Ensysce Biosciences(ENSC) - 2024 Q2 - Quarterly Report

Financial Performance - Ensysce Biosciences has not generated any revenue from product sales since its inception and does not expect to do so in the near future[84]. - The company has incurred significant operating losses since inception and expects to continue incurring net losses for the foreseeable future[86]. - Net loss for the three months ended June 30, 2024, was $2.0 million, an improvement of $0.3 million compared to a net loss of $2.2 million in 2023[113]. - Net cash used in operating activities for the six months ended June 30, 2024, was $5.7 million, compared to $6.7 million in 2023, a decrease of $1.0 million[129]. - As of June 30, 2024, the company had $1.0 million in cash and cash equivalents, indicating limited liquidity and ongoing operating losses[125]. Research and Development - The lead product candidate, PF614, is ready for Phase 3 clinical development, while PF614-MPAR is in Phase 1b and nafamostat has completed Phase 1 clinical development[85]. - Ensysce anticipates substantial expenses related to ongoing development activities, including preclinical studies and clinical trials for its product candidates[89]. - The company does not track research and development expenses on a program-by-program basis, making it difficult to estimate costs for specific product candidates[98]. - Research and development expenses for the three months ended June 30, 2024, were $0.9 million, down from $1.6 million in 2023, representing a decrease of $0.7 million[115]. - Research and development expenses for the six months ended June 30, 2024, were $1.7 million, a decrease of $1.7 million from $3.4 million in 2023[121]. - The company expects a substantial increase in operating expenses due to ongoing research and development activities, particularly in preclinical and clinical trials[133]. - As of June 30, 2024, the company has approximately $16 million in commitments related to open purchase orders and contractual obligations for preclinical and clinical research studies[134]. Funding and Capital Requirements - The company requires substantial additional funding to support operations and pursue its growth strategy, which may involve dilution of existing ownership interests[86]. - Ensysce's future viability is dependent on its ability to raise additional capital to finance operations[88]. - The company raised approximately $4.7 million from the exercise of warrants at a reduced price of $1.31 per share[90]. - Future funding requirements may increase significantly based on the scope and costs of research, regulatory reviews, and manufacturing capabilities[135]. Expenses and Grants - General and administrative expenses are expected to increase as the company expands its headcount to support product development[104]. - Federal grant funding for the three months ended June 30, 2024, was $0.2 million, a decrease of $0.3 million from $0.5 million in the same period of 2023[114]. - Federal grant funding for the six months ended June 30, 2024, totaled $0.5 million, down from $1.3 million in 2023, a decrease of $0.8 million[120]. - General and administrative expenses for the three months ended June 30, 2024, were $1.2 million, an increase of $0.1 million from $1.1 million in 2023[116]. - Total operating expenses for the three months ended June 30, 2024, were $2.1 million, a decrease of $0.6 million from $2.8 million in 2023[113]. - Total operating expenses for the six months ended June 30, 2024, were $4.3 million, down from $6.1 million in 2023, a decrease of $1.8 million[119]. Company Classification and Market Conditions - The company is classified as a "smaller reporting company," allowing for reduced disclosure obligations until certain market value or revenue thresholds are met[142]. - Cash and cash equivalents as of June 30, 2024, consist of cash and a money market fund account, with minimal impact expected from changes in market interest rates[143]. - Inflation and changing prices have not significantly impacted the company's results of operations for the periods presented[144].