the fiscal year ended: December 31, 2023

 OR

 TRANSITION
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from to

 Commission
File Number 001-38306

 ENSYSCE
BIOSCIENCES, INC.

 (Exact
name of registrant as specified in its charter)

 Delaware

 82-2755287

 (State
 or other jurisdiction

 of
 incorporation or organization)

 (I.R.S.
 Employer

 Identification
 No.)

 7946
 Ivanhoe Avenue, Suite 201

 La
 Jolla, California

 92037

 (Address
 of principal executive offices)

 (Zip
 Code)

 ( 858)
 263-4196

 (Registrant's
 telephone number, including area code)

 SECURITIES
REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of each exchange on which registered

 Common
 Stock, $0.0001 par value per share

 ENSC

 The
 Nasdaq Stock Market

 Warrants,
 to purchase one share of Common Stock

 ENSCW

 OTC
 Pink Open Market

 SECURITIES
REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes No

by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company,
or an emerging growth company. See definitions of "large accelerated filer", "accelerated filer", "smaller
reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act:

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated
 filer

 Smaller
 reporting company

 Emerging
 growth company

 If
an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the fi ling reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 The
aggregate market value of the common stock held by non-affiliates of the registrant on June 30, 2023, the last business day of the registrant's
most recently completed second fiscal quarter, was $ 4.6 million. The aggregate market value was computed by reference to the closing
price of the common stock on such date.

 Registrant
had 7,329,172 shares of common stock outstanding as of March 8, 2024.

 DOCUMENTS
INCORPORATED BY REFERENCE

 None

 ENSYSCE
BIOSCIENCES, INC.

 Risk
 Factor Summary

 Glossary

 Cautionary
 Note Regarding Forward-Looking Statements

 PART
 I

 Item
 1. Business

 Item
 1A. Risk Factors

 Item
 1B. Unresolved Staff Comments

 Item
 1C. Cybersecurity

 Item
 2. Properties

 Item
 3. Legal Proceedings

 Item
 4. Mine Safety Disclosures

 PART
 II

 Item
 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A. Quantitative and Qualitative Disclosures About Market Risk

 Item
 8. Financial Statements and Supplementary Data

 Item
 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A. Controls and Procedures

 Item
 9B. Other Information

 Item
 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 PART
 III

 Item
 10. Directors, Executive Officers and Corporate Governance

 Item
 11. Executive Compensation

 Item
 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13. Certain Relationships and Related Transactions, and Director Independence

 Item
 14. Principal Accounting Fees and Services

 PART
 IV

 Item
 15. Exhibits and Financial Statement Schedules

 Item
 16. Form 10-K Summary

 SIGNATURES

 Risk
Factor Summary

 Below
is a summary of material factors that make an investment in our securities speculative or risky. Importantly, this summary does not address
all of the risks and uncertainties that we face. Additional discussion of the risks and uncertainties in this summary, as well as other
risks and uncertainties that we face, can be found under the section titled " Risk Factors " beginning on page 34 of
this Annual Report on Form 10-K. This summary is qualified in its entirety by that more complete discussion of such risks and uncertainties.
If we are unable to adequately address these and other risks we face, our business, results of operations, financial condition and prospects
may be harmed. You should consider carefully the risks and uncertainties described under the section titled " Risk Factors "
as part of your evaluation of an investment in our securities:

 We
 are a clinical-stage pharmaceutical company with a limited operating history. We have incurred significant financial losses since
 our inception and anticipate that we will continue to incur significant financial losses for the foreseeable future.

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

 We
 require substantial additional funding.

 There
 may be no proceeds under the GEM Agreement or proceeds may be less than anticipated.

 We
 depend heavily on the success of PF614 and PF614-MPAR product candidates, which are currently in clinical trials, and which may not
 be successful.

 Due
 to the significant resources required for the development of our product pipeline, and depending on our ability to access capital,
 we must prioritize the development of certain product candidates over others.

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

 If
 we do not achieve our projected development and commercialization goals within the timeframes we expect, the development and commercialization
 of our product candidates may be delayed.

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

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

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

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

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

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

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

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

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

 Interim
 and preliminary data from our clinical trials may change.

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

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

 We
 may encounter difficulties enrolling patients in our clinical trials.

 Fast
 track designation by the FDA for PF614, for management of moderate to severe chronic pain when a continuous, around-the-clock analgesic
 is needed for an extended period of time, may not lead to a faster development or regulatory review or approval process and does
 not assure FDA approval.

 If
 the FDA does not conclude that certain of our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval
 pathway, or if such requirements are not as we expect, the approval pathway will likely take significantly longer, cost significantly
 more and entail significantly greater complications and risks than anticipated, and in either case may not be successful.

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

 Our
 product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval,
 limit the commercial profile of an approved label, or result in significant negative consequences following regulatory approval,
 if obtained.

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

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

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

 If
 we are unable to obtain and maintain patent protection for our products candidates, or if the scope of the patent protection obtained
 is not sufficiently broad, our competitors could develop and commercialize product candidates that are similar or identical to our
 product candidates.

 We
 may face litigation from third parties claiming that our products or business infringe, misappropriate, or otherwise violate their
 intellectual property rights, or seeking to challenge the validity of our patents.

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

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

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

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

 We
 may be subject to claims that we infringed, misappropriated or otherwise violated the intellectual property of a third party, or
 claiming ownership of what we regard as our own intellectual property.

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

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

 Cyber-attacks
 or other failures in our telecommunications or information technology systems, or those of third parties could result in information
 theft, data corruption and significant disruption of our business.

 Raising
 additional capital in the public or private equity markets at prices per share below the current market price of our common stock
 could cause dilution to our stockholders, adversely affect the market price of our common stock, restrict our operations or require
 us to relinquish rights to our technologies or product candidates.

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

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

 GLOSSARY

 Definitions:

 2013
 Framework

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

 2021
 Notes

 The
 senior secured convertible promissory notes in the aggregate original principal amount of $15.9 million, sold in two closings on
 September 24, 2021 and November 5, 2021, respectively, pursuant to the Securities Purchase Agreement entered into on September 24,
 2021

 2021
 Omnibus Incentive Plan

 Biosciences, Inc. Amended and Restated 2021 Omnibus Incentive Plan

 2022
 Notes

 The
 senior secured convertible promissory notes in the aggregate original principal amount of $8.5 million, sold in two closings on June
 30, 2022 and August 8, 2022, respectively, pursuant to the Securities Purchase Agreement entered into on June 30, 2022

 2023
 Notes

 The
 senior secured convertible promissory notes in the aggregate original principal amount of $1.8 million, sold in two closings on October
 25, 2023 and November 28, 2023, respectively, pursuant to the Securities Purchase Agreement entered into on October 23, 2023

 2022
 December Offering

 The
 Company's December 2022 registered direct offering of common stock (including pre-funded warrants in lieu thereof). The Offering
 closed on December 9, 2022 for aggregate consideration of $4.1 million

 2023
 February Offering

 The
 Company's February 2023 registered direct offering of common stock and private placement warrants for aggregate consideration
 of $3.0 million

 2023
 May Offering

 The
 Company's May 2023 registered direct offering of common stock (including pre-funded warrants in lieu thereof) for aggregate
 consideration of $7.0 million

 ADFs

 Abuse
 deterrent formulations

 ADHD

 Attention
 deficit hyperactivity disorder

 Aggregate
 Limit

 Up
 to $60 million of gross proceeds with respect to the GEM Agreement

 ANDA

 Abbreviated
 New Drug Application

 API

 Active
 pharmaceutical ingredient

 AUC

 Area
 under the concentration time curve

 Board

 Board
 of directors of Ensysce, or a committee thereof, as applicable

 Business
 Combination

 The
 definitive merger agreement among LACQ, Merger Sub and Former Ensysce, dated January 31, 2021, providing for, among other things,
 and subject to terms and conditions therein, the business combination between LACQ and Former Ensysce pursuant to the merger of Merger
 Sub with and into Former Ensysce, with Former Ensysce continuing as the surviving entity and as a wholly-owned subsidiary of LACQ

 CARA

 Comprehensive
 Addiction and Recovery Act

 CDC

 Center
 for Disease Control

 CDER

 Center
 for Drug Evaluation and Research

 cGMP

 Current
 Good Manufacturing Practice

 Cmax

 Maximum
 plasma concentration

 CMC

 Chemistry,
 manufacturing, and controls

 CMOs

 Contract
 manufacturing organizations

 CNS

 Central
 nervous system

 Company

 Biosciences, Inc. and its consolidated subsidiaries

 COVID-19

 Novel
 coronavirus disease

 Covistat

 A
 subsidiary renamed EBIR, Inc.

 CROs

 Contract
 research organizations

 CSA

 Controlled
 Substances Act

 CSOS

 Controlled
 Substance Ordering System

 DEA

 United
 States Drug Enforcement Agency

 Draw
 Down Limit

 400%
 of the average daily trading volume for the 30 trading days immediately preceding the date the Company delivers the draw down notice
 with respect to the GEM Agreement

 DSCSA

 Title
 II of the Federal Drug Quality and Security Act of 2013, known as the Drug Supply Chain Security Act

 EB

 Biosciences, Inc. prior to its merger with Signature Acquisition Corp. pursuant to the EB-ST Agreement.

 EBIR

 Previously
 known as Covistat, Inc., EBIR, Inc. is a clinical stage pharmaceutical company that is developing a compound utilized in the Company's
 overdose protection program for the treatment of COVID-19 and 79.2%-owned subsidiary of the Company

 EB-ST

 and Plan of Merger, dated as of December 28, 2015, by and among Signature, SAQ, and EB

 EMA

 European
 Medicines Agency

 Biosciences Inc.

 EPO

 European
 Patent Office

 ETASU

 Elements
 to assure a products safe use

 Exchange
 Act

 Exchange Act of 1934, as amended

 FDA

 United
 States Food and Drug Administration

 FDC
 Act

 Federal
 Food, Drug and Cosmetic Act, as amended

 Former

 Biosciences, Inc., a Delaware corporation, prior to the consummation of the merger with and into Merger Sub

 GAAP

 Generally
 Accepted Accounting Principles in the United States of America

 GCP

 Good
 Clinical Practices

 GEM

 Share
 Purchase Agreement between the Company, GEM Global, and GYBL, dated as of December 29, 2020, including a Registration Rights Agreement
 between the same parties and dated as of the same date

 GEM
 Global

 GEM
 Global Yield LLC SCS

 GEM

 4,608
 shares of common stock that may be issued upon the exercise of warrants issued to GYBL under the terms of the GEM Agreement at an
 exercise price of $1.5675 per share

 GMP

 Good
 Manufacturing Practices

 GYBL

 GEM
 Yield Bahamas Limited

 Hatch-Waxman
 Act or Hatch-Waxman Amendments

 Drug
 Price Competition and Patent Term Restoration Act of 1984

 HHS

 United
 States Department of Health and Human Services

 IMPDs

 Investigational
 Medicinal Product Dossiers

 IND

 Investigational
 New Drug

 Investor
 Notes

 The
 2021 Notes, 2022 Notes and 2023 Notes, collectively.

 IRB

 Institutional
 Review Board

 JOBS
 Act

 Jumpstart
 Our Business Startups Act of 2012

 LACQ

 Leisure
 Acquisition Corp., a Delaware Corporation

 LACQ

 that relate to the Business Combination or were issued prior to it and are exercisable for 21,993 shares of our common stock at a
 weighted average exercise price of $2,725.90 per share

 MAD

 Multi-Ascending
 Dose

 Merger

 The
 merger of Merger Sub with and into Former Ensysce, with Former Ensysce continuing as the surviving entity and a wholly owned subsidiary
 of LACQ, which changed its name to Ensysce Biosciences, Inc. following consummation of the Merger.

 Merger

 and Plan of Merger, dated as of January 31, 2021, by and among LACQ, Merger Sub and Former Ensysce, providing for, among other things,
 and subject to the terms and conditions therein, a business combination between Former Ensysce and LACQ pursuant to the proposed
 merger of Merger Sub with and into Former Ensysce, with Former Ensysce surviving the transaction as a wholly-owned subsidiary of
 LACQ, which changed its name to Ensysce Biosciences, Inc. following consummation of the Merger

 Merger
 Sub

 EB
 Merger Sub, Inc., a Delaware corporation, a wholly-owned subsidiary of LACQ prior to the consummation of the Merger

 MPAR
 Grant

 and development grant related to the development of its MPAR overdose prevention technology awarded to the Company
 by NIH through NIDA in September 2018

 Nasdaq

 The
 Nasdaq Stock Market LLC

 NCE

 New
 Chemical Entity

 NDA

 New
 Drug Application

 NEO

 Named
 Executive Officer

 NIDA

 National
 Institute of Drug Abuse

 NIH

 National
 Institutes of Health

 NME

 New
 molecular entity

 Orange
 Book

 FDA's
 publication Approved Drug Products with Therapeutic Equivalence Evaluations

 OUD
 Grant

 and development grant related to the development of its TAAP/MPAR abuse deterrent technology for Opioid Use Disorder
 awarded to the Company by NIH/NIDA in September 2019

 PCT

 Cooperation Treaty

 PDMA

 U.S.
 Prescription Drug Marketing Act

 PK

 Pharmacokinetics

 Prior

 issued pursuant to the Securities Purchase Agreement. The Prior Warrants issued in (i) 2021 are exercisable for an aggregate of 4,518
 shares of our common stock at an exercise price of $3.64 per share and in (ii) 2022 are exercisable for an aggregate of 38,900 shares
 of our common stock at an exercise price of $3.64 per share

 PTA

 Term Adjustment

 PTE

 Term Extension

 Public

 The
 redeemable warrants issued by us and sold as part of the units in the LACQ IPO (whether they were purchased in the LACQ IPO or thereafter
 in the open market). The Public Warrants are exercisable for an aggregate of approximately 41,666 shares of our common stock at an
 exercise price of $2,760.00 per share

 R&D

 and Development

 Recro

 Recro
 Gainesville LLC

 Recro

 Manufacturing
 Agreement, dated September 19, 2019, by and between Recro Gainesville LLC and the Company

 REMS

 Risk
 evaluation and mitigation strategy

 Resale
 Registration Statement

 Ensysce's
 Resale Registration Statement filed on August 9, 2021

 SARS-CoV-2

 Severe
 acute respiratory syndrome coronavirus 2

 SAQ

 Signature
 Acquisition Corp., a wholly-owned subsidiary of Signature

 SEC

 U.S.
 Securities and Exchange Commission

 Act

 Act of 1933, as amended

 Purchase Agreement

 The
 Securities Purchase Agreement, dated as of September 24, 2021, June 30, 2022, or October 23, 2023 as the context dictates, by and
 between Ensysce and the institutional investors party thereto

 Signature

 Signature
 Therapeutics Inc.

 SPA

 A
 Securities Purchase Agreement, dated as of September 24, 2021, June 30, 2022, or October 23, 2023 as the context dictates, by and
 between Ensysce and the institutional investors party thereto

 SUPPORT
 Act

 Substance
 Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act

 TAAP

 Trypsin
 Activated Abuse Protection

 TEAEs

 Treatment-emergent
 adverse events

 USPTO

 United
 States Patent and Trademark Office

 CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS

 This
Annual Report on Form 10-K includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions, or projections
regarding future events or future results and therefore are, or may be deemed to be, " forward-looking statements."
These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms " believes,"
" estimates," " anticipates," " expects," " seeks," " projects,"
" intends," " plans," " may," " will," or " should "
or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters
that are not historical facts. They appear in a number of places throughout this Annual Report on Form 10-K and include statements regarding
our intentions, beliefs or current expectations concerning, among other things, results of operations, financial condition, liquidity,
prospects, growth, strategies and the markets in which we operate. Such forward-looking statements are based on available current market
material and management's expectations, beliefs and forecasts concerning future events impacting our company. Factors that may
impact such forward-looking statements include:

 our
 estimates regarding expenses, revenue, capital requirements and timing and availability of and the need for additional financing
 will almost certainly not match actual amounts and timing;

 our
 ability to continue as a going concern for the next twelve months;

 the
 risk that our lead product candidate PF614 and PF614-MPAR may not be successful in limiting or impeding abuse, overdose, or misuse
 or providing additional safety upon commercialization;

 reliance
 by us on third-party contract research organizations, or CROs, for our research and development activities and clinical trials;

 the
 need for substantial additional funding to complete the development and commercialization of our product candidates;

 the
 risk that our clinical trials may fail to replicate positive results from earlier preclinical studies or clinical trials conducted
 by us or third parties;

 the
 risk that the potential product candidates that we develop may not progress through clinical development or receive required regulatory
 approvals within expected timelines or at all;

 the
 risk that clinical trials may not confirm any safety, potency, or other product characteristics described or assumed in this Annual
 Report on Form 10-K;

 the
 risk that we will be unable to successfully market or gain market acceptance of our product candidates;

 the
 risk that our product candidates may not be beneficial to patients or successfully commercialized;

 the
 risk that we have overestimated the size of the target market, patients' willingness to try new therapies, and the willingness
 of physicians to prescribe these therapies;

 effects
 of competition;

 the
 risk that third parties on which we depend for laboratory, clinical development, manufacturing, and other critical services will
 fail to perform satisfactorily;

 the
 risk that our business, operations, clinical development plans and timelines, and supply chain could be adversely affected by the
 effects of health epidemics;

 the
 risk that we will be unable to obtain and maintain sufficient intellectual property protection for its investigational products or
 will infringe the intellectual property protection of others;

 the
 loss of key members of our management team;

 changes
 in our regulatory environment;

 the
 ability to attract and retain key scientific, medical, commercial, or management personnel;

 changes
 in our industry;

 our
 ability to remediate any material weaknesses or establish and maintain effective internal controls over financial reporting;

 the
 risk that our common stock will be delisted from Nasdaq;

 the
 risk that we may not be able to regain or maintain compliance with applicable listing standards of Nasdaq;

 potential
 litigation associated with the Business Combination Transactions;

 other
 factors disclosed in this Annual Report on Form 10-K; and

 other
 factors beyond our control.

 The
forward-looking statements contained in this Annual Report on Form 10-K are based on our current expectations and beliefs concerning
future developments and their potential effects on our company. There can be no assurance that future developments affecting us will
be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond
our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied
by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the
heading " Risk Factors ". Should one or more of these risks or uncertainties materialize, or should any of the assumptions
prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We will not undertake
any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.

 References
in this Annual Report on Form 10-K to "we," "our," "us," the "Company" or "Ensysce"
generally refer to Ensysce and its consolidated subsidiaries.

 PART
I

 Item
1. Business

 Corporate
Information

 We
were originally incorporated in the State of Delaware in April 2003 as PharmacoFore, Inc. and, in January 2012, we changed our name from
PharmacoFore, Inc. to Signature Therapeutics Inc. (" Signature "). On December 28, 2015, Signature, Signature Acquisition
Corp., a wholly-owned subsidiary of Signature (" SAQ "), and Ensysce Biosciences, Inc. (" EB ") entered
into an Agreement and Plan of Merger (" EB-ST Agreement "). Pursuant to the EB-ST Agreement, SAQ merged with and into
EB with EB surviving the merger as a wholly-owned subsidiary of Signature. As part of the transaction, Signature changed its name to
"Ensysce Biosciences, Inc." (" Former Ensysce ") and changed EB's name to EBI Operating Inc. On January
31, 2021, LACQ, Former Ensysce, and Merger Sub entered into the Merger Agreement. On June 30, 2021, pursuant to the Merger Agreement,
Merger Sub merged with and into Former Ensysce, with Former Ensysce surviving the transaction as a wholly-owned subsidiary of LACQ. As
part of the transaction, LACQ changed its name to "Ensysce Biosciences, Inc." and Former Ensysce changed its name to EBI
OpCo, Inc.

 The
mailing address of our principal executive office is 7946 Ivanhoe Avenue, Suite 201, La Jolla, California 92037. Our corporate telephone
number is (858) 263-4196. Our website address is www.ensysce.com. Information contained on our website, or connected thereto, does not
constitute part of, and is not incorporated by reference into, this Annual Report on Form 10-K.

 Channels
for Disclosure of Information

 Investors,
the media, and others should note that we announce material information to the public through filings with the SEC, the investor relations
page on our website, blog posts on our website, press releases, public conference calls, webcasts, and our twitter feed (@EnsysceBio).

 The
information disclosed by the foregoing channels could be deemed to be material information. As such, we encourage investors, the media,
and others to follow the channels listed above and to review the information disclosed through such channels.

 Any
updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on
our website.

 Business
Overview

 We
are a clinical stage pharmaceutical company seeking to develop innovative solutions for severe pain relief while reducing the potential
for opioid misuse, abuse, and overdose.

 We
are currently developing product candidates designed to improve the safety of prescription drugs. Our primary focus has been on opioid
pain products and opioid use disorder products. Prescription opioid abuse presents major burdens to society, resulting in significant
costs, illnesses, and deaths, many of which we believe could be prevented through the use of our proprietary technologies. We believe
the intertwined issues of (1) the widespread abuse of prescription opioids and (2) the resultant reluctance of many prescribers to write
prescriptions for opioid analgesics have resulted in the persistent under-treatment of patients with moderate-to-severe pain. Our platforms
utilize a novel molecular delivery technology designed to deter prescription opioid abuse at the molecular level.

 Our
current development pipeline includes two new drug platforms - an abuse-resistant opioid prodrug technology – the Trypsin
Activated Abuse Protection, or the TAAP platform, and an over-dose protection opioid prodrug technology - the Multi-Pill Abuse Resistant,
or the MPAR platform. The TAAP platform is designed to seek to improve the care of patients with chronic pain while reducing the
human and economic costs associated with prescription opioid drug abuse. The MPAR platform when combined with our TAAP prodrugs
is designed not only to seek to prevent abuse of prescription drugs but also to reduce overdose occurrences. Each prodrug is intended
to be able to be combined with our MPAR technology for overdose protection. Additionally, nafamostat di-mesylate (" nafamostat "),
which is an ingredient in our overdose protection combination products, is also being developed for the intended purpose of treating
infection and pulmonary lung diseases.

 The
technology under the TAAP platform when applied to opioid drugs is designed to release clinically effective opioid drugs only when exposed
to specific physiological conditions (i.e., when the drug is ingested and exposed to the digestive enzyme trypsin). Our lead product
candidate, PF614, is a TAAP oxycodone prodrug that is a biologically inactive compound which can be metabolized in the body to produce
a drug with demonstrable features aimed at resisting both oral and non-oral modes of prescription drug abuse. This approach differs from
current formulation-based strategies such as OxyContin OP which uses Intac Technology (crush-resistant polymers) and Extampza ER
which uses DETERx (insoluble fatty acid salts in polymers), in a number of ways. First, the TAAP technology seeks to remove the
ability of a user to abuse PF614 intravenously or intranasally based on preclinical studies that show PF614 does not readily convert
into oxycodone in the blood stream and trypsin is not present in the nasal passage, and, accordingly, PF614 would not convert to oxycodone
in the nose. Furthermore, the chemically modified and abuse-resistance TAAP opioid drug is unaffected by simple physical manipulations
designed to extract abusable amounts of opioid, such as through kitchen chemistry. Our portfolio of TAAP product candidates is based
on a differentiated understanding of chemical reactivity and metabolism, as well as the key pillars of our unique approach which focuses
on: (1) enzyme mediated metabolic activation localized in the gastrointestinal track; (2) rearrangement chemistry to achieve pharmacokinetic
release of active drug products; and (3) preclinical and clinical data that set forth the metabolic and chemical activation profile for
each of our clinical candidates.

 Utilizing
this approach, we filed an Investigational New Drug application, or IND (116794), and commenced a Phase 1 clinical trial for PF614, which
was completed in February 2018. The clinical data from the Phase 1 trial demonstrated that oxycodone released from PF614 as chemically-designed,
and that it was absorbed following oral administration of the TAAP PF614, resulting in blood levels that matched the same release profile
as the extended release oxycodone product, OxyContin OP. A second multi-ascending dose study with a bioequivalent arm was completed in
July 2022 and a nasal human abuse potential (HAP) study was completed in October 2022. A second oral HAP study was completed in March
2023. Most recently, a study to evaluate efficacy was completed in December 2023.

 The
MPAR technology is designed to limit the bioavailability of active opioid following co-ingestion of multiple doses, whether
inadvertent or intentional, through a combination of a TAAP prodrug with nafamostat. Nafamostat is a small molecule that clinical studies
have shown to have a steep dose response curve and to be a highly potent trypsin inhibitor. When combined with our TAAP prodrugs, our
MPAR technology is designed not to affect metabolism and the release of the active pharmaceutical ingredient. However,
if the MPAR combination product is taken in larger quantities than intended, the excess nafamostat is designed to inhibit
trypsin, thereby preventing metabolic activation and averting a drug overdose. We believe the potential benefits to society of an opioid
that resists both oral and parenteral abuse are considerable. A Phase 1 study to explore the combination of PF614 and nafamostat, PF614-MPAR-101
was initiated in December of 2021, and early data from the study reported in May 2022 demonstrated the combination product showed overdose
protection, with a reduction in the release of oxycodone over that of PF614 delivered alone. A second part of this trial to confirm overdose
protection from PF614-MPAR 25 mg was completed in 2023 and data reported in May 2023. PF614-MPAR was granted Breakthrough Therapy designation
by the FDA in January 2024.

 Our
pipeline has been developed over the course of 15 years of research and investment and includes three clinical-stage product candidates.
While our principal focus and lead product candidates are geared towards combating abuse and overdose of opioid drugs, we have, over
the years of research and development, discovered and recognized qualities and unique features of certain product candidates that may
be useful in addressing other treatments. For example, we discovered the ability of nafamostat in inhibiting the action of enzymes associated
with the COVID-19 infection, and, as such, have devoted efforts to develop an oral and inhalation drug product of nafamostat, for use
against coronaviral infections and other pulmonary diseases such as cystic fibrosis.

 PF614

 PF614
is our lead TAAP prodrug candidate under development for the treatment of acute or chronic pain. PF614 is a delayed release TAAP prodrug
designed to release oxycodone under certain specific physiological circumstances when taken orally. PF164 was evaluated for safety and
pharmacokinetic release of oxycodone in a Phase 1 single ascending dose clinical trial in 64 healthy subjects. The trial showed that
PF614 was well tolerated with no serious adverse events. The study also showed pharmacokinetics had a maximum blood concentration of
oxycodone at 4 to 6 hours after swallowing PF614, demonstrating its delayed release profile. A second Phase 1b multi-ascending dose study
(MAD) was initiated in 2021 to evaluate PF614 delivered to healthy subjects twice daily for 4.5 days. This study evaluated both safety
and PK, with a second part to evaluate the bioequivalence (BE) of PF614 versus OxyContin. Final data from this trial was reported in
July 2022. The MAD study demonstrated both the safety of PF614 showing it was well tolerated at doses up to 200 mg, which was comparable
to 80 mg of OxyContin both delivered twice daily. The BE study arm followed the successful completion of the multi-ascending twice-daily
dosing study of PF614 and compared the release of oxycodone from PF614 versus OxyContin administered to subjects in both fasted
and fed states. It was concluded that 100 mg PF614 was bioequivalent to 40 mg OxyContin under both fasted and fed conditions. This data
is critical to understand future prescribing criteria for PF614 as an agent bioequivalent to OxyContin and therefore may be developed
through the 505(b)(2) regulatory path as defined by the FDA. The intranasal (IN) and oral human abuse potential of PF614 was assessed
in two different studies. In study 1, PF614-103, we evaluated the abuse potential of PF614 100 mg relative to crushed oxycodone immediate-release
(IR) tablets 40 mg (equivalent opioid doses) and placebo following intranasal administration. In study 2, PF614-104, we evaluated the
oral abuse potential of intact PF614 at 3 different dose levels 50, 100 and 200 mg to IR oxycodone 40 mg and placebo. The purpose of
this study is to assess the PK and human oral abuse potential of PF614. An efficacy study, PF614-201 was conducted to evaluate 50 and
100 mg PF614 in 16 healthy male subjects for the time of onset of pain relief and the ability of PF614 to relieve pain. The data will
be used to design our Phase 3 clinical trials. We believe PF614 has the potential to provide a safer alternative to the abuse deterrent
formulated opioid products that are currently commercially available.

 PF614-MPAR

 PF614-MPAR,
a combination product of PF614 and nafamostat has been designed to limit abuse potential by providing resistance to use through injection
or inhalation and to provide overdose protection against excessive oral ingestion. Our IND application (150966) for PF614-MPAR received
FDA allowance on April 27, 2021 following the release of a Full Clinical Hold from January 8, 2021. We addressed deficiencies from the
initial IND submission, amended the protocol and submitted a response to the clinical hold letter on March 29, 2021. We initiated a Phase
1 clinical trial, PF614-MPAR-101, to evaluate safety and PK in healthy subjects in December 2021. Initial data from this trial was reported
in May of 2022. The PF614-MPAR-101 overdose protection study examined PF614 administered orally alone or in combination with the trypsin
inhibitor nafamostat (MPAR) to healthy volunteers. The initial data demonstrated the overdose protection of our MPAR
 combination product, with reduced release of oxycodone from PF614 in a simulated overdose situation. It also demonstrated the PF614
in the systemic circulation (simulated injection) did not convert to oxycodone. We completed the clinical portion and reported data from
Part A of this study in December 2022. Part B of the study to test the overdose protection of the selected PF614-MPAR 25 mg formulation
by administering an escalating number of dose units to a group of healthy subjects completed enrollment in March 2023. The PK data from
Part B successfully showed that PF614-MPAR 25 mg administered at a prescribed dose of one or two dose units (capsules)
provided oxycodone in an equivalent manner to PF614 without MPAR. However, the simultaneous administration of 3 dose
units or greater of PF614-MPAR 25 mg, resulted in reduced oxycodone in the circulation, as compared to the unprotected PF614. There was
a highly significant difference between the oxycodone blood levels following delivery of PF614 200 mg versus 8 dose units of PF614-MPAR
25 mg (200 mg PF614 total) demonstrating the overdose protection produced by the MPAR technology. This was reported in
May of 2023. PF614-MPAR was granted Breakthrough Therapy designation by the FDA in January 2024.

 MPAR
is being tested clinically in partnership with Quotient Sciences, using its integrated Translational Pharmaceutics platform to search
for a PF614-MPAR formulation that allows conversion into oxycodone within the prescribed dose range but reduces conversion to oxycodone
at higher than prescribed dose levels in an overdose scenario.

is an enzyme inhibitor (protease inhibitor) used in our combination overdose protection technology, MPAR. Due to its ability to
inhibit the action of enzymes associated with the COVID-19 infection, we are also developing an oral drug product of nafamostat, for
use against coronaviral infections and other pulmonary diseases such as cystic fibrosis. An IND was submitted (149877) for the evaluation
of oral nafamostat in coronaviral infections. A Phase 1 trial to evaluate safety and PK was completed in 2021.

 Market
Opportunity

 Drug
Abuse and Drug Overdose

 Opioid
pain medications are essential for improving the care and outcomes of a majority of Americans who live with chronic pain. An NIH study,
updated September 2018, reported that 25.3 million adults suffered from pain every day for the preceding three months and almost 40 million
adults experience severe levels of pain, which is linked to worse health status. High impact chronic pain affects over 10 million Americans
and is characterized by extended periods of suffering which impair life quality to a severe degree. Prescription opioids drugs, such
as morphine, hydromorphone, hydrocodone, and oxycodone, have a long history of use for the management of severe and chronic pain. Prescriptions
for opioid medications in 2021 totaled 153 million, with $4.2 billion in market size in the United States.

 The
CDC recently provided recommendations for clinicians who provide pain care, defining acute pain (duration less than 1 month), subacute
pain (duration of 1–3 months), or chronic pain (duration of 3 months or more), not including sickle cell disease related pain management,
cancer pain treatment, palliative care, and end-of life care. These guidelines are based on the indications, acute and chronic
pain, that we intend to explore for our TAAP and MPAR opioid products including PF614.

 Opioids
are offered in a variety of dosages including immediate-release tablets (or capsules), extended-release tablets (or capsules), patches,
and other dose forms. Oxycodone is one of the most effective pain killers available today. This drug helps the patient to overcome pain
and focus on his or her work. Opioids have a risk of dependence and, when used improperly, a common side effect of high doses of opioids
like oxycodone can be euphoria, or a "high." As a result of these side effects, opioids have become amongst the most misused
or abused prescription drugs in the United States. Opioid abuse was declared a public-health emergency in 2017 when more than 91 people
died each day from opioid-related overdoses. In 2021 the total number of opioid-related deaths rose to 109,600, with 45 people dying
each day from a prescription opioid overdose.

 The
large increase in overall overdose deaths is now driven by use of synthetic opioids, in particular fentanyl, as prescription opioids
have become harder to obtain. From 2017 to 2018 the prescription opioid-involved death rates decreased by 13.5% showing that attention
to the problem had beneficial effect. However, 2.1 million people reported having opioid use disorder (" Opioid Use Disorder ")
in 2019. Based on information from the CDC, the most common drugs involved in prescription opioid overdose deaths include Methadone,
Oxycodone (such as OxyContin), and Hydrocodone (such as Vicodin). The CDC indicates that improving opioid prescribing, treatment
of opioid use disorder, and prevention of opioid use disorder would help to improve the opioid crisis. Misuse or abuse of opioids is
often done in one of the following manners:

 Oral
 Excessive Tablet Abuse. Generally recognized as the most prevalent route of administration by abusers, an abuser orally ingests
 more tablets (or capsules) than is recommended for pain relief.

 Nasal
 snorting. Crushed tablets are insufflated for absorption of the drug through the nasal tissues.

 Injection.
 The opioid is physically or chemically removed from the dosage and injected into the vein using a syringe.

 Oral
 Manipulated Tablet Abuse. Extended-release tablets or patches are crushed, chewed, or otherwise physically or chemically manipulated
 to defeat an extended-release mechanism and provide an immediate-release of the opioid for oral ingestion.

 Poly-pharmacy.
 Opioids are sometimes used in conjunction with alcohol, methamphetamine, benzodiazepines or other drugs to enhance the euphoria.

 Overdose.
 Users may accidentally introduce excessive quantities of drugs in their systems or combine drugs that may heighten the chance of
 adverse effects of drugs. Some patients may over-ingest drugs accidentally or with the express intent of suicide.

 Chronic
 or prolonged use. Chronic or prolonged use of opioids resulting in dependence is another form of misuse or abuse.

 Amphetamines
like Adderall are manufactured in pill form and are intended for oral ingestion. As of Q4 2022, seventy-five percent of Adderall prescriptions
are prescribed to the 10.5 million adults, age 22 or older, that are diagnosed with attention deficit hyperactivity disorder, or ADHD.
ADHD is the most common neurodevelopment disorder in children. Five million adults misuse stimulant medication annually, by using alternative
consumption methods to achieve a more intense high faster; snorting or injecting are most-common methods of abuse. Both of these methods
involve crushing pills.

 We
believe that having prescription drug products available that have a reduced potential for abuse by crushing and injecting, snorting,
and chewing could provide an even greater reduction of prescription opioid related deaths in the abuse of opioids or amphetamines.

 Nafamostat's
market opportunity is multifaceted. The oral form could be used alone or in combination with other antiviral drugs that target separate
processes needed for virus product, such as RNA replication or viral protein processing. Nafamostat delivered orally was evaluated in
a Phase 1 study for safety and tolerability with the anticipation of further evaluating an oral nafamostat drug product against COVID-19
in Phase 2 trials, however at this time the oral nafamostat program is not the company's primary focus.

 Our
Technology Platform Solution

 TAAP
Prescription Drugs

 The
technology under the TAAP platform utilizes a novel technology designed to deter prescription drug abuse at the molecular level. The
molecular delivery system is designed to release clinically effective drugs only when exposed to specific physiological conditions (i.e.,
when the drug is ingested and exposed to the digestive enzyme trypsin). Our TAAP prodrugs delivery system demonstrates a number
of features aimed at resisting both oral and non-oral modes of abuse. This platform's approach differs from current formulation-based
strategies (abuse deterrent formulations, or ADFs) in a number of ways. First, the abuse-resistance provided by TAAP is designed to be
unaffected by simple physical manipulations (e.g., crushing and extraction and/or chewing of the dose form provided to patients). We
believe the potential benefits to society of applying TAAP to opioids and amphetamines providing medication that resists both oral and
parenteral abuse are considerable.

 MPAR
Prescription Drugs

 MPAR
 combination therapy, involves co-formulating TAAP prodrugs with a trypsin inhibitor, nafamostat, which, when administered at prescribed
dose levels, are intended to have no effect on the conversion of the prodrug to the active ingredient thus allowing normal drug plasma
exposure levels. However, if the drug were taken in greater than prescribed quantities, the trypsin inhibitor would also be present at
higher levels, inhibiting the first step in the activation process, preventing the conversion of the prodrug to the active ingredient
thus limiting the potential to an overdose from the medication.

 Our
Development Programs

 We
are currently developing product candidates designed to improve the safety and performance of prescription drugs. Our primary focus has
been on opioid pain products and opioid use disorder products. Each prodrug is intended to be able to be combined with our MPAR
technology for overdose protection. Additionally, nafamostat, which is an ingredient in our overdose protection combination products,
may be developed for infection and pulmonary lung diseases. Besides our clinical candidates, we have a product portfolio of other TAAP
and MPAR opioids and amphetamines that could potentially be developed to build on this pipeline.

 Clinical
agents

 PF614

 PF614
is a chemically modified, extended-release oxycodone-derivative which releases clinically effective oxycodone only when exposed trypsin
in the gut (i.e., when the drug is ingested). This approach differs from formulation-based strategies which are currently commercially
available, in a number of ways. First, the abuse-resistance provided by PF614 is retained even when dissolved in water and is designed
to be unaffected by simple physical manipulations (e.g., extraction, chewing, and/or crushing). It also limits the bioavailability of
active medication following co-ingestion of multiple doses.

 Following
ingestion, the release of oxycodone from PF614 proceeds via a two-step process comprised of (1) trypsin activation in the small intestine
and (2) a subsequent intramolecular cyclization release reaction. This reaction releases oxycodone with concomitant formation of a cyclic
urea metabolite. The time-course of oxycodone release from PF614 is a function of the kinetics of (i) the trypsin hydrolysis and (ii)
the cyclization-release reaction. In the Phase 1 study of PF614, the time to maximal blood concentration of oxycodone (T max)
was five to six hours for the release of oxycodone and this time cannot be modified by crushing, chewing, or physically manipulating
the drug product. Oxycodone safety, metabolism, and pharmacokinetics have been well studied.

 PF614-101
Phase 1 Clinical Trial

 PF614
(IND 116796) has been evaluated in a Phase 1 clinical study for safety and pharmacokinetics of oxycodone release in 64 healthy subjects
in seven different closing cohorts from November 2016 to January 2018. This study was conducted for us by PRA Health Sciences –
Early Development Services Lenexa, Kansas, principal investigator, Daniel Dickerson, M.D., Ph. D. to evaluate the safety and pharmacokinetics
of PF614, as well as the pharmacokinetics of oxycodone at doses sufficient to characterize the extent to which plasma oxycodone is produced
and maintained following oral ingestion of PF614 and was compared to the oxycodone released from extended release oxycodone from OxyContin
OP. Subjects were randomized to receive a single dose of PF614 (dose of 15, 25, 50, 100, and 200 mg with 6 subjects per dosing group)
or OxyContin OP (dose of 10, 20, 50, and 80 mg with 2 subjects per dosing group). New subjects were recruited for each cohort. Cohort
1 compared subjects receiving PF614 and OxyContin OP with and without naltrexone blockade. Naltrexone is an opioid blocker to prevent
opioids from attaching to the opioid receptors, preventing the effect of the opioid medication such as pain relief, feeling of euphoria
or respiratory depression. The single ascending dose study also compared the release of oxycodone from PF614 under both fasted and fed
conditions at the highest dose of PF614 evaluated, 200 mg. The pharmacokinetics of the prodrug fragments was also evaluated. In addition,
this study instructed as to the "conversion efficiency" of the PF614 prodrug to oxycodone, with respect to OxyContin.

 Pharmacokinetic
Analyses

 The
shape of the plasma concentration versus time curve of oxycodone was similar following administration of OxyContin OP (oxycodone extended
release) and PF614. The efficiency of conversion for PF614 to oxycodone was determined to be approximately 86%. A PF614 dose of 50 mg
yields oxycodone exposure comparable to a 20.01 mg dose of OxyContin, indicating a potency ratio of 0.40. This data has allowed us to
match doses of PF614 to those of commercially available OxyContin OP.

 Safety

 A
total of 64 subjects were included in this study, of which 23 (35.9%) experienced 47 treatment-emergent adverse events, or TEAEs. The
majority of TEAEs were either gastrointestinal disorders or nervous system disorders with no deaths, serious adverse events, or severe
TEAEs. Additionally, there were no discontinuations due to study drug-related adverse events. Over half of TEAEs were study drug related,
but they were mostly mild in severity. The three TEAEs that were moderate in severity were nephrolithiasis, or kidney stones, nausea,
and vomiting, with the nausea and vomiting being study drug related. Comparing safety data across cohorts, the data indicated that dose,
naltrexone, and fed/fasted state had no clinically relevant effect on the safety profile of PF614. PF614 was generally well tolerated
at doses up to 200 mg in healthy subjects.

 PF614-102
Phase 1b Clinical Trial

 A
Phase 1b study was conducted by ICON (formerly PRA Health Sciences) with Dr. M Johnston as Principal investigator. This was a 2-part
study comprised of a MAD study (Part A) and a comparative bioavailability/bioequivalence and food effect study (Part B) in healthy subjects.
Part A treated a total of 24 subjects and utilized a randomized, open-label, MAD design with up to 3 separate dose groups of 8 subjects
per group. Within each dose group, subjects were randomized to receive either PF614 (n=6) or OxyContin (n=2). Subjects received repeated
BID doses, planned to be administered every 12 hours (q12h) over a 5-day period, for a total of 9 doses. PF614 doses were 50 mg, 100
mg, and 200 mg, which were expected to be approximately equivalent to the 20 mg, 40 mg, and 80 mg OxyContin doses, for Dose Groups 1,
2, and 3, respectively. Serial PK sampling was performed for the first day/first dose (Day 1) and for the last day/last dose (Day 5).
Only trough PK samples were taken within 30 minutes prior to the morning dose on Days 2, 3, and 4. Safety assessments, including regular
assessments of adverse events (AEs), vital signs (pulse rate, blood pressure, respiratory rate, and oxygen saturation [SpO 2 ]),
clinical laboratory tests, 12-lead electrocardiograms (ECGs), and cardiac telemetry were monitored throughout the study. Subjects were
monitored for hypotension, hypopnea, apnea, and oxygen desaturation.

 Part
B treated a total of 60 subjects and utilized an open-label, single-dose, randomized, 4-way crossover design. Subjects were randomized
to receive each of the following single oral doses of study drugs in a Williams design crossover manner (1 at each treatment period):

Treatment A: 100 mg PF614, administered under fasted conditions (hereafter referred to as 100 mg PF614, fasted)

Treatment B: 100 mg PF614, administered under fed conditions (high-fat breakfast) (hereafter referred to as 100 mg PF614, fed)

Treatment C: 40 mg OxyContin, administered under fasted conditions (hereafter referred to as 40 mg OxyContin, fasted)

Treatment D: 40 mg OxyContin, administered under fed conditions (high-fat breakfast) (hereafter referred to as 40 mg OxyContin, fed)

 Each
treatment was separated by a washout interval of 5 days. Serial PK sampling was performed after each study drug administration up to
120 hours postdose. Safety including regular assessments of AEs, vital signs (pulse rate, blood pressure, respiratory rate, and SpO 2
), clinical laboratory tests, and 12-lead ECGs were monitored. Subjects were monitored for hypotension, hypopnea, apnea, and oxygen
desaturation.

 Pharmacokinetics

 Part
A: The shape of the plasma concentration versus time curve of oxycodone was similar following administration of PF614 and OxyContin (oxycodone
extended release). Oxycodone plasma exposure (T max, C max,ss and AUC tau) were assessed and PF614 showed
similar trends as OxyContin following administration of multiple oral BID doses. Due to the small sample number for OxyContin some PK
parameters could not be calculated. Trough concentrations of oxycodone were generally similar from Day 2 through Day 4, suggesting that
subjects achieved steady state after repeated oral BID dosing of PF614 and OxyContin at all dose levels.

 Part
B: A total of 57 subjects were included in the PK analyses. The data for C max, AUC 0-t, and AUC 0-inf
of oxycodone post 100 mg PF614 versus 40 mg OxyContin dosing under fasted and fed conditions were completely contained within the standard
bioequivalence limits of 80% to 125%. Therefore, it was concluded that 100 mg PF614 was bioequivalent to 40 mg OxyContin under both fasted
and fed conditions.

 Safety

 PF614
was generally safe and well-tolerated following oral administration of 50 mg, 100 mg, or 200 mg PF614 BID for 5 days. There was no apparent
difference in the safety profile of single oral doses of 100 mg PF614 when administered in the fasted or fed state or between PF614 and
OxyContin when administered in the fasted and fed state. PF614 was generally safe and well-tolerated following single and multiple oral
doses under naltrexone blockade.

 PF614-103
Intranasal Human Abuse Potential Clinical Trial

 PF614-103
was a randomized, double-blind, placebo- and active-controlled, 3-way crossover study to evaluate the abuse potential and pharmacokinetics
of intranasally administered PF614, relative to crushed oxycodone IR tablets and placebo, in non-dependent recreational opioid users
conducted by Lotus Clinical Trials LLC through Ohio Clinical Trials, Inc with Principal investigator, Dr. G. Apseloff.

 The
study consisted of 4 phases: Screening, Qualification, Treatment, and Follow-up. Subjects were randomized to receive PF614 100mg or crushed
oxycodone 40 mg intranasally. The primary objective of the study was to evaluate the abuse potential of PF614 relative to crushed oxycodone
immediate-release (IR) tablets and placebo following intranasal administration in non-dependent recreational opioid users (n=26), with
the primary pharmacodynamic endpoint being the maximum effect (E max) for Drug Liking (" at this moment ")
measured up to 24 hours after dosing using a visual analogue scale (VAS). The secondary objectives of the study were to evaluate the
pharmacokinetic profile of PF614 relative to crushed oxycodone IR tablets following intranasal administration, to evaluate the safety
of PF614 following intranasal administration.

 In
the study, PF614 powder produced a statistically significant lower peak "drug liking" (Emax) when compared with intranasal
crushed IR oxycodone (p = 0.0133) using the full modified completer population in a 3-period crossover of PF614 vs. crushed oxycodone
and placebo. Furthermore, in a first period analysis of initial impressions of each drug, a statistically significant difference was
noted between PF614 (n=8) and crushed IR oxycodone (n=10) (p = 0.0175), even with this smaller cohort of subjects.

 Statistically
significant differences in peak effects (Emax) between PF614 and crushed IR oxycodone intranasal were also demonstrated for the secondary
endpoint of "take drug again," also using a first period analysis (p < 0.0001).

 The
intranasal HAP study was designed to test if known recreational drug users " liked " the product and is critical for
labeling claims for new drugs in this class. The primary measure in this study, " drug liking," is recommended by the
FDA in their Guidance on "Assessment of Abuse Potential of Drugs." This measure is known to correlate with a drug's
potential for abuse. The results demonstrated that inhaled powdered PF614 had significantly lower drug liking than inhaled crushed IR
oxycodone.

 PF614-104
Oral Human Abuse Potential Clinical Trial

 PF614-104
was a randomized, double-blind, placebo- and active-controlled, 5-way crossover study to evaluate the abuse potential and pharmacokinetics
of orally administered PF614, relative to oxycodone IR tablets and placebo, in non-dependent recreational opioid users conducted by DVCR,
Kansas.

 The
study consisted of 4 phases: Screening, Qualification, Treatment, and Follow-up. Subjects were randomized to receive PF614 50, 100 and
200 mg, oxycodone 40 mg or placebo orally. The primary objective of the study was to evaluate the abuse potential of PF614 relative to
oxycodone immediate-release (IR) tablets and placebo following oral administration in non-dependent recreational opioid users (n=28),
with the primary pharmacodynamic endpoint being the maximum effect (E max) for Drug Liking (" at this moment ")
and "Take Drug Again" Emax (Secondary endpoint) measured up to 24 hours after dosing using a visual analogue scale (VAS).
The secondary objectives of the study were to evaluate the pharmacokinetic profile of PF614 relative to oxycodone IR tablets and to evaluate
the safety of PF614.

 PF614
produced statistically lower effects than oxycodone, the lowest dose p<0.0001, and statistically significant overall "Drug Liking"
at both the low and the mid doses p<0.0001 and p=0.0025, respectively. PF614 took a significantly lower median time to reach Emax
for "Drug Liking" than oxycodone at all three dose levels, which is highly important for reducing drug abuse. Similar findings
were noted with a second endpoint "Take Drug Again". The secondary endpoint was met at both the low and mid dose of PF614
with highly significant values of p<0.001 and p=0.0038, respectively, and was numerically lower than comparator even at double the
dose, demonstrating that recreational users would be less motivated to abuse PF614 compared to immediate release oxycodone.

 In
November 2022, we received written guidance from the FDA that an acute pain indication may be appropriate for PF614. The FDA guidance,
while not binding, states that our proposed clinical development approach of conducting at least two adequate and well-controlled clinical
trials in two different pain models comparing PF614 to a placebo and to another immediate release (IR) opioid, such as IR oxycodone,
appears reasonable to support a new drug application for PF614 for an acute pain indication. The FDA guidance also provides additional
guidance with respect to the non-clinical studies and clinical trials planned by us. The clinical development pathway of PF614 for an
acute pain indication may reduce the development timeline and be more cost-effective than initially pursuing a chronic pain indication
for PF614.

 PF614-201
Time of Onset clinical study

 PF614-201
was a randomized, double-blind, placebo-controlled study of PF614 50 and 100 mg to evaluate the onset of analgesia following administration
of a single oral dose of PF614 in healthy male subjects in an experimental pain model (cold pressor test [CPT]). This study was initiated
in September of 2023 and enrolled 16 subjects. The Treatment Phase consisted of 2 treatment periods; PF614 50 mg or 100 mg versus placebo.
The CPT, pharmacodynamic (PD), and safety assessments were conducted prior to dosing and for six hours after each study drug administration.
This study was the first to successfully demonstrate the efficacy of PF614. Data was reported December 2023, stating the time-of-onset
of pain relief from both doses of PF614 was identified, and PF614 did decrease the intensity of pain.

 Next
Steps

 An
End of Phase 2 regulatory meeting request for PF614 IND 116794 was submitted on October 13, 2023, with a meeting was held on January
30, 2024. The meeting clarified the non-clinical and clinical Phase 3 study plans for the further development of PF614 which are expected
to initiate in mid-2024.

 PF614-MPAR

 We
initiated a Phase 1 study that is evaluating PF614-MPAR in study entitled "A Single Dose, 2 Part Study to Evaluate the Pharmacokinetics
of Oxycodone and PF614, when PF614 Solution is Co-Administered with nafamostat, as an Immediate Release Solution and/or Extended Release
(ER) Capsule Formulations in Healthy Subjects:" We are clinically testing MPAR in partnership with Quotient Sciences,
using its integrated Translational Pharmaceutics platform to search for a PF614-MPAR formulation that allows conversion
into oxycodone within the prescribed dose range but reduces conversion to oxycodone at higher than prescribed dose levels in an overdose
scenario.

 PF614-MPAR-101
Phase 1 Clinical Trial

 The
primary objectives of the Phase 1 study are to assess the pharmacokinetics of oxycodone, when PF614 solution is administered alone and
with nafamostat as an immediate release solution and/or extended-release capsule prototypes. The study is designed to aid in the selection
of the optimal nafamostat formulation and dose to combine with PF614 in order to provide oxycodone when a prescribed dose is taken yet
attenuate the maximum plasma concentration (C max) and the area under the concentration time curve (AUC) of oxycodone when
more than the prescribed PF614-MPAR dose is taken. Initial data was reported in May 2022 that demonstrated nafamostat administer in combination
with PF614 in a simulated overdose situation reduced the release of oxycodone from PF614 as designed. We completed the clinical portion
of Part A of this study in December 2022, with the identification of an optimal drug product formulation. A second, Part B was initiated
in January 2023 to test the overdose protection of the selected formulation by administering an escalating number of dose units to a
group of healthy subjects. Enrollment was completed in March 2023.

 Part
B was a dose escalation study of PF614 25 mg alone, or increasing dose units of PF614-MPAR 25 mg (PF614 25 mg with 1 mg formulated nafamostat),
and enrolled 6 to 8 healthy subjects in each cohort. PF614-MPAR 25 mg was delivered at 1, 2, 3, 5, and 8 doses simultaneously, with safety
and PK endpoints. The plasma PK of oxycodone released from PF614 or PF614-MPAR was measured and compared to prior data where PF614 was
delivered up to 200 mg alone. Additionally, the PK of parent PF614 and metabolic fragments were measured.

 The
results of the study successfully demonstrated that up to 2 dose units of PF614-MPAR delivered oxycodone at the same level as was derived
from PF614 without MPAR. At 3 units of PF614-MPAR the amount of oxycodone delivered was reduced compared to a 75 mg dose
of PF614. At 8 dose units there was a significant decrease (p<0.00333) in the maximal oxycodone plasma concentration (Cmax) as compared
to that delivered from unprotected PF614 200 mg. In addition, delivering 2 doses of PF614-MPAR sequentially, 12 hours apart did not affect
the release of oxycodone from the 2nd dose. Data from this study was reported in May 2023.

 PF614-MPAR
was granted Breakthrough Therapy designation by the FDA in January 2024. A Type D meeting request to discuss the non-clinical program
for PF614-MPAR was submitted in 2023 and responses to questions were received in February 2024.

 Competition

 The
life sciences industry is characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary
products. We expect to face competition from a number of sources, including pharmaceutical and biotechnology companies, generic drug
companies, drug delivery companies, and academic and research institutions. Most of these existing and potential competitors have significantly
greater financial and other resources than we do.

 The
key competitive factors that are expected to affect the development and commercial success of our product candidates include safety and
tolerability, the ability of our product candidates to limit human abuse potential, bioavailability and therapeutic efficacy of our product
candidates, market indications and convenience of dosing and distribution. PF614 will also face competition from commercially available
generic and branded extended-release and long-acting opioid drugs other than oxycodone, including, but not limited to, fentanyl, hydromorphone,
oxymorphone, and methadone, as well as opioids that are currently in clinical development.

 We
believe that obtaining an abuse-deterrent label through the FDA for our prodrugs would provide us with a significant competitive advantage.
There are only four commercially available (in the United States) opioid drugs for chronic pain relief that have an abuse-deterrent label.
These drugs are MorphaBond ER, marketed by Daiichi Sankyo, OxyContin ER and Hysingla ER, both
of which are marketed by Purdue Pharma, LP, and Collegium Pharmaceutical, Inc.'s XTampza ER. However, obtaining
an abuse-deterrent label involves a lengthy and complicated process with no certainty of success. We believe abuse-deterrent opioids
represent a therapeutic option to maximize pain relief in patients for whom opioid analgesia is indicated, while reducing the risks of
abuse and diversion.

 A
number of other companies including, but not limited to, Pfizer Inc., Daiichi Sankyo, Endo Health Solutions, Nektar Therapeutics, Teva
Pharmaceutical, Inc., Egalet Ltd., KemPharm Inc., Elysium Therapeutics Inc., and Acura Pharmaceutical, have either extended-release or
abuse-deterrent products in various stages of development. Other companies offer products indicated for chronic, severe, long-term pain
with various delivery technologies, but these products do not have abuse-deterrent claims on their labels. Vertex has recently announced
a non-opioid pain product that inhibits NaV1.8 and has entered Phase 3 development.

 We
do not believe there are other companies developing products that have an overdose mechanism similar to our MPAR technology.

 Intellectual
Property

 Our
commercial success depends in part on our ability to obtain and maintain proprietary protection for product candidates and any of our
future product candidates, novel discoveries, product development technologies, and know-how; to operate without infringing on the proprietary
rights of others; and to prevent others from infringing our proprietary rights. Our policy is to seek to protect our proprietary position
by, among other methods, filing or in-licensing United States and foreign patents and patent applications related to our proprietary
technology, inventions, and improvements that are important to the development and implementation of our business. We also rely on trademarks,
trade secrets, know-how, continuing technological innovation, and potential in-licensing opportunities to develop and maintain our proprietary
position.

 In
August 2020, EBIR entered into a Technology Transfer Agreement with Mucokinetica to acquire its intellectual property and all assets
associated with the inhaled nafamostat program. Specifically, EBIR acquired Patent EP2124926B1 and all data and assets associated with
the development and expansion of the inhaled nafamostat program. These assets included COVID-19 and cystic fibrosis drug targets in development.

 In
consideration for this intellectual property, Mucokinetica received a 1% equity ownership in EBIR, and its founders, Roderick Hall and
Peter Cole, entered into Consulting Agreements with EBIR. The Consulting Agreements were subsequently terminated by Messrs. Hall and
Cole.

 Patents
and Patent Applications

 We
own numerous patents and applications in the United States and significant commercial markets, such as Europe, China, and Japan, relating
to our product candidates currently in development, as well as other product candidates that may be developed in the future. These patents
and applications are projected to expire between 2028 and 2042, subject to any patent term adjustment or extension that might be available
in a particular jurisdiction. A table of the key patent families and their natural or projected expiry dates is presented below.

 Countries
 of Filings*

 Natural
 or Projected Expiry Date

 TAAP
 and MPAR Patents and Applications for Opioids

 Comprising Enzyme-Cleavable Ketone-Modified Opioid Prodrugs and Optional Inhibitors Thereof

 U.S.,
 Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, India, Japan, Mexico, Russia

 2030

 Comprising Enzyme-Cleavable Opioid Prodrugs and Inhibitors Thereof

 U.S.

 2030

 Comprising Enzyme-Cleavable Oxycodone Prodrugs

 U.S.,
 Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, India, Japan, Russia

 2032

 Comprising Enzyme-Cleavable Prodrugs and Controlled Release Nafamostat and Methods of Use Thereof

 U.S.,
 PCT, Taiwan

 2042

 Active
 Agent Prodrugs with Heterocyclic Linkers

 U.S.,
 Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, India, Japan, Russia

 2032

 Enzyme-Cleavable
 Methadone Prodrugs and Methods of Use Thereof

 U.S.,
 PCT, Europe, Brazil, China, Japan, Korea, Canada, Mexico, Australia, India, Israel

 2042

 Patents and Applications

 Methods
 of Treating Coronavirus Infections and COVID-19

 U.S.,
 Canada, Europe

 2041

 Oral
 formulations of Nafamostat

 U.S.,
 PCT, Taiwan, Europe, Brazil, China, Japan, Korea, Canada, Mexico, Australia, India, Israel

 2042

 Methods
 of Treating Respiratory Diseases with Mucostasis

 Germany,
 France, Italy, United Kingdom

 2028

 TAAP
 and MPAR Patents and Applications for Amphetamines

 Comprising Enzyme-Cleavable Amphetamine Prodrugs and Inhibitors Thereof

 U.S.,
 Europe

 2031

 Comprising Enzyme-Cleavable Amphetamine Prodrugs and Inhibitors Thereof

 U.S.,
 Europe, Hong Kong

 2040

 *" Europe "
refers to patent applications filed in, and patents issued by, the European Patent Office (" EPO "), which can provide
the basis for rights in multiple countries that are members of the European Patent Convention.

 While
we seek broad coverage under our existing patent applications, there is always a risk that an alteration to the products or processes
may provide sufficient basis for a competitor to avoid infringing our patent claims. In addition, patents, if granted, expire and we
cannot provide any assurance that any patents will be issued from our pending or any future applications or that any potentially issued
patents will adequately protect our product candidates.

 Individual
patents extend for varying periods depending on the date of filing of the patent application or the date of patent issuance and the legal
term of patents in the countries in which they are obtained. Generally, patents issued for regularly filed applications in the United
States are granted a term of 20 years from the earliest effective non-provisional filing date. In addition, in certain instances, a patent
term can be extended to recapture a period due to delay by the United States Patent and Trademark Office (" USPTO ")
in issuing the patent as well as a portion of the term effectively lost as a result of the FDA regulatory review period. However, as
to the FDA component, the restoration period cannot be longer than five years and the total patent term including the restoration period
must not exceed fourteen years following FDA approval. The duration of foreign patents varies in accordance with provisions of applicable
local law, but typically is also 20 years from the earliest effective non-provisional filing date. However, the actual protection afforded
by a patent varies on a product-by-product basis, from country to country, and depends upon many factors, including the type of patent,
the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country,
and the validity and enforceability of the patent.

 Our
commercial success will also depend in part on not infringing upon the proprietary rights of third parties. It is uncertain whether the
issuance of any third-party patent would require us to alter our development or commercial strategies for our products or processes,
or to obtain licenses or cease certain activities. Our breach of any license agreements or failure to obtain a license to proprietary
rights that we may require to develop or commercialize our future products may have an adverse impact on us. If third parties prepare
and file patent applications in the United States that also claim technology to which we have rights, we may have to participate in interference
or derivation proceedings in the USPTO to determine priority of invention. For more information, please see " Risk Factors—Risks
Related to Our Intellectual Property."

 TAAP
and MPAR Patents and Applications for Opioids

 Following
our merger with Signature, we became the owner of patent families that include several granted U.S. patents, as well as granted patents
and pending patent applications in numerous foreign jurisdictions, including Australia, Brazil, Canada, China, Europe, India, Japan,
and Russia, relating to chemically modified opioids, such as oxycodone, methadone, and hydromorphone, covalently linked using specific
linkers to a gastrointestinal enzyme-cleavable moiety and pharmaceutical compositions containing these modified opioids, pharmaceutical
compositions containing these modified opioids and a gastrointestinal enzyme inhibitor, and methods of using the same to treat pain.
Three of these patent families are directed to ketone containing opioids and cover PF614 and PF614-MPAR and certain methadone TAAP product
candidates that are still in the discovery phase. These three families contain issued patents in the United States and certain foreign
jurisdictions, including Australia, Brazil, Canada, China, Europe, India, Japan, and Russia and expire between 2030 and 2032, subject
to any applicable patent term extension that might be available in a jurisdiction. We also own pending United States, Patent Cooperation
Treaty (PCT), and Taiwan applications directed to oral formulations of PF614-MPAR, which if pursued and issued would expire in 2042,
subject to any potential patent term adjustment or extension that may be available in a jurisdiction. We also own one patent family that
includes granted patents in the United States, as well as granted patents and pending patent applications in numerous foreign jurisdictions,
including Australia, Brazil, Canada, China, Europe, India, Japan, and Russia, relating to chemically modified ketone-containing agents,
such as oxycodone, methadone, and hydromorphone, covalently linked using specific linkers to a gastrointestinal enzyme-cleavable moiety,
pharmaceutical compositions containing these modified ketone-containing agents, pharmaceutical compositions containing these modified
ketone-containing agents and a gastrointestinal enzyme inhibitor, and methods of using the same to treat pain, would cover certain methadone
TAAP product candidates that are still in discovery phase and expire in 2032. While we own these patent families, we have not updated
records in the various patent offices to reflect our ownership of these patent families. Failure to update such ownership may result
in an innocent purchaser potentially acquiring rights in such patents that are adverse to our interests. Furthermore, as noted above,
we have not obtained assignments for certain patent applications relating to abuse-resistant amphetamines.

 We
believe that one patent covering PF614 will be eligible for up to five years of patent term extension in the United States and intend
to pursue such extension. In addition to patent exclusivity until at least 2032, under the provisions of the Hatch-Waxman Act, upon any
approval in the United States, we believe that PF614 will be eligible for five-year New Chemical Entity, or NCE, regulatory exclusivity,
during which time no 505(b)(2) New Drug Application, or NDA, or Abbreviated New Drug Application, or ANDA, can be approved that contains
the same active moiety as the chemical entity in the PF614 NDA. In addition, if an ANDA or 505(b)(2) applicant were to file its application
referencing the NDA for PF614 before expiration of our formulation patent and the applicant asserted that the patent is invalid or would
not be infringed, it may be subject to additional waiting periods prior to the FDA's approval (including a statutory thirty-month
stay, starting at the end of the five-year NCE regulatory exclusivity period, if we sue for infringement, or a shorter period if the
patent expires of there are certain settlements or judicial decisions in the patent litigation) and may ultimately be required to wait
until the natural expiration of our compositions patents if the patents are found to be valid and infringed by the challenging applicant.
For more information please see "— Patents and Patent Applications."

Patents Applications

 We
own pending applications in the U.S., Canada and Europe directed to the use of orally administered nafamostat for the treatment of infections
caused by coronaviruses, including COVID-19, and pending United States, PCT, and Taiwan patent applications directed to oral formulations
of nafamostat. We intend to pursue these applications in the United States and other significant commercial markets and any patents that
may be issued would expire in 2041 and 2042, respectively, subject to any applicable patent term adjustment or extension in a particular
jurisdiction. Additionally, we acquired one European patent from Mucokinetica Ltd. that is directed to the use of certain compounds,
including nafamostat, for the manufacture of a medicament for the treatment of respiratory diseases with mucostasis or poor mucus clearance.
This patent was validated in Germany, France, Italy, and the United Kingdom and expires in 2028, subject to any applicable patent term
extension that might be available in Europe Union or United Kingdom. Currently, we do not have any issued patent or pending application
directed to methods of treating infections caused by coronaviruses, including COVID-19, with inhaled nafamostat, but intend to file pending
applications upon development of a suitable inhalation formulation of nafamostat. We believe that one patent covering nafamostat will
be eligible for up to five years of patent term extension in the United States and Europe and intend to pursue such extension. In addition
to patent exclusivity, under the provisions of the Hatch-Waxman Act, upon any approval in the United States, we believe that nafamostat
will be eligible for five-year NCE regulatory exclusivity, during which time no 505(b)(2) NDA or ANDA can be approved that contains the
same active moiety as the chemical entity in the nafamostat NDA. In addition, if an ANDA or 505(b)(2) applicant were to file its application
referencing the NDA for nafamostat before expiration of our use patent and the applicant asserted that the patent is invalid or would
not be infringed, it may be subject to additional waiting periods prior to the FDA's approval (including a statutory thirty-month
stay, starting at the end of the five-year NCE regulatory exclusivity period, if we sue for infringement, or a shorter period if the
patent expires of there are certain settlements or judicial decisions in the patent litigation) and may ultimately be required to wait
until the natural expiration of our compositions patents if the patents are found to be valid and infringed by the challenging applicant.
For more information please see "— Patent and Patent Applications."

 TAAP
and MPAR Patents and Applications for Amphetamines

 Following
the merger with Signature, we became the owner of one patent family that includes pending applications in the United States and numerous
European foreign jurisdictions relating to chemically modified amphetamines covalently linked to a gastrointestinal enzyme-cleavable
moiety, pharmaceutical compositions containing the modified amphetamines, pharmaceutical compositions containing the modified amphetamines
and a gastrointestinal enzyme inhibitor and methods of using the same to treat a subject. While we own this patent family, we have not
updated the records in the various patent offices to reflect our ownership of this patent family. Failure to update such ownership may
result in an innocent purchaser potentially acquiring rights in such patents that are adverse to our interests. In addition, we own pending
United States and European patent applications directed to pharmaceutical compositions containing chemically modified amphetamines covalently
linked to a gastrointestinal enzyme-cleavable moiety and a trypsin inhibitor and methods of using the same to treat a subject. We have
not obtained assignments from all of the inventors of these applications to date, which could negatively impact our ability to pursue
or enforce this application. If issued, these patent applications would expire between 2031 and 2040, subject to any applicable patent
term adjustment or extension that might be available in a jurisdiction.

 Trademarks
and Trade Secrets

 We
intend to pursue trademark registrations in the United States and other significant commercial markets for our product candidates as
they progress through clinical development. We received registration of our trademark for MPAR on May 16, 2023.

 Furthermore,
we rely upon trade secrets, know-how, continuing technological innovation, and potential in-licensing opportunities to develop and maintain
our competitive position. We seek to protect our proprietary information, in part, using confidentiality and invention assignment agreements
with our commercial partners, collaborators, employees, and consultants. These agreements are designed to protect our proprietary information
and, in the case of the invention assignment agreements, to grant us ownership of technologies that are developed through a relationship
with an employee or a third party. These agreements may be breached, and we may not have adequate remedies for any breach. In addition,
our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our commercial partners,
collaborators, employees, and consultants use intellectual property owned by others in their work for us, disputes may arise as to the
rights in related or resulting know-how and inventions.

 Manufacturing
and Supply

 We
do not currently own or operate manufacturing facilities for the production of clinical or commercial quantities of our product candidates.
Our drug substance and drug products are manufactured for us by contract manufacturing organizations, or CMOs, to our specifications.
Any manufacturing problem or the loss of a CMO could be disruptive to our operations.

 Our
lead product candidate, PF614, is a small molecule opioid prodrug. As such, it is a controlled substance, regulated by the Drug Enforcement
Administration (" DEA ") and state-controlled substance authorities. Our CMOs will be required to be registered with
DEA and will be responsible for obtaining adequate quota to manufacture and otherwise handle controlled substances.

 We
currently engage third parties to provide clinical supplies of PF614 and nafamostat. We also currently engage a CMO to provide drug product
manufacture of PF614, PF614-MPAR and nafamostat. We currently have sufficient supplies of PF614 and nafamostat on hand for our current
clinical trial needs. Any reliance on suppliers may involve several risks, including a potential inability to obtain critical materials
and reduced control over production costs, delivery schedules, reliability, and quality.

 Purisys

 Purisys
LLC manufactures PF614 and other clinical trial materials under cGMP conditions and provides stability studies with respect to our PF614
clinical trials. We do not currently have a binding written agreement with Purisys. In the event that Purisys is unable to perform the
services promised under future agreements, we may be subject to unforeseen costs and delays with respect to our clinical trials and may
be unable to replace the Purisys arrangements on terms as favorable to us. See " Risk Factors—We expect to be completely
dependent on third parties to manufacture our product candidates, and our commercialization of our product candidates could be halted,
delayed or made less profitable if those third parties fail to maintain a compliance status acceptable to the FDA or comparable foreign
regulatory authorities, fail to provide to us with sufficient quantities of our product candidates or fail to do so at acceptable quality
levels or prices " for more information.

 Societal
CDMO

 Societal
CDMO manufactures PF614 and other clinical trial drug products under cGMP conditions and provides stability studies with respect to our
PF614 clinical trials. Societal has completed the manufacture of PF614 50 and 100 mg capsules that have been used in clinical studies
PF614-102, PF614-103, PF614-104 and PF614-201. We expect to enter into additional related agreements with Societal CDMO as we manufacture
future batches of PF614. In the event that Societal is unable to perform the services anticipated under future agreements, we may be
subject to unforeseen costs and delays with respect to our clinical trials. See " Risk Factors—We expect to be completely
dependent on third parties to manufacture our product candidates, and our commercialization of our product candidates could be halted,
delayed or made less profitable if those third parties fail to maintain a compliance status acceptable to the FDA or comparable foreign
regulatory authorities, fail to provide to us with sufficient quantities of our product candidates or fail to do so at acceptable quality
levels or prices " for more information.

 Government
Grants

 We
have received funding under federal grant award programs through governmental agencies, such as the NIH and NIDA. For the year ended
December 31, 2023, we received federal grant funding totaling $2.2 million, $1.3 million from NIH related to the Phase 1 clinical trial
for PF614-MPAR and $0.9 million from NIDA for preclinical development of our opioid use disorder-MPAR technology. Current
remaining funding under approved grants totaled $2.2 million as of December 31, 2023, covering the period through August 2024. We may
apply for additional grant funding from these or similar governmental agencies in the future.

 GEM
Facility

to the GEM Agreement, we are entitled to draw down up to $60 million of gross proceeds (" Aggregate Limit ") from GEM
Global in exchange for shares of our common stock, subject to meeting the terms and conditions of the GEM Agreement. This equity line
facility is available for a period of 36 months from the closing date of the Merger. A draw down is subject to limitations on the amount
that is drawn under the facility and must comply with certain conditions precedent including the listing of our shares on a principal
market (which includes Nasdaq), having the necessary number of shares that are issuable pursuant to the draw down registered under an
effective registration statement, and other notice and timing requirements. Upon our valid exercise of a draw down, pursuant to delivery
of a notice and in accordance with other conditions, GEM Global is required to pay, in cash, a per-share amount equal to 90% of the average
closing bid price of the shares of our common stock recorded by Nasdaq during the 30 consecutive trading days commencing on the first
trading day that is designated on the draw down notice. In no event may our draw down requests exceed 400% (" Draw Down Limit ")
of the average daily trading volume for the 30 trading days immediately preceding the date we deliver the draw down notice.

 Further,
upon the closing of the Merger, GEM Global became entitled to a commitment fee in the form of cash or freely tradeable shares of our
common stock in an amount equal to 2% of the Aggregate Limit or $1.2 million to be paid in two tranches. The commitment fees have been
paid in full.

 Additionally,
we issued a warrant with a 36-month term at the closing of the Merger granting GYBL the right to purchase 4,608 shares of our common
stock at a strike price per share equal to $1.5675, after several downward adjustments to the strike price. Any failure by us to timely
transfer the shares under the warrant pursuant to GYBL's exercise will entitle GYBL to compensation in addition to other remedies.
The number of shares underlying the warrant as well as the strike price is subject to adjustments for recapitalizations, reorganizations,
change of control, stock split, stock dividend and reverse stock splits. The strike price is subject to adjustment for issuances of additional
common shares at a price per share less than the strike price.

 The
GEM Agreement contains certain negative covenants restricting us from securing an equity line similar to the financing provided under
the GEM Agreement and requiring prompt notice of events constituting an alternate transaction. An " alternate transaction "
includes an issuance of common stock at a price less than the then current market price, an " at-the-market " offering
of securities, and an issuance of options, warrants, or similar rights of subscription or the issuance of convertible equity or debt
securities. See " Risks Related to Our Business, Financial Condition and Capital Requirements " for additional information.

 Finally,
pursuant to the terms of the GEM Agreement, we are required to indemnify GEM Global for any losses it incurs as a result of a breach
by us or of our representations and warranties and covenants under the GEM Agreement or for any misstatement or omission of a material
fact in a registration statement registering those shares pursuant to the GEM Agreement. Also, GEM Global is entitled to be reimbursed
for legal or other costs or expenses reasonably incurred in investigating, preparing, or defending against any such loss. To date, we
have not raised any capital pursuant to the GEM facility and we may not raise any capital pursuant to it prior to its expiration. Restrictions
pursuant to the terms of our recent financings may also affect our ability to use the GEM Facility.

 Government
Regulation

 In
the United States, pharmaceutical products are subject to extensive regulation by the FDA, and those pharmaceutical products that are
controlled substance are also subject to extensive regulation by the DEA. The Federal Food, Drug, and Cosmetic Act (the " FDC
Act "), the Controlled Substances Act (" CSA "), and other federal, state, and local statutes and regulations,
govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and
marketing, distribution, prescribing, dispensing, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical
products. Pharmaceutical products used for the prevention, treatment, or cure of a disease or condition of a human being are subject
to regulation under the FDC Act. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative
or judicial sanctions, such as clinical hold, FDA refusal to approve pending NDAs, revocation of licensing authority, warning or untitled
letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties,
and criminal prosecution.

 The
FDA Drug Approval Process

 FDA
approval is required before any new drug can be marketed. A new drug is one not generally recognized by experts qualified by scientific
training and experience, as safe and effective for its intended use. The process of drug development is complex and lengthy. The activities
undertaken before a new pharmaceutical product may be marketed in the United States generally include, but are not limited to, preclinical
studies; submission to the FDA of an IND, which must become active before human clinical trials may commence; adequate and well-controlled
human clinical trials to establish the safety and efficacy of the product; submission to the FDA of an NDA; filing of the NDA by FDA;
satisfactory completion of an FDA pre-approval inspection of the clinical trial sites and manufacturing facility or facilities at which
both the active ingredients and finished drug product are produced to assess compliance with, among other things, patient informed consent
requirements, the clinical trial protocols, current Good Clinical Practices, or GCP, and GMPs; and FDA review and approval of the NDA
prior to any commercial sale and distribution of the product in the United States.

 Preclinical
studies include laboratory evaluation of product chemistry and formulation, and in some cases, animal studies and other studies to preliminarily
assess the potential safety and efficacy of the product candidate. The results of preclinical studies together with manufacturing information,
analytical data, and detailed information including protocols for proposed human clinical trials are then submitted to the FDA as a part
of an IND. An IND must become effective, and approval must be obtained from an Institutional Review Board (" IRB ")
prior to the commencement of human clinical trials. The IND becomes effective 30 days following its receipt by the FDA unless the FDA
objects to, or otherwise raises concerns or questions and imposes a clinical hold. We, the FDA, or the IRB may suspend or terminate a
clinical trial at any time after it has commenced due to safety or efficacy concerns or for commercial reasons. In the event the FDA
imposes a clinical hold, the IND sponsor must address any outstanding FDA concerns or questions to the satisfaction of the FDA before
clinical trials can proceed or resume.

 Human
clinical trials are typically conducted in three sequential phases that may sometimes overlap or be combined:

 In
Phase 1, the initial introduction of the drug into patients, the product is tested to assess safety, dosage tolerance, metabolism, pharmacokinetics,
pharmacological actions, side effects associated with drug exposure, and to obtain early evidence of a treatment effect if possible.
Phase 2 usually involves trials in a limited patient population to determine the effectiveness of the drug for a particular indication,
determine optimal dose and regimen, and to identify common adverse effects and safety risks. If a compound demonstrates evidence of effectiveness
and an acceptable safety profile in Phase 2 evaluations, Phase 3 trials are undertaken to obtain additional information about clinical
effects and confirm efficacy and safety in a larger number of patients, typically at geographically dispersed clinical trial sites, to
permit the FDA to evaluate the overall benefit-risk relationship of the drug and to provide adequate information for the labeling of
the product. In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the safety and efficacy
of the drug. In rare instances, a single Phase 3 trial may be sufficient when either (1) the trial is a large, multicenter trial demonstrating
internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity,
or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or
ethically impossible or (2) the single trial is supported by other confirmatory evidence.

 In
addition, the manufacturer of an investigational drug in a Phase 2 or Phase 3 clinical trial for a serious or life-threatening disease
is required to make available, such as by posting on its website, its policy on evaluating and responding to requests for expanded access
to such investigational drug.

 After
completion of the required clinical testing, an NDA is prepared and submitted to the FDA. FDA approval of the NDA is required before
marketing and distribution of the product may begin in the United States. The NDA must include the results of all preclinical, clinical,
and other testing and a compilation of data relating to the product's pharmacology, chemistry, manufacture, and controls. The cost
of preparing and submitting an NDA is substantial. The submission of most NDAs is additionally subject to a substantial application user
fee, currently exceeding $3.1 million for Fiscal Year 2022. Under an approved NDA, the applicant is also subject to an annual program
fee, currently exceeding $330,000. These fees typically increase annually. Under limited circumstances, an applicant may be exempt from
or seek a waiver of the application fee requirement.

 The
FDA has 60 days from its receipt of an NDA to determine whether the application will be filed based on the FDA's determination
that it is adequately organized and sufficiently complete to permit substantive review. Once the submission is filed, the FDA begins
an in-depth review. The FDA has agreed to certain performance goals to complete the review of NDAs. For a standard review, the goal for
review of a new molecular entity (" NME ") is ten months from the date the FDA files the NDA, while the goal for review
of a non-NME is ten months from the date of receipt of the NDA. For an NDA that has received a priority review designation from the FDA,
the goal for review of an NME is six months from the date the FDA files the NDA, while the goal for review of a non-NME is six months
from the date of receipt of the NDA. An NDA can receive a priority review designation when the FDA determines the drug has the potential
to treat a serious or life-threatening condition and, if approved, would be a significant improvement in safety or effectiveness compared
to available therapies. The review process for both standard and priority reviews may be extended by the FDA for three or more additional
months to consider certain late-submitted information, or information intended to clarify information already provided in the NDA submission.

 The
FDA may also refer applications for novel drug products, as well as drug products that present difficult questions of safety or efficacy,
to be reviewed by an advisory committee—typically a panel that includes clinicians, statisticians, and other experts—for
review, evaluation, and a recommendation as to whether the NDA should be approved. The FDA is not bound by the recommendation of an advisory
committee, but generally follows such recommendations. Before approving an NDA, the FDA will typically inspect one or more clinical sites
to assure compliance with GCP. Additionally, the FDA will inspect the facility or the facilities at which the drug product is manufactured.
The FDA will not approve the product unless compliance with cGMP is satisfactory and the NDA contains data that provide substantial evidence
that the drug is safe and effective in the claimed indication.

 After
the FDA evaluates the NDA and completes any clinical and manufacturing site inspections, it issues either an approval letter or a complete
response letter. A complete response letter generally outlines the deficiencies in the NDA submission and may require substantial additional
testing, or information, in order for the FDA to reconsider the application for approval. If, or when, those deficiencies have been addressed
to the FDA's satisfaction in a resubmission of the NDA, the FDA will issue an approval letter. The FDA has committed to reviewing
such resubmissions in two or six months depending on the type of information included. An approval letter authorizes commercial marketing
and distribution of the drug with specific prescribing information for specific indications. As a condition of NDA approval, the FDA
may require a risk evaluation and mitigation strategy (" REMS ") to help ensure that the benefits of the drug outweigh
the potential risks to patients. A REMS can include medication guides, communication plans for healthcare professionals, and elements
to assure a products safe use (" ETASU "). An ETASU REMS can include, but is not limited to, special training or certification
for prescribing or dispensing the product, dispensing the product only under certain circumstances, special monitoring, and the use of
patient-specific registries. The requirement for a REMS can materially affect the potential market and profitability of the product.
Moreover, the FDA may require substantial post-approval testing and surveillance to monitor the product's safety or efficacy.

 Before
approval, the FDA evaluates the results from in vitro manipulation and extraction, pharmacokinetics, and clinical human abuse potential
studies to determine whether the accumulated evidence is sufficient to warrant claims of abuse deterrence. Post-marketing studies may
also be required to determine whether the marketing of a product with abuse-deterrent properties results in meaningful reductions in
abuse, misuse, and related adverse clinical outcomes, including addiction, overdose, and death in the post-approval setting.

 Once
granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following
initial marketing. Changes to some of the conditions established in an approved NDA, including changes in indications, product labeling,
manufacturing processes, or facilities, require submission and FDA approval of a new NDA, or supplement to an approved NDA, before the
change can be implemented. An NDA supplement for a new indication typically requires clinical data similar to that in the original application,
and the FDA uses the same procedures and actions in reviewing NDA supplements as it does in reviewing original NDAs.

 Section
505(b)(2) NDAs

 An
alternative to the NDA pathway described above is an NDA submitted under Section 505(b)(2) of the FDC Act, which enables the applicant
to rely, in part, on the FDA's prior findings in approving a similar product or published literature in support of its application.
Section 505(b)(2) NDAs often provide an alternate path to FDA approval for modified formulations, new routes of administration, or new
uses of previously approved products. Section 505(b)(2) permits the submission of an NDA where at least some of the information required
for approval comes from studies not conducted by, or for, the applicant and for which the applicant has not obtained a right of reference.
If the Section 505(b)(2) applicant can establish that reliance on the FDA's prior findings of safety or effectiveness is scientifically
appropriate, it may eliminate the need to conduct certain preclinical or clinical studies of the new product. The FDA may also require
companies to perform additional studies or measurements to support the change from the approved product. The FDA may then approve the
new product candidate for all, or some, of the indications for which the referenced product has been approved, as well as for any new
indication sought by the Section 505(b)(2) applicant.

 Fast
Track Designation and Priority Review

 FDA
is required to facilitate the development, and expedite the review, of drugs that are intended for the treatment of a serious or life-threatening
disease or condition for which there is no effective treatment and which demonstrate the potential to address unmet medical needs for
the condition. Fast Track designation may be granted for products that are intended to treat a serious or life-threatening disease or
condition for which there is no effective treatment and preclinical or clinical data demonstrate the potential to address unmet medical
needs for the condition. Fast Track designation applies to both the product and the specific indication for which it is being studied.
Any product submitted to FDA for marketing, including under a Fast Track designation, may be eligible for other types of FDA programs
intended to expedite development and review, such as priority review.

 Priority
review may be granted for products that are intended to treat a serious or life-threatening condition and, if approved, would provide
a significant improvement in safety and effectiveness compared to available therapies. FDA will attempt to direct additional resources
to the evaluation of an application designated for priority review to facilitate the review.

 Breakthrough
Therapy Designation

 FDA
Breakthrough Therapy designation is designed to expedite the development and review of drugs that are intended to treat a serious condition
where preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapies. The primary
intent of Breakthrough Therapy designation is to develop evidence needed to support approval as efficiently as possible. The designation
provides all the features of Fast Track designation including accelerated approval and priority review along with intensive guidance
involving FDA senior managers on an efficient drug development program.

 Disclosure
of Clinical Trial Information

 Sponsors
of clinical trials of FDA-regulated products, including drugs, are required to register and disclose certain clinical trial information
on the website www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, trial sites and
investigators, and other aspects of a clinical trial are then made public as part of the registration. Sponsors are also obligated to
disclose the results of their clinical trials after completion. Disclosure of the results of clinical trials can be delayed in certain
circumstances for up to two years after the date of completion of the trial. Competitors may use this publicly available information
to gain knowledge regarding the progress of clinical development programs as well as clinical trial design.

 The
Hatch-Waxman Amendments

 Under
the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments, a portion of a product's
U.S. patent term that was lost during clinical development and regulatory review by the FDA may be restored. The Hatch-Waxman Amendments
also provide a process for listing patents pertaining to approved products in the FDA's Approved Drug Products with Therapeutic
Equivalence Evaluations (commonly known as the " Orange Book ") and for a competitor seeking approval of an application
that references a product with listed patents to make certifications pertaining to such patents. In addition, the Hatch-Waxman Amendments
provide for a statutory protection, known as non-patent exclusivity, against the FDA's acceptance or approval of certain competitor
applications.

Term Extension

Term Extension (" PTE ") in the United States can compensate for lost patent grant time during product development and
the regulatory review process for a patent that covers a new product or its use. This PTE period is generally one-half the time between
the effective date of an IND (falling after issuance of the patent) and the submission date of an NDA, plus the time between the submission
date of an NDA and the approval of that application, provided the sponsor acted with diligence. PTEs that can be obtained are for up
to five years beyond the expiration of the patent or fourteen years from the date of product approval, whichever is earlier. Only one
patent applicable to an approved drug may be extended and the extension must be applied for prior to expiration of the patent. The USPTO,
in consultation with the FDA, reviews and approves the application for any patent term extension or restoration.

 The
term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries
in which we file, the patent term is 20 years from the earliest date of filing a nonprovisional patent application related to the patent.
A U.S. patent also may be accorded patent term adjustment, or PTA, under certain circumstances to compensate for delays in obtaining
the patent from the USPTO. In some instances, such a PTA may result in a U.S. patent term extending beyond 20 years from the earliest
date of filing a non-provisional patent application related to the U.S. patent. In addition, in the United States, the term of a U.S.
patent that covers an FDA-approved drug may also be eligible for a patent term extension, or PTE, which permits patent term restoration
as compensation for the patent term lost during the FDA regulatory review process. The Hatch-Waxman Act permits a PTE of up to five years
beyond the expiration of the patent. The length of the PTE is related to the length of time the drug is under regulatory review. PTE
cannot extend the remaining term of a patent beyond a total of fourteen years from the date of product approval and only one patent applicable
to an approved drug may be extended. Similar provisions are available in Europe and certain other jurisdictions to extend the term of
a patent that covers an approved drug. In the future, if and when our products receive FDA approval, we expect to apply for PTEs on patents
covering products eligible for PTE. We plan to seek PTEs for any of our issued patents in any jurisdiction where these are available;
however, there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment
of whether such extensions should be granted, and if granted, the length of such extensions.

 We
also believe that (1) PF614 and nafamostat will be eligible for a five-year NCE regulatory exclusivity, and (2) PF614-MPAR will be eligible
for a three-year clinical investigation, or CI, regulatory exclusivity, under the Hatch-Waxman Act, during which time no ANDA can be
approved.

 Under
the Hatch-Waxman Act, patents covering the product such as patents claiming the approved composition of matter, approved methods of use,
approved formulations, and approved dosing and administration shall be listed in the Orange Book, which identifies drug products approved
by FDA under the FDC Act. Applicable regulatory exclusivities, such as the five-year NCE exclusivity and the three-year CI exclusivity,
are also listed in the Orange Book. If an ANDA or 505(b)(2) applicant were to file its application before expiration of all patents listed
in the Orange Book, it must certify whether it will either honor or challenge all the patents listed in the Orange Book. If an Orange
Book listed patent is challenged and we sue the ANDA or 505(b)(2) applicant for infringement, a statutory 30-month stay of approval,
started at the end of the NCE exclusivity period, will be put in place that will prohibit the FDA from finally approving the ANDA or
505(b)(2) application until the 30-months have expired or after a court has held in favor of the ANDA or 505(b)(2) applicant. The 30-month
stay begins at the end of the five-year NCE exclusivity period. If the Orange Book listed patent(s) is ultimately held valid and infringed,
the ANDA or 505(b)(2) applicant will not be finally approved until the Orange Book listed patent(s) expires. If a pediatric study is
requested by the FDA in a Pediatric Written Request, or PWR, and we complete the pediatric study according to the terms of the PWR, all
unexpired Orange Book listed exclusivities (patent or regulatory) will be extended by six months.

 Similar
provisions are available in Europe, Japan, and certain other jurisdictions to extend the exclusivity of a patent that covers an approved
drug. In Europe, we believe PF614 and nafamostat will be eligible for 10 years of regulatory exclusivity from European Marketing Application,
or EMA, approval. In Japan, we believe PF614 will be eligible for eight years of regulatory exclusivity from a Japanese new drug application,
or J-NDA, approval.

 Orange
Book Listing

 In
seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent with claims covering the applicant's
product or method of using the product. Upon approval of a drug, each of the patents identified in the application for the drug are then
published in the FDA's Orange Book. Drugs listed in the Orange Book can, in turn, be cited by potential generic competitors in
support of approval of an ANDA. An ANDA provides for marketing of a drug product that has the same active ingredients in the same strengths
and dosage form as the listed drug and has been shown to be bioequivalent to the listed drug. Other than the requirement for bioequivalence
testing, ANDA applicants are not required to conduct, or submit results of, preclinical or clinical tests to prove the safety or effectiveness
of their drug product. Drugs approved in this way are commonly referred to as " generic equivalents " to the listed
drug and can often be substituted by pharmacists under prescriptions written for the original listed drug.

 The
ANDA applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA's Orange Book.
Specifically, the applicant must certify that: (i) the required patent information has not been filed; (ii) the listed patent has expired;
(iii) the listed patent has not expired but will expire on a particular date and approval is sought after patent expiration; or (iv)
the listed patent is invalid or will not be infringed by the new product. The ANDA applicant may also elect to submit a Section VIII
statement certifying that its proposed ANDA labeling does not contain (or carves out) any language regarding the patented method-of-use
rather than certify to a listed method-of-use patent. If the applicant does not challenge the listed patents, the ANDA application will
not be approved until all the listed patents claiming the referenced product have expired.

 A
certification that the new product will not infringe the already approved product's listed patents, or that such patents are invalid,
is called a Paragraph IV certification. If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must
also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been filed with and accepted by the
FDA. The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification.
The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV certification automatically prevents the
FDA from approving the ANDA until the earlier of 30 months, expiration of the patent, settlement of the lawsuit, or a decision in the
infringement case that is favorable to the ANDA applicant.

 An
applicant submitting an NDA under Section 505(b)(2) of the FDC Act, which permits the filing of an NDA where at least some of the information
required for approval comes from studies not conducted by, or for, the applicant and for which the applicant has not obtained a right
of reference, is required to certify to the FDA regarding any patents listed in the Orange Book for the approved product it references
to the same extent that an ANDA applicant would.

 Market
Exclusivity

 Market
exclusivity provisions under the FDC Act also can delay the submission or the approval of certain applications. The FDC Act provides
a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for
a new chemical entity (" NCE "). A drug is entitled to NCE exclusivity if it contains a drug substance with no active
moiety of which has been previously approved by the FDA. During the exclusivity period, the FDA may not accept for review an ANDA or
a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right
of reference to all the data required for approval. However, an application may be submitted after four years if it contains a Paragraph
IV certification. For a drug that has been previously approved by the FDA, the FDC Act also provides three years of marketing exclusivity
for an NDA, 505(b)(2) NDA, or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that
were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, for
new indications, dosages or strengths of an existing drug. This three-year exclusivity covers only the new conditions of use and does
not prohibit the FDA from approving ANDAs for drugs for the original conditions of use, such as the originally approved indication. Five-year
and three-year exclusivity will not delay the submission or approval of a full NDA; however, an applicant submitting a full NDA would
be required to conduct or obtain a right of reference to all of the non-clinical studies and adequate and well-controlled clinical trials
necessary to demonstrate safety and effectiveness.

 Post-Marketing
Requirements

 Following
approval of a new product, a pharmaceutical company and the approved product are subject to continuing regulation by the FDA, including,
among other things, monitoring and recordkeeping activities, reporting to the applicable regulatory authorities of adverse experiences
with the product, providing the regulatory authorities with updated safety and efficacy information, product sampling and distribution
requirements, and complying with promotion and advertising requirements, which include, among others, standards for direct-to-consumer
advertising, restrictions on promoting drugs for uses or in patient populations that are not described in the drug's approved labeling
(known as " off-label use "), limitations on industry-sponsored scientific and educational activities and requirements
for promotional activities involving the internet. Although physicians may prescribe legally available drugs for off-label uses, manufacturers
may not market or promote such off-label uses. Modifications or enhancements to the product or its labeling or changes of the site of
manufacture are often subject to the approval of the FDA and other regulators, who may or may not grant approval or may include in a
lengthy review process.

 Prescription
drug advertising is subject to federal, state, and foreign regulations. In the United States, the FDA regulates prescription drug promotion,
including direct-to-consumer advertising. Prescription drug promotional materials must be submitted to the FDA in conjunction with their
first use. Any distribution of prescription drug products and pharmaceutical samples must comply with the U.S. Prescription Drug Marketing
Act (" PDMA "), a part of the FDC Act. In addition, Title II of the Federal Drug Quality and Security Act of 2013, known
as the Drug Supply Chain Security Act or the DSCSA, has imposed new " track and trace " requirements on the distribution
of prescription drug products by manufacturers, distributors, and other entities in the drug supply chain. These requirements are being
phased in over a ten-year period. Unless the products were packaged prior to November 27, 2018, the DSCSA requires product identifiers
(i.e., serialization) on prescription drug products in order to establish an electronic interoperable prescription product system to
identify and trace certain prescription drugs distributed in the United States. The DSCSA replaced the prior drug " pedigree "
requirements under the PDMA and preempts existing state drug pedigree laws and regulations. The DSCSA also establishes requirements for
the licensing of wholesale distributors and third-party logistic providers. These licensing requirements preempt states from imposing
licensing requirements that are inconsistent with, less stringent than, directly related to, or otherwise encompassed by standards established
by FDA pursuant to the DSCSA. Until FDA promulgates regulations to address the DSCSA's new national licensing standard, current
state licensing requirements typically remain in effect.

 In
the United States, once a product is approved, its manufacture is subject to comprehensive and continuing regulation by the FDA. The
FDA regulations require that products be manufactured in specific facilities and in accordance with cGMP. cGMP regulations require among
other things, quality control and quality assurance as well as the corresponding maintenance of records and documentation and the obligation
to investigate and correct any deviations from cGMP. Drug manufacturers and other entities involved in the manufacture and distribution
of approved drugs are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced
inspections by the FDA and certain state agencies for compliance with cGMP and other laws. Accordingly, manufacturers must continue to
expend time, money, and effort in the area of production and quality control to maintain cGMP compliance. These regulations also impose
certain organizational, procedural, and documentation requirements with respect to manufacturing and quality assurance activities. NDA
holders using contract manufacturers, laboratories, or packagers are responsible for the selection and monitoring of qualified firms,
and, in certain circumstances, qualified suppliers to these firms. These firms and, where applicable, their suppliers are subject to
inspections by the FDA at any time, and the discovery of violative conditions, including failure to conform to cGMP, could result in
enforcement actions that interrupt the operation of any such product or may result in restrictions on a product, manufacturer, or holder
of an approved NDA, including, among other things, recall or withdrawal of the product from the market.

 The
CSA and DEA Regulation

 Our
products are regulated as " controlled substances " as defined under the CSA and regulations promulgated by DEA. The
law and regulations establish registration, security, recordkeeping, reporting, storage, distribution, importation, exportation, and
other requirements administered by DEA.

 Controlled
substances are classified into five schedules: Schedule I, II, III, IV, or V, depending on the abuse potential. Schedule I substances
by definition have no established medicinal use and may not be marketed or sold in the United States. A pharmaceutical product may be
listed as Schedule II, III, IV, or V, with Schedule II substances considered to present the highest risk of abuse and Schedule V substances
the lowest relative risk of abuse among such substances.

 PF614
will be classified as a Schedule II controlled substance under the CSA and regulations because it contains oxycodone which is already
regulated as a Schedule II controlled substance. Consequently, the manufacturing, shipping, storing, selling, prescribing, and dispensing
of our products is subject to a high degree of regulation. Schedule II drugs are subject to the strictest requirements for registration,
security, recordkeeping, and reporting. Facilities must maintain complete and accurate inventories and records of all controlled substances
received, manufactured, stored, and distributed. These facilities must comply with strict security requirements to prevent diversion
of drugs in their possession. Also, distribution and dispensing of these drugs are highly regulated. For example, all Schedule II drug
prescriptions must be signed by a physician, presented to a pharmacist and generally limited to a 30-day supply, and may not be refilled,
that is, a new prescription is required.

 Annual
registration is required for any facility that manufactures, distributes, imports, or exports any controlled substance. Also, practitioners
and pharmacies are required to register every three years. The registration is specific to the location, activity, and controlled substance
schedule. For example, separate registrations are needed for import and manufacturing, and each registration will specify which schedules
of controlled substances the facility is authorized to handle. Our contract manufacturers must be registered with DEA.

 In
addition, the CSA establishes an annual quota system that limits the manufacturing of API and dosage forms in the United States of Schedule
I and II controlled substances. First, the DEA establishes an annual aggregate quota for how much active opioid ingredients, such as
oxycodone and tapentadol, may be produced in total in the United States based on the DEA's estimate of the quantity needed to meet
legitimate scientific and medicinal needs. The limited aggregate number of opioids that the DEA allows to be produced in the United States
each year is allocated among individual companies, who must submit applications annually to the DEA for individual production quotas.
Also, dosage form manufacturers must also request a procurement quota to acquire opioid API to manufacture dosage forms for distribution.
We and our contract manufacturers must receive an annual quota from the DEA in order to produce or procure any Schedule I or Schedule
II substance, including oxycodone base for use in manufacturing PF614. The DEA may adjust aggregate production quotas and individual
production and procurement quotas from time to time during the year. DEA has substantial discretion in whether or not to make such adjustments.
Our contract manufacturers must apply for and obtain the necessary quotas on an annual basis.

 In
November 2017, the DEA reduced the amount of almost every Schedule II opiate and opioid medication that may be manufactured in the United
States in calendar year 2018 by 20%. In October 2018, the SUPPORT Act was enacted, which included amendments to the CSA to require that
appropriate quota reductions be made after estimating potential for diversion. DEA announced that the estimate is based on rates of overdose
deaths and abuse, the overall public health impact related to specific controlled substances and may include other factors as appropriate.
For 2019, the DEA proposed decreased manufacturing quotas for the six most frequently misused opioids, including oxycodone, by an average
of 10% as compared to the 2018 quotas. In October 2019, consistent with the SUPPORT Act, DEA proposed additional regulations to amend
the manner in which the agency grants quotas to manufacturers. The proposed regulations will establish use-specific quotas, including
commercial sales, product development, transfer, replacement, and packaging. To decrease the risk of diversion and increase accountability,
inventory allowances will be reduced, and procurement quota certifications will be required. The DEA proposed further decreasing manufacturing
quotas in 2020 for five of the six opioids (fentanyl, hydrocodone, hydromorphone, oxycodone, and oxymorphone), by an average of 28%.
For 2021, the DEA decreased the aggregate quota for oxycodone by about 13% and for hydrocodone by about 10% from the final established
2020 quotas. Because PF614 is regulated as a Schedule II controlled substance, it is subject to the DEA's aggregate, individual
production, and procurement quota scheme.

 Ordering
and distribution of any Schedule I or II controlled substance are also subject to special ordering requirements under either the electronic
Controlled Substance Ordering System (" CSOS ") or use of DEA Form 222s. Information regarding specific transactions
are reported to DEA, and cumulative reports of such transactions are required monthly/quarterly.

 The
DEA also requires drug manufacturers to design and implement a system that identifies and reports suspicious orders of controlled substances.
Such orders include those of unusual size, those that deviate substantially from a normal pattern, and those of unusual frequency. Manufacturers
must refuse to complete any sale and report to DEA any orders for which it is unable to resolve any potential " red flags."
A compliant suspicious order monitoring system includes well-defined due diligence, " know your customer " process as
well as systems to identify and monitor ordering and sales of controlled substances.

 To
enforce these requirements, the DEA conducts periodic inspections of registered establishments that handle controlled substances. Failure
to maintain compliance with applicable requirements, especially security and recordkeeping and as manifested in loss or diversion or
inability to account for all controlled substances, can result in administrative, civil, or criminal enforcement action that could have
a material adverse effect on our business, results of operations, and financial condition. The DEA may seek civil penalties, refuse to
renew necessary registrations, or initiate administrative proceedings to revoke those registrations. The DEA may also reduce or deny
quota to manufacturing facilities based on non-compliance with these requirements. In certain circumstances, violations could result
in criminal proceedings.

 Individual
states also independently regulate controlled substances.

 Legislative
and Regulatory Initiatives for Opioids

 In
response to widespread prescription opioid abuse, the United States government and a number of state legislatures have enacted legislation
and regulations intended to fight the opioid epidemic. The number and scope of legislative and regulatory actions, particularly in the
last three years, emphasize the severity of the opioid epidemic and its impact on our society. The FDA has stated that addressing prescription
drug abuse is a priority and has reaffirmed that the development of abuse-deterrent opioids is a key part of that strategy.

 Recent
actions to address the opioid abuse epidemic include:

 FDA
 guidance: In April 2015, the FDA adopted final guidance regarding studies and clinical trials that should be conducted to demonstrate
 that a given formulation has abuse-deterrent properties, how those studies and clinical trials will be evaluated, and what product
 labeling claims may be approved based on the results of those studies and clinical trials. The guidance describes four categories
 of abuse-deterrence studies and clinical trials: Categories 1, 2, and 3 consist of pre-marketing studies and clinical trials designed
 to evaluate a product candidate's potentially abuse-deterrent properties under controlled conditions, while Category 4, post-marketing
 clinical trials and studies, assesses the real-world impact of abuse-deterrent formulations. The final guidance also provides examples
 of product label claims that may be made based on the results of the corresponding studies and clinical trials.

 FDA
 Opioids Action Plan: In February 2016, the FDA released an action plan to address the opioid abuse epidemic and reassess the FDA's
 approach to opioid medications. The FDA's plan is part of a broader initiative led by the U.S. Department of Health and Human
 Services (" HHS "), to address opioid-related overdose, death, and dependence.

 CDC
 Prescribing Guidelines: In November 2022, the CDC released a new Guideline for Prescribing Opioids for Pain to update their 2016
 Guidelines. The new guidance includes recommendations for managing acute (duration of <1 month), subacute (duration of 1–3
 months), and chronic (duration of >3 months) pain. The guideline addresses the following four areas: 1) determining whether or
 not to initiate opioids for pain, 2) selecting opioids and determining opioid dosages, 3) deciding duration of initial opioid prescription
 and conducting follow-up, and 4) assessing risk and addressing potential harms of opioid use. The guideline addresses the following
 four areas: 1) determining whether or not to initiate opioids for pain, 2) selecting opioids and determining opioid dosages, 3) deciding
 duration of initial opioid prescription and conducting follow-up, and 4) assessing risk and addressing potential harms of opioid
 use.

 FDA
 Drug Safety Communication: In April 2023, the FDA issued a communication that in the ongoing effort to address the nation's
 opioid crisis, it was making several updates to the prescribing information of opioid pain medicines to provide additional guidance
 on their use. The changes include label updates addressing addiction, abuse and misuse as well as life-threatening respiratory depression,
 accidental ingestion, risks from concomitant use with other CNS depressants, neonatal withdrawal and opioid analgesic risk evaluation
 and mitigation strategy.

 Enhanced
 Warnings and Safety Labeling: In March 2016, the FDA announced required enhanced warnings for immediate-release opioid pain medications
 related to risks of misuse, abuse, addiction, overdose, and death. Subsequently, there have been several class-wide labeling changes,
 including the addition of boxed warnings relating to serious risks of using certain opioids medications along with benzodiazepines
 and other central nervous system depressants, including alcohol (Decembers 2016); and additional information relating to the new
 class-wide REMS (Septembers 2018).

 Enactment
 of the Comprehensive Addiction and Recovery Act (" CARA "): In 2016, the CARA was enacted to address the national
 epidemics of prescription opioid abuse and heroin use. Consistent with the initiatives of HHS, this legislation sought to, among
 other things, expand the availability of naloxone for law enforcement and other first responders; form an interagency task force
 to develop best practices for pain management with opioid medications; and provide resources to improve state monitoring of controlled
 substances, including opioids. In 2018, CARA 2.0 was introduced as follow-up legislation to limit initial prescriptions for opioids
 to 3 days, while exempting initial prescriptions for chronic care, cancer care, hospice or end of life care, and palliative care.

 Enactment
 of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (" SUPPORT
 Act "): In November 2018, the SUPPORT Act was enacted as a comprehensive legislative response to the continuing opioid epidemic.
 It includes a number of measures directed towards regulation and improvement of treatment for substance use-disorder and increased
 coverage by CMS of medically assisted treatment options. In addition, the SUPPORT Act requires HHS to report to Congress on existing
 barriers to access to abuse-deterrent opioid formulations by Medicare Part C and D beneficiaries. It also includes a number of requirements
 directed at reducing the potential for oversupply of opioids to reduce the potential for misuse and diversion.

 Properties

 Our
principal executive office is located at 7946 Ivanhoe Ave., Suite 201 in La Jolla, California, where we lease a total of 850 square feet
of office space that we use for our administrative activities. All development activities are undertaken at contract research organizations.
The lease expires in October 2024. We believe that our current arrangements will be sufficient to meet our needs for the foreseeable
future, and that, should it be needed, suitable space will be available to accommodate our administrative activities.

 Human
Capital Resources (Employees)

 We
have seven full-time employees, one part-time employee and one consultant. Of these, five have a Ph. D. From time to time, we also retain
independent contractors to support our organization. None of our employees is represented by a labor union or covered by collective bargaining
agreements, and we believe our relationship with our employees is good.

 Item
1A. Risk Factors

 Risks
Related to Our Business, Financial Condition and Capital Requirements

 There
is substantial doubt about our ability to continue as a going concern.

 The
Company does not have revenue generating activities and is dependent on additional financing to fund operations. These conditions raise
substantial doubt about the Company's ability to continue as a going concern. While we believe that we will be able to raise the
capital we need to continue our operations, there can be no assurances that we will be successful in these efforts or will be able to
resolve our liquidity issues or eliminate our operating losses. If we are unable to obtain sufficient funding, we would need to significantly
reduce our operating plans and curtail some or all of our product development activities. Accordingly, our business, prospects, financial
condition and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern. If
we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue
as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially reasonable terms
or at all.

 We
are a clinical-stage pharmaceutical company with a limited operating history. We have incurred significant financial losses since our
inception and anticipate that we will continue to incur significant financial losses for the foreseeable future.

 We
are a clinical-stage pharmaceutical company with a limited operating history. We have not yet demonstrated an ability to generate revenues,
obtain regulatory approvals, engage in clinical development beyond Phase 1 trials, manufacture any product on a commercial scale or arrange
for a third party to do so on our behalf or enter into licensing arrangements to commercialize a product, or conduct sales and marketing
activities necessary for successful product commercialization.

 We
have no products approved for commercial sale and we have not generated any revenue from product sales to date, nor do we expect to generate
any significant revenue from product sales for the next few years. We will continue to incur significant research and development and
other expenses related to our product development, preclinical and clinical activities and ongoing operations. As a result, we are not
profitable and have incurred losses in each period since our inception. Net losses and negative cash flows have had, and will continue
to have, an adverse effect on our stockholders' equity and working capital. Net losses and negative cash flows have had, and will
continue to have, an adverse effect on our stockholders' equity and working capital. We expect to continue to incur significant
losses for the foreseeable future as we continue our research and development of, and seek regulatory approvals for, our product candidates.

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

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

 meet
 the requirements and demands of being a public company;

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

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

 advance
 our clinical-stage product candidate PF614 through clinical development;

 advance
 our preclinical stage product candidates into clinical development;

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

 undertake
 any pre-commercialization activities to establish sales, marketing and distribution capabilities for any product candidates for which
 we may receive regulatory approval in regions where we choose to commercialize our products on our own or jointly with third parties;

 maintain,
 expand and protect our intellectual property portfolio; and

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

 Pharmaceutical
product development entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail
to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, secure market access and reimbursement and
become commercially viable. Therefore, any investment in us would be highly speculative. Our prospects are subject to the costs, uncertainties,
delays and difficulties frequently encountered by companies in clinical development, especially clinical-stage pharmaceutical companies
such as ours. Any predictions you make about our future success or viability may not be as accurate as they would otherwise be if we
had a longer operating history or a history of successfully developing and commercializing pharmaceutical products. We will likely encounter
unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives.

 Additionally,
our expenses could increase beyond our expectations if we are required by the United States Food and Drug Administration, or FDA, or
other regulatory authorities to perform clinical trials in addition to those that we currently expect to conduct, or if there are any
delays in establishing appropriate manufacturing arrangements for or in completing our clinical trials or the development of any of our
product candidates.

 Our
ability to generate revenue from any of our potential products is subject to our ability to obtain regulatory approval and fulfill numerous
other requirements and we may never be successful in generating revenues or becoming profitable.

 Our
ability to become and remain profitable depends on our ability to generate revenue or execute other business development arrangements.
We do not expect to generate significant revenue, if any, unless and until we are able to obtain regulatory approval for, and successfully
commercialize the product candidates we are developing or may develop. Successful commercialization, to the extent it occurs, will require
achievement of many key milestones, including demonstrating safety and efficacy in clinical trials, obtaining regulatory approval for
these product candidates, manufacturing, marketing and selling, or entering into other agreements to commercialize, those products for
which we may obtain regulatory approval, satisfying any post-marketing requirements and obtaining reimbursement for our products from
private insurance or government payors. Because of the uncertainties and risks associated with these activities, we cannot accurately
and precisely predict the timing and amount, if any, of revenues, the extent of any further losses or when we might achieve profitability.
We may never succeed in these activities and, even if we do, we may never generate revenues that are sufficient enough for us to achieve
profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual
basis.

 Our
failure to become and remain profitable may depress the market price of our common stock and could impair our ability to raise capital,
expand our business, diversify our product offerings or continue our operations.

 We
require substantial additional funding. If we are unable raise capital when needed, we could be forced to delay, reduce or terminate
our product discovery and development programs or commercialization efforts.

 We
are a clinical stage pharmaceutical company that will need to raise additional capital to continue to operate as a going concern. Our
quarterly operating results are likely to show continued losses in the future. Our operations have consumed substantial amounts of cash
since inception. We expect to continue to spend substantial amounts to continue the clinical and preclinical development of our product
candidates, including our planned Phase 2 program for nafamostat and planned clinical trials for PF614 and PF614-MPAR. We will need to
raise additional capital to complete our currently planned clinical trials and any future clinical trials. Other unanticipated costs
may arise during our development efforts. If we can obtain marketing approval for product candidates that we develop, we would require
significant additional amounts of funding to launch and commercialize such product candidates. We cannot reasonably estimate the actual
amounts necessary to successfully complete the development and commercialization of any product candidate we develop and we will require
substantial additional funding to complete the development and commercialization of our product candidates.

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

 the
 scope, progress, results and costs of researching and developing our current product candidates, as well as other additional product
 candidates we may develop and pursue in the future, including the costs related to preclinical and clinical development of the product;

 the
 timing of, and the costs involved in, obtaining marketing approvals for our product candidates and any other additional product candidates
 we may develop and pursue in the future;

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

 subject
 to receipt of regulatory approval, the costs of commercialization activities for our product candidates, to the extent such costs
 are not the responsibility of any future collaborators, including the costs and timing of establishing product sales, marketing,
 distribution and manufacturing capabilities;

 subject
 to receipt of regulatory approval, the amount of revenue, if any, received from commercial sales of our product candidates or any
 other additional product candidates we may develop and pursue in the future;

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

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

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

 the
 costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights, including
 enforcing and defending intellectual property related claims; and

 the
 costs of operating as a public company.

 A
change in the outcome of any of these or other factors with respect to the development of any of our product candidates could significantly
change the costs and timing associated with the development of that product candidate, and many of these factors are outside of our control.
Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain
process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory and marketing
approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Accordingly,
we will need to continue to rely on additional financing to achieve our business objectives. We cannot be certain that additional funding
will be available on acceptable terms, or at all. Please see the risk factors under " Risks Related to the Ownership of Common
Stock and Financial Reporting."

 We
believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements
into the third quarter of 2024, while advancing our main product candidates such as, PF614 and PF614-MPAR and nafamostat through their
respective next phases of clinical development. Our estimate may prove to be wrong, and we could use our available capital resources,
if any, sooner than we currently expect. Further, changing circumstances, some of which may be beyond our control, could cause us to
consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned. To the
extent this occurs, it could impose significant dilution on our stockholders.

 We
may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds
for our current or future operating plans. Attempting to secure additional financing may divert our management from our day-to-day activities,
which may adversely affect our ability to develop our product candidates. Our failure to raise capital as and when needed or on acceptable
terms would have a negative impact on our financial condition and our ability to pursue our business strategy, and we may have to delay,
reduce the scope of, suspend or eliminate one or more of our platforms, programs, planned clinical trials or future commercialization
efforts.

 There
may be no proceeds under the GEM Agreement or proceeds may be less than anticipated. The issuances of common stock pursuant to the GEM
Agreement would result in dilution of existing stockholders and could have a negative impact on the market price of our common stock.
Additionally, the negative covenants under the GEM Agreement are onerous and any breach by us thereunder may entitle GEM Global and GYBL
to indemnification payments, reimbursements of legal and other expenses and other compensation thereby diverting our time and resources.

 While
we have raised capital from other sources, we have not used the GEM Facility to date. Under a Share Purchase Agreement between us,
GEM Global Yield LLC SCS (" GEM Global ") and GEM Yield Bahamas Limited (" GYBL "), dated as of
December 29, 2020, including a Registration Rights Agreement between the same parties and dated as of the same date (the
" GEM Agreement "), we are entitled to draw down up to $60 million of gross proceeds from GEM Global in exchange
for shares of our common stock at a price equal to 90% of the average closing bid price of the shares of our common stock on Nasdaq
for a 30 day period, subject to meeting the terms and conditions of the GEM Agreement. This equity line facility is available for a
period of 36 months from the closing date of the Merger. However, we have not been able to make use of the GEM Facility and we may
not be able to do so before it expires. Please see the section entitled "Item1. Business " for additional
information. The limitations on the amount and frequency of the draws that we can make pursuant to the GEM Agreement, which include
the requirement that (i) there be an effective registration statement and (ii) size restrictions relating to our trading volume, may
affect the ability to draw under the GEM Agreement and result in proceeds that are less than anticipated.

 In
addition, the occurrence of the Merger triggered (i) payment of a commitment fee of $1.2 million to GEM Global payable in either our
common stock or cash, of which all has been satisfied with 3,838 shares of common stock transferred from related parties in July 2022
and an additional 44,444 shares of common stock issued in January 2023 and (ii) the issuance of a warrant granting GYBL the right to
purchase 4,608 shares of our common stock, at a strike price per share reset to $1.5675. The number of shares underlying the warrant
as well as the strike price is subject to adjustments for recapitalizations, reorganizations, change of control, stock split, stock dividend,
reverse stock splits and certain issuances of additional shares of our common stock.

 The
issuances of shares at discount under the GEM Agreement and the anti-dilution protection granted to GEM Global in connection with issuances
of additional shares of our common stock, would result in dilution of existing stockholders and have a negative impact on the market
price of our common stock and our ability to obtain equity financing.

 In
addition, the negative covenants under the GEM Agreement are onerous and any breach thereof may trigger indemnification, reimbursement
of losses and other liability for us thereby diverting our time and resources. To date, we have not used the GEM facility to raise capital.

 Our
business is highly dependent on the success of our product candidates. If we are unable to successfully complete clinical development,
obtain regulatory approval for or commercialize one or more of our product candidates, or if we experience delays in doing so, our business
will be materially harmed.

 Our
future success and ability to generate significant revenue from our product candidates, which we do not expect will occur for several
years, is dependent on our ability to successfully develop, obtain regulatory approval for and commercialize one or more of our product
candidates. A Phase 1b study of PF614 was initiated in 2021. Part A of the study completed enrollment in December 2021 and Part B was
completed mid-year 2022. Two Human Abuse Potential clinical studies were completed in 2023. An efficacy Phase 2 study of PF614 was completed
in December 2023. A Phase 1 trial was also initiated for PF614-MPAR in December 2021 and the clinical portion of Part A of that trial
was completed in December 2022. The clinical portion of Part B was initiated in January 2023 and enrollment completed in March 2023.
A Phase 1 safety study of nafamostat was completed in 2020. All of our other product candidates are in earlier stages of development
and will require substantial additional investment for manufacturing, preclinical testing, clinical development, regulatory review and
approval in one or more jurisdictions. If any of our product candidates encounter safety or efficacy problems, development delays or
regulatory issues or other problems, our development plans and business would be materially harmed.

 We
may not have the financial resources to continue development of our product candidates. Even if clinical trials are completed, we may
experience other issues that may delay or prevent regulatory approval of, or our ability to commercialize, our product candidates, including:

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

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

 negative
 or inconclusive results from our clinical trials, preclinical studies or the clinical trials of others for product candidates that
 are similar to ours, leading to a decision or requirement to conduct additional clinical trials or preclinical studies or abandon
 a program;

 product-related
 adverse events experienced by subjects in our clinical trials, including unexpected toxicity results, or by individuals using drugs
 or therapeutic biologics similar to our product candidates;

 delays
 in submitting an Investigational New Drug application, or IND, or comparable foreign applications or delays or failure in obtaining
 the necessary approvals from regulators to commence a clinical trial or a suspension or termination, or hold, of a clinical trial
 once commenced;

 conditions
 imposed by the FDA, the European Medicines Agency, or EMA, or comparable foreign regulatory authorities regarding the scope or design
 of our clinical trials;

 poor
 effectiveness of our product candidates during clinical trials;

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

 delays
 in enrolling subjects in clinical trials;

 high
 drop-out rates of subjects from clinical trials;

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

 greater
 than anticipated clinical trial or manufacturing costs;

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

 failure
 of our third-party contractors or investigators to comply with regulatory requirements or the clinical trial protocol or otherwise
 meet their contractual obligations in a timely manner, or at all;

 unfavorable
 FDA, EMA or comparable regulatory authority inspection and review of manufacturing facilities or inability of those facilities to
 maintain a compliance status acceptable to the FDA, EMA or comparable regulatory authorities;

 delays
 and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around
 clinical testing generally or with respect to our therapies in particular; or

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

 Our
product candidates will require additional, time-consuming development efforts prior to commercial sale, including preclinical studies,
clinical trials and approval by the FDA and applicable foreign regulatory authorities. All product candidates are prone to the risks
of failure that are inherent in pharmaceutical product development, including the possibility that such product candidate will not be
shown to be sufficiently safe and effective for approval by regulatory authorities. In addition, we cannot assure stockholders that any
such products that are approved will be manufactured or produced economically, successfully commercialized or widely accepted in the
marketplace or be more effective than other commercially available alternatives.

 We
depend heavily on the success of our lead product candidate PF614, which is currently in clinical trials. Our clinical trials of PF614
may not be successful. If we are unable to commercialize PF614 or experience significant delays in doing so, our business will be materially
harmed.

 We
have invested a significant portion of our efforts and financial resources in the research and development of our lead product candidate,
PF614 and we expect to continue to do so. Our ability to generate revenues from the sale of abuse-deterrent opioid products, which may
not occur at a significant level for several years, will depend heavily on the successful development, regulatory approval and eventual
commercialization of PF614.

 We
cannot commercialize product candidates in the United States without first obtaining regulatory approval for the product from the FDA;
similarly, we cannot commercialize product candidates outside of the United States without obtaining regulatory approval from similar
regulatory authorities outside of the United States. Even if PF614 or another product candidate were to successfully obtain approval
from the FDA and non-U.S. regulatory authorities, any approval might contain significant limitations related to use restrictions for
specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management
requirements. If we are unable to obtain regulatory approval for PF614 in one or more jurisdictions, or any approval contains significant
limitations, we may not be able to obtain sufficient funding or generate sufficient revenue to continue the development, marketing and/or
commercialization of PF614 or any other product candidate that we may discover, in-license, develop or acquire in the future. Furthermore,
even if we obtain regulatory approval for PF614, we will still need to develop a commercial organization, or collaborate with third parties
for the commercialization of PF614, establish commercially viable pricing and obtain approval for adequate reimbursement from third-party
and government payors. If we or our commercialization collaborators are unable to successfully commercialize PF614, we may not be able
to generate sufficient revenues to continue our business.

 Due
to the significant resources required for the development of our product pipeline, and depending on our ability to access capital, we
must prioritize the development of certain product candidates over others. Moreover, we may fail to expend our limited resources on product
candidates or indications that may have been more profitable or for which there is a greater likelihood of success.

 We
currently have three clinical-stage product candidates as well as certain other product candidates that are at various stages of preclinical
development. We seek to maintain a process of prioritization and resource allocation to maintain an optimal balance between aggressively
pursuing our more advanced clinical-stage product candidates, such as PF614 and PF614-MPAR, and ensuring the development of additional
potential product candidates.

 Due
to the significant resources required for the development of our product candidates, we must focus on specific diseases and disease pathways
and decide which product candidates to pursue and advance and the amount of resources to allocate to each. Our decisions concerning the
allocation of research, development, collaboration, management and financial resources toward particular product candidates or therapeutic
areas may not lead to the development of any viable commercial products and may divert resources away from better opportunities. If we
make incorrect determinations regarding the viability or market potential of any of our product candidates or misinterpret trends in
the pharmaceutical industry, in particular for opioid abuse and drug overdose, our business, financial condition, and results of operations
could be materially adversely affected. As a result, we may (i) fail to capitalize on viable commercial products or profitable market
opportunities, (ii) be required to forego or delay pursuit of opportunities with other product candidates or other diseases and disease
pathways that may later prove to have greater commercial potential than those we choose to pursue, or (iii) relinquish valuable rights
to such product candidates through collaboration, licensing, or other royalty arrangements in cases in which it would have been advantageous
for us to invest additional resources to retain sole development and commercialization rights.

 Our
PF614 and PF614-MPAR product candidates may not be successful in limiting or impeding abuse, overdose or misuse or providing additional
safety upon commercialization.

 We
are committing a substantial majority of our resources to the development of products utilizing our TAAP and MPAR. There
can be no assurance that our products will perform as tested and limit or impede the actual abuse, overdose or misuse of such products
or provide other benefits in commercial settings. Moreover, there can be no assurance that if our products are approved by the FDA, the
post-approval epidemiological studies required by the FDA as a condition of any such approvals of the products will show a reduction
in the consequences of abuse and misuse by patients for whom the applicable product is prescribed. The failure of our products to limit
or impede actual abuse, overdose or misuse or provide other safety benefits in practice will have a material adverse impact on market
acceptance for such products and on our financial condition and results of operations.

 If
we do not achieve our projected development and commercialization goals within the timeframes we expect, the development and commercialization
of our product candidates may be delayed, and our business and results of operations may be harmed.

 For
planning purposes, we seek to estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product
development objectives. These milestones may include our expectations regarding the commencement or completion of scientific studies
and clinical trials, the submission of regulatory filings, or commercialization objectives. From time to time, we may publicly announce
the expected timing of some of these milestones, such as the completion of an ongoing clinical trial, the initiation of other clinical
programs, receipt of marketing approval or a commercial launch of a product. The potential achievement of many of these milestones may
be outside of our control. Each of these milestones is based on a variety of assumptions which, if not realized as expected, may cause
the timing of such potential achievement of the respective milestones to vary considerably from our estimates, including:

 our
 available capital resources or capital constraints we experience;

 the
 rate of progress, costs and results of our clinical trials and research and development activities, including the extent of scheduling
 conflicts with participating clinicians and collaborators;

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

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

 clinical
 outcomes;

 other
 actions, decisions or rules issued by regulators;

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

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

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

 If
we fail to achieve any announced milestones in the timeframes we expect, the development and commercialization of our product candidates
may be delayed, and our business and results of operations may be harmed and it could negatively impact our share price performance.
Please see " Business " for more information.

 Competitive
products may reduce or eliminate commercial opportunity for our product candidates, if approved. If our competitors develop technologies
or product candidates more rapidly than we do, or their technologies or product candidates are more effective or safer than any such
technologies or product candidate of ours, our ability to develop and successfully commercialize our own technologies or product candidates
may be adversely affected.

 The
clinical and commercial landscapes for the solution of opioid abuse and drug overdose are highly competitive and subject to rapid and
significant technological change. We face competition with respect to our indications for our product candidates and will face competition
with respect to any other product candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies,
specialty pharmaceutical companies and biotechnology companies worldwide. There are several large pharmaceutical and biotechnology companies
that currently market and sell drugs or are pursuing the development of product candidates for the treatment of the indications that
we are pursuing. These companies include, but are not limited to, Purdue Pharma, LP, and Collegium Pharmaceutical, Inc. Potential competitors
include companies developing novel non-opioid pain drug candidates such as pharmaceutical companies and academic institutions, government
agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative
arrangements for research, development, manufacturing and commercialization.

 We
believe that a significant number of product candidates are currently under development for the same indications that we are currently
pursuing, and some or all may become commercially available in the future for the treatment of conditions for which we are trying or
may try to develop product candidates. Our potential competitors include large pharmaceutical and biotechnology companies, specialty
pharmaceutical and generic drug companies, academic institutions, government agencies and research institutions. See the section entitled
" Business — Competition " for examples of the competition that our product candidates face.

 Our
competitors may have significantly greater financial resources, established presence in the market, expertise in research and development,
manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing approved products than
us. Accordingly, our competitors may be more successful than we may be in obtaining regulatory approval for therapies and achieving widespread
market acceptance. Our competitors' products may be more effective, or more effectively marketed and sold, than any product candidate
we may commercialize and may render our therapies obsolete or non-competitive before we can recover development and commercialization
expenses. If any of our product candidates, including PF614, is approved, these product candidates could compete with a range of therapeutic
treatments that are in development. In addition, our competitors may succeed in developing, acquiring or licensing technologies and products
that are more effective or less costly than PF614, our other product candidates or any other product candidates that we may develop,
which could render our product candidates obsolete and noncompetitive.

 If
we obtain approval for any of our product candidates, we may face competition based on many different factors, including the efficacy,
safety and tolerability of our products, the ease with which our products can be administered, the timing and scope of regulatory approvals
for these products, the availability and cost of manufacturing, marketing and sales capabilities, price, reimbursement coverage and patent
position. Existing and future competing products could present superior treatment alternatives, including being more effective, safer,
less expensive or marketed and sold more effectively than any products we may develop.

 Competitive
products may make any products we develop obsolete or noncompetitive before we are able to recover the expense of developing and commercializing
our product candidates. Such competitors could also recruit our employees, which could negatively impact our level of expertise and our
ability to execute our business plan.

 In
addition, our competitors may obtain patent protection, regulatory exclusivities or FDA approval and commercialize products more rapidly
than we do, if we are successful at all, which may impact future approvals or sales of any of our product candidates that receive regulatory
approval. If the FDA approves the commercial sale of PF614 or any other product candidate, we will also be competing with respect to
marketing capabilities and manufacturing efficiency. We expect any such competition among products will be based on product efficacy
and safety, the timing and scope of regulatory approvals, availability of supply, marketing and sales capabilities, product price, reimbursement
coverage by government and private third-party payors, regulatory exclusivities and patent position. Our profitability and financial
position will suffer if our product candidates receive regulatory approval but cannot compete effectively in the marketplace.

 Mergers
and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller
number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through
collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified
scientific and management personnel and establishing clinical trial sites, as well as in acquiring technologies complementary to, or
necessary for, our programs.

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

 Our
business depends upon our ability to attract and retain highly qualified personnel, including managerial, sales and technical personnel.
We compete for key personnel with other companies, healthcare institutions, academic institutions, government entities and other organizations.
Our ability to maintain and expand our business may be impaired if we are unable to retain our current key personnel or hire or retain
other qualified personnel in the future.

 We
currently only have seven full-time employees, one part-time employee and one consultant and we expect to add additional employees. Our
future success also depends on our ability to identify, attract, hire or engage, retain and motivate other well-qualified managerial,
technical, clinical and regulatory personnel.

 Competition
for such individuals, particularly in the United States, is intense, and we may not be able to hire sufficient personnel to support our
efforts. There can be no assurance that such professionals will be available in the market, or that we will be able to retain existing
professionals or to meet or to continue to meet their compensation requirements. Furthermore, our cost base with respect to such compensation,
which may include equity compensation, may increase significantly, which could have a material adverse effect on our financial results,
including the potential for additional dilution to our stockholders. Failure to establish and maintain an effective management team and
work force could adversely affect our ability to operate, grow and manage our business.

 Our
employees, independent contractors, principal investigators, consultants, commercial collaborators, service providers and other vendors
may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could
have an adverse effect on our results of operations.

 We
are exposed to the risk that we and our contract research organizations' (" CROs ") employees and contractors,
including principal investigators, consultants, commercial collaborators, service providers and other vendors may engage in fraudulent
or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or other unauthorized
activities that violate the laws and regulations of the FDA and other similar regulatory bodies, including those laws that require the
reporting of true, complete and accurate information to such regulatory bodies; manufacturing standards; federal and state healthcare
fraud and abuse and health regulatory laws and other similar foreign fraudulent misconduct laws; or laws that require the true, complete
and accurate reporting of financial information or data. Activities subject to these laws also involve the improper use or misrepresentation
of information obtained during clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is
not always possible to identify and deter third-party misconduct, and the precautions we take to detect and prevent this activity may
not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions
or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us,
and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business
and financial results, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines,
possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, reputational harm, diminished profits
and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our
results of operations

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

 We
have received funding under grant award programs funded by governmental agencies, such as the NIH and NIDA. To fund a portion of our
future research and development programs, we may apply for additional grant funding from these or similar governmental agencies in the
future. However, funding by these, and other, governmental agencies may be significantly reduced or eliminated in the future for several
reasons. For example, some programs are subject to a yearly appropriations process in Congress. In addition, we may not receive full
funding under current or future grants because of budgeting constraints of the agency administering the program or unsatisfactory progress
on the study being funded. Therefore, we cannot provide any assurance that we will receive any future grant funding from any government
agencies, or, if received, we will receive the full amount of the particular grant award. Any such reductions could delay the development
of our product candidates and the introduction of new products.

 Risks
Related to Our Dependence on Third-Party Providers

 We
currently rely on, and expect to rely on in the future, third parties to conduct our clinical trials, and those third parties may not
perform satisfactorily, including failing to meet deadlines for completing such trials, failing to satisfy legal or regulatory requirements
or terminating the relationship.

 We
currently rely on, and expect to rely on in the future, third-party CROs to conduct research and development activities and our clinical
trials for our product candidates. Agreements with these CROs might terminate for a variety of reasons, including for their failure to
perform. Entry into alternative arrangements, if necessary, could significantly delay our product development activities.

 Our
reliance on these CROs for research and development activities and clinical trials will reduce our control over these activities but
will not relieve us of any of our responsibilities. For example, we will remain responsible for ensuring that each of our clinical trials
is conducted in accordance with the general investigational plan and protocols in the applicable IND. Moreover, the FDA requires compliance
with standards, commonly referred to as good clinical practices, or GCPs, for conducting, recording and reporting the results of clinical
trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial
participants are protected.

 If
these CROs do not successfully carry out their contractual duties, meet expected deadlines or conduct the clinical trials in accordance
with regulatory requirements or our stated protocols, it could adversely affect the development of our product candidates and it could
result in us not being able to obtain, or being delayed in obtaining, marketing approvals for our product candidates and it could adversely
affect our efforts to successfully commercialize our product candidates.

 We
expect to be completely dependent on third parties to manufacture our product candidates, and our commercialization of our product candidates
could be halted, delayed or made less profitable if those third parties fail to maintain a compliance status acceptable to the FDA or
comparable foreign regulatory authorities, fail to provide to us with sufficient quantities of our product candidates or fail to do so
at acceptable quality levels or prices.

 We
do not currently have, nor do we plan to acquire, the capability or infrastructure to manufacture the ingredients in our product candidates
for use in our clinical trials or for commercial product, if any. We have entered into an agreement with Purisys LLC ("Purisys")
for production of PF614 drug substance and a Manufacturing Agreement (the "Recro Agreement") with Recro Gainesville LLC ("Recro")
now known as Societal CDMO, ("Societal") for the production of PF614 capsules and other materials and services with respect
to our clinical studies. In addition, we do not have the capability to encapsulate any of our product candidates as a finished product
for commercial distribution. As a result, we expect to be obligated to rely on contract manufacturers, like Societal, if and when any
of our product candidates are approved for commercialization. In the event that Societal is unable to perform its obligations under the
Recro Agreement, we may be unable to replace the Recro Agreement on terms as favorable to us. We have not entered into an agreement with
any contract manufacturers for commercial supply and may not be able to engage a contract manufacturer for commercial supply of any of
our product candidates on favorable terms to us, or at all.

 The
processes used by our contract manufacturers to manufacture our product candidates must be approved by the FDA or comparable foreign
regulatory authorities and the facilities at which the product candidates are manufactured must maintain a compliance status acceptable
to the FDA and foreign regulatory authorities. FDA and foreign regulatory authorities will conduct inspections after we submit a new
drug application, or NDA, to the FDA or its equivalent to other relevant regulatory authorities. We will not control the manufacturing
process of, and will be completely dependent on, its contract manufacturing partners for compliance with cGMPs for manufacture of both
active drug substances and finished products. These cGMP regulations cover all aspects of the manufacturing, testing, quality control
and record keeping relating to our product candidates. If our contract manufacturers, including Societal, do not successfully manufacture
material that conforms to our specifications and the strict regulatory requirements of the FDA or others, our product candidates may
not be approved. If these facilities do not maintain a compliance status acceptable to the FDA, Drug Enforcement Agency, or DEA, or comparable
regulatory authorities, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop,
obtain regulatory approval for or market our product candidates, if approved.

 Our
contract manufacturers, including Purisys and Societal, will be subject to ongoing periodic unannounced inspections by the FDA, DEA and
corresponding state and foreign agencies for compliance with cGMPs, security, recordkeeping and similar regulatory requirements. Although
we will not have control over our contract manufacturers' compliance with these regulations and standards, we are nonetheless responsible
for assuring such compliance. Failure by any of our contract manufacturers to comply with applicable regulations could result in sanctions
being imposed on us, including fines, injunctions, civil penalties, failure to grant approval to market any of our product candidates,
delays, suspensions or withdrawals of approvals, operating restrictions and criminal prosecutions, any of which could significantly and
adversely affect our business and results of operations. Failure by our contract manufacturers to comply with or maintain any of these
standards could adversely affect our ability to develop, obtain regulatory approval for or market any of our product candidates.

 If,
for any reason, these third parties, including Societal, are unable or unwilling to perform, we may not be able to terminate our agreements
with them, and we may not be able to locate alternative manufacturers or formulators or enter into favorable agreements with them and
we cannot be certain that any such third parties will have the manufacturing capacity to meet future requirements. If these manufacturers
or any alternate manufacturer of finished drug product experiences any significant difficulties in its respective manufacturing processes
for our ingredients or finished products or should cease doing business with us, we could experience significant interruptions in the
supply of any of our product candidates or may not be able to create a supply of our product candidates at all. Our inability to coordinate
the efforts of our third-party manufacturing partners, or the lack of capacity available at our third-party manufacturing partners, could
impair our ability to supply any of our product candidates at required levels. Because of the significant regulatory requirements that
we would need to satisfy in order to qualify a new bulk or finished product manufacturer, if we face these or other difficulties with
our current manufacturing partners, we could experience significant interruptions in the supply of any of our product candidates if we
decide to transfer the manufacture of any of our product candidates to one or more alternative manufacturers in an effort to deal with
the difficulties.

 Any
manufacturing problem or the loss of a contract manufacturer, including Societal, could be disruptive to our operations and delay development
of our investigational products. Additionally, we rely on third parties to supply the raw materials needed to manufacture our potential
products. Any reliance on suppliers may involve several risks, including a potential inability to obtain critical materials and reduced
control over production costs, delivery schedules, reliability and quality. Any unanticipated disruption to a future contract manufacturer
caused by problems at suppliers could delay shipment of any of our investigational products and, if approved, product candidates.

 We
cannot guarantee that our future manufacturing and supply partners will be able to reduce the costs of commercial scale manufacturing
of any of our product candidates over time. If the commercial-scale manufacturing costs of any of our product candidates are higher than
expected, these costs may significantly impact our operating results. In order to reduce costs, we may need to develop and implement
process improvements. However, in order to do so, we will need, from time to time, to notify or make submissions with regulatory authorities,
and the improvements may be subject to approval by such regulatory authorities.

 We
cannot be sure that we will receive these necessary approvals or that these approvals will be granted in a timely fashion. We also cannot
guarantee that we will be able to enhance and optimize output in our commercial manufacturing process. If we cannot enhance and optimize
output, we may not be able to reduce our costs over time.

 If
we are unable to develop our sales, marketing and distribution capability on our own or through collaborations with marketing partners,
we will not be successful in commercializing our product candidates.

 We
currently have no marketing, sales or distribution capabilities. We intend to establish a sales and marketing organization, either on
our own or in collaboration with third parties, with technical expertise and supporting distribution capabilities to commercialize PF614
or one or more of our other product candidates that may receive regulatory approval in key territories. These efforts will require substantial
additional resources, some or all of which may be incurred in advance of any approval of the product candidate. Any failure or delay
in the development of our or third parties' internal sales, marketing and distribution capabilities would adversely impact the
commercialization of PF614, our other product candidates and other future product candidates.

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

 our
 inability to recruit and retain effective sales and marketing personnel;

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

 the
 lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies
 with more extensive product lines; and

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

 With
respect to our existing and future product candidates, we may choose to collaborate with third parties that have direct sales forces
and established distribution systems to serve as an alternative to our own sales force and distribution systems. Our future product revenue
may be lower than if we directly marketed or sold our product candidates, if approved. In addition, any revenue we receive will depend
in whole or in part upon the efforts of these third parties, which may not be successful and are generally not within our control. If
we are not successful in commercializing any approved products, our future product revenue will suffer, and we may incur significant
additional losses.

 If
we do not establish sales and marketing capabilities successfully, either on our own or in collaboration with third parties, we will
not be successful in commercializing our product candidates.

 Risks
Related to Product Development, Regulatory Approval, Manufacturing and Commercialization

 The
regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming and inherently unpredictable,
and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.

 We
are not permitted to commercialize, market, promote or sell any product candidate in the United States without obtaining regulatory approval
from the FDA. Foreign regulatory authorities, such as the EMA, impose similar requirements. The time required to obtain approval by the
FDA and comparable foreign authorities is inherently unpredictable, but typically takes many years following the commencement of clinical
trials and depends upon numerous factors, including substantial discretion of the regulatory authorities. In addition, approval policies,
regulations, or the type and amount of clinical data necessary to gain approval may change during a product candidate's clinical
development and may vary among jurisdictions. To date, we have not submitted an NDA to the FDA or similar drug approval submissions to
comparable foreign regulatory authorities for our most advanced product candidate, PF614, or any other product candidate. We must complete
additional preclinical studies and clinical trials to demonstrate the safety and efficacy of our product candidates in humans before
we will be able to obtain these approvals.

 Clinical
testing is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome. We
cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. The clinical development
of our initial and potential additional product candidates is susceptible to the risk of failure inherent at any stage of development,
including failure to demonstrate efficacy in a clinical trial or across a broad population of patients, the occurrence of adverse events
that are severe or medically or commercially unacceptable, failure to comply with protocols or applicable regulatory requirements, and
determination by the FDA or any comparable foreign regulatory authority that a product candidate may not continue development or is not
approvable. It is possible that even if any of our product candidates has a beneficial effect, that effect will not be detected during
clinical evaluation because of one or more of a variety of factors, including the size, duration, design, measurements, conduct or analysis
of our clinical trials. Conversely, because of the same factors, our clinical trials may indicate an apparent positive effect of such
product candidate that is greater than the actual positive effect, if any. Similarly, in our clinical trials, we may fail to detect toxicity
of, or intolerability caused by, such product candidate, or mistakenly believe that our product candidates are toxic or not well tolerated
when that is not in fact the case. Serious adverse events, or SAEs, or other adverse effects, as well as tolerability issues, could hinder
or prevent market acceptance of the product candidate at issue.

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

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

 we
 may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate
 is safe and effective for our proposed indication;

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

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

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

 the
 data collected from clinical trials of our product candidates may not be sufficient to support the submission of an NDA to the FDA
 or other submission or to obtain regulatory approval in the United States, the European Union or elsewhere;

 the
 FDA or comparable foreign regulatory authorities may find deficiencies with the manufacturing processes of third-party manufacturers
 with which we contract for clinical and commercial supplies; and

 the
 approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering
 our clinical data insufficient for approval.

 This
lengthy approval process as well as the unpredictability of clinical trial results may result in us failing to obtain regulatory approval
to market any product candidate we develop, which would substantially harm our business, results of operations and prospects. The FDA
and other comparable foreign authorities have substantial discretion in the approval process and determining when or whether regulatory
approval will be granted for any product candidate that we develop. Even if we believe the data collected from future clinical trials
of our product candidates are promising, such data may not be sufficient to support approval by the FDA or any other regulatory authority.

 In
addition, even if we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited
indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance
of costly post-marketing clinical trials, or may approve a product candidate with labeling that does not include the claims necessary
or desirable for the successful commercialization of that product candidate. Any of the foregoing scenarios could materially harm the
commercial prospects for our product candidates.

 The
FDA may recommend scheduling with respect to any of our current or future product candidates. In such event, prior to a product launch,
the DEA will need to determine the controlled substance schedule of the product, considering the recommendation of the FDA. The timing
of the scheduling process is uncertain and may delay our ability to market any product candidate that we successfully developed and approved.

 If
our clinical trials fail to replicate positive results from earlier preclinical studies or clinical trials conducted by us or third parties,
we may be unable to successfully develop, obtain regulatory approval for, or commercialize our product candidates.

 The
results observed from preclinical studies or early-stage clinical trials of our product candidates may not necessarily be predictive
of the results of later-stage clinical trials that we conduct. Similarly, positive results from such preclinical studies or early-stage
clinical trials may not be replicated in our subsequent preclinical studies or clinical trials. For example, preclinical studies showed
that PF614 does not readily convert into oxycodone in the blood stream following direct injection, and the Phase 1 trial we have conducted
with TAAP prodrug PF614 (" prodrug ": a medication or compound that, after administration, is metabolized, i.e., converted
within the body into a pharmacologically active drug), demonstrated that, after oral administration, the corresponding opioid was measured
in the subjects' blood. Furthermore, our product candidates may not be able to demonstrate similar activity or adverse event profiles
as other product candidates that we believe may have similar profiles.

 There
can be no assurance that any of our clinical trials will ultimately be successful or support further clinical development of any of our
product candidates. There is a high failure rate for drugs proceeding through clinical trials. Many companies in the pharmaceutical and
biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage
development, and we cannot be certain that we will not face similar setbacks. These setbacks have been caused by, among other things,
preclinical findings made while clinical trials were underway or safety or efficacy observations made in preclinical studies and clinical
trials, including previously unreported adverse events.

 Moreover,
preclinical and clinical data are often susceptible to varying interpretations and analyses and many companies that believed their product
candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA, EMA or comparable foreign
regulatory authority approval.

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

 We
hold INDs for PF614 and nafamostat and completed a Phase 1 trial for each product candidate. We have completed multiple human abuse potential
and efficacy studies for PF614. We have applied for and received fast track designation for PF614. However, fast track designation does
not guarantee a faster development or regulatory review or approval process and does not assure FDA approval. We have received feedback
from the FDA on requirements to achieve abuse deterrent labeling claims for PF614. We have also received an IND for PF614-MPAR and have
completed an initial Phase 1 study. We have been granted Breakthrough Therapy designation by the FDA for PF614-MPAR. For all INDs that
we hold we have received feedback on required pre-clinical, manufacturing and clinical studies that will be required for an NDA.

 Our
clinical trial results may not support approval of our product candidates. The general approach for FDA approval of a new drug is dispositive
data from two or more well-controlled Phase 3 clinical trials of the product candidate in the relevant patient population. Phase 3 clinical
trials typically involve a large number of patients, have significant costs, and take years to complete. In addition, there is no assurance
that the endpoints and trial designs that we intend to use for our planned clinical trials, including those that we have developed based
on feedback from regulatory agencies or those that have been used for the approval of similar drugs, will be acceptable for future approvals.

 Interim
topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become
available and are subject to audit and verification procedures that could result in material changes in the final data.

 From
time to time, we may publish interim topline or preliminary data from our clinical trials. Interim data from clinical trials that we
may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues
and more patient data become available. Preliminary or topline data also remain subject to audit and verification procedures that may
result in the final data being materially different from the preliminary data we previously published. As a result, interim and preliminary
data should be viewed with caution until the final data is available. Adverse differences between preliminary or interim data and final
data could significantly harm our reputation and business prospects.

 Even
if we complete the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time-consuming and
uncertain and may prevent us from obtaining approvals for the commercialization of our product candidates.

 Any
product candidate we develop and the activities associated with such development and commercialization, including our design, testing,
manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale, and distribution, are subject
to comprehensive regulation by the FDA and other regulatory authorities in the United States and by comparable authorities in other countries.
Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate in a given jurisdiction.
We have not received approval to market any product candidates from regulatory authorities in any jurisdiction and it is possible that
none of the product candidates we are developing or may seek to develop in the future will ever obtain regulatory approval. Ensysce has
no experience in submitting and supporting the applications necessary to gain marketing approvals and we expect to rely on third-party
CROs or regulatory consultants to assist us in this process. Securing regulatory approval requires the submission of extensive preclinical
and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the product
candidate's safety and efficacy. Securing regulatory approval also requires the submission of information about the product manufacturing
process to, and inspection of manufacturing facilities by, the relevant regulatory authority. Any product candidates we develop may not
be effective, may be only moderately effective, or may prove to have undesirable or unintended side effects, toxicities or other characteristics
that may preclude us from obtaining marketing approval or prevent or limit commercial use.

 The
process of obtaining marketing approvals, both in the United States and abroad, is expensive, may take many years if additional clinical
trials are required, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type,
complexity, and novelty of the product candidates involved. Changes in marketing approval policies during the development period, changes
in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may
cause delays in the approval or rejection of an application. The FDA and comparable authorities in other countries have substantial discretion
in the approval process and may refuse to accept any application or may decide that our data is insufficient for approval and requires
additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained from preclinical and clinical
testing could delay, limit, or prevent marketing approval of a product candidate. Any marketing approval that we may ultimately obtain
could be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable. For
example, during the product approval process, the FDA will determine whether a REMS plan is necessary to assure the safe use of the product.
All opioid analgesic products currently on the market in the United States are subject to a REMS. A REMS may be required to include various
elements, such as a medication guide or patient package insert, a communication plan to educate health care providers of the risks, limitations
on who may prescribe or dispense the drug or other measures that the FDA deems necessary to assure the safe use of the drug. In addition,
the REMS plan must include a timetable to assess the strategy at eighteen months, three years and seven years after approval. We may
be required to develop a REMS for the product, or participate in a REMS with other manufacturers, or to develop a similar strategy as
required by a regulatory authority.

 Even
if approved, our contract manufacturers will need to obtain quota from DEA to manufacture sufficient quantities and maintain inventories
of product to be commercially distributed.

 If
we experience delays in obtaining manufacturing approval or if we fail to obtain manufacturing approval of any product candidates we
may develop, the commercial prospects for those product candidates may be harmed, and our ability to generate revenues will be materially
impaired.

 We
may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, the preclinical and clinical studies
necessary for development and commercialization of our product candidates.

 To
obtain the requisite regulatory approvals to commercialize any of our product candidates, we must demonstrate through extensive preclinical
studies and clinical trials that our product candidates are safe and effective in humans. We may experience delays in completing our
clinical trials or preclinical studies and initiating or completing additional clinical trials or preclinical studies, including as a
result of regulators not allowing or delay in allowing clinical trials to proceed under an IND, or not approving or delaying approval
for any clinical trial grant or similar approval that we need to initiate a clinical trial. We may also experience numerous unforeseen
events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize the product
candidates we develop, including:

 regulators, or institutional
 review boards, or IRBs, or other reviewing bodies may not authorize us or our investigators to commence a clinical trial, or to conduct
 or continue a clinical trial at a prospective or specific trial site;

 we may not reach agreement
 on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and
 may vary significantly among different CROs and trial sites;

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

 the number of subjects
 or patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical
 trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any given time may
 be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at
 a higher rate than we anticipate;

 our third-party contractors,
 including those manufacturing our product candidates or conducting clinical trials on our behalf, may fail to comply with regulatory
 requirements or meet their contractual obligations to us in a timely manner, or at all;

 we may have to amend clinical
 trial protocols submitted to regulatory authorities or conduct additional studies to reflect changes in regulatory requirements or
 guidance, which we may be required to resubmit to an IRB and regulatory authorities for re-examination;

 regulators or other reviewing
 bodies may find deficiencies with or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers
 with which we enter into agreement for clinical and commercial supplies, or the supply or quality of any product candidate or other
 materials necessary to conduct clinical trials of our product candidates may be insufficient, inadequate or not available at an acceptable
 cost, or we may experience interruptions in supply; and

 the potential for approval
 policies or regulations of the FDA or the applicable foreign regulatory agencies to significantly change in a manner rendering our
 clinical data insufficient for approval.

 Regulators
or IRBs of the institutions in which clinical trials are being conducted may suspend, limit or terminate a clinical trial, or data monitoring
committees may recommend that we suspend or terminate a clinical trial, due to a number of factors, including failure to conduct the
clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial
site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold (such as the clinical hold placed on PF614-MPAR
in January 2021), safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental
regulations or administrative actions, or lack of adequate funding to continue the clinical trial. Negative or inconclusive results from
our clinical trials or preclinical studies could mandate repeated or additional clinical trials and, to the extent we choose to conduct
clinical trials in other indications, could result in changes to or delays in clinical trials of our product candidates in such other
indications. We do not know whether any clinical trials that we conduct will demonstrate adequate efficacy and safety to result in regulatory
approval to market our product candidates for the indications that we are pursuing. If later-stage clinical trials do not produce favorable
results, our ability to obtain regulatory approval for our product candidates will be adversely impacted.

 Our
failure to successfully initiate and complete clinical trials and to demonstrate the efficacy and safety necessary to obtain regulatory
approval to market our product candidates would significantly harm its business. The development costs of our product candidates will
also increase if we experience delays in testing or regulatory approvals and we may be required to obtain additional funds to complete
clinical trials. We cannot assure stockholders that our clinical trials will begin as planned or be completed on schedule, if at all,
or that we will not need to restructure or otherwise modify our trials after they have begun. Significant clinical trial delays could
also shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors
to bring products to market before we do and impair our ability to successfully commercialize our product candidates, which may harm
our business and results of operations. In addition, many of the factors that cause, or lead to, delays of clinical trials may ultimately
lead to the denial of regulatory approval of our product candidates.

 If
we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise
adversely affected.

 The
timely completion of clinical trials in accordance with our protocols depends on, among other things, our ability to enroll a sufficient
number of patients who remain in the study until its conclusion.

 We
may experience difficulties in patient enrollment in our clinical trials for a variety of factors, including:

 the patient eligibility
 criteria defined in the protocol;

 the size of the patient
 population required for analysis of the trial's primary endpoints;

 the proximity of patients
 to study sites;

 the design of the trial;

 our ability to recruit
 clinical trial investigators with the appropriate competencies and experience;

 competing clinical trials
 and clinicians' and patients' perceptions as to the potential advantages and risks of the product candidate being studied
 in relation to other available therapies, including any new drugs that may be approved for the indications that we are investigating;

 our ability to obtain and
 maintain patient consents; and

 the risk that patients
 enrolled in clinical trials will drop out of the trials before completion.

 In
addition, our clinical trials may compete with other clinical trials for product candidates that are in the same therapeutic areas as
our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who
might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Since the number
of qualified clinical investigators is limited, we may conduct some of our clinical trials at the same clinical trial sites that some
of our competitors use, which will reduce the number of patients who are available for our clinical trials in such clinical trial site.
Furthermore, if significant adverse events or other side effects are observed in any of our clinical trials, we may have difficulty recruiting
patients to our trials and patients may drop out of our trials.

 Our
inability to enroll enough patients for our clinical trials would result in significant delays or might require us to abandon one or
more clinical trials or our development efforts altogether. Delays in patient enrollment may result in increased costs, negatively affect
the timing or outcome of the planned clinical trials, delay the product candidate development and approval process and jeopardize our
ability to seek and obtain the regulatory approval required to commence product sales and generate revenue, which could cause our value
to decline and limit our ability to obtain additional financing if needed.

 Fast
Track designation by the FDA for PF614 for chronic pain may not lead to a faster development or regulatory review or approval process
and does not assure FDA approval.

 We
have obtained Fast Track designation for PF614 for management of moderate to severe chronic pain when a continuous, around-the-clock
analgesic is needed for an extended period. We believe that Fast Track designation will enable us to facilitate the development and expedite
the review of PF614. Fast Track designation does not ensure that PF614 will receive marketing approval or that approval will be granted
within any timeframe. As a result, we may not experience a faster development process, review or approval compared to conventional FDA
procedures. In addition, the FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data
from our clinical development program. Fast Track designation does not guarantee that an NDA will obtain priority review designation.
If any of these events occur, it could require us to conduct more extensive clinical trials and go through more extensive FDA reviews,
which could substantially increase expenses and delay the time for commercializing our products.

 If
the FDA does not conclude that certain of our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval
pathway, or if the requirements for such product candidates under Section 505(b)(2) are not as we expect, the approval pathway for those
product candidates will likely take significantly longer, cost significantly more and entail significantly greater complications and
risks than anticipated, and in either case may not be successful.

 We
may seek FDA approval through the Section 505(b)(2) regulatory pathway for our product candidate PF614. Section 505(b)(2) of the Federal
Food, Drug and Cosmetic Act, or FDC Act, permits the submission of an NDA where at least some of the information required for approval
comes from studies that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference.
Section 505(b)(2), if applicable to us under the FDC Act, would allow an NDA we submit to FDA to rely in part on data in the public domain
or on the FDA's prior conclusions regarding the safety and effectiveness of an approved product, or listed drug, which could expedite
the development program for our product candidates by potentially decreasing the amount of data that we would need to generate in order
to obtain FDA approval. If the FDA does not agree that the 505(b)(2) regulatory pathway is appropriate or scientifically justified for
PF614, we may need to conduct additional preclinical and clinical trials, provide additional data and information, and meet additional
standards for regulatory approval. For example, the FDA may not agree that we have provided a scientific bridge, through comparative
bioavailability data, to demonstrate that reliance on the prior findings of safety or efficacy for a listed drug is justified. If this
were to occur, the time and financial resources required to obtain FDA approval for this product candidate, and complications and risks
associated with this product candidate, would likely substantially increase. We could need to obtain additional funding, which could
result in significant dilution to the ownership interests of our then existing stockholders to the extent we issue equity securities
or convertible debt. We cannot assure you that we would be able to obtain such additional financing on terms acceptable to us, if at
all. Moreover, the inability to pursue the Section 505(b)(2) regulatory pathway may result in new competitive products reaching the market
more quickly than our product candidates, which would likely materially adversely impact of our competitive position and prospects. Even
if we are allowed to pursue the Section 505(b)(2) regulatory pathway, we cannot assure our stockholders that our product candidates will
receive the requisite approvals for commercialization.

 In
addition, notwithstanding the approval of a number of products by the FDA under Section 505(b)(2) over the last few years, certain brand-name
pharmaceutical companies and others have objected to the FDA's interpretation of Section 505(b)(2). If the FDA's interpretation
of Section 505(b)(2) is successfully challenged, the FDA may change its 505(b)(2) policies and practices, which could delay or even prevent
the FDA from approving any NDA that we submit under Section 505(b)(2). The pharmaceutical industry is highly competitive, and Section
505(b)(2) NDAs are subject to special requirements designed to protect the patent rights of sponsors of previously approved drugs that
are referenced in a Section 505(b)(2) NDA. These requirements may give rise to patent litigation and mandatory delays in approval of
our NDAs for up to 30 months or longer depending on the outcome of any litigation. It is not uncommon for a manufacturer of an approved
product to file a citizen petition with the FDA seeking to delay approval of, or impose additional approval requirements for, pending
competing products. If successful, such petitions can significantly delay, or even prevent, the approval of the new product. Even if
the FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers and responds to the petition.
In addition, even if we are able to utilize the Section 505(b)(2) regulatory pathway, there is no guarantee this would ultimately lead
to accelerated product development or earlier approval.

 Moreover,
even if our product candidates are approved under Section 505(b)(2), the approval may be subject to limitations on the indicated uses
for which the products may be marketed or to other conditions of approval, or may contain requirements for costly post-marketing testing
and surveillance to monitor the safety or efficacy of the products.

 If
we submit a 505(b)(2) application that references a third-party product, we may be subject to a patent infringement suit and the approval
of our product may be delayed.

 If
we submit a 505(b)(2) application that relies in whole or in FDA's findings for a listed drug, we will be required to certify to
the FDA that either: (1) there is no patent information listed in the FDA's publication Approved Drug Products with Therapeutic
Equivalence Evaluations, which we refer to as the Orange Book, with respect to the listed drug; (2) the patents listed in the Orange
Book have expired; (3) the listed patents have not expired, but will expire on a particular date and approval is sought after patent
expiration; or (4) the listed patents are invalid or will not be infringed by the manufacture, use or sale of our product. A certification
that our new drug will not infringe the Orange Book-listed patents for the applicable listed drug, or that such patents are invalid,
is called a paragraph IV certification. If we submit a paragraph IV certification to the FDA, a notice of the paragraph IV certification
must also be sent to the NDA holder once our 505(b)(2) application is filed by the FDA. The third party may then initiate a lawsuit to
defend the patents identified in the notice. The filing of a patent infringement lawsuit within 45 days of receipt of the notice automatically
prevents the FDA from approving our 505(b)(2) application until the earliest of 30 months or the date on which the patent expires, the
lawsuit is settled, or the court reaches a decision in the infringement lawsuit in our favor. If the third party does not file a patent
infringement lawsuit within the required 45-day period, our 505(b)(2) application will not be subject to the 30-month stay of FDA approval.

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

 As
product candidates proceed through preclinical studies to late-stage clinical trials towards potential approval and commercialization,
it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way
in an effort to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives. Any
of these changes could cause our product candidates to perform differently and affect the results of planned clinical trials or other
future clinical trials conducted with the materials manufactured using altered processes. Such changes may also require additional testing,
FDA notification or FDA approval. This could delay or prevent completion of clinical trials, require conducting bridging clinical trials
or repeating one or more clinical trials, increase clinical trial costs, delay or prevent approval of our product candidates and jeopardize
our ability to commence sales and generate revenue.

 Our
product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval,
limit the commercial profile of an approved label, or result in significant negative consequences following regulatory approval, if obtained.

 Undesirable
side effects caused by any of our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials
and could result in restrictive warnings or contraindication or the delay or denial of regulatory approval by the FDA or comparable foreign
regulatory authorities. In our planned and future clinical trials of our product candidates, we may observe a less favorable safety and
tolerability profile than was observed in earlier-stage testing of these candidates.

 Undesirable
side effects have been observed in our product candidates to date. For example, in clinical trials of PF614, opioid side effects were
observed. Many compounds that initially showed promise in clinical or earlier-stage testing are later found to cause undesirable or unexpected
side effects that prevented further development of the compound. Results of future clinical trials of our product candidates could reveal
a high and unacceptable severity and prevalence of side effects or unexpected characteristics, despite a favorable tolerability profile
observed in earlier-stage testing. If unacceptable side effects arise in the development of our product candidates, we, the FDA or comparable
foreign regulatory authorities, the IRBs, or independent ethics committees at the institutions in which its trials are conducted, could
suspend, limit or terminate our clinical trials, or the independent safety monitoring committee could recommend that we suspend, limit
or terminate our trials, or the FDA or comparable foreign regulatory authorities could order us to cease clinical trials or deny approval
of our product candidates for any or all targeted indications. Treatment-emergent side effects that are deemed to be drug-related could
delay recruitment of clinical trial subjects or may cause subjects that enroll in our clinical trials to discontinue participation in
our clinical trials. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff. We
may need to train medical personnel using our product candidates to understand the side effect profiles for our clinical trials and upon
any commercialization of any of our product candidates. Inadequate training in recognizing or managing the potential side effects of
our product candidates could result in harm to patients that are administered our product candidates. Any of these occurrences may adversely
affect our business, financial condition and prospects significantly.

 Moreover,
clinical trials of our product candidates are conducted in carefully defined sets of patients who have agreed to enter into clinical
trials. Consequently, it is possible that our clinical trials may indicate an apparent positive effect of a product candidate that is
greater than the actual positive effect, if any, or alternatively fail to identify undesirable side effects.

 FDA's
evolving standards for the approval of opioid products may delay or prevent approval of our product candidates.

 FDA
has identified addressing misuse and abuse of opioid drugs as one of its highest priorities. As part of its plan, the agency has established
new standards for the development of prescription opioids with abuse-deterrent formulations and has published two sets of guidance. Since
the publication of the second guidance in November 2017, FDA has not approved any new abuse–deterrent opioid drugs. If we are unable
to meet FDA's new and evolving standards for approving opioid products, we will not be able to market our products.

 Product
liability lawsuits against us or any of our future collaborators could divert our resources and attention, cause us to incur substantial
liabilities and limit commercialization of our product candidates.

 We
are exposed to potential product liability and professional indemnity risks that are inherent in the research, development, manufacturing,
marketing and use of pharmaceutical products. Currently, we have no products that have been approved for commercial sale; however, the
use of our product candidates by us and any collaborators in clinical trials, and the sale of these product candidates, if approved,
in the future, may expose us to liability claims. We face an inherent risk of product liability lawsuits related to the use of our product
candidates in patients and will face an even greater risk if product candidates are approved by regulatory authorities and introduced
commercially. Product liability claims may be brought against us by participants enrolled in our clinical trials, patients, health care
providers, pharmaceutical companies, our collaborators or others using, administering or selling any of our future approved products.
If we cannot successfully defend ourselves against any such claims, we may incur substantial liabilities or be required to limit commercialization
of our product candidates. Regardless of the merits or eventual outcome, liability claims may result in:

 decreased demand for any
 of our future approved products;

 injury to our reputation;

 withdrawal of clinical
 trial participants;

 termination of clinical
 trial sites or entire trial programs;

 significant litigation
 costs;

 substantial monetary awards
 to, or costly settlements with, patients or other claimants;

 product recalls or a change
 in the indications for which they may be used;

 loss of revenue;

 diversion of management
 and scientific resources from our business operations; and

 the inability to commercialize
 our product candidates.

 Although
the clinical trial process is designed to identify and assess potential side effects, clinical development does not always fully characterize
the safety and efficacy profile of a new medicine, and it is always possible that a drug, even after regulatory approval, may exhibit
unforeseen side effects. If our product candidates were to cause adverse side effects during clinical trials or after approval, we may
be exposed to substantial liabilities. Physicians and patients may not comply with any warnings that identify known potential adverse
effects and patients who should not use our product candidates. If any of our product candidates are approved for commercial sale, we
will be highly dependent upon consumer perceptions of us and the safety and quality of our products. We could be adversely affected if
we are subject to negative publicity associated with illness or other adverse effects resulting from patients' use or misuse of
our products or any similar products distributed by other companies.

 Although
we maintain product liability insurance coverage consistent with industry norms, including clinical trial liability, this insurance may
not fully cover potential liabilities that we may incur. The cost of any product liability litigation or other proceeding, even if resolved
in our favor, could be substantial. We will need to increase our insurance coverage if we commercialize any product that receives regulatory
approval. In addition, insurance coverage is becoming increasingly expensive. If we are unable to maintain sufficient insurance coverage
at an acceptable cost or to otherwise protect against potential product liability claims, it could prevent or inhibit the development
and commercial production and sale of our product candidates, which could harm our business, financial condition, results of operations
and prospects.

 Oxycodone
is a Schedule II controlled substance under the federal CSA, and any failure to comply with the CSA or its state equivalents would have
a negative impact on our business.

 Oxycodone,
the ingredient in PF614, is classified as a Schedule II controlled substance under the Controlled Substances Act, or CSA and regulations
promulgated by the DEA. The law and regulations classify substances as Schedule I, II, III, IV or V controlled substances, with Schedule
I controlled substances considered to present the highest risk of substance abuse and Schedule V controlled substances the lowest risk.
Scheduled controlled substances are subject to DEA regulations relating to supply, procurement, manufacturing, storage, shipment, sale,
use, distribution and physician prescription procedures. For example, Schedule II controlled substances are subject to various restrictions,
including, but not limited to, mandatory written prescriptions and the prohibition of refills. In addition to federal scheduling, oxycodone
is subject to state-controlled substance laws and regulations, and in some cases, with additional requirements than those imposed by
federal law and regulations. Though state controlled substances laws often mirror federal law, because the states are separate jurisdictions,
they may schedule products separately.

 Entities
must register annually with the DEA to manufacture, distribute, dispense, import, export and conduct research using controlled substances.
In addition, the DEA requires entities handling controlled substances to maintain complete and accurate records and file reports, including
reports related to thefts or losses of any controlled substances, and to obtain authorization to destroy any controlled substances. Registered
entities also must follow specific labeling and packaging requirements. Facilities must maintain appropriate security measures to control
against diversion of controlled substances. Security requirements vary by controlled substance schedule with the most stringent requirements
applying to Schedule I and Schedule II controlled substances. Required security measures include background checks on employees and physical
control of inventory through measures such as vaults and inventory reconciliations.

 Our
contract manufacturing organizations, or CMOs, who manufacture and distribute PF614 are required to be registered with DEA and relevant
state authorities and comply with all security, recordkeeping and reporting requirements. Manufacturers and distributors are subject
to routine inspections and audits by the DEA related to compliance with security, recordkeeping and reporting requirements. Failure to
maintain the required registrations or to comply and follow these requirements can lead to significant civil and/or criminal penalties
and possibly even lead to a revocation of a DEA registration to manufacture or distribute such products.

 Manufacturing
of oxycodone is subject to annual quotas that limit the amount of API and dosage forms that can be produced in any given year; the failure
of our CMOs to obtain the necessary manufacturing and/or procurement quota would have a negative impact on our business.

 The
CSA and DEA regulations establish an annual aggregate production quota for Schedule I and II controlled substances, including oxycodone
and other narcotic drugs. In addition, each manufacturer of active pharmaceutical ingredient, or API or dosage forms must obtain an individual
manufacturing or production quota that limits the amount of product that a company can produce and/or distribute each year. The DEA allocates
manufacturing quota issued to companies so as to not exceed the aggregate quota established for a given year. Moreover, companies must
demonstrate the need for procurement quota based on expected demand and sales of the controlled substance the DEA requires the submission
of substantial evidence of expected legitimate medical and scientific need for the drug product before assigning its aggregate production
quotas, or manufacturing and procurement quotas to manufacturers. The DEA has decreased the aggregate quota for certain narcotic drugs,
including oxycodone over the last five years. Also, in October 2018, Congress passed the SUPPORT Act which requires the DEA to consider
potential diversion in establishing quotas for narcotic drugs which could lead to continued decreases in quota available to API manufacturers
and dosage form manufacturers of these substances.

 In
future years, we may need greater amounts of controlled substances that are subject to the DEA's quota system to sustain our development
program. We may also need significantly greater amounts to implement our commercialization plans if the FDA approves our proposed formulations.
If any of our manufacturers of API or dosage forms are unable to obtain the necessary annual quota to meet the research and development
or commercial demand for PF614, our business would be negatively impacted. Any delay or refusal by the DEA in establishing a quota, a
reduction in quota, or a failure to increase quota over time could delay or stop the clinical development or commercial sale of some
of our products or product candidates. This could have a material adverse effect on our business, results of operations, financial condition
and prospects.

 Risks
Related to our Intellectual Property

 If
we are unable to obtain and maintain patent protection for our products candidates, or if the scope of the patent protection obtained
is not sufficiently broad, our competitors could develop and commercialize product candidates that are similar or identical to our product
candidates, and our ability to successfully commercialize our product candidates may be adversely affected.

 Our
commercial success will depend, in part, on our ability to obtain and maintain patent protection in the United States and other countries
with significant commercial markets with respect to our product candidates. We seek to protect our proprietary position by filing patent
applications in the United States and abroad related to our product candidates that are important to our business, as appropriate. We
cannot be certain that patents will be issued or granted with respect to applications that are currently pending or that we may apply
for in the future with respect to one or more of our product candidates, or that issued or granted patents will not later be found to
be invalid and/or unenforceable.

 The
patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent
applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our
research and development output before it is too late to obtain patent protection. Although we may enter into non-disclosure and confidentiality
agreements with parties who have access to patentable aspects of our research and development output, such as our employees, distribution
partners, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such output before
a patent application is filed, thereby jeopardizing our ability to seek patent protection.

 The
patent position of pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent
years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patent
rights are highly uncertain. Our pending and future patent applications may not result in patents being issued, and even if issued, the
patents may not meaningfully protect our product candidates, effectively prevent competitors and third parties from commercializing competitive
products or otherwise provide us with any competitive advantage. Even if the patent applications that we own or licenses issue as patents,
they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise
provide us with any competitive advantage. For product candidates for which we do not hold or do not obtain composition of matter patents,
competitors who obtain the requisite regulatory approval can offer products with the same composition as our product candidate so long
as the competitors do not infringe any method patents that we may hold. Method patents protect the product when used or sold for the
specified method. However, this type of patent protection can be more difficult to enforce and does not limit a competitor from making
and marketing a product that is identical to our product candidate that is either labeled or marketed for an indication that is outside
of the patented method, or for which there is a substantial use in commerce outside the patented method. Our competitors or other third
parties may be able to circumvent our patents by developing similar or alternative products in a non-infringing manner.

in either the patent laws, implementing regulations or interpretation of the patent laws in the United States and other countries may
also diminish the value of our patents or narrow the scope of our patent protection. The laws of foreign countries may not protect our
rights to the same extent as the laws of the United States, and many companies have encountered significant difficulties in protecting
and defending such rights in foreign jurisdictions.

 We
cannot be certain that our patents and patent rights will be effective in protecting our product candidates and technologies. Failure
to protect such assets may have a material adverse effect on our business, operations, financial condition and prospects.

 We
may face litigation from third parties claiming that our products or business infringe, misappropriate, or otherwise violate their intellectual
property rights, or seeking to challenge the validity of our patents.

 Our
future success is also dependent in part on the strength of our intellectual property, trade secrets and know-how, which have been developed
from years of research and development, and on our ability, and the ability of our future collaborators, to develop, manufacture, market
and sell our product candidates, if approved, and use our proprietary technologies without alleged or actual infringement, misappropriation
or other violation of the patents and other intellectual property rights of third parties.

 We
may be exposed to, or be threatened with, adversarial proceedings or additional future litigation by third parties regarding intellectual
property rights with respect to our current and any future product candidates and technology, including interference or derivation proceedings,
post grant review and inter partes review before the United States Patent and Trademark Office, or USPTO, or similar adversarial
proceedings or litigation in other jurisdictions seeking to challenge the validity of our intellectual property rights, claiming that
we have misappropriated the trade secrets of others, or claiming that our technologies, products or activities infringe the intellectual
property rights of others.

 There
have been many lawsuits and other proceedings involving patent and other intellectual property rights in the biotechnology and pharmaceutical
industries, including patent infringement lawsuits, interferences, oppositions, post grant review, inter partes review and reexamination
proceedings before the USPTO, and corresponding foreign patent offices. Numerous United States and foreign issued patents and pending
patent applications, which are owned by third parties, exist in the fields in which we are developing product candidates. As the biotechnology
and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims
of infringement of the intellectual property rights of third parties.

 We
are aware of patents owned by third parties, including potential competitors, that are directed to compositions comprising a chemically
modified opioid, such as oxycodone, which decreases the potential of the opioid to be abused or cause overdose and related methods of
use. Third parties, including potential competitors, may assert infringement claims against us based on existing patents or patents that
may be granted in the future including, perhaps, the aforementioned patents, regardless of their merit. There is a risk that third parties
may choose to engage in litigation with us to enforce or to otherwise assert their patent rights against us.

 Even
if we believe such claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable
and infringed, and the holders of any such patents may be able to block our ability to commercialize such product candidate unless we
obtain a license under the applicable patents, or until such patents expire or are finally determined to be invalid or unenforceable.
Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of our compositions, formulations,
or methods of treatment, prevention or use, the holders of any such patents may be able to block our ability to develop and commercialize
the applicable product candidate unless we obtain a license or until such patent expires or is finally determined to be invalid or unenforceable.
In either case, such a license may not be available on commercially reasonable terms, or at all. Even if we were able to obtain a license,
it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. Some claimants may have substantially
greater resources than we do and may be able to sustain the costs of complex intellectual property litigation to a greater degree and
for longer periods of time than we could. In addition, patent holding companies that focus solely on extracting royalties and settlements
by enforcing patent rights may target us.

 Furthermore,
even in the absence of litigation, we may need to obtain licenses from third parties to advance our research or to enable the commercialization
of our product candidates. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In such
an event, we would be unable to further practice our technologies or develop and commercialize any of our product candidates at issue,
which could harm our business and financial condition significantly.

 Parties
making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop
and commercialize one or more of our product candidates, if approved. Defense of these claims, regardless of their merit, would involve
substantial litigation expense and would be a substantial diversion of management and employee time and resources from our business.
Third parties making such claims may have the ability to dedicate substantially greater resources to these legal actions than us or our
licensors or collaborators can. In the event of a successful claim of infringement, misappropriation or other violation against us, we
may have to pay substantial damages, including treble damages and attorneys' fees for willful infringement, pay royalties, redesign
our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary
expenditure.

litigation and other proceedings may also absorb significant management time. The cost to us of any patent litigation or other proceeding,
even if resolved in our favor, could be substantial. During the course of any patent or other intellectual property litigation or other
proceeding, there could be public announcements of the results of hearings, rulings on motions, and other interim proceedings or developments
and if securities analysts or investors regard these announcements as negative, the perceived value of our product candidates or intellectual
property could be diminished. Accordingly, the market price of our common stock may decline. Uncertainties resulting from the initiation
and continuation of patent litigation or other proceedings could have a material adverse effect on our business, ability to compete in
the marketplace, financial condition, results of operations and growth prospects.

 We
may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming
and unsuccessful.

 Competitors
may infringe, misappropriate or otherwise violate our patents, trademarks, copyrights or other intellectual property, or those of our
licensors. To counter infringement, misappropriation, unauthorized use or other violations, we may be required to file legal claims,
which can be expensive and time consuming and divert the time and attention of our management and scientific personnel.

 There
can be no assurances that we will be successful with respect to any litigation matters which may arise in the ordinary course of our
business. Such a failure may have a material impact on our business, results of operations and financial condition in the future.

 We
may not be able to prevent, alone or with any future licensors, infringement, misappropriation or other violations of our intellectual
property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Any claims we
assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents.
In addition, in a patent infringement proceeding, there is a risk that a court will decide that a patent of ours is invalid or unenforceable,
in whole or in part, and that we do not have the right to stop the other party from using the invention at issue. There is also a risk
that, even if the validity of such patents is upheld, the court will construe the patent's claims narrowly or decide that we do
not have the right to stop the other party from using the invention at issue on the grounds that our patents do not cover the invention.
An adverse outcome in a litigation or proceeding involving our patents could limit our ability to assert our patents against those parties
or other competitors and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive
products. Any of these occurrences could adversely affect our competitive business position, business prospects and financial condition.
Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable,
or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we
could ultimately be forced to cease use of such trademarks.

 In
any infringement, misappropriation or other intellectual property litigation, any award of monetary damages we receive may not be commercially
valuable. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there
is a risk that some of our confidential information could be compromised by disclosure during litigation. Moreover, there can be no assurance
that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years
before they are concluded. Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the
attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings.

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

 We
rely on patent, trademark, trade secret and other intellectual property protection in the discovery, development, manufacturing and sale
of our product candidates. In particular, patent protection is important in the development and eventual commercialization of our product
candidates. Patents covering our product candidates normally provide market exclusivity, which is important in order to improve the probability
that our product candidates are able to become profitable.

 Certain
of our patents relating to PF614 will expire in 2030. In addition, certain of our patents relating to the use of nafamostat for treating
respiratory diseases will expire in 2028. While we are seeking additional patent coverage which may protect the technology underlying
these patents, there can be no assurances that such additional patent protection will be granted, or if granted, that these patents will
not be infringed upon or otherwise held enforceable. Even if we are successful in obtaining a patent, patents have a limited lifespan.
In the United States, the natural expiration of a utility patent is generally 20 years after it is filed. Various extensions may be available;
however, the life of a patent, and the protection it affords, is limited. Without patent protection of our product candidates, we may
be open to competition from generic versions of such methods and compositions.

 If
we do not obtain protection under the Hatch-Waxman Amendments by extending the patent term, our business may be harmed.

 Our
commercial success will largely depend on our ability to obtain and maintain patent and other intellectual property in the United States
and other countries with respect to our product candidates. Given the amount of time required for the development, testing and regulatory
review of new product candidates, patents protecting our product candidates might expire before or shortly after such candidates begin
to be commercialized. We expect to seek extensions of patent terms in the United States and, if available, in other countries where we
are prosecuting patents.

 Depending
upon the timing, duration and specifics of FDA marketing approval of our product candidates, one or more of our United States patents
may be eligible for limited patent term extension, or PTE, under the Drug Price Competition and Patent Term Restoration Act of 1984,
referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years beyond the
normal expiration of the patent as compensation for patent term lost during development and the FDA regulatory review process, which
is limited to the approved indication (and potentially additional indications approved during the period of extension) covered by the
patent. This extension is limited to only one patent that covers the approved product, the approved use of the product, or a method of
manufacturing the product. If we are unable to extend the expiration date of our existing patents or obtain new patents with longer expiry
dates, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical
and preclinical data to obtain approval of competing products following our patent expiration and launch their product earlier than might
otherwise be the case.

 We
may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business.

 Filing,
prosecuting and defending patents covering our product candidates in all countries throughout the world would be prohibitively expensive,
and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.
In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws
in the United States. Further, licensing partners may not prosecute patents in certain jurisdictions in which we may obtain commercial
rights, thereby precluding the possibility of later obtaining patent protection in these countries. Consequently, we may not be able
to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products
made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions
where we have not obtained patent protection to develop our own products and may also export infringing products to territories where
we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our product
candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

 Many
companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The
legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets
and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for
us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings
to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts
and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our
patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits
that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce
our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual
property that we develop or license. Furthermore, while we intend to protect our intellectual property rights in our expected significant
markets, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market
our product candidates. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate, which
may have an adverse effect on our ability to successfully commercialize our product candidates in all of our expected significant foreign
markets.

 Additionally,
the requirements for patentability may differ in certain countries, particularly developing countries. For example, unlike other countries,
China has a heightened requirement for patentability, and specifically requires a detailed description of medical uses of a claimed drug.
In India, unlike the United States, there is no link between regulatory approval of a drug and our patent status. Furthermore, generic
or biosimilar drug manufacturers or other competitors may challenge the scope, validity or enforceability of us or our licensors'
patents, requiring us or our licensees or any future licensors to engage in complex, lengthy and costly litigation or other proceedings.
In addition, certain countries in Europe and developing countries, including China and India, have compulsory licensing laws under which
a patent owner may be compelled to grant licenses to third parties. In those countries, We and our licensees or any future licensors
may have limited remedies if patents are infringed or if we or our licensees or any future licensors are compelled to grant a license
to a third party, which could materially diminish the value of those patents. This could limit our potential revenue opportunities. Accordingly,
we and our licensees' or any future licensors' efforts to enforce intellectual property rights around the world may be inadequate
to obtain a significant commercial advantage from the intellectual property that we own or license.

in European law have caused uncertainty about our European patent portfolio and may result in additional costs to us.

 In
2012, the European Patent Package, or EU Patent Package, regulations were passed with the goal of providing for a single pan-European
Unitary Patent, and a new European Unified Patent Court, or UPC, for litigation of European patents. The EU Patent Package was ratified
in February 2023 and currently covers 17 member states. On June 1, 2023, all European patents, including those issued prior to ratification,
will by default automatically fall under the jurisdiction of the UPC and allow for the possibility of obtaining pan-European injunctions,
and further will be at risk of a central revocation proceeding at the UPC in participating UPC states. Under the EU Patent Package, patent
holders are permitted to "opt out" of the UPC on a patent-by-patent basis during an initial seven year period after the EU
Patent Package is ratified, with the proviso that an "opt-out" is no longer available for EP patents for which a revocation
has been initiated before the UPC. Owners of European patent applications who receive notice of grant after the EU Patent Package is
ratified could, for the UPC contracting states, either obtain a Unitary Patent or validate the patent nationally and file an opt-out
demand. The EU Patent Package may increase the uncertainties and costs surrounding the enforcement or defense of our issued European
patents and pending applications. The full impact on future European patent filing strategy and the enforcement or defense of our issued
European patents in member states and/or the UPC is not known.

 We
may be subject to claims that we or our employees, consultants, contractors or advisors have infringed, misappropriated or otherwise
violated the intellectual property of a third party, or claiming ownership of what we regard as our own intellectual property.

 Many
of the contributors to our intellectual property, including patents and applications, were previously employed at universities or other
biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees
do not use the intellectual property and other proprietary information, know-how or trade secrets of others in their work for us, we
may be subject to claims that we or these employees have used or disclosed such intellectual property or other proprietary information.
Litigation may be necessary to defend against these claims.

 In
addition, while we typically require our employees, consultants and contractors who may be involved in the development of intellectual
property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with
each party who in fact develops intellectual property that we regard as our own. For example, we have not obtained assignments for certain
patent applications relating to abuse-resistant amphetamines. To the extent that we fail to obtain such assignments, such assignments
do not contain a self-executing assignment of intellectual property rights or such assignments are breached, we may be forced to bring
claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual
property.

 Our
reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them
or that our trade secrets will be misappropriated or disclosed and if we are unable to protect the confidentiality of our trade secrets,
the value of our technology could be materially adversely affected and our business would be harmed.

 In
addition to seeking patents for some of our technology and products, we also rely on trade secrets, including unpatented know-how, technology
and other proprietary information, in seeking to develop and maintain a competitive position. Because we expect to rely on third parties
to manufacture our product candidates and we expect to collaborate with third parties on the development of our product candidates, we
must, at times, share trade secrets with them. We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality
agreements with parties who have access to them, such as our employees, consultants, independent contractors, advisors, corporate collaborators,
outside scientific collaborators, contract manufacturers, suppliers and other third parties. We also enter into confidentiality and invention
or patent assignment agreements with employees and certain consultants. We also seek to preserve the integrity and confidentiality of
our data, trade secrets and know-how by maintaining physical security of our premises and physical and electronic security of our information
technology systems. Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to
protect our proprietary technologies will be effective.

 Since
our inception, we have sought to contract with manufacturers to supply commercial quantities of pharmaceutical formulations and products.
As a result, we have disclosed, under confidentiality agreements, various aspects of our technology with potential manufacturers and
suppliers. We believe that these disclosures, while necessary for our business, may have resulted and may result in the attempt by potential
manufacturers and suppliers to improperly assert ownership claims to our technology in an attempt to gain an advantage in negotiating
manufacturing and supplier rights.

 We
cannot guarantee that our trade secrets and other proprietary and confidential information will not be disclosed or that competitors
will not otherwise gain access to our trade secrets. Any party with whom we have executed such an agreement may breach that agreement
and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.
Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and
the outcome is unpredictable. In addition, some courts both within and outside the United States may be less willing or unwilling to
protect trade secrets. Further, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor,
we would have no right to prevent such third party, or those to whom they communicate such technology or information, from using that
technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor,
our business and competitive position could be harmed.

 Trade
secrets and know-how can be difficult to protect as trade secrets and know-how will over time be disseminated within the industry through
independent development, the publication of journal articles, and the movement of personnel skilled in the art from company to company
or academic to industry scientific positions. If we fail to prevent material disclosure of the know-how, trade secrets and other intellectual
property related to our technologies to third parties, we will not be able to establish or maintain a competitive advantage in our market,
which could materially adversely affect our business, results of operations and financial condition. Even if we are able to adequately
protect our trade secrets and proprietary information, our trade secrets could otherwise become known or could be independently discovered
by our competitors. For example, we are aware that certain of our former employees founded Elysium Therapeutics, which appears to be
developing orally administered abuse deterrent opioids. Additionally, competitors could purchase our products and attempt to replicate
some or all of the competitive advantages we derive from our development efforts, design around our protected technology or develop their
own competitive technologies that fall outside of our intellectual property rights. If any of our trade secrets were to be lawfully obtained
or independently developed by a competitor, in the absence of patent protection, we would have no right to prevent them, or those to
whom they communicate, from using that technology or information to compete with us.

 We
may not be able to prevent misappropriation of our intellectual property, trade secrets or confidential information, particularly in
countries where the laws may not protect those rights as fully as in the United States. Furthermore, because of the substantial amount
of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information
could be compromised by disclosure during this type of litigation.

 We
may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent,
which might adversely affect our ability to develop and market our product candidates.

 To
the extent undertaken, we cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents,
the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified
each and every third-party patent and pending application in the United States and abroad that is or may be relevant to or necessary
for the commercialization of our product candidates in any jurisdiction. Patent applications in the United States and elsewhere are not
published until approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being
commonly referred to as the priority date. In addition, certain United States patent applications can remain confidential until patents
issue. Therefore, patent applications covering our products could have been filed by others without our knowledge. Additionally, pending
patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our product
candidates or the use of our product candidates.

 The
scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent's prosecution
history. Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect, which may negatively
impact our ability to market our product candidates. We may incorrectly determine that our product candidates are not covered by a third-party
patent or may incorrectly predict whether a third party's pending application will issue with claims of relevant scope. Our determination
of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, and our failure to identify
and correctly interpret relevant patents may negatively impact our ability to develop and market our product candidates.

 If
we fail to identify and correctly interpret relevant patents, we may be subject to infringement claims. We cannot guarantee that we will
be able to successfully settle or otherwise resolve such infringement claims. If we fail in any such dispute, in addition to being forced
to pay damages, we may be temporarily or permanently prohibited from commercializing any of our product candidates that are held to be
infringing. We might, if possible, also be forced to redesign product candidates or services so that we no longer infringe the third-party
intellectual property rights. Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial
and management resources that we would otherwise be able to devote to our business.

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

 Once
granted, patents may remain open to opposition, interference, re-examination, post-grant review, inter partes review, nullification or
derivation action in court or before patent offices or similar proceedings for a given period after allowance or grant, during which
time third parties can raise objections against such grant. In the course of such proceedings, which may continue for a protracted period
of time, the patent owner may be compelled to limit the scope of the allowed or granted claims thus attacked or may lose the allowed
or granted claims altogether. In addition, the degree of future protection afforded by our intellectual property rights is uncertain
because even granted intellectual property rights have limitations and may not adequately protect our business. The following examples
are illustrative:

 others may be able to make
 formulations that are similar to our product candidates or other formulations but that are not covered by the claims of our patent
 rights;

 the patents of third parties
 may have an adverse effect on our business;

 we or any future strategic
 partners might not have been the first to conceive or reduce to practice the inventions covered by the issued patent or pending patent
 application that we own;

 we or any future strategic
 partners might not have been the first to file patent applications covering certain of our inventions;

 others may independently
 develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

 it is possible that our
 pending patent applications will not lead to issued patents;

 issued patents that we
 may own or that we exclusively license in the future may not provide us with any competitive advantage, or may be held invalid or
 unenforceable, as a result of legal challenges by our competitors;

 our competitors might conduct
 research and development activities in countries where we do not have patent rights and then use the information learned from such
 activities to develop competitive products for sale in our major commercial markets;

 third parties performing
 manufacturing or testing for us using our product candidates or technologies could use the intellectual property of others without
 obtaining a proper license;

 we may not develop additional
 proprietary technologies that are patentable; and

 the patents of others may
 have an adverse effect on our business.

 Should
any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and
prospects.

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

 If
one of our product candidates is approved by the FDA, one or more third parties may challenge the current patents, or patents that may
issue in the future, within our portfolio which could result in the invalidation of, or render unenforceable, some or all of the relevant
patent claims or a finding of non-infringement. For example, if a third party submits an application under Section 505(b)(2) or an abbreviated
new drug application, or ANDA, for a generic drug containing any of our product candidates, and relies in whole or in part on studies
conducted by or for us, the third party will be required to certify to the FDA that either: (1) there is no patent information listed
in the Orange Book with respect to our NDA for the applicable approved drug candidate; (2) the patents listed in the Orange Book have
expired; (3) the listed patents have not expired, but will expire on a particular date and approval is sought after patent expiration;
or (4) the listed patents are invalid or will not be infringed by the manufacture, use or sale of the third party's generic drug.
A certification that the new drug will not infringe the Orange Book-listed patents for the applicable approved drug candidate, or that
such patents are invalid, is called a paragraph IV certification. If the third party submits a paragraph IV certification to the FDA,
a notice of the paragraph IV certification must also be sent to us once the third party's ANDA is accepted for filing by the FDA.
We may then initiate a lawsuit to defend the patents identified in the notice. The filing of a patent infringement lawsuit within 45
days of receipt of the notice automatically prevents the FDA from approving the third party's ANDA until the earliest of 30 months
or the date on which the patent expires, the lawsuit is settled, or the court reaches a decision in the infringement lawsuit in favor
of the third party. If we do not file a patent infringement lawsuit within the required 45-day period, the third party's ANDA will
not be subject to the 30-month stay of FDA approval.

 Moreover,
a third party may challenge the current patents, or patents that may be issued in the future, within our portfolio which could result
in the invalidation of some or all the patents that might otherwise be eligible for listing in the Orange Book for one of our products.
If a third party successfully challenges all of the patents that might otherwise be eligible for listing in the Orange Book for one of
our products, we will not be entitled to the 30-month stay of FDA approval upon the filing of an ANDA for a generic drug containing any
of our product candidates, and relies in whole or in part on studies conducted by or for us. Litigation or other proceedings to enforce
or defend intellectual property rights are often very complex in nature, may be very expensive and time-consuming, may divert our management's
attention from our core business, and may result in unfavorable results that could limit our ability to prevent third parties from competing
with our product candidates.

 Cyber-attacks
or other failures in our telecommunications or information technology systems, or those of our collaborators, CROs, third-party logistics
providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption
of our business operations.

 We,
our collaborators, CROs, third-party logistics providers, distributors and other contractors and consultants utilize information technology,
or IT, systems and networks to process, transmit and store electronic information in connection with our business activities. As use
of digital technologies has increased, cyber incidents, including third parties gaining access to employee accounts using stolen or inferred
credentials, computer malware, viruses, spamming, phishing attacks or other means, and deliberate attacks and attempts to gain unauthorized
access to computer systems and networks, have increased in frequency and sophistication. These threats pose a risk to the security of
us, our collaborators', CROs', third-party logistics providers', distributors' and other contractors' and
consultants' systems and networks, and the confidentiality, availability and integrity of our data. There can be no assurance that
we will be successful in preventing cyber-attacks or successfully mitigating their effects. Similarly, there can be no assurance that
our collaborators, CROs, third-party logistics providers, distributors and other contractors and consultants will be successful in protecting
our clinical and other data that is stored on their systems. Like other companies, we have on occasion experienced, and will continue
to experience, threats to our data and systems, including malicious codes and viruses, phishing, business email compromise attacks or
other cyber-attacks. Any cyber-attack, data breach or destruction or loss of data could result in a violation of applicable United States
and international privacy, data protection and other laws and subject us to litigation and governmental investigations and proceedings
by federal, state and local regulatory entities in the United States and by international regulatory entities, resulting in exposure
to material civil and/or criminal liability. Further, our general liability insurance and corporate risk program may not cover all potential
claims to which we are exposed and may not be adequate to indemnify us for all liability that may be imposed, which could have a material
adverse effect on our business and prospects. For example, the loss of clinical trial data from completed or ongoing clinical trials
for any of our product candidates could result in delays in our development and regulatory approval efforts and significantly increase
our costs to recover or reproduce the data. In addition, we may suffer reputational harm or face litigation or adverse regulatory action
as a result of cyber-attacks or other data security breaches and may incur significant additional expense to implement further data protection
measures.

 Risks
Related to the Ownership of Common Stock and Financial Reporting

 Raising
additional capital has caused, and may in the future cause, dilution to our stockholders, adversely affect the market price of our common
stock, restrict our operations or require us to relinquish rights to our technologies or product candidates.

 We
expect our expenses to increase in connection with our planned operations. Unless and until we can generate a substantial amount of revenue
from our product candidates, we expect to finance our future cash needs through public or private equity offerings, debt financings,
collaborations, licensing arrangements or other sources, or any combination of the foregoing. In addition, we may seek additional capital
due to favorable market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future
operating plans.

 To
the extent that we raise additional capital through the sale of common stock, convertible securities or other equity securities as we
have done in the past, our stockholders' ownership interest has been, and may in the future be, diluted. In addition, debt financing,
if available, may result in fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability
to take specific actions, such as incurring additional debt, making capital expenditures, creating liens, redeeming stock or declaring
dividends, that could adversely impact our ability to conduct our business. In addition, securing financing could require a substantial
amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities,
which may adversely affect our management's ability to oversee the development of our product candidates.

 In
addition, we may sell securities in the public or private equity markets if and when conditions are favorable, or at prices per share
below the current market price of our common stock, even if we do not have an immediate need for additional capital at that time. Sales
of substantial amounts of shares of our common stock, or the perception that such sales could occur, could adversely affect the prevailing
market price of our shares and our ability to raise capital. We may issue additional shares of common stock in future financing transactions
or as incentive compensation for our executive management and other key personnel, consultants and advisors. Moreover, sales of substantial
amounts of shares in the public market, or the perception that such sales could occur, may adversely affect the prevailing market price
of our common stock and make it more difficult for us to raise additional capital.

 Debt
financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability
to take specific actions, such as incurring additional debt, making acquisitions, engaging in acquisition, merger or collaboration transactions,
selling or licensing our assets, making capital expenditures, redeeming our stock, making certain investments, declaring dividends or
encumbering our assets to secure future indebtedness. Such restrictions could adversely impact our ability to conduct our operations
and execute our business plan. The Investor Notes contain such restrictions including a pledge of substantially all of our tangible and
intangible assets, including our intellectual property.

 If
we raise additional funds through upfront payments or milestone payments pursuant to strategic collaborations, strategic alliances or
marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or
intellectual property, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable
to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit,
reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates
that we would otherwise prefer to develop and market ourselves.

 We
are a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure
requirements available to "smaller reporting companies," this could make our securities less attractive to investors and
may make it more difficult to compare our performance with other public companies.

 We
are a " smaller reporting company " as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take
advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held
by non-affiliates is greater than or equal to $250 million as of the end of that fiscal year's second fiscal quarter, and (ii)
our annual revenues are greater than or equal to $100 million during the last completed fiscal year and the market value of our common
stock held by non-affiliates exceeds $700 million as of the end of that fiscal year's second fiscal quarter. To the extent we take
advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies
difficult or impossible.

 Our
internal controls over financial reporting currently may not meet all of the standards contemplated by Section 404 of Sarbanes-Oxley
Act, and failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley
Act could impair our ability to produce timely and accurate financial statements or comply with applicable regulations and have a material
adverse effect on our business.

 Our
management has significant requirements for enhanced financial reporting and internal controls as a public company. The process of designing
and implementing effective internal controls is a continuous effort that will require us to anticipate and react to changes in our business
and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate
to satisfy our reporting obligations as a public company. If we are unable to maintain appropriate internal financial reporting controls
and procedures, it could cause us to fail to meet our reporting obligations on a timely basis or result in material misstatements in
our consolidated financial statements, which could harm our operating results. In addition, we are required, pursuant to Section 404
of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal controls over
financial reporting. This assessment needs to include disclosure of any material weaknesses identified by our management in our internal
control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control
over financial reporting are complex and require significant documentation, testing, and possible remediation.

 Matters
impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us
to adverse regulatory consequences, including sanctions by the SEC, or violations of applicable stock exchange listing rules, which may
result in a breach of the covenants under existing or future financing arrangements. There also could be a negative reaction in the financial
markets due to a loss of investor confidence in us and the reliability of our financial statements. This could materially adversely affect
us and lead to a decline in the market price of our common stock.

 The
amount of our future losses is uncertain and our quarterly and annual operating results may fluctuate significantly or fall below the
expectations of investors or securities analysts, each of which may cause our stock price to fluctuate or decline.

 Our
quarterly and annual operating results may fluctuate significantly in the future due to a variety of factors, many of which are outside
of our control and may be difficult to predict, including the following:

 the timing and success
 or failure of clinical trials for our product candidates or competing product candidates, or any other change in the competitive
 landscape of our industry,

 our ability to successfully
 recruit and retain subjects for clinical trials, and any delays caused by difficulties in such efforts;

 the risk/benefit profile,
 cost and reimbursement policies with respect to our product candidates, if approved, and existing and potential future therapeutics
 that compete with our product candidates;

 our ability to obtain marketing
 approval for our product candidates and the timing and scope of any such approvals we may receive;

 the timing and cost of,
 and level of investment in, research and development activities relating to our product candidates, which may change from time to
 time;

 the cost of manufacturing
 our product candidates, which may vary depending on the quantity of production and the terms of our agreements with manufacturers;

 our ability to attract,
 hire and retain qualified personnel;

 expenditures that we will
 or may incur to develop additional product candidates;

 the level of demand for
 our product candidates should they receive approval, which may vary significantly;

 the changing and volatile
 U.S. and global economic environments; and

 future accounting pronouncements
 or changes in our accounting policies.

 The
cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results.
As a result, comparing our operating results on a period-to-period basis may not be meaningful. This variability and unpredictability
could also result in our failing to meet the expectations of industry or financial analysts or investors for any period. If our operating
results or revenue fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the
forecasts we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially.
Such a stock price decline could occur even when we have met any previously publicly stated guidance we may provide, if any.

for shares of our common stock, if exercised, will increase the number of shares eligible for future resale in the public market and
result in dilution to our stockholders.

 We
have issued warrants to purchase shares of our common stock in connection with various financing transactions. To the extent these warrants
are exercised, additional shares of our common stock will be issued, which will result in dilution to the holders of shares of our common
stock and increase the number of shares of common stock eligible for resale in the public market. Sales of substantial numbers of such
shares of common stock in the public market or the fact that such warrants may be exercised could adversely affect the market price of
our common stock.

 Our
issuance of additional capital stock in connection with financings, acquisitions, investments and our 2021 Omnibus Incentive Plan will
dilute all other stockholders.

 We
expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We have granted equity
awards to employees, directors, and consultants under our 2021 Omnibus Incentive Plan and plan to do so in the future. We may also raise
capital through equity financings in the future. As part of our business strategy, we may acquire or make investments in complementary
companies, products, or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of
additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value
of our common stock to decline.

 If
we are unable to regain compliance with the listing standards of Nasdaq, our common stock could be delisted and may become subject to
"penny stock" rules, which could have a material adverse effect on the liquidity of our common stock, the ability of investors
to sell their shares and our ability to raise funding.

 On
November 13, 2023, we received notice from the Listing Qualifications department of Nasdaq stating that, due to our non-compliance with
the $2.5 million stockholders' equity requirement set forth in Nasdaq Listing Rule 5550(b)(1) as of September 30, 2023, we were
subject to delisting unless we timely request a hearing before the Nasdaq Hearings Panel (the "Panel"), which we did, resulting
in a hearing before the Panel in early February 2024. The Panel granted our request for continued listing until May 13, 2024. We intend
to actively explore options to regain compliance with Nasdaq listing requirements; however, there can be no assurance that we will be
able to evidence compliance prior to the expiration of the extension granted to us by the Panel.

 The
de-listing of our common stock on Nasdaq could have a material adverse effect on us, including on our ability to raise capital through
alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors,
suppliers, customers and employees and fewer business development opportunities. Upon any delisting, our common stock could become subject
to the regulations of the SEC relating to the market for penny stocks. Penny stocks are securities with a price of less than $5.00 per
share unless (i) the securities are traded on a "recognized" national exchange or (ii) the issuer has net tangible assets
less than $2,000,000 (if the issuer has been in continuous operation for at least three years) or $5,000,000 (if in continuous operation
for less than three years), or with average annual revenues of less than $6,000,000 for the last three years.

 The
procedures applicable to penny stocks requires a broker-dealer to (i) obtain from the investor information concerning his financial situation,
investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks
are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating
the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer
made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it
accurately reflects the investor's financial situation, investment experience and investment objectives. The regulations applicable
to penny stocks may severely affect the market liquidity for our common stock and could limit the ability of stockholders to sell their
common stock in the secondary market.

 Item
1B. Unresolved Staff Comments

 Not

 Item
1C. Cybersecurity

 Risk
Management and Strategy

 We
have developed and implemented cybersecurity risk management processes intended to protect the confidentiality, integrity and availability
of our critical systems and information.

 Our
cybersecurity risk management program includes:

 physical, technological and administrative controls intended
to support our cybersecurity and data governance framework, including protections designed to protect the confidentiality, integrity
and availability of our key information systems;

 risk assessments designed to help identify material cybersecurity risks to our critical systems and information;

 designated team members are responsible for managing our cybersecurity risk assessment processes, our security controls, and our response
to cybersecurity incidents; and

 the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls.

 We
have not identified risks from known cybersecurity threats that have materially affected or are reasonably likely to materially affect
us, including our operations, business strategy, results of operations, or financial condition. See Item 1A. "Risk Factors –
 Cyber-attacks or other failures in our telecommunications or information technology systems, or those of our collaborators, CROs,
third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption
and significant disruption of our business operations."

 Governance

 Our
Board considers cybersecurity risk as part of its risk oversight function. The Audit Committee oversees our cybersecurity and other information
technology risks and management's implementation of our cybersecurity risk management program. The Audit Committee receives periodic
reports from management on our cybersecurity risks. In addition, management updates the Board and the Audit Committee, as necessary,
regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.

 Our
management team, including our Chief Financial Officer, is responsible for assessing and managing our material risks from cybersecurity
threats. Our Chief Financial Officer has primary responsibility for our overall cybersecurity risk management program. Our Chief Financial
Officer has experience supervising and managing company information technology departments.

 Our
management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means,
which may include briefings from external security personnel; threat intelligence and other information obtained from governmental, public
or private sources; and alerts and reports produced by security tools deployed in the information technology environment.

 Item
2. Properties

 Our
principal executive office is located at 7946 Ivanhoe Ave., Suite 201 in La Jolla, California, where we lease a total of 850 square feet
of office space that we use for our administrative activities. All development activities are undertaken at contract research organizations.
The lease expires in October 2024. We believe that our current arrangements will be sufficient to meet our needs for the foreseeable
future, and that, should it be needed, suitable space will be available to accommodate our administrative activities.

 Item
3. Legal Proceedings

 From
time to time, we 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,
we review the status of significant matters, if any exist, and assess the potential financial exposure. If the potential loss from any
claim or legal claim is considered probable and the amount can be estimated, we accrue a liability for the estimated loss. Legal proceedings
are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best
information available at the time. As additional information becomes available, we reassess the potential liability related to pending
claims and litigation. As of the date hereof, we are not a party to any material legal proceeding.

 Item
4. Mine Safety Disclosures

 Not

 PART
II

 Item
5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Market
Price and Ticker Symbol

 Our
common stock is currently listed on the Nasdaq Stock Market under the symbol "ENSC." Our Public Warrants are currently listed
on the OTC Pink Open Market under the symbol "ENSCW."

 The
closing price of our common stock and Public Warrants on March 8, 2024, was $0.7852 and $0.041, respectively.

 Holders

 As
of March 8, 2024, there were approximately 71 holders of record of our common stock.

 Such
numbers do not include beneficial owners holding our securities through nominee names.

 Dividends

 We
have not paid any cash dividends on our common stock to date. We may retain future earnings, if any, for future operations, expansion
and debt repayment and has no current plans to pay cash dividends for the foreseeable future. Any decision to declare and pay dividends
in the future will be made at the discretion of the Board and will depend on, among other things, our results of operations, financial
condition, cash requirements, contractual restrictions and other factors that the Board may deem relevant. In addition, our ability to
pay dividends may be limited by covenants of any existing and future outstanding indebtedness we or our subsidiaries incur. We do not
anticipate declaring any cash dividends to holders of our common stock in the foreseeable future.

Authorized for Issuance under Equity Compensation Plans

 The
following table provides information as of December 31, 2023, with respect to securities that may be issued under our equity compensation
plans:

 Plan Category

 Number of
 Securities to be
 Issued upon
 Exercise of
 Outstanding
 Options,
 Warrants and
 Rights

 Weighted
 Average
 Exercise Price
 of Outstanding
 Options,
 Warrants and
 Rights

 Number of
 Remaining
 Available for
 Future Issuance
 Under Equity
 Plans
 (Excluding
 Reflected in the
 First Column)

 Equity compensation plans approved by security holders

 $
 33.15

 2,112

 Equity compensation plans not approved by security holders

 -

 -

 -

 Total

 $
 33.15

 2,112

 Recent
Sales of Unregistered Securities and Use of Proceeds

 On
October 23, 2023, we entered into a Securities Purchase Agreement for an aggregate financing of $1.7 million with investors. The Company
issued to the investors (i) 2023 Notes in the aggregate principal amount of $1.8 million for an aggregate purchase price of $1.7 million
and (ii) warrants to purchase 3.8 million shares of the Company's common stock in the aggregate at an exercise price of $1.5675
per share. The first funding of $0.6 million occurred on October 25, 2023 and the second funding of $1.1 million occurred on November
28, 2023. Pursuant to the 2023 Notes, shares of Company common stock were issued to these investors in satisfaction of principal and
interest payments. The proceeds are being used for working capital purposes subject to certain customary restrictions. See, " Liquidity
and Capital Resources " for a detailed description of the 2023 Notes.

 None
of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. Unless otherwise
set forth above, we believe each of these transactions was exempt from registration under the Securities Act in reliance on Section 4(a)(2)
of the Securities Act (and Regulation D promulgated thereunder) as transactions by an issuer not involving any public offering or Rule
701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer under benefit plans and contracts relating to compensation
as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the
securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends
were placed on the share certificates issued in these transactions. All recipients had adequate access, through their relationships with
us, to information about us. The sales of these securities were made without any general solicitation or advertising.

 Purchases
of Equity Securities by the Issuer and Affiliated Purchasers

 None.

 Item
7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 Overview

is a clinical stage pharmaceutical company seeking to develop innovative solutions for severe pain relief while reducing the fear of
and the potential for opioid misuse, abuse and overdose. Our lead product candidate, PF614, is an extended release TAAP prodrug of oxycodone.
TAAP modification of prescription drugs removed the ability to crush, chew or manipulate and inject to achieve the effect of the medication
more quickly than by swallowing. MPAR adds a layer of overdose protection to each TAAP product.

 Since
our inception in 2003, we devoted substantially all of our efforts and financial resources to organizing and staffing our company, business
planning, raising capital, discovering product candidates and securing related intellectual property rights and conducting research and
development activities for our product candidates. We do not have any products approved for sale and we have not generated any revenue
from product sales. We may never be able to develop or commercialize a marketable product.

 Our
lead product candidate, PF614, is in Phase 2 clinical development, PF614-MPAR is in Phase 1b clinical development and nafamostat is proceeding
towards Phase 2 clinical development. Our other product candidates and our research initiatives are in preclinical or earlier stages
of development. Our ability to generate revenue from product sales sufficient to achieve profitability will depend heavily on the successful
development and eventual commercialization of one or more of our product candidates. We have not yet successfully completed any pivotal
clinical trials, nor have we obtained any regulatory approvals, manufactured a commercial-scale drug, or conducted sales and marketing
activities.

 We
have incurred significant operating losses since inception and we expect to continue to incur net losses for the foreseeable future.
We expect that our expenses and capital requirements will increase substantially in connection with our ongoing development activities,
particularly if and as we:

 continue preclinical studies
 and continues existing and initiates new clinical trials for PF614, PF614-MPAR and nafamostat, our lead product candidates being
 tested for chronic pain and infectious disease;

 advance the development
 of our product candidate pipeline of other product candidates, including through business development efforts to invest in or in-license
 other technologies or product candidates;

 maintain, expand and protect
 our intellectual property portfolio;

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

 seek regulatory approval
 for any product candidates that successfully complete clinical trials;

 undertake any pre-commercialization
 activities to establish sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory
 approval;

 expand our infrastructure
 and facilities to accommodate our growing employee base; and

 add operational, financial
 and management information systems and personnel, including personnel to support our research and development programs, any future
 commercialization efforts and our transition to operating as a public company.

 We
have incurred and expect to continue to incur additional costs associated with operating as a public company, including significant legal,
accounting, insurance, investor relations and other expenses. We may never become profitable.

 We
require substantial additional funding to support our continuing operations and pursue our growth strategy. Until we can generate significant
revenue from product sales, if ever, we expect to finance our operations through a combination of private and public equity offerings,
debt financings or other capital sources, which may include collaborations with other companies or other strategic transactions. To the
extent that we raise additional capital through the sale of private or public equity or convertible debt securities, existing ownership
interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights
of our equity holders.

 Debt
financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take
specific actions, such as incurring additional debt, issuing additional equity, making acquisitions or capital expenditures or declaring
dividends. If we raise additional funds through collaborations or other strategic transactions with third parties, we may have to relinquish
valuable rights to our technologies, future revenue streams, research programs or drug candidates, or grant licenses on terms that may
not be favorable to us. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on
favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly
delay, scale back or discontinue the development and commercialization of one or more of our product candidates or delay our pursuit
of potential in-licenses or acquisitions.

 Because
of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased
expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not
become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, we may be unable to
continue our operations at planned levels and be forced to reduce or terminate our operations.

 We
have generated limited revenues and have incurred significant operating losses since our inception and expect to continue to incur operating
losses for the foreseeable future. These factors raise substantial doubt about our ability to continue as a going concern. Our future
viability is dependent on our ability to raise additional capital to finance our operations. Without raising additional capital through
a future offering, we believe that current cash on hand is sufficient to fund operations into the third quarter of 2024. We based this
estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See "—
 Liquidity and Capital Resources." Our future viability beyond the twelve months is dependent on our ability to raise additional
capital to finance our operations.

 We
expect to incur substantial expenses in the foreseeable future for the development and potential commercialization of our product candidates
and ongoing internal research and development programs. At this time, we cannot reasonably estimate the nature, timing or aggregate amount
of costs for our development, potential commercialization, and internal research and development programs. However, in order to complete
our current and future preclinical studies and clinical trials, and to complete the process of obtaining regulatory approval for our
product candidates, as well as to build the sales, marketing and distribution infrastructure that we believe will be necessary to commercialize
our product candidates, if approved, we may require substantial additional funding in the future.

 2021
Notes

 On
September 24, 2021, we entered into the SPA for an aggregate financing of $15.0 million with institutional investors. A first closing
under the SPA occurred on September 24, 2021 and a second closing under the SPA occurred on November 5, 2021. At the first closing, the
Company issued to the investors (i) senior secured convertible promissory notes in the aggregate principal amount of $5.3 million for
an aggregate purchase price of $5.0 million and (ii) warrants to purchase 1,507 shares of the Company's common stock in the aggregate
at a current exercise price of $3.64 per share. At the second closing, the Company issued to the institutional investors referenced above,
(i) senior secured convertible promissory notes in the aggregate principal amount of $10.6 million for an aggregate purchase price of
$10.0 million and (ii) warrants to purchase 3,011 shares of the Company's common stock in the aggregate at a current exercise price
of $3.64 per share. The 2021 Notes were satisfied on October 10, 2022.

 2022
Notes

 On
June 30, 2022, we 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. The remaining amount of principal and interest on the 2022
Notes was repaid in the first quarter of 2023. We were obligated under the 2022 Notes to pay additional cash as true-up payments for
interest or redemption amounts that we paid in shares of common stock that were valued below $24.07 or the lower conversion price of
$9.01 in effect between January 12, 2023 and May 12, 2023. The true-up payments compensate the holder for the difference between the
value of a share and the conversion price in effect at the time of redemption, multiplied by the number of shares paid. The true-up payments
totaling $0.6 million were paid on May 12, 2023.

 In
connection with each of the first and second closings of the 2022 Notes we also issued warrants to purchase 38,900 shares of the
Company's common stock. The warrants have a current exercise price of $3.64 and are exercisable for five years following
issuance of the 2022 Notes.

 2022
December Offering

 On
December 7, 2022, we entered into an underwriting agreement with Lake Street Capital Management, LLC (the " 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.

 In
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.

 Each
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.

 2023
February Offering

 On
February 2, 2023, we 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, priced "at-the-market" under the rules of The Nasdaq
Stock Market, 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 of the Offering occurred on February 6, 2023.

 In
a concurrent private placement, the Company issued to the institutional investors, for each share of common stock purchased in the offering,
a common warrant to purchase one 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 $8.58 per share and are exercisable to purchase
an aggregate of up to 297,619 shares of Common Stock and expire on August 7, 2028. A holder of a common warrant will not have the right
to exercise any portion of its warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or 9.99%
at the election of the holder prior to the date of issuance) of the number of shares of common stock outstanding immediately after giving
effect to such exercise; provided, however, that upon 61 days' prior notice to the Company, the holder may increase or decrease
the beneficial ownership limitation, provided that in no event shall the beneficial ownership limitation exceed 9.99%.

 H.C.
Wainwright & Co. acted as the exclusive placement agent (the " Placement Agent ") for the offering. We issued placement
agent warrants to purchase up to 20,832 shares of common stock to the Placement Agent (including its designees). These warrants have
an exercise price equal to $12.60 per share and are exercisable for five years from the commencement of sales in the offering. The common
warrants and placement agent warrants and the shares of our common stock issuable upon the exercise of the common warrants and placement
agent warrants are not being registered under the Securities Act of 1933, as amended, are not being offered pursuant to the Registration
Statement, and are being offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act of 1933 and Rule 506(b).

 In
the Securities Purchase Agreement, we agreed not to issue, enter into any agreement to issue or announce the issuance or proposed issuance
of any shares of common stock or any securities convertible into or exercisable or exchangeable for Common Stock for a period of 30 days
following the closing of the offering. Our officers and directors agreed, subject to limited exceptions, for a period of 90 days after
the closing of the offering, to not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of, directly or indirectly,
or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, with respect to, any shares of common stock or securities convertible, exchangeable
or exercisable into, shares of common stock beneficially owned, held or thereafter acquired by them.

 2023
May Offering

 On
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), Series A-1 warrants to purchase up to 1,800,876 shares of common stock and Series
A-2 warrants to purchase up to 1,800,876 shares of common stock, at a combined public offering price of $3.887 per share (or pre-funded
warrant in lieu thereof) and accompanying warrants. The Series A-1 warrants have an exercise price of $3.64 per share, are exercisable
immediately upon issuance and expire five years from the date of issuance, and the Series A-2 warrants have an exercise price of $3.64
per share, are exercisable immediately upon issuance and expire eighteen months from the date of issuance. A
holder of a warrant issued in the offering will not have the right to exercise any portion of its warrants if the holder, together with
its affiliates, would beneficially own in excess of 4.99% (or 9.99% at the election of the holder prior to the date of issuance) of the
number of shares of Common Stock outstanding immediately after giving effect to such exercise; provided, however, that upon 61 days'
prior notice to the Company, the holder may increase or decrease the beneficial ownership limitation, provided that in no event shall
the beneficial ownership limitation exceed 9.99%. Gross proceeds from this offering are approximately $7.0 million before the
deduction of placement agent fees and related costs of $0.7 million. The Series A-1 and Series A-2 warrants were repriced to $1.31 per
share and exercised in February 2024.

 H.C.
Wainwright & Co. acted as the exclusive placement agent for the offering. The Company also registered warrants issued to the placement
agent to purchase 126,061 shares of common stock at a per share exercise price of $4.8588, which is 125% of the price of the shares in
the offering.

 In
connection with the offering, the Company amended 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 the amended warrants have a reduced exercise price of $3.64 per share, at an additional offering
price of $0.125 per amended warrant.

 2023
Notes

 On
October 23, 2023, the Company entered into a Securities Purchase Agreement (the "SPA") for an aggregate financing of $1.7
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 in the
aggregate. At the second closing under the SPA, which occurred on November 28, 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.

 The
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% 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 notes at the first closing and second closing, respectively, 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 investor 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. Conversions and repayments of principal and
interest on the notes in January and February 2024 totaled $1.7 million.

 The
warrants have an exercise price of $1.5675 and are exercisable for five years following issuance on each of the first and second closing
dates under the SPA. Warrants for 1.3 million shares of common stock were exercised in January 2024.

 Components
of Our Operating Results

 Revenue

 We
have generated limited revenue since our inception and we do not expect to generate any revenue from the sale of products in the near
future, if at all. If our development efforts are successful and we commercialize our products, or if we enter into collaboration or
license agreements with third parties, we may generate revenue in the future from product sales, as well as upfront, milestone and royalty
payments from such collaboration or license agreements, or a combination thereof.

 We
have received funding under federal grants from the National Institutes of Health ("NIH") through the National Institute
on Drug Abuse ("NIDA"). In September 2018, we were awarded a research and development grant related to the development of
our MPAR overdose prevention technology (the "MPAR Grant"). In September 2019, we were awarded a second research and
development grant related to the development of our TAAP/MPAR abuse deterrent technology for Opioid Use Disorder ("OUD")
(the "OUD Grant"). Grant funds are awarded annually through a Notice of Award which contains certain terms and conditions
including, but not limited to, complying with the grant program legislation, regulation and policy requirements, complying with conditions
on expenditures of funds with respect to other applicable statutory requirements such as the federal appropriations acts, periodic reporting
requirements, and budget requirements.

 Operating
Expenses

and Development Expenses

and development expenses consist primarily of costs incurred for research activities, including drug discovery efforts and the development
of our product candidates. We expense research and development costs as incurred, which include:

 expenses incurred to conduct
 the necessary preclinical studies and clinical trials required to obtain regulatory approval;

 expenses incurred under
 agreements with contract research organizations (" CROs ") that are primarily engaged in the oversight and conduct
 of our drug discovery efforts and preclinical studies, clinical trials and contract manufacturing organizations (" CMOs ")
 that are primarily engaged to provide preclinical and clinical drug substance and product for our research and development programs;

 other costs related to
 acquiring and manufacturing materials in connection with our drug discovery efforts and preclinical studies and clinical trial materials,
 including manufacturing validation batches, as well as investigative sites and consultants that conduct our clinical trials, preclinical
 studies and other scientific development services;

 payments made in cash or
 equity securities under third-party licensing, acquisition and option agreements;

 employee-related expenses,
 including salaries and benefits, travel and stock-based compensation expense for employees engaged in research and development functions;

 costs related to compliance
 with regulatory requirements; and

 allocated facilities-related
 costs, depreciation and other expenses, which include rent and utilities.

 We
recognize external development costs as incurred. Any advance payments that we make for goods or services to be received in the future
for use in research and development activities are recorded as prepaid expenses. Such amounts are expensed as the related goods are delivered
or the related services are performed, or until it is no longer expected that the goods will be delivered or the services rendered. We
estimate and accrue for the value of goods and services received from CROs and other third parties each reporting period based on an
evaluation of the progress to completion of specific tasks using information provided to us by our service providers. This process involves
reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf
and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or
otherwise notified of actual costs.

 We
do not track our research and development expenses on a program-by-program basis. Our direct external research and development expenses
consist primarily of external costs, such as fees paid to outside consultants, CROs, CMOs and research laboratories in connection with
our preclinical development, process development, manufacturing and clinical development activities. We do not allocate employee costs,
costs associated with our discovery efforts, laboratory supplies, and facilities, including depreciation or other indirect costs, to
specific programs because these costs are deployed across multiple programs and, as such, are not separately classified. We use internal
resources primarily to conduct our research and development as well as for managing our preclinical development, process development,
manufacturing and clinical development activities. These employees work across multiple programs and, therefore, we do not track our
costs by program and cannot state precisely the total costs incurred for each of our clinical and preclinical programs on a project-by-project
basis.

and development activities are central to our business model. Product candidates in later stages of clinical development generally have
higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage
clinical trials. As a result, we expect that our research and development expenses will remain elevated as we continue our existing,
and commences additional, planned clinical trials for PF614, PF614-MPAR and nafamostat, as well as conduct other preclinical and
clinical development, including submitting regulatory filings for our other product candidates, subject to our ability to obtain financing.
We also expect our related personnel costs to increase and, as a result, we expect our research and development expenses, including costs
associated with stock-based compensation, to remain elevated. In addition, we may incur additional expenses related to milestone and
royalty payments payable to third parties with whom we may enter into license, acquisition and option agreements to acquire the rights
to future product candidates.

 At
this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical
and clinical development of any of our product candidates or when, if ever, material net cash inflows may commence from any of our product
candidates. The successful development and commercialization of our product candidates are highly uncertain. This uncertainty is due
to the numerous risks and uncertainties associated with product development and commercialization, including the uncertainty of the following:

 the scope, progress, outcome
 and costs of our preclinical development activities, clinical trials and other research and development activities;

 establishing an appropriate
 safety and efficacy profile with investigational new drug (" IND ") enabling studies;

 successful patient enrollment
 in and the initiation and completion of clinical trials;

 the timing, receipt and
 terms of any marketing approvals from applicable regulatory authorities including the FDA and non-U.S. regulators;

 the extent of any required
 post-marketing approval commitments to applicable regulatory authorities;

 establishing clinical and
 commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that we or our third-party
 manufacturers are able to make product successfully;

 development and timely
 delivery of clinical-grade and commercial-grade drug formulations that can be used in our clinical trials and for commercial launch;

 obtaining, maintaining,
 defending and enforcing patent claims and other intellectual property rights;

 significant and changing
 government regulation;

 launching commercial sales
 of our product candidates, if and when approved, whether alone or in collaboration with others; and

 maintaining a continued
 acceptable safety profile of our product candidates following approval, if any, of our product candidates.

 Any
changes in the outcome of any of these variables with respect to the development of our product candidates in preclinical and clinical
development could mean a significant change in the costs and timing associated with the development of these product candidates. For
example, if the FDA or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical
trials or other testing beyond those that we currently expect or if we experience significant delays in enrollment in any of our planned
clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development
of that product candidate.

and Administrative Expenses

and administrative expenses consist primarily of employee-related expenses, including salaries and related benefits, travel and stock-based
compensation for personnel in executive, business development, finance, human resources, legal, information technology, and administrative
functions. General and administrative expenses also include direct and allocated facility-related costs as well as insurance costs and
professional fees for legal, patent, consulting, investor and public relations, accounting and audit services. We expense general and
administrative costs as incurred.

 We
anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support the continued
development of our product candidates, subject to our ability to obtain financing. We also anticipate that we will continue to incur
significant accounting, audit, legal, regulatory, compliance and director and officer insurance costs as well as investor and public
relations expenses as a public company. Additionally, if and when we believe a regulatory approval of a product candidate appears likely,
we anticipate an increase in payroll and other employee-related expenses as a result of our preparation for commercial operations, especially
as it relates to the sales and marketing of that product candidate.

 Other
Income (Expense)

 Loss
on issuance of convertible notes

 The
2022 Notes were accounted for under ASC 480 – Distinguishing Liabilities from Equity, due to share settlement features contained
within the notes. As a result, the 2022 Notes were recorded as liabilities at fair value upon initial recognition and at the balance
sheet date. We used a discounted cash flow model and a Monte Carlo simulation to estimate the fair value of the notes, both of which
rely on unobservable Level 3 inputs. The loss on issuance of convertible notes represents the difference between the gross proceeds received
and the calculated fair value on the issuance date of the notes.

 Issuance
costs for convertible notes

 The
issuance costs for convertible notes represent the original issue discount (expensed immediately due to the initial recognition at fair
value of the 2022 Notes noted above), and legal and accounting fees incurred in connection with the issuance of the 2022 Notes.

 Loss
on conversions and change in fair value of convertible notes

 When
conversions on the 2021 Notes occurred, we calculated the difference between the conversion price and the average of the high and low
stock price on the date of conversion. The resulting difference was either a loss if the conversion price was below the average of the
high and low stock price on the date of conversion or a gain if the conversion price was above the average of the high and low stock
price on the date of conversion.

 We
elected the fair value option to account for the 2021 Notes as we believe the fair value option provided users of the financial statements
with greater ability to estimate the outcome of future events as facts and circumstances change, particularly with respect to changes
in the fair value of the common stock underlying the conversion option. The 2022 Notes were accounted for under ASC 480 – Distinguishing
Liabilities from Equity, due to share settlement features contained within the notes. We used a discounted cash flow model and a
Monte Carlo simulation to estimate the fair value of the notes, both of which rely on unobservable Level 3 inputs. Changes in the fair
value of the notes are recognized through earnings for each reporting period.

 Issuance
of liability classified warrants

 The
warrants issued with the 2021 Notes and 2022 Notes are liability classified due to certain cash settlement features. We use a Black-Scholes
option pricing model to estimate the fair value of the warrants. This represents the immediate expense upon initial recognition of the
liability that is included in the statement of operations. The liability is remeasured each reporting period as described further below.

 Change
in fair value of liability classified warrants

 We
use a Black-Scholes option pricing model to estimate the fair value of the liability classified warrants. Changes in the fair value of
the warrants are recognized through earnings for each reporting period.

 Interest
Expense

 Interest
expense consists of interest accrued on our financed directors' and officers' insurance, and accumulated interest from
the 2023 Notes based on the stated interest rate. In addition, the 2023 Notes balance at December 31, 2023 reflects amortization of
the debt discount from the original issuance and a discount associated with the warrant issuances and amortization of the associated
debt issuance costs that are all recorded as interest expense. Interest expense related to the 2021 Notes and 2022 Notes was included in
the estimate of fair value of the convertible notes.

 Provision
for Income Taxes

 We
have not recorded any significant amounts related to income tax expense, we have not recognized any reserves related to uncertain tax
positions, nor have we recorded any income tax benefits for the majority of our net losses we have incurred to date or for our research
and development tax credits.

 We
account for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included in the financial statements or our tax returns. Deferred tax
assets and liabilities are determined based on difference between the financial statement carrying amounts and tax bases of existing
assets and liabilities and for loss and credit carryforwards, which are measured using the enacted tax rates and laws in effect in the
years in which the differences are expected to reverse. The realization of our deferred tax assets is dependent upon the generation of
future taxable income, the amount and timing of which are uncertain. Valuation allowances are provided, if, based upon the weight of
available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2023
and 2022, we continue to maintain a full valuation allowance against all of our deferred tax assets based on our evaluation of all available
evidence.

 Beginning
in 2022, the Tax Cuts and Jobs Act, or the Tax Act, eliminated the option to deduct research and development expenditures currently and
requires taxpayers to capitalize and amortize them over five or fifteen years pursuant to Internal Revenue Code Section 174. This has
not impacted our effective tax rate or our cash tax payable in 2023; however, if the requirement to capitalize Section 174 expenditures
is not modified, it may also impact our effective tax rate and our cash tax liability in future years.

 We
file income tax returns in the United States federal tax jurisdiction and state jurisdictions and may become subject to income tax audit
and adjustments by related tax authorities. Our tax return period for United States federal income taxes for the tax years since 2020
remain open to examination under the statute of limitations by the Internal Revenue Service and state jurisdictions are open for examination
from 2019. We record reserves for potential tax payments to various tax authorities related to uncertain tax positions, if any. The nature
of uncertain tax positions is subject to significant judgment by management and subject to change, which may be substantial. These reserves
are based on a determination of whether and how much a tax benefit taken by us in our tax filings or whether our position is more likely
than not to be realized following the resolution of any potential contingencies related to the tax benefit. We develop our assessment
of uncertain tax positions, and the associated cumulative probabilities, using internal expertise and assistance from third-party experts.
As additional information becomes available, estimates are revised and refined. Differences between estimates and final settlement may
occur resulting in additional tax expense. Potential interest and penalties associated with such uncertain tax positions is recorded
as a component of our provision for income taxes. To date, no amounts are being presented as an uncertain tax position.

 The
following table summarizes our results of operations for the years ended December 31, 2023 and 2022:

 Results
of Operations

 Comparison
of the Years ended December 31, 2023 and 2022

 2023

 2022

 Change

 Federal grants

 $
 2,230,520

 $
 2,523,383

 $
 (292,863
)

 Operating expenses:

 Research and development

 $
 7,587,473

 $
 19,835,875

 $
 (12,248,402
)

 General and administrative

 5,361,234

 6,909,603

 (1,548,369
)

 Total operating expenses

 12,948,707

 26,745,478

 (13,796,771
)

 Loss from operations

 (10,718,187
)

 (24,222,095
)

 13,503,908

 Other income (expense):

 Loss on issuance of convertible notes

 -

 (3,609,944
)

 3,609,944

 Issuance costs for convertible notes

 -

 (1,137,740
)

 1,137,740

 Loss on conversions and change in fair value of convertible notes

 146,479

 1,792,154

 (1,645,675
)

 Issuance of liability classified warrants

 -

 (3,737,371
)

 3,737,371

 Change in fair value of liability classified warrants

 283,958

 6,730,613

 (6,446,655
)

 Interest expense

 (353,945
)

 (109,525
)

 (244,420
)

 Other income and expense, net

 15,420

 86,223

 (70,803
)

 Total other income/(expenses), net

 91,912

 14,410

 77,502

 $
 (10,626,275
)

 $
 (24,207,685
)

 $
 13,581,410

 Net loss attributable to noncontrolling interests

 (13,201
)

 (35,393
)

 22,192

 12,937

 913,204

 (900,267
)

 Net loss attributable to common stockholders

 $
 (10,626,011
)

 $
 (25,085,496
)

 $
 14,459,485

 Federal
Grants

 Revenue
from federal grants totaled $2.2 million for the year ended December 31, 2023, compared to $2.5 million for the year ended December 31,
2022. Revenue decreased $0.3 million during the year ended December 31, 2023, due to the timing of research activities eligible for funding
under the grants.

and Development Expenses

and development expenses were $7.6 million for the year ended December 31, 2023, compared to $19.8 million for the year ended December
31, 2022. The decrease was primarily the result of changes in timing of external research and development costs related to the clinical
programs for PF614 and PF614-MPAR. We do not currently track expenses on a program-by-program basis. We expect future research and development
expenses to approximate current levels but may need to be adjusted based on our ability to raise capital sufficient to fund these expenses.

and Administrative Expenses

and administrative expenses were $5.4 million for the year ended December 31, 2023, compared to $6.9 million for the year ended December
31, 2022. The decrease was primarily a result of reduced stock-based compensation, reduced liability insurance, legal, and consulting
fees and no employee bonus expenses in the 2023 period. We expect future general and administrative expenses to approximate current levels.

 Other
Income and Expense

 Other
income and expenses, net, were $91,912 for the year ended December 31, 2023, compared to $14,410 for the year ended December 31,
2022. The decrease was primarily the result of interest expense in the current year offset by changes in the fair value of certain
financial instruments. The activity from 2022 included the accounting considerations of the conversions of the 2021 Notes as well as
the issuance of the 2022 Notes. There was no corresponding conversions activity in the 2023 period associated with the 2022 Notes
due to the accounting under ASC 480. Interest expense incurred in 2023 is primarily driven by the amortization of debt discount and
debt issuance costs related to the 2023 Notes.

 Liquidity
and Capital Resources

 Sources
of Liquidity and Capital

 As
of December 31, 2023, we had $1.1 million of cash and cash equivalents. Since inception, we have generated limited revenues and have
incurred significant operating losses and negative cash flows from our operations, and we anticipate that we will continue to incur losses
for at least the foreseeable future. We have not yet commercialized any of our product candidates and we do not expect to generate revenue
from sales of any product candidates for several years, if at all.

 We
have funded our operations to date primarily with proceeds from the sale of common equity, funding under federal research grants and
borrowings under convertible promissory notes. To fund future operations, we will need to raise additional capital. The amount and timing
of future funding requirements will depend on many factors, including the timing and results of our ongoing research and development
efforts and related general and administrative support. We anticipate that we will fund our operations through public or private equity
or debt financings or other sources, such as potential collaboration agreements. We cannot make assurances that anticipated additional
financing will be available to us on favorable terms, if at all.

 Remaining
funding under approved federal research grants totals $2.2 million and is expected to be utilized by August 2024. Pursuant to the terms
and conditions of the two grants, we are required to submit progress reports to NIDA on an annual basis and a final research performance
progress report within 120 days of the performance period end date. Additionally, the grants limit the use of funds to activities that
are clearly severable and independent from activities that involve human subjects until the receipt by NIDA of (i) Institutional Review
Board (" IRB ") approval, (ii) federal-wide assurance from the Office for Human Research Protections, (iii) a Data and
Safety Monitoring Plan, (iv) certification that all key personnel have completed education on the protection of human subjects and (v)
a Clinical Trials Dissemination Plan. We must also comply with the data sharing policies of NIDA and the NIH Public Access Policy, that
require submission of final peer-reviewed journal manuscripts that arise from the use of grants to PubMed Central immediately upon acceptance
for publication.

 Neither
grant must be repaid. To receive the remaining funding for each respective study covered by a grant, we must meet certain milestones.
We have met the required milestones under the MPAR Grant. The remaining milestone under the OUD Grant is identification of a R-methadone-TAAP
clinical candidate that meet the specified criteria.

 Inventions
arising from the research projects funded with the grants are required to be reported to NIDA, per the Bayh-Dole Act (the Patent and
Trademark Law Amendments Act), that permits us to retain ownership of the inventions, while also giving NIDA the license to practice
the subject invention. In turn, we are expected to file for patent protection and to ensure commercialization upon licensing for the
benefit of public health.

to the GEM Agreement, we are entitled to draw down up to $60.0 million of gross proceeds (" Aggregate Limit ") from
GEM Global in exchange for shares of our common stock, subject to meeting the terms and conditions of the GEM Agreement. This share subscription
facility is available for a period of 36 months from the closing date of the Merger (July 2024). A draw down is subject to limitations
on the amount that is drawn under the facility and must comply with certain conditions precedent including the listing of our shares
on a principal market (which includes Nasdaq), having the necessary number of shares that are issuable pursuant to the draw down registered
under an effective registration statement, and other notice and timing requirements. Upon our valid exercise of a draw down, pursuant
to delivery of a notice and in accordance with other conditions, GEM Global is required to pay, in cash, a per-share amount equal to
90% of the average closing bid price of the shares of our common stock recorded by Nasdaq during the 30 consecutive trading days commencing
on the first trading day that is designated on the draw down notice. In no event may our draw down requests exceed 400% (" Draw
Down Limit ") of the average daily trading volume for the 30 trading days immediately preceding the date we deliver the draw
down notice. We may not be able to utilize the facility before it expires. Our ability to utilize this share subscription facility is
restricted while financing commitments to which we are subject remain outstanding.

 Upon
the public listing of the Company's shares following the closing of the Merger, GEM Global became entitled to a commitment fee
in the form of cash or freely tradeable shares of our common stock in an amount equal to 2% of the Aggregate Limit or $1.2 million to
be paid in two tranches. The commitment fee for the first tranche, which was equal to 67% of the commitment fee, or $800,000, was discharged
with 3,838 shares of common stock transferred from related parties in July 2022. The commitment fee for the second tranche, which was
equal to the remaining 33% of the commitment fee, or $400,000 was paid in January 2023 through the issuance of 44,444 shares of registered
common stock.

 Additionally,
we issued a warrant with a 36-month term at the closing of the Merger granting GEM Global the right to purchase 4,608 shares of our common
stock (an amount equal to 4% of the total number of our common stock outstanding as of the closing date of the Merger (subject to adjustments
described below), calculated on a fully diluted basis), at a strike price per share equal to $2,402.40, which was the closing bid price
for such common stock on the first day of trading on Nasdaq. The exercise price was reduced to $1.5675 per share as of December 31, 2023
because of a pricing adjustment per the GEM Agreement which is reflected on the consolidated statement of operations as a deemed dividend.
The warrant can be exercised on a cashless basis in part or in whole at any time during the term. Any failure by us to timely transfer
the shares under the warrant pursuant to GEM Global's exercise will entitle GEM Global to compensation in addition to other remedies.
The number of shares underlying the warrant as well as the strike price is subject to adjustments for recapitalizations, reorganizations,
change of control, stock split, stock dividend, reverse stock splits, and issuances of additional common shares at a price per share
less than the exercise price.

to the terms of the GEM Agreement, we are required to indemnify GEM Global for any losses it incurs as a result of a breach by us or
of our representations and warranties and covenants under the GEM Agreement or for any misstatement or omission of a material fact in
a registration statement registering those shares pursuant to the GEM Agreement. Also, GEM Global is entitled to be reimbursed for legal
or other costs or expenses reasonably incurred in investigating, preparing, or defending against any such loss.

 Going
Concern

 We
have generated limited revenues and have incurred significant operating losses since our inception and, as of December 31, 2023, we have
an accumulated deficit of $121.6 million. We expect to continue to incur significant expenses and operating losses for the foreseeable
future. Without capital raised through financing transactions, existing cash resources are sufficient to allow us to fund current planned
operations into the third quarter of 2024, which raises substantial doubt about the Company's ability to continue as a going concern.

 For
additional information on risks associated with our substantial capital requirements, please read the section titled " Risk Factors "
included elsewhere in this Annual Report on Form 10-K.

 Cash
Flows for the years ended December 31, 2023 and 2022

 The
following table summarizes our cash flows for each of the periods presented:

 2023

 2022

 Net cash used in operating activities

 $
 (10,779,982
)

 $
 (17,887,439

)

 Net cash provided by investing activities

 -

 4,500

 Net cash provided by financing activities

 8,755,884

 8,765,905

 Net decrease in cash and cash equivalents

 $
 (2,024,098
)

 $
 (9,117,034
)

 Operating
Activities

 During
the years ended December 31, 2023 and 2022, we used cash in operating activities of $10.8 million and $17.9 million, respectively. The
decrease primarily resulted from the change in net loss between 2022 and 2023 and the timing of vendor invoicing and payments primarily
associated with research and development activities.

 Financing
Activities

 During
the years ended December 31, 2023 and 2022, net cash provided by financing activities was $8.7 million and $8.8 million, respectively.
For 2023, net cash proceeds from 2023 February and 2023 May offerings of $9.1 million, net of transaction costs of $0.4 million, net
cash proceeds from 2023 Notes of $1.6 million, and the repayment of financed insurance premiums of $0.5 million and cash payment of 2022
Notes of $1.0 million. In 2022, net cash consisted primarily of net proceeds from the issuance of the 2022 Notes and the net proceeds
of the issuance of shares and related warrants in connection with the underwriting agreement completed in December of 2022.

 Funding
Requirements

 Our
primary use of cash is to fund operating expenses, primarily related to our research and development activities. Cash used to fund operating
expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued
expenses and prepaid expenses.

 We
expect our expenses, excluding non-cash expenses to recognize the fair value of warrants and convertible notes, to remain elevated in
connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials of our product candidates.
In addition, upon the completion of the Merger, we have incurred, and will continue to incur, additional costs associated with operating
as a public company, including significant legal, accounting, insurance, investor relations and other expenses. The timing and amount
of our operating expenditures will depend largely on our ability to:

 advance preclinical development
 of our early-stage programs and clinical trials of our product candidates;

 manufacture, or have manufactured
 on our behalf, our preclinical and clinical drug material and develop processes for late state and commercial manufacturing;

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

 establish a sales, marketing,
 medical affairs and distribution infrastructure to commercialize any product candidates for which we may obtain marketing approval
 and intend to commercialize on our own;

 hire additional clinical,
 quality control and scientific personnel;

 expand our operational,
 financial and management systems and increase personnel, including personnel to support our clinical development, manufacturing and
 commercialization efforts and our operations as a public company;

 obtain, maintain, expand
 and protect our intellectual property portfolio;

 manage the costs of preparing,
 filing and prosecuting patent applications, maintaining and protecting our intellectual property rights, including enforcing and
 defending intellectual property related claims; and

 manage the costs of operating
 as a public company.

 Commitments

 Our
commitments as of December 31, 2023 included an estimated $17.9 million related to open purchase orders and contractual obligations that
occurred in the ordinary course of business, including commitments with contract research organizations for multi-year pre-clinical and
clinical research studies. Although open purchase orders are considered enforceable and legally binding, the terms generally allow us
the option to cancel, reschedule, and adjust requirements based on our business needs prior to the delivery of goods or the performance
of services.

 Working
Capital

 Because
of the numerous risks and uncertainties associated with research, development and commercialization of biologic product candidates, we
are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on and could
increase significantly as a result of many factors, including:

 the scope, progress, results
 and costs of researching and developing our product candidates, and conducting preclinical and clinical trials;

 the costs, timing and outcome
 of regulatory review of our product candidates;

 the costs, timing and ability
 to manufacture our product candidates to supply our clinical and preclinical development efforts and our clinical trials;

 the costs of future activities,
 including product sales, medical affairs, marketing, manufacturing and distribution, for any of our product candidates for which
 we receive marketing approval;

 the costs of manufacturing
 commercial-grade product and necessary inventory to support commercial launch;

 the ability to receive
 additional non-dilutive funding, including grants from organizations and foundations;

 the revenue, if any, received
 from commercial sale of our products, should any of our product candidates receive marketing approval;

 the costs of preparing,
 filing and prosecuting patent applications, obtaining, maintaining, expanding and enforcing our intellectual property rights and
 defending intellectual property-related claims;

 our ability to establish
 and maintain collaborations on favorable terms, if at all; and

 the extent to which we
 acquire or in-license other product candidates and technologies.

 Critical
Accounting Policies and Significant Judgments and Estimates

 Our
consolidated financial statements are prepared in accordance with GAAP. The preparation of our consolidated financial statements and
related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses.
We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under
the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ
from these estimates under different assumptions or conditions.

 While
our significant accounting policies are described in more detail in Note 3 to our audited consolidated financial statements, we believe
that the following accounting policy is the most critical to the judgments and estimates used in the preparation of our consolidated
financial statements.

 Accrued
Research and Development Expenses

 As
part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development
expenses. This process involves reviewing open contracts and purchase orders, communicating with our applicable personnel to identify
services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the
service when it has not yet been invoiced or otherwise notified of actual costs. Many of our service providers invoice us in arrears
for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advance payments.
We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances
known to us at that time. We periodically confirm the accuracy of the estimates with the service providers and adjust if necessary. Examples
of estimated accrued research and development expenses include fees paid to:

 vendors, including research
 laboratories, in connection with preclinical development activities;

 CROs and investigative
 sites in connection with preclinical studies and clinical trials; and

 CMOs in connection with
 drug substance and drug product formulation of preclinical studies and clinical trial materials.

 We
base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant
to quotes and contracts with multiple research institutions and CROs that supply, conduct and manage preclinical studies and clinical
trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result
in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and
result in a prepayment of the expense. Payments under some of these contracts depend on factors such as the successful enrollment of
patients and the completion of clinical trial milestones. In accruing service fees, we estimate the time period over which services will
be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level
of effort varies from the estimate, we adjust the accrual or the prepaid expense accordingly. Although we do not expect our estimates
to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative
to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any
period.

 Off-Balance
Sheet Arrangements

 We
do not have during the periods presented, and do not currently have, any off-balance sheet arrangements, as defined in the rules and
regulations of the SEC.

 Recently
Issued Accounting Pronouncements

 A
description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations
is disclosed in Note 3 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

 Smaller
Reporting Company Status

 We
are a "smaller reporting company" as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage
of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We
will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held
by non-affiliates exceeds $250 million as of the prior June 30, or (ii) our annual revenues exceeded $100 million during such completed
fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30.

 Item
7A. Quantitative and Qualitative Disclosure About Market Risk

 We
are exposed to market risk in the ordinary course of our business. These risks primarily relate to changes in interest rates and inflation.

 Interest
Rate Risk

 Our
cash and cash equivalents as of December 31, 2023, consisted of cash and a money market fund account. Because of the short-term nature
of our money market fund, a sudden change in market interest rates would not be expected to have a material impact on our financial position
or results of operations.

 Inflation
Risk

 We
do not believe that inflation and changing prices had a significant impact on our results of operations for any periods presented herein.

 Item
8. Financial Statements and Supplementary Data

 The
financial statements required by this Item are included in Item 15 of this report and are presented beginning on page F-1.

 Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 None.

 Item
9A. Controls and Procedures

 Evaluation
of Disclosure Controls and Procedures

 Our
disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit
under the Securities Exchange Act of 1934 as amended (the "Exchange Act") is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness
of our disclosure controls and procedures (as defined in Exchange Act Rule 13a–15(e) and 15d-15(e)) as of December 31, 2023. Based
on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and
procedures were effective as of December 31, 2023.

 Management's
Annual Report on Internal Control over Financial Reporting

 Our
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.

 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.

 As
of December 31, 2023, our management assessed the effectiveness of our internal control over financial reporting using the criteria set
forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013)
(the "2013 Framework"). In adopting the 2013 Framework, management assessed the applicability of the principles within each
component of internal control and determined whether 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, 2023, our internal control over financial reporting was effective
based on these criteria.

 This
Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal
control over financial reporting. As 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

 Management
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.

 Item
9B. Other Information

 Not

 Item
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

 Not

 PART
III

 Item
10. Executive Officers and Directors

 The
following persons are our executive officers and directors:

 Name

 Age*

 Position

 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

 Directors**

 Andrew Benton, J.D.

 Class I Director

 William Chang

 Class I Director

 Bob Gower, Ph. D.

 Class II Director and Chairman of the Board

 Adam S. Levin, M.D.

 Class III Director

 Steve R. Martin

 Class III Director

 Lee Rauch

 Class I Director

 Curtis Rosebraugh, M.D., MPH

 Class II Director

 *Ages
presented as of December 31, 2023

 **
Information about Dr. Kirkpatrick is set forth under "Executive Officers"

 Information
about our Executive Officers and Directors

 Executive
Officers

 Lynn
Kirkpatrick, Ph. D. has served as our Chief Executive Officer since January 2009. Dr. 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,
Corp. (" 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.,
and Dr. 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. Dr. 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.

 Geoffrey
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. He then
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.
Mr. 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.
Mr. Birkett joined us in 2018 and is focused on building a world class commercial team. Mr. Birkett attended Henley Business College
in London and INSEAD Business School in France where he studied general management and a global leadership.

 David
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. In
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. Mr. 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. Mr. 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.

 Jeffrey
Millard, Ph. D. has served as our Chief Operating Officer since January 2019. Dr. 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. Dr. Millard has been directly responsible
for research and development activities and writing of more than seven IND submissions and Investigational Medicinal Product Dossiers,
or IMPDs. 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.
Dr. Millard received a Bachelor of Arts from Rice University and a Ph. D. in Pharmaceutical Sciences from the University of Arizona.

 Linda
Pestano, Ph. D. joined Ensysce in October 2021, as Chief Development Officer. Dr. 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. Dr. Pestano's expertise spans lead development,
pre-clinical and translational studies, and interacting with multiple regulatory agencies. Dr. 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.

 William
K. 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. Dr. Schmidt received a Bachelor of Arts degree from the University of California Berkeley and his Ph. D. University of
California-San Francisco.

 Directors

 Andrew
Benton, J.D. has served as a member of our Board since December 2, 2019. Mr. Benton was the President, Chief Executive Officer
and Trustee of Pepperdine University from June 2000 to July 2019. Mr. 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. Mr. 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. Mr. Benton
holds an undergraduate degree in American studies from Oklahoma Christian University and a J.D. from Oklahoma University. We believe
that Mr. Benton's experience governing academic and other institutions qualifies him to serve on our Board.

 William
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. Mr. Chang is an investor in the San Francisco Giants of Major League Baseball. Mr. Chang was the former Chairman
of U.S. Rugby Football Union. He also served on the Board of the Asia Foundation and San Francisco Port and Social Services Commissions.
Mr. 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.

 Bob
Gower, Ph. D. has served as our Chairman since 2008. Dr. 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.
Dr. 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. Dr.
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. Dr. 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
our Board.

 Adam
S. 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.
Dr. Levin holds the Virginia M. Percy and William Algernon Percy Chair in Orthopaedic Surgery at Johns Hopkins University. He serves
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. From 2010
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. Dr. 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. Dr. Levin served as a subject-matter consultant
to our predecessor, LACQ, during their initial review of our preclinical and Phase I clinical trial results. Dr. Levin holds a B.S. in
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
Technology. 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.

 Steve
R. Martin has served as a member of our Board since August 2020. Mr. 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,
Mr. 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. From
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. Mr. 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. Mr. 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.

 Lee
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. Ms. 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.

 Curtis
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. Dr. 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. Dr. 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. Rosebraugh's
regulatory experience in the biopharmaceutical industry qualifies him to serve on our Board.

 Role
of Board in Risk Oversight

 The
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.

 Composition
of the Board

 Our
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.

 Board
Committees

 The
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.

 Our
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.

 Audit
Committee

 We
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.

 The
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.

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

Committee

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

 The
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
the SEC.

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

 Nominating
and Corporate Governance Committee

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

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

 Delinquent
Section 16(a) Reports

 None
to report.

 Code
of Business Conduct

 We
adopted a code of business conduct that applies to all our directors, officers and employees, including our principal executive officer,
principal financial officer and principal accounting officer, which is available on our website. Our code of business conduct is a "code
of ethics," as defined in Item 406(b) of Regulation S-K. We will make any legally required disclosures regarding amendments to,
or waivers of, provisions of our code of ethics on our website.

 Item
11. Executive & Director Compensation

 This
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
 Officer; and

 Geoff Birkett, Chief Commercial
 Officer.

 This
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.

 Summary
Compensation Table

 The
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
 Position

 Year

 Salary
 ($)

 Bonus ($)

 Stock and Option
 Awards ($) (1)

 Non-Equity
 Incentive
 Plan
 Compensation ($)

 All Other
 Compensation ($) (2)

 Total ($)

 Dr. Lynn Kirkpatrick, PhD.
 Chief Executive Officer

 2023

 404,875

 -

 93,800

 -

 9,900

 508,575

 2022

 392,500

 -

 214,914

 -

 15,195

 622,609

 Dave Humphrey
 Chief Financial Officer

 2023

 338,250

 -

 93,800

 -

 9,900

 441,950

 2022

 328,333

 -

 438,562

 -

 13,722

 780,617

 Geoff Birkett
 Chief Commercial Officer

 2023

 312,625

 -

 70,350

 -

 9,379

 392,354

 2022

 304,167

 -

 53,664

 -

 9,125

 366,956

 (1)

 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.

 (2)

 Amounts shown represent
 401(k) matching contributions.

 Narrative
Disclosure to Summary Compensation Table

 Elements
of Compensation in 2023

 The
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

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

 Annual
Performance-Based Bonuses

 Each
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
for Dr. 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.

 Long-Term
Equity Incentives

 In
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. On January
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.

 Employment
Agreements with our NEOs

 Dr.
Lynn Kirkpatrick, Ph. D.

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

 Dr.
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.

 Dave
Humphrey

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

 Mr.
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
Mr. 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
control. Cause and good reason are as defined in Mr. Humphrey's offer letter.

 Geoff
Birkett

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

 Mr.
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
Mr. 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.

 At-Will,
Confidential Information and Assignment of Inventions Agreement

 In
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.

 Other
Benefits

 We
currently provide welfare benefits that are available to all of our employees, including our NEOs, including health, dental, vision and
group life insurance.

 Effective
January 1, 2022, we put into place the Ensysce Biosciences, Inc. 401(k) Plan" (the " 401(k) Plan "). The 401(k)
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
Code. 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.

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

 Outstanding
Equity Awards at Fiscal Year-End

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

 Option Awards

 Stock Awards

 Name

 Grant Date

 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 ($)

 Dr. Lynn Kirkpatrick, PhD.

 1/15/2016

 1,097

 765.60

 1/15/2026

 -

 -

 1/4/2017

 1,920

 439.20

 1/4/2027

 -

 -

 2/5/2018

 3,406

 403.20

 2/5/2028

 -

 -

 3/1/2019

 2,743

 621.60

 2/28/2029

 -

 -

 3/15/2019

 621.60

 3/14/2029

 -

 -

 2/17/2022

 336.00

 2/17/2032

 -

 -

 10/25/2023

 100,000

 1.18

 10/25/2033

 -

 -

 Dave Humphrey

 2/4/2022

 751.20

 2/4/2032

 -

 -

 2/17/2022

 336.00

 2/17/2032

 -

 -

 10/25/2023

 100,000

 1.18

 10/25/2033

 -

 -

 Geoff Birkett

 10/1/2018

 621.60

 9/30/2028

 -

 -

 3/1/2019

 1,371

 621.60

 2/28/2029

 -

 -

 2/17/2022

 336.00

 2/17/2032

 -

 -

 10/25/2023

 75,000

 1.18

 10/25/2033

 -

 -

 Pay
Versus Performance

 In August 2022, the SEC adopted additional disclosure
requirements regarding the relationship between a registrant's executive compensation and its financial performance. SEC rules in
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
SEC rules. 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; thus, no
adjustments are made for these items.

 Year

 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)

 2023

 $
 508,575

 $
 507,187

 $
 417,152

 $
 416,177

 $
 0.09

 ($
 10,626,011
)

 2022

 $
 622,609

 $
 152,787

 $
 573,787

 $
 372,469

 $
 0.80

 ($
 25,085,496
)

 (1)

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

 (2)

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

 Year

 Less: 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

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

 Total Adjustments

 2023

 $
 (93,800
)

 $
 -

 $
 (809
)

 $
 93,800

 $
 (579
)

 $
 -

 $
 (1,388
)

 2022

 $
 (214,914
)

 $
 1,574

 $
 -

 $
 -

 $
 -

 $
 (256,482
)

 $
 (469,822
)

 (3)

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

 (4)

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

 Year

 Less: 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

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

 Total Adjustments

 2023

 $
 (82,075
)

 $
 -

 $
 (362
)

 $
 82,075

 $
 (613
)

 $
 -

 $
 (975
)

 2022

 $
 (246,113
)

 $

 $
 -

 $
 43,798

 $
 -

 $
 -

 $
 (201,318
)

 (5)

 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)

 The
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.

 Name

 Fees Earned or Paid in Cash ($)

 Option Awards
 ($)

 Total
 ($)

 Bob Gower

 25,000

 22,600

 47,600

 William Chang

 7,500

 22,600

 30,100

 Andrew Benton

 7,500

 22,600

 30,100

 Steve Martin

 15,000

 17,920

 32,920

 Adam Levin

 10,000

 17,920

 27,920

 Lee Rauch

 11,250

 17,920

 29,170

 Curt Rosebraugh

 7,500

 17,920

 25,420

 In
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.

 Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 The
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.

 Beneficial
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.

 In
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.

 Percentage
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.

 Beneficial
Ownership Table

 Name and Address of Beneficial Owners

 Number of Shares

 Percentage

 Officers and Directors

 Dr. Lynn Kirkpatrick (1)

 111,235

 1.5
 %

 Geoff Birkett (2)

 76,565

 1.0
 %

 David Humphrey (3)

 101,294

 1.4
 %

 Linda Pestano (4)

 75,520

 1.0
 %

 Andrew Benton (5)

 20,444

 *

 William Chang (6)

 30,960

 *

 Bob Gower (7)

 379,262

 5.0
 %

 Adam Levin (8)

 20,145

 *

 Steve R. Martin (9)

 20,419

 *

 Lee Rauch (10)

 20,121

 *

 Curtis Rosebraugh (11)

 20,145

 *

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

 876,110

 10.9
 %

 Greater than 5% Holders

 Bob Gower (7)

 379,262

 5.0
 %

 *

 Indicates less than 1%.

 (1)

 Includes 109,644 shares
 subject to options.

 (2)

 (3)

 Consists of 101,086 shares
 subject to options.

 (4)

 (5)

 Consists of 419 shares
 subject to options and 20,025 shares owned directly.

 (6)

 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.

 (7)

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

 (8)

 (9)

 (10)

 (11)

 Item
13. Certain Relationships and Related Transactions and Director Independence

 Other
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.

 EBIR

 We
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%. Dr. Kirkpatrick is also Chief Executive Officer of EBIR. There is no revenue sharing agreement between us
and EBIR.

 Convertible
Notes

 In
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.

 Employment
Relationship

 Jeff
Millard is an executive officer of the Company. Mr. Millard's spouse is also employed by the Company.

 Related
Party Transaction Policy

 The
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.

 An
" 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).

 A
" 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.

 A
" 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.

 A
" 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.

 Under
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.

 Indemnity
 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.

Independence

 Nasdaq
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."

 Item
14. Principal Accountant Fees and Services

 On
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
10, 2023.

 The
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.

 2023

 2022

 Audit Fees

 $
 472,200

 $
 670,372

 Audit-Related Fees

 76,125

 -

 Tax Fees

 -

 -

 All
 Other Fees

 -

 -

 Total

 $
 548,325

 $
 670,372

 Audit
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
fees. Consist of fees incurred for professional services rendered for the compliance audit in accordance with the audit requirements of Title
2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards related to funding under federal government grants.

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

 All
other fees. There were no fees billed for professional services rendered for other compliance purposes for the fiscal years ended
December 31, 2023 and 2022.

 All
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.

 PART
IV

 Item
15. Exhibits and Financial Statement Schedules.

 Financial
Statements

 ENSYSCE
BIOSCIENCES, INC.

 CONSOLIDATED
FINANCIAL STATEMENTS

 Report of Independent Registered Public Accounting Firm (PCAOB No. 659)

 Consolidated Balance Sheets as of December 31, 2023 and 2022

 Consolidated Statements of Operations for the years ended December 31, 2023 and 2022

 Consolidated Statements of Changes in Stockholders' Deficit for the years ended December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

 Notes to the Consolidated Financial Statements

 to F-25

 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To
the Shareholders and the Board of Directors of

Biosciences Inc.

 Opinion
on the Financial Statements

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

 Going
Concern Uncertainty

 The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note
2 to the financial statements, the Company 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
2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 Basis
for Opinion

 These
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.

 We
conducted our audits in accordance with the standards of the PCAOB. 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. 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. Accordingly, we express no such opinion.

 Our
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.

 Critical
Audit Matters

 Critical
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.

 /s/
 Moss Adams LLP

 San
Diego, California

 March
14, 2024

 We
have served as the Company's auditor since 2023.

 F- 1

 Consolidated
Balance Sheets

 2023

 2022

 December 31,

 2023

 2022

 Assets

 Current assets:

 Cash and cash equivalents

 $
 1,123,604

 $
 3,147,702

 Unbilled receivable

 97,561

 276,821

 Right-of-use asset

 -

 27,165

 Prepaid expenses and other current assets

 1,067,703

 1,847,481

 Total current assets

 2,288,868

 5,299,169

 Property and equipment, net

 -

 -

 Other assets

 419,217

 585,883

 Total assets

 $
 2,708,085

 $
 5,885,052

 Liabilities and stockholders' deficit

 Current liabilities:

 Accounts payable

 $
 1,936,007

 $
 2,943,791

 Accrued expenses and other liabilities

 542,260

 2,226,494

 Lease liability

 -

 27,315

 Notes payable and accrued interest

 854,697

 4,266,610

 Total current liabilities

 3,332,964

 9,464,210

 Long-term liabilities:

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

 -

 140,148

 Other long-term liabilities

 310,346

 Total long-term liabilities

 450,494

 Total liabilities

 $
 3,359,352

 $
 9,914,704

 Commitments and contingencies (Note 6)

 -

 -

 Stockholders' deficit

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

 -

 -

 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; 3,146,076 and 534,490 shares outstanding at December 31, 2023 and December 31, 2022, respectively

 Additional paid-in capital

 121,233,901

 107,216,566

 Accumulated deficit

 ( 121,557,074
)

 ( 110,931,063
)

 Total Ensysce Biosciences, Inc. stockholders' deficit

 ( 322,858
)

 ( 3,714,444
)

 Noncontrolling interests in stockholders' deficit

 ( 328,409
)

 ( 315,208
)

 Total stockholders' deficit

 ( 651,267
)

 ( 4,029,652
)

 Total liabilities and stockholders' deficit

 $
 2,708,085

 $
 5,885,052

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

 F- 2

 Consolidated
Statements of Operations

 2023

 2022

 2023

 2022

 Federal grants

 $
 2,230,520

 $
 2,523,383

 Operating expenses:

 Research and development

 7,587,473

 19,835,875

 General and administrative

 5,361,234

 6,909,603

 Total operating expenses

 12,948,707

 26,745,478

 Loss from operations

 ( 10,718,187
)

 ( 24,222,095
)

 Other income (expense):

 Loss on issuance of convertible notes

 -

 ( 3,609,944
)

 Issuance costs for convertible notes

 -

 ( 1,137,740
)

 Loss on conversions and change in fair value of convertible notes

 146,479

 1,792,154

 Issuance of liability classified warrants

 -

 ( 3,737,371
)

 Change in fair value of liability classified warrants

 283,958

 6,730,613

 Interest expense, net

 ( 353,945
)

 ( 109,525
)

 Other income and expense, net

 15,420

 86,223

 Total other income (expense), net

 91,912

 14,410

 $
 ( 10,626,275
)

 $
 ( 24,207,685
)

 Net loss attributable to noncontrolling interests

 ( 13,201
)

 ( 35,393
)

 12,937

 913,204

 Net loss attributable to common stockholders

 $
 ( 10,626,011
)

 $
 ( 25,085,496
)

 Net loss per basic and diluted share:

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

 $
 ( 4.69
)

 $
 ( 139.42
)

 Weighted average common shares outstanding, basic and diluted

 2,264,060

 179,925

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

 F- 3

 Consolidated
Statements of Changes in Stockholders' Deficit

 Number of Shares

 Amount

 Paid-In

Capital

 Accumulated

Deficit

 Noncontrolling

interests

 Total

 Stockholders' Equity (Deficit)

 Common Stock

 Additional

 Number of Shares

 Amount

 Paid-In

Capital

 Accumulated

Deficit

 Noncontrolling

interests

 Total

 Balance on December 31, 2021

 102,678

 $

 $
 77,967,314

 $
 ( 85,845,567
)

 $
 ( 279,815
)

 $
 ( 8,158,058
)

 Consultant compensation

 -

 54,250

 -

 -

 54,250

 Settlement of restricted stock units

 3,278

 -

 -

 -

 -

 -

 Conversion of convertible notes

 181,999

 21,485,886

 -

 -

 21,485,904

 Settlement of payable to related parties

 3,838

 191,617

 -

 -

 191,618

 Capital contribution from related parties

 -

 -

 608,382

 -

 -

 608,382

 Public offering, net

 241,666

 3,783,216

 -

 -

 3,783,240

 -

 -

 2,760,074

 -

 -

 2,760,074

 Transaction costs associated with public offering

 -

 -

 ( 547,377
)

 -

 -

 ( 547,377
)

 Reverse split fractional shares

 -

 -

 -

 -

 -

 -

 913,204

 ( 913,204
)

 -

 -

 -

 -

 ( 24,172,292
)

 ( 35,393
)

 ( 24,207,685
)

 Balance on December 31, 2022

 534,490

 $

 $
 107,216,566

 $
 ( 110,931,063
)

 $
 ( 315,208
)

 $
 ( 4,029,652
)

 Balance

 534,490

 $

 $
 107,216,566

 $
 ( 110,931,063
)

 $
 ( 315,208
)

 $
 ( 4,029,652
)

 Settlement of restricted stock units

 60,938

 ( 6
)

 -

 -

 -

 Settlement of commitment fee

 44,444

 399,996

 -

 400,000

 Conversion of convertible notes

 408,580

 3,056,851

 -

 -

 3,056,892

 Public offering, net

 1,381,619

 9,049,865

 -

 -

 9,050,004

 -

 -

 879,160

 -

 -

 879,160

 Issuance of warrants - debt discount

 -

 -

 1,066,483

 1,066,483

 Transaction costs associated with public offering

 -

 -

 ( 447,879
)

 -

 -

 ( 447,879
)

 Issuance of common stock upon exercise of warrants

 716,867

 ( 72
)

 -

 -

 Reverse split fractional shares

 ( 862
)

 -

 -

 -

 -

 -

 -

 -

 12,937

 ( 12,937
)

 -

 -

 -

 -

 -

 ( 10,613,074
)

 ( 13,201
)

 ( 10,626,275
)

 Balance on December 31, 2023

 3,146,076

 $

 $
 121,233,901

 $
 ( 121,557,074
)

 $
 ( 328,409
)

 $
 ( 651,267
)

 Balance

 3,146,076

 $

 $
 121,233,901

 $
 ( 121,557,074
)

 $
 ( 328,409
)

 $
 ( 651,267
)

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

 F- 4

 Consolidated
Statements of Cash Flow s

 2023

 2022

 2023

 2022

 Cash flows from operating activities:

 $
 ( 10,626,275
)

 $
 ( 24,207,685
)

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

 Gain on sale of asset

 -

 ( 4,500
)

 Accrued interest

 18,648

 60,488

 Amortization of original issue discount and debt issuance costs

 326,151

 -

 Loss on conversions and change in fair value of convertible notes

 ( 146,479
)

 ( 1,792,154
)

 Loss on issuance of convertible notes

 -

 3,609,944

 Issuance costs for convertible notes

 -

 946,085

 Issuance of liability classified warrants

 -

 3,737,371

 Change in fair value of liability classified warrants

 ( 283,958
)

 ( 6,730,613
)

 879,160

 1,071,843

 Lease cost

 ( 150
)

 ( 3
)

 Other income

 -

 ( 60,035
)

 Unbilled receivable

 179,260

 164,900

 Prepaid expenses and other assets

 1,392,181

 1,652,756

 Accounts payable

 ( 1,234,287
)

 2,642,686

 Accrued expenses and other liabilities

 ( 1,284,233
)

 1,021,478

 Net cash used in operating activities

 ( 10,779,982
)

 ( 17,887,439
)

 Cash flows from investing activities:

 Proceeds from sale of assets

 -

 4,500

 Net cash provided by investing activities

 -

 4,500

 Cash flows from financing activities:

 Proceeds from public offerings, net

 9,050,004

 3,783,240

 Proceeds from issuance of convertible notes, net

 1,605,635

 7,533,915

 Repayment of convertible notes

 ( 1,000,208
)

 ( 1,408,364
)

 Transaction costs from public offerings

 ( 447,879
)

 ( 547,377
)

 Repayment of financed insurance premiums

 ( 451,668
)

 ( 595,509
)

 Net cash provided by financing activities

 8,755,884

 8,765,905

 Decrease in cash and cash equivalents

 ( 2,024,098
)

 ( 9,117,034
)

 Cash and cash equivalents beginning of period

 3,147,702

 12,264,736

 Cash and cash equivalents end of period

 $
 1,123,604

 $
 3,147,702

 Supplemental cash flow information:

 Income tax payments

 $
 3,200

 $
 1,600

 Supplemental disclosure of non-cash investing and financing activities:

 $
 -

 $
 1,742,481

 Conversion of convertible notes into common stock

 $
 3,056,892

 $
 17,521,271

 Payable to related parties settled in shares

 $
 -

 $
 191,618

 Capital contribution from related parties

 $
 -

 $
 608,382

 Original debt discount from convertible notes

 $
 136,000

 $
 -

 Debt discount from warrants issuance

 $
 1,066,483

 $
 -

 Issuance cost from convertible notes

 $
 226,503

 $
 -

 Financed insurance premiums

 $
 445,737

 $
 399,949

 Settlement of commitment fee in shares

 $
 400,000

 $
 -

 $
 12,937

 $
 913,204

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

 F- 5

 Notes

 NOTE
1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

Biosciences, Inc. ("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.

 In
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. 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.

 The
Company currently operates in one business segment, which is pharmaceuticals. The Company is not organized by market and is managed and
operated as one business. A single management team reports to the chief operating decision maker, the Chief Executive Officer.

 F- 6

 Notes

 NOTE
2 - BASIS OF PRESENTATION

 The
consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America ("GAAP") and pursuant to the rules and regulations of the United States Securities Exchange Commission ("SEC").
The consolidated financial statements include the accounts of Ensysce Biosciences, Inc. and its subsidiaries. All intercompany balances
and transactions have been eliminated in the consolidation.

 Reverse
Stock Split

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

 Going
Concern

 The
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.

 The
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
financing. There can be no assurance the Company will be able to obtain such funds. These matters, among others, raise substantial doubt
about the Company's ability to continue as a going concern.

 While
the Company believes in the viability of its strategy to ultimately realize revenues and in its ability to raise additional funds, management
cannot be certain that additional funding will be available on acceptable terms, or at all. The Company's ability to continue as
a going concern is dependent upon its ability to obtain adequate financing and achieve profitable operations. As a result, these plans
do not alleviate substantial doubt about the Company's ability to continue as a going concern for a period of 12 months following
the date these consolidated financial statements were issued.

 The
consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as
a going concern.

 F- 7

 Notes

 NOTE
3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Use
of Estimates and Assumptions

 Preparation
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.

 Cash
and Cash Equivalents

 For
purposes of the consolidated balance sheets and consolidated statements of cash flows, the Company considers all highly liquid instruments
with maturity of three months or less at the time of issuance to be cash equivalents.

 Concentrations
of Credit Risk and Off-Balance Sheet Risk

 Cash
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 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.

 F- 8

 Notes

 Property
and Equipment

 Property
and equipment include office and laboratory equipment that is recorded at cost and depreciated using the straight-line method over the
estimated useful lives of five to six years. Property and equipment are fully depreciated as such there is no depreciation recognized
in the years ended December 31, 2023 and 2022.

 Fair
Value Measurement

 ASC
820, Fair Value Measurements, ("ASC 820") provides guidance on the development and disclosure of fair value measurements.
Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between willing market participants at the measurement date. As such, fair
value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset
or a liability.

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

 Level 1:

 Quoted prices in active
 markets for identical assets or liabilities.

 Level 2:

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

 Level 3:

 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.

 F- 9

 Notes

 The
Company evaluates assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at
which to classify them for each reporting period. This determination requires significant judgments to be made by the Company.

 As
of December 31, 2023 and 2022, 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.

 2021
Notes

 In
2021 the Company issued convertible notes with a face value of $ 15.9 million. The Company elected the fair value option to account for
the convertible notes as it believes the fair value option provides users of the financial statements with greater ability to estimate
the outcome of future events as facts and circumstances change, particularly with respect to changes in the fair value of the common
stock underlying the conversion option and redemption feature. The fair value estimate of the 2021 Notes was based on a discounted cash
flow model and a Monte Carlo simulation, which represent Level 3 measurements. Significant assumptions include the discount rate used
in the discounted cash flow model and the expected premium for conversion and expected volatility used in the Monte Carlo simulation.
Changes in the fair value of the notes are recognized in other income (expense) for each reporting period. Refer to Note 7 for details
of the terms and conditions of the 2021 Notes.

 2022
Notes

 In
July 2022 the Company issued convertible notes with a face value of $ 8.5 million. The 2022 Notes are accounted for under ASC 480 –
 Distinguishing Liabilities from Equity, due to share settlement features contained within the notes. As a result, the 2022 Notes
are recorded as liabilities at fair value at the balance sheet date with changes in the fair value of the notes recognized in other income
(expense) for each reporting period. The fair value estimate of the 2022 Notes was based on a discounted cash flow model and a Monte
Carlo simulation, which represent Level 3 measurements. Significant assumptions include the discount rate used in the discounted cash
flow model and the expected premium for conversion and expected volatility used in the Monte Carlo simulation. Refer to Note 7 for details
of the terms and conditions of the 2022 Notes.

 In
2021 the Company issued liability classified warrants in connection with the issuance of the 2021 Notes. In 2022 the Company issued liability
classified warrants in connection with the issuance of the 2022 Notes. The warrants were liability classified due to certain cash settlement
features and included in "Other long-term liabilities" on the consolidated balance sheets. The Company uses a Black Scholes
model to estimate the fair value of the warrants. Changes in the fair value of the warrants are recognized in other income (expense)
for each reporting period. Refer to Note 8 for additional details of the warrants.

 The
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.

OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE

 Total

 Level 1

 Level 2

 Level 3

 December 31, 2023

 Total

 Level 1

 Level 2

 Level 3

 Fair value of convertible note

 Liability classified warrants

 $

 $
 -

 $
 -

 $

 Total

 $

 $
 -

 $
 -

 $

 Total

 Level 1

 Level 2

 Level 3

 December 31, 2022

 Total

 Level 1

 Level 2

 Level 3

 Fair value of convertible note

 $
 4,203,579

 $
 -

 $
 -

 $
 4,203,579

 Liability classified warrants

 310,346

 -

 -

 310,346

 Total

 $
 4,513,925

 $
 -

 $
 -

 $
 4,513,925

 F- 10

 Notes

 The
following table summarizes the change in fair value of the Company's Level 3 assets and liabilities for the year ended December
31, 2023:

OF CHANGE IN FAIR VALUE OF COMPANY'S LEVEL 3

 For the year ended December 31, 2023

 Total

 Convertible note

 Liability classified warrants

 Fair value, December 31, 2022

 $
 4,513,925

 $
 4,203,579

 $
 310,346

 Conversions

 ( 3,056,892
)

 ( 3,056,892
)

 -

 Cash payments

 ( 415,351
)

 ( 415,351
)

 -

 Cash true up liability

 ( 584,857
)

 ( 584,857
)

 -

 Change in fair value

 ( 430,437
)

 ( 146,479
)

 ( 283,958
)

 Fair value, December 31, 2023

 $

 $
 -

 $

 Federal
Grants

 In
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 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 4 under the MPAR Grant from July 1, 2022 through June 30, 2023. This brings total funding under this grant to approximately $ 10.7
million.

 In
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 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

 The
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.

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

OF REVENUE RECOGNIZATION UNDER GRANTS

 2023

 2022

 2023

 2022

 MPAR

 $
 1,293,238

 $
 2,006,885

 TAAP/OUD

 937,282

 516,498

 Total

 $
 2,230,520

 $
 2,523,383

 Amounts
requested or eligible to be requested through the NIH payment management system, but for which cash has not been received, are presented
as an unbilled receivable on the Company's consolidated balance sheet. As all amounts are expected to be remitted timely, no valuation
allowances are recorded.

 F- 11

 Notes

and Development Costs

 The
Company's research and development expenses consist primarily of third-party research and development expenses, consulting expenses,
animal and clinical studies, and any allocable direct overhead, including facilities and depreciation costs, as well as salaries, payroll
taxes, and employee benefits for those individuals directly involved in ongoing research and development efforts. Research and development
expenses are charged to expense as incurred. Payments made prior to the receipt of goods or services to be used in research and development
are capitalized until the goods or services are received.

and Administrative Expenses

and administrative expenses consist primarily of personnel costs associated with the Company's executive, finance, human resources,
compliance, and other administrative personnel, as well as accounting and legal professional services fees.

 Stock-based

 The
Company expenses stock-based compensation over the requisite service period based on the estimated grant-date fair value of the awards
using a graded amortization approach. The Company accounts for forfeitures as they occur.

 The
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. Stock-based compensation costs are recorded in research and development and general and administrative
expenses in the consolidated statements of operations.

 From
time-to-time equity classified awards may be modified. On the modification date, the Company estimates the fair value of the awards immediately
before and immediately after modification. The incremental increase in fair value is recognized as expense immediately to the extent
the underlying equity awards are vested and on a straight-line basis over the same remaining amortization schedule as the unvested underlying
equity awards.

 Income
Taxes

 Income
taxes are recorded in accordance with ASC 740, Income Taxes ("ASC 740"), which provides for deferred taxes using an
asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of
events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined
based on the difference between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates
in effect for the year in which the differences are expected to reverse. Valuation allowances are provided if, based upon the weight
of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

 The
Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company
recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination
by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical
merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes any interest and
penalties accrued related to unrecognized tax benefits as income tax expense.

 F- 12

 Notes

 Earnings
per Share

 The
basic earnings per share is calculated by dividing the Company's net income or loss attributable to common stockholders by the
weighted average number of common shares outstanding during the period. The diluted earnings per share is calculated by dividing the
Company's net earnings attributable to common stockholders by the diluted weighted average number of common shares outstanding
during the period, determined using the treasury stock method and the average stock price during the period.

 The
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):

OF WEIGHTED AVERAGE SHARES OF ANTI-DILUTIVE SECURITIES

 2023

 2022

 2023

 2022

 Stock options

 131,767

 26,302

 RSUs

 -

 3,772

 3,798,114

 138,485

 Convertible Notes

 1,171,292

 73,326

 Total

 5,101,173

 241,885

 Anti-dilutive weighted average shares

 5,101,173

 241,885

 Recently
Adopted Accounting Pronouncements

 In
August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Topic 470) to address issues identified
as a result of the complexity with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The
FASB decided to reduce the number of accounting models for convertible debt instruments and convertible preferred stock, resulting in
fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Certain types of
convertible instruments will continue to be subject to separation models: (a) those with embedded conversion features that are not clearly
and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from
derivative accounting and (b) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in
capital. For convertible instruments, the contracts primarily affected are those with beneficial conversions or cash conversion features
as the accounting models for those specific features have been removed. For contracts in an entity's own equity, the contracts
primarily affected are freestanding instruments and embedded features that are accounted for as derivatives due to a failure to meet
the settlement conditions of the derivatives scope exceptions. The FASB simplified the settlement assessment by removing the requirements
to (a) consider whether the contract would be settled in registered shares, (b) to consider whether collateral is required to be posted,
and (c) assess shareholder rights. The FASB also decided to enhance information transparency by making targeted improvements to the disclosures
for convertible instruments and earnings-per-share guidance. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023
and early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. 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.

 Recently
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. ASU 2023-07
will be effective retrospectively for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15,
2024. Adoption of this ASU is currently being evaluated by the Company.

 In
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
taxes paid. 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.

 F- 13

 Notes

 NOTE
4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

 Prepaid
expenses and other current assets consisted of the following:

OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

 2023

 2022

 December 31,

 2023

 2022

 Prepaid research and development

 $
 535,474

 $
 1,300,473

 Prepaid insurance

 441,871

 445,583

 Other prepaid expenses

 72,358

 101,425

 Other current assets

 18,000

 -

 Total prepaid expenses and other current assets

 $
 1,067,703

 $
 1,847,481

 NOTE
5 – ACCRUED EXPENSES AND OTHER LIABILITIES

 Accrued
expenses and other liabilities consisted of the following:

OF ACCRUED EXPENSES AND OTHER LIABILITIES

 2023

 2022

 December 31,

 2023

 2022

 Accrued research and development

 $
 329,228

 $
 1,332,713

 Share subscription facility commitment fees

 -

 400,000

 Professional fees

 110,202

 421,530

 Other accrued liabilities

 102,830

 72,251

 Total accrued expenses and other liabilities

 $
 542,260

 $
 2,226,494

 F- 14

 Notes

 NOTE
6 - COMMITMENTS AND CONTINGENCIES

 Purchase
Commitments

 As
of December 31, 2023, the Company's commitments included an estimated $ 17.9 million related to the Company's open purchase
orders and contractual obligations that occurred in the ordinary course of business, including commitments with contract research organizations
for multi-year pre-clinical and clinical research studies. Although open purchase orders are considered enforceable and legally binding,
the terms generally allow the Company the option to cancel, reschedule, and adjust its requirements based on its business needs prior
to the delivery of goods or the performance of services.

 Litigation

 As
of December 31, 2023 and 2022, there were no pending legal proceedings against the Company that are expected to have a material adverse
effect on cash flows, financial condition or results of operations. From time to time, the Company could become involved in disputes
and various litigation matters that arise in the normal course of business. These may include disputes and lawsuits related to intellectual
property, licensing, contract law and employee relations matters. Periodically, the Company reviews the status of significant matters,
if any exist, and assesses its potential financial exposure. If the potential loss from any claim or legal claim is considered probable
and the amount can be estimated, the Company accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties,
and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the
time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation.

 Lease

 The
Company's current lease agreement (as amended) has a term that extends through October 31, 2024 with no option to renew. As of
December 31, 2023, the future lease payments totaled $ 31,249. The Company recognized total rent expense of $ 33,747 and $ 31,756 in the
year ended December 31, 2023, and 2022, respectively.

 Share
Subscription Facility

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

Subject to Shareholder Approval

 In
July 2021, the Company engaged two consultants to perform certain public and investor relations services in consideration for warrants
to purchase 2,083 shares of common stock with a five-year term and an exercise price of $ 1,507.20 each, 208 shares of common stock each,
and 833 restricted stock units each. The restricted stock units vested over one year with 50 % of the vesting contingent upon certain
market conditions. These equity awards were contingent upon shareholder approval of an amended and restated 2021 Omnibus Plan at a special
shareholder meeting in January 2022, at which time the warrants were replaced by non-qualified stock options with similar terms. As the
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 of $ 1,342,479 to reflect the estimated value of services received during the period. On February 14, 2022, the equity awards
were granted, and the Company reclassified the outstanding liability to stockholders' equity (See Note 9 for additional details
of the Company's stock-based compensation).

 F- 15

 Notes

 NOTE
7 - NOTES PAYABLE

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

OF DEBT

 Principal

 balance

 Accrued

 interest

 Unamortized Debt

 Discount & Issuance Costs

 Net debt

 balance

 2023 Notes

 $
 1,836,000

 $
 13,078

 $
 ( 1,197,200
)

 $
 651,878

 Financed insurance

 197,249

 5,570

 -

 202,819

 Total

 $
 2,033,249

 $
 18,648

 $
 ( 1,197,200
)

 $
 854,697

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

 Principal

 balance

 Accrued

 interest

 Fair value

 adjustment

 Net debt

 balance

 2022 Notes

 $
 3,905,264

 $
 10,544

 $
 287,771

 $
 4,203,579

 Financed insurance

 195,273

 7,906

 -

 203,179

 Total

 $
 4,100,537

 $
 18,450

 $
 287,771

 $
 4,406,758

 Interest
expense

 The
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.

 2021
Notes

 On
September 24, 2021, the Company entered into an agreement with institutional investors to issue the 2021 Notes. 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 second closing for $ 10.6 million (resulting in net proceeds of $ 9.4 million) which closed on November 5, 2021.

 The
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.

 The
Company elected to apply the fair value option to the measurement of the 2021 Notes. The total initial fair value of the debt at issuance
was $ 15.9 million. 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.

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

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

 2022
Notes

 On
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 per closing). Funds were
received for the first closing on July 1, 2022 and for the second closing on August 9, 2022.

 On
the issuance date, the Company assessed the probability of the potential settlement scenarios under the terms of the 2022 Notes and determined
that the predominant settlement feature of the 2022 Notes was the redemption feature into shares of the Company's common stock
issuable at the lower of the conversion price or 92 % of the average of the three lowest VWAPs in the 10 trading days immediately preceding
the redemption date. As the predominant settlement feature of the 2022 Notes is to settle a fixed monetary amount into a variable number
of shares, the 2022 Notes fell within the scope of ASC 480. Accordingly, the Company determined that the 2022 Notes should be recorded
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.

 F- 16

 The
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.

 The
December 31, 2022 fair value measurement includes the assumption of accrued interest and interest expense (at the stated rate plus an
 8 % cash settlement premium) and thus a separate amount is not reflected on the consolidated statements of operations. If presented separately,
the amount of interest expense after consideration of the conversions would be $ 0.2 million for the year ended December 31, 2022.

 In
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 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
per share.

 The
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 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 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
the cash Mandatory Redemption Amount (i.e., 108% of outstanding principal and unpaid interest). The Company triggered this provision
in connection with the public offering of securities in December of 2022, the resulting principal payments and interest were reflected
as a reduction to the outstanding balance of the 2022 Notes. The 8 % premium was paid in cash and was reflected as interest expense within
the consolidated statement of operations.

 The
2022 Notes were scheduled to 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. The outstanding
principal and interest balances were satisfied in March 2023.

 In
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.

 F- 17

 2023
Notes

 On
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.

 The
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 %
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 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.

 The
warrants have an exercise price of $ 1.5675, the same as the conversion price, and are exercisable for five years following the issuance
date. The warrants were equity classified as they are indexed to the Company's stock and only settleable in shares. The warrants
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.

 Financed
Insurance Premiums

 In
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
31, 2023. The Company paid a total of $ 9,402 in interest from inception through March 2023 when the note was paid in full. The Company
incurred $ 14,715 and $ 9,909 of interest expense associated with the financed insurance premiums for the years ended December 31, 2023
and 2022.

 NOTE
8 - STOCKHOLDERS' EQUITY

 In
June 2021, in connection with the Business Combination, the Company amended and restated its Certificate of Incorporation to authorize
 150,000,000 shares of common stock and 1,500,000 shares of preferred stock, both with par value equal to $ 0.0001. In September 2022,
the Company amended and restated its Certificate of Incorporation to authorize up to a total of 250,000,000 shares of common stock. As
of December 31, 2023 and 2022, there were no shares of preferred stock issued and outstanding.

 F- 18

 Notes

 2022
December Offering

 On
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.

 In
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.

 Each
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.

 2023
February Offering

 On
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. The warrants
issued in connection with the 2023 February Offering are described further below.

 2023
May Offering

 On
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.

 In
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.

 On
December 31, 2023, outstanding warrants to purchase shares of common stock are as follows:

OF OUTSTANDING WARRANT

 Reference

 Shares

 Underlying

 Outstanding

 Exercise Price

 Description

 Classification

 (a)

 63,659

 $ 2,400.00 - 2,760.00

 LACQ warrants

 (b)

 4,608

 $
 1.57

 Share subscription facility

 (c)

 4,518

 $
 3.64

 2021 Notes

 Liability

 (d)

 38,900

 $
 3.64

 2022 Notes

 Liability

 (e)

 549,993

 $ 3.64 - 16.80

 Public offering

 (f)

 318,451

 $ 8.58 - 12.60

 Public offering

 (g)

 3,727,813

 $ 3.64 - 4.86

 Public offering

 (h)

 3,767,091

 $
 1.57

 2023 Notes

 8,475,033

 a)

 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.

 b)

 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.

 F- 19

 Notes

 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.

 c)

 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. 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.

 d)

 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.

 e)

 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.

 (f)

 On 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.

 (g)

 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.

 (h)

 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 $ 1.5675 and expire on October 25, 2028 and November 28, 2028, respectively.

 The
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

 Stock price

 Exercise price

 Expected term (years)

 Volatility

 Risk free rate

 (a) LACQ warrants (grant date varies)

 3,477.60

 2,400.00 - 2,760.00

 3.00

 110.0
 %

 0.5
 %

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

 3,477.60

 2,402.40

 3.00

 110.0
 %

 0.5
 %

 (b) Share subscription facility (remeasurement date varies)

 1.13 - 1,029.60

 1.57 - 680.23

 0.68 - 2.58

 91.3 % - 117.2
 %

 1.04 % - 5.43
 %

 (c) Liability classified warrants (grant date 9/24/21)

 1,077.60

 1,831.20

 5.00

 94.1
 %

 1.0
 %

 (c) Liability classified warrants (grant date 11/5/21)

 540.00

 1,831.20

 5.00

 94.1
 %

 1.0
 %

 (c) Liability classified warrants (remeasured at 12/31/23)

 1.09

 3.64

 2.75 - 3.86

 124.7 % - 126.9
 %

 4.1
 %

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

 136.80

 170.04

 5.00

 98.9
 %

 2.9
 %

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

 127.20

 170.04

 5.00

 102.8
 %

 3.0
 %

 (d) Liability classified warrants (remeasured at 12/31/23)

 1.09

 3.64

 3.50 - 3.61

 116.2 % - 116.7
 %

 3.9
 %

 NOTE
9 - STOCK-BASED COMPENSATION

 In
connection with the Business Combination, the Company assumed the 2021 Omnibus Incentive Plan (the "2021 Omnibus Plan"),
which was approved by LACQ's board and subsequently LACQ's stockholders at a special stockholder meeting on June 28, 2021.
The 2021 Omnibus Plan provides for the conversion with existing terms of the 18,432 options outstanding under Former Ensysce stock plans
and reserves for issuance an additional 4,166 shares for future awards under the 2021 Omnibus Plan. No further awards may be made under
the Former Ensysce stock plans.

 In
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.

 The
Company recognized within general and administrative expense stock-based compensation expense of $ 627,406 and $ 919,056 for the year ended
December 31, 2023 and 2022, respectively. During the year ended December 31, 2023 and 2022, the company recognized within research and
development expense stock-based compensation expense of $ 251,754 and $ 152,787, respectively.

 F- 20

 Notes

 Option
Activity

 During
the year ended December 31, 2023, the Company granted stock options to purchase an aggregate of 555,000 shares of common stock to employees
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.

 The
following table summarizes the Company's stock option activity during the year ended December 31, 2023:

 SCHEDULE OF STOCK OPTION ACTIVITY

 Weighted average

 Options

 Exercise price

 Remaining contractual life

 Intrinsic value

 Outstanding at December 31, 2022

 26,334

 $
 707.63

 6.53

 $
 -

 Granted

 555,000

 1.17

 -

 -

 Exercised

 -

 -

 -

 -

 Expired / Forfeited

 ( 20
)

 770.40

 -

 -

 Outstanding at December 31, 2023

 33.15

 9.57

 -

 Exercisable at December 31, 2023

 579,733

 31.89

 9.57

 -

 Vested and expected to vest

 33.15

 9.57

 -

 Option
Valuation

 The
fair value of each stock option granted has been determined using the Black-Scholes option-pricing model. The material assumptions used
in the Black-Scholes model in estimating the fair value of the options granted for the periods presented were as follows:

 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)

 5.00

 5.19 -10.00

 Risk-free interest rate

 4.62 % - 4.89
 %

 1.52 % - 3.14
 %

 Expected dividend yield

 %

 %

 Expected 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.

 Expected term. 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.

 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 U.S. Treasury
 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.

 F- 21

 Notes

 The
weighted-average grant date fair value of options granted during the year ended December 31, 2023 was $ 0.93. The weighted-average grant
date fair value of options granted during the year ended December 31, 2022 was $ 230.89.

 As
of December 31, 2023, the Company had an aggregate of $ 119,848 of unrecognized share-based compensation cost, which is expected to be
recognized over the weighted average period of 1.21 years.

 Restricted
Stock Units

 The
following table summarizes the Company's restricted stock units activity during the year ended December 31, 2023:

 SCHEDULE OF RESTRICTED STOCK UNITS

 Restricted Stock Units

 Weighted average fair value

 Outstanding at December 31, 2022

 1,003

 $
 120.02

 Granted

 60,000

 1.13

 Released

 ( 61,001
)

 3.07

 Cancelled

 ( 2
)

 386.40

 Outstanding at December 31, 2023

 -

 $
 -

 The
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.

 Shares
Reserved for Future Issuance

 The
following shares of common stock are reserved for future issuance:

 SCHEDULE OF COMMON STOCK FUTURE ISSUANCE

 December 31, 2023

 Awards outstanding under the 2021 Omnibus Incentive Plan

 Awards available for future grant under 2021 Omnibus Incentive Plan

 2,112

 Warrants outstanding

 8,475,033

 Total shares of common stock reserved for future issuance

 9,058,459

 NOTE
10 - INCOME TAXES

 Loss
before provision for income taxes consisted of the following:

 SCHEDULE OF INCOME TAXES BENEFIT

 Year ending December 31,

 2023

 2022

 United States

 $
 ( 10,626,275
)

 $
 ( 24,207,685
)

 The
federal and state income tax provision (benefit), included in general and administrative expenses in the Consolidated Statement of Operations,
is summarized as follows:

 SCHEDULE OF FEDERAL AND STATE INCOME TAX PROVISION (BENEFIT)

 Year ending December 31,

 2023

 2022

 Current state provision

 $
 3,200

 $
 1,600

 F- 22

 Notes

 The
effective tax rate of the Company's provision (benefit) for income taxes differs from the federal statutory rate as follows:

 SCHEDULE OF FEDERAL INCOME TAX RATE RECONCILIATION

 2023

 2022

 Year ending December 31,

 2023

 2022

 Income (benefit) taxes at statutory rates

 ( 2,231,518
)

 ( 5,083,614
)

 State income tax, net of federal benefit

 ( 77,243
)

 ( 175,164
)

 Warrants and convertible debt

 ( 90,392
)

 ( 234,214
)

 Nondeductible executive compensation

 2,107

 -

 Stock based compensation

 580,823

 303,499

 Share subscription facility transaction costs

 -

 20,335

 Research and development tax credits

 ( 629,239
)

 ( 1,028,988
)

 Change in tax rates

 ( 3,848
)

 54,263

 Other

 77,162

 ( 78,227
)

 Change in valuation allowance

 2,372,148

 6,222,110

 Total

 -

 -

 Deferred
income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards.

 The
Company's deferred tax assets were comprised of the following:

 SCHEDULE OF DEFERRED TAX ASSETS

 2023

 2022

 As of December 31,

 2023

 2022

 Deferred tax assets:

 Net operating loss tax carryforwards

 $
 28,485,164

 $
 26,726,066

 Tax credits

 4,793,138

 4,164,187

 Capitalized research costs

 4,368,767

 3,729,483

 746,444

 1,173,158

 Other

 31,279

 265,677

 Gross deferred tax assets

 38,424,792

 36,058,571

 Valuation allowance

 ( 38,424,792
)

 ( 36,052,644
)

 Total deferred tax assets

 -

 5,927

 Deferred tax liabilities:

 Other

 -

 ( 5,927
)

 Total deferred tax liabilities

 -

 ( 5,927
)

 Net deferred tax assets

 $
 -

 $
 -

 As
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
utilized. The California NOL carryforwards will begin to expire in 2028, unless previously utilized.

 F- 23

 Notes

 In
addition, as of December 31, 2023, the Company had federal and state research and development (R&D) tax credit carryforwards of $ 5.1
million and $ 1.7 million, respectively. The federal tax credit carryforwards will begin to expire in 2024 unless previously utilized.
The California research tax credits do not expire.

to IRC Sections 382 and 383, annual use of the Company's NOL and R&D credit carryforwards may be limited in the event that
a cumulative change in ownership of more than 50% occurs within a three-year period. Although the Company has not completed 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. Accordingly,
the related NOL and R&D credit carryforwards have been removed from deferred tax assets accompanied by a corresponding reduction
of the valuation allowance. Due to the existence of the valuation allowance, limitations created by current and future ownership changes,
if any, related to the Company's operations in the United States will not impact its effective tax rate. Any additional ownership
changes may further limit the ability to use the NOL and R&D credit carryforwards.

 The
following table summarizes the activity related to the Company's unrecognized tax benefits:

 SUMMARY OF INCOME TAX CONTINGENCIES

 2023

 2022

 Year ending December 31,

 2023

 2022

 Balance at beginning of year

 $
 1,428,261

 $
 1,135,179

 Increases related to current year tax positions

 128,404

 341,108

 Increases related to prior year tax positions

 128,695

 -

 Decreases related to prior year tax positions

 -

 48,026

 Balance at end of year

 $
 1,685,360

 $
 1,428,261

 As
of December 31, 2023 and 2022, the Company had unrecognized tax benefits of $ 1.7 million and $ 1.4 million, respectively. Due to the existence
of the valuation allowance, none of the unrecognized tax benefits would affect the effective tax rate. The Company's policy is
to recognize interest and penalties from uncertain tax positions in income tax expense. The Company did not record any interest or penalties
for the years ended December 31, 2023 or 2022 and had no accrued interest on the consolidated balance sheets as of December 31, 2023
or 2022. The Company does not anticipate that the total amount of unrecognized tax benefits will significantly increase or decrease within
twelve months of the reporting date.

 The
Company and its subsidiaries are subject to U.S. federal income tax as well as income tax in multiple state jurisdictions. With few exceptions,
the Company is no longer subject to United States federal income tax examinations for years before 2020 and state and local income tax
examinations before 2019. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where
net operating losses were generated and carried forward, and make adjustments up to the amount of the NOL carryforward amount. The Company
is not currently under examination by the Internal Revenue Service or any state or local tax authority.

 F- 24

 Notes

 NOTE
11 - RELATED PARTIES

 In
July 2022, the Chief Executive Officer and a Board member transferred 3,838 shares of registered common stock to GYBL to settle $ 0.8
million of Company obligations related to the GEM Agreement (Note 6). In October 2022, 3,838 shares of unregistered and restricted common
stock were subsequently issued by the Company to the related parties as reimbursement and recognized under the consolidated statement
of changes in stockholders' deficit.

 In
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.

 NOTE
12 - SUBSEQUENT EVENTS

 In
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.

 In
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
per share. 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.

 F- 25

 Exhibit

 No.

 Description
 of Exhibit

 2.1

 Agreement and Plan of Merger, dated January 31, 2021, by and among Leisure Acquisition Corp., Ensysce Biosciences, Inc. and EB Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 filed with the registrant's Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021).

 3.1(a)

 Third Amended and Restated Certificate of Incorporation of Ensysce Biosciences, Inc. (incorporated by reference to Exhibit 3.1 filed with the registrant's Current Report on Form 8-K on July 7, 2021).

 3.1(b)

 Certificate of amendment to Third Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1(b) filed with the registrant's Registration Statement on Form S-1 (File No. 333-268038) on October 28, 2022)

 3.1(c)

 Certificate of Second Amendment to Third Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 filed with the registrant's Current Report on Form 8-K (File No. 001-38306) on October 27, 2022)

 3.1(d)

 Certificate of Designation of the Series A Preferred Stock of Ensysce Biosciences, Inc., dated February 1, 2023 (incorporated by reference to Exhibit 3.1 to the registrant's Registration Statement on Form 8-A, filed on February 1, 2023, File No. 000-56516)

 3.1(e)

 Certificate of Amendment to Certificate of Designation of the Series A Preferred Stock of Ensysce Biosciences, Inc., dated February 7, 2023 (incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form 8-A/A (Amendment No. 1), filed on February 7, 2023, File No. 000-56516)

 3.2

 Amended and Restated Bylaws of Ensysce Biosciences, Inc. (incorporated by reference to Exhibit 3.2 filed with the registrant's Current Report on Form 8-K on July 7, 2021)

 4.1

 Warrant Agreement, dated December 1, 2017, between the Leisure Acquisition Corp. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 filed with the registrant's Current Report on Form 8-K on December 5, 2017)

 4.2

 Investor Rights Agreement between Ensysce Biosciences, Inc. and the Investors listed on the signature pages thereto dated as of May 11, 2018 (incorporated by reference to Exhibit 4.6 filed with the registrant's Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021)

 4.3

 Form of Warrant Certificate issued to previous holders of Private Placement Warrants and other private warrants (incorporated by reference to Exhibit 4.8 filed with the registrant's Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021)

 4.4

 Form of Senior Secured Convertible Promissory Note issued by the Company pursuant to and in accordance with the Securities Purchase Agreement (incorporated by reference to Exhibit 4.6 filed with the registrant's Current Report on Form 8-K initially filed on September 27, 2021)

 4.5

 Form of Common Stock Purchase Warrant to be issued by the Company pursuant to and in accordance with the Securities Purchase Agreement (incorporated by reference to Exhibit 4.7 filed with the registrant's Current Report on Form 8-K initially filed on September 27, 2021)

 4.6

 Form of Senior Secured Convertible Promissory Note issued by Ensysce Biosciences, Inc. pursuant to and in accordance with a 2022 Securities Purchase Agreement (incorporated by reference to Exhibit 4.6 filed with the registrant's Current Report on Form 8-K on August 9, 2022)

 4.7

 Form of Common Stock Purchase Warrant issued by Ensysce Biosciences, Inc. pursuant to and in accordance with a 2022 Securities Purchase Agreement (incorporated by reference to Exhibit 4.7 filed with the registrant's Current Report on Form 8-K on August 9, 2022)

 4.8

 Form of warrant delivered by Ensysce Biosciences, Inc. in December 2022 in connection with an underwritten offering (incorporated by reference to Exhibit 4.10 filed with the registrant's Post-Effective Amendment No. 1 to the registrant's Registration Statement on Form S-1 filed December 8, 2022)

 4.9

 Form of pre-funded warrant delivered by Ensysce Biosciences, Inc. in December 2022 in connection with an underwritten offering (incorporated by reference to Exhibit 4.11 filed with the registrant's Post-Effective Amendment No. 1 to the registrant's Registration Statement on Form S-1 filed December 8, 2022)

 4.10

 Form of warrant issued in connection with a private placement conducted concurrently with a public offering (incorporated by reference to Exhibit 4.1 filed with the registrant's Current Report on Form 8-K on February 7, 2023)

 4.11

 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)

 4.12

 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)

 4.13

 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)

 4.14

 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)

 4.15

 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)

 4.16

 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)

 4.17

 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).

 4.18

 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)

 4.19

 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)

 10.1

 Registration Rights Agreement, dated December 1, 2017, among Leisure Acquisition Corp. and certain securityholders (incorporated by reference to Exhibit 10.2 filed with the registrant's Current Report on Form 8-K on December 5, 2017)

 10.2

 Warrant Purchase Agreement, dated December 1, 2017, between Leisure Acquisition Corp. and certain security holders (incorporated by reference to Exhibit 10.3 filed with the registrant's Current Report on Form 8-K on December 5, 2017)

 10.3(a)

 Form of Director and Officer Indemnity Agreement (incorporated by reference to Exhibit 10.8 filed with the registrant's Registration Statement on Form S-1 (File No.333-221330) initially filed on November 3, 2017)

 10.3(b)

 Form of Indemnification Agreement executed by each of the Ensysce directors and executive officers (incorporated by reference to Exhibit 10.6 filed with the registrant's Form 10-Q initially filed on November 15, 2021)

 10.4+

 Executive Employment Agreement, by and between the Company and Dr. Lynn Kirkpatrick, dated September 14, 2021 (incorporated by reference to Exhibit 10.44 filed with the registrant's Amendment Number 1 to its Registration Statement on Form S-1 (File No.333-260478) filed on October 29, 2021)

 10.5

 Agreement and Plan of Merger by and among the Signature Therapeutics, Inc., Signature Acquisition Corp. and the Company dated December 28, 2015 (incorporated by reference to Exhibit 10.21 filed with the registrant's Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021)

 10.6+

 Executive Employment Agreement, by and between the Company and Geoffrey Birkett, dated August 21, 2021 (incorporated by reference to Exhibit 10.45 filed with the registrant's Amendment Number 1 to its Registration Statement on Form S-1 (File No.333-260478) filed on October 29, 2021)

 10.7+

 Employment Agreement between the Company and David Humphrey dated February 11, 2021 (incorporated by reference to Exhibit 10.26 filed with the registrant's Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021)

 10.8+

 Amendment to Offer Letter between the Company and David Humphrey dated February 23, 2021 (incorporated by reference to Exhibit 10.27 filed with the the registrant's Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021)

 10.9(a)+

 Amended and Restated 2021 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.22 filed with the registrant's Annual Report on Form 10-K filed on March 31, 2022)

 10.9(b)+

 Amended and Restated 2021 Omnibus Incentive Plan Form of Stock Option Grant Notice and Award Agreement (incorporated by reference to Exhibit 10.22(a) filed with the registrant's Annual Report on Form 10-K filed on March 31, 2022)

 10.10

 Share Purchase Agreement between the Company, GEM Global Yield LLC SCS and GEM Yield Bahamas Limited dated as of December 29, 2020, including a Registration Rights Agreement between the same parties and dated as of the same date and form of Warrant to Purchase Common Shares of Ensysce Biosciences, Inc. issued by the Company to GEM Yield Bahamas Limited (incorporated by reference to Exhibit 10.29 filed with the registrant's Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021)

 10.11

 Technology Transfer Agreement by and among the Company, Covistat, Inc., Mucokinetica, Ltd., Roderick Hall and Peter Cole dated August 5, 2020 (incorporated by reference to Exhibit 10.30 filed with the registrant's Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021)

 10.12

 Manufacturing Agreement between Recro Gaineville LLC and the Company dated September 11, 2019 (incorporated by reference to Exhibit 10.35 filed with the registrant's Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021)

 10.13(a)

 Form of Exchange Agreement between Leisure Acquisition Corp. and the holders of Private Placement Warrants (incorporated by reference to Exhibit 10.36(a) filed with the registrant's Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021)

 10.13(b)

 Form of Exchange Agreement to be entered into by the Company with each of the Sponsors and the Strategic Investor (incorporated by reference to Exhibit 10.36(b) filed with the registrant's Registration Statement on Form S-4 (File No.333-254279) initially filed on March 15, 2021)

 10.14(a)

 Securities Purchase Agreement, dated September 24, 2021 by and among the Company and the purchasers signatory thereto (incorporated by reference to Exhibit 10.1 filed with the registrant's Current Report on Form 8-K initially filed on September 27, 2021)

 10.14(b)

 Registration Rights Agreement, dated September 24, 2021, by and among the Company and the parties signatory thereto (incorporated by reference to Exhibit 10.2 filed with the registrant's Current Report on Form 8-K initially filed on September 27, 2021)

 10.14(c)

 Subsidiary Guarantee, dated September 24, 2021, by and among the Company and the purchasers signatory thereto (incorporated by reference to Exhibit 10.3 filed with the registrant's Current Report on Form 8-K initially filed on September 27, 2021)

 10.14(d)

 Security Agreement, dated September 24, 2021, by and among the Company, EBI OpCo, Inc., Covistat, Inc. and the other parties signatory thereto (incorporated by reference to Exhibit 10.4 filed with the registrant's Current Report on Form 8-K initially filed on September 27, 2021)

 10.14(e)

 Patent Security Agreement, dated September 24, 2021, by and among the Company, EBI OpCo, Inc., Covistat, Inc. and the other parties signatory thereto (incorporated by reference to Exhibit 10.5 filed with the registrant's Current Report on Form 8-K initially filed on September 27, 2021)

 10.14(f)

 Letter Agreement, dated December 27, 2021, by and among the Company and the parties signatory thereto (incorporated by reference to Exhibit 10.6 filed with the registrant's Current Report on Form 8-K initially filed on December 27, 2021)

 10.14(g)

 Second Letter Agreement, dated January 16, 2022, by and among the Company and the parties signatory thereto (incorporated by reference to Exhibit 10.7 filed with the registrant's Current Report on Form 8-K initially filed on January 18, 2022)

 10.15(a)

 Securities Purchase Agreement, dated June 30, 2022, by and among the Company and the purchasers signatory thereto (incorporated by reference to Exhibit 10.1 filed with the registrant's Current Report on Form 8-K on July 6, 2022)

 10.15(b)

 Registration Rights Agreement, dated June 30, 2022, by and among the Company and the parties signatory thereto (incorporated by reference to Exhibit 10.2 filed with the registrant's Current Report on Form 8-K on July 6, 2022)

 10.15(c)

 Subsidiary Guarantee, dated June 30, 2022, by and among the Company and the purchasers signatory thereto (incorporated by reference to Exhibit 10.3 filed with the registrant's Current Report on Form 8-K on July 6, 2022)

 10.15(d)

 Security Agreement, dated June 30, 2022, by and among the Company, EBI OpCo, Inc., Covistat, Inc. and the other parties signatory thereto (incorporated by reference to Exhibit 10.4 filed with the registrant's Current Report on Form 8-K on July 6, 2022)

 10.15(e)

 Patent Security Agreement, dated June 30, 2022, by and among the Company, EBI OpCo, Inc., Covistat, Inc. and the other parties signatory thereto (incorporated by reference to Exhibit 10.5 filed with the registrant's Current Report on Form 8-K on July 6, 2022)

 10.15(f)

 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)

 10.16

 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)

 10.17

 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)

 10.18

 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)

 10.19

 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)

 10.20

 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)

 10 21

 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)

 10.22

 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)

 21.1

 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)

 23.1*

 Consent of Moss Adams LLP, Independent Registered Public Accounting Firm

 31.1*++

 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

 31.2*++

 Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 32.1*++

 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 32.2*++

 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 97*

 Policy relating to recovery of erroneously awarded compensation

 (101)

 Interactive
 Data File

 (104)

 Cover

 *

 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. The
 registrant agrees to furnish supplementally a copy of all omitted schedules to the Securities and Exchange Commission upon its request.

 +

 Denotes compensatory plans
 or arrangements or management 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.

 Item
16. Form 10-K Summary.

 Not

 SIGNATURES

to the requirements of the Securities Act, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, in San Diego, State of California, on March 14, 2024.

 ENSYSCE BIOSCIENCES, INC.

 By:

 /s/
 Dr. Lynn Kirkpatrick

 Name:

 Dr. Lynn Kirkpatrick

 Title:

 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
on March 14, 2024.

 Name

 Title

 By:

 /s/
 Dr. Lynn Kirkpatrick

 President, Chief Executive Officer
 and Director

 Dr. Lynn Kirkpatrick

 (Principal Executive Officer)

 By:

 /s/ David
 Humphrey

 Chief Financial Officer, Secretary and Treasurer

 David Humphrey

 (Principal Financial and Accounting Officer)

 By:

 /s/ Andrew
 Benton

 Andrew Benton

 By:

 /s/ William
 Chang

 William Chang

 By:

 /s/ Bob
 Gower

 Director and Chairman of the Board

 Bob Gower

 By:

 /s/ Adam
 Levin

 Adam Levin

 By:

 /s/ Steve
 Martin

 Steve Martin

 By:

 /s/ Lee
 Rauch

 Lee Rauch

 By:

 /s/ Curtis
 Rosebraugh

 Curtis Rosebraugh