Ensysce Biosciences(ENSC) - 2024 Q3 - Quarterly Report

Financial Performance - Ensysce has incurred significant operating losses since its inception and expects to continue incurring net losses for the foreseeable future[97]. - The company has not generated any revenue from product sales and may never be able to commercialize a marketable product[95]. - Net income for Q3 2024 was $661,769, a significant improvement from a net loss of $2.7 million in Q3 2023, reflecting a change of $3.35 million[134]. - The company does not expect to generate revenue from product candidates for several years, if at all[146]. - The company has incurred significant operating losses since inception and expects to continue doing so for the foreseeable future, raising substantial doubt about its ability to continue as a going concern[149]. Funding and Cash Flow - Ensysce requires substantial additional funding to support ongoing operations and growth strategy, expecting to finance through equity offerings, debt financings, or collaborations[99]. - The company generated gross proceeds of approximately $4.7 million from the exercise of warrants at a reduced exercise price of $1.31 per share[104]. - In August 2024, Ensysce agreed to issue 2,490,798 shares of common stock at an offering price of $0.47 per share, generating gross proceeds of approximately $1.67 million[108]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was $9.8 million, compared to $7.3 million in the same period of 2023, mainly from a public offering and warrant exercises[151]. - The remaining cash funding under the MPAR federal research grant totaled $14 million as of September 30, 2024, expected to be utilized by May 31, 2027[148]. - Cash used in operating activities for the nine months ended September 30, 2024, was $6.7 million, a decrease from $9.0 million in the same period of 2023, primarily due to timing of vendor invoicing and reduced R&D activities[150]. - The net increase in cash and cash equivalents for the nine months ended September 30, 2024, was $3.0 million, compared to a decrease of $1.7 million in the same period of 2023[152]. - As of September 30, 2024, the company had $4.2 million in cash and cash equivalents, with expectations of continued operating losses for the foreseeable future[146]. 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[96]. - Research and development expenses are expected to remain elevated due to ongoing and planned clinical trials for PF614, PF614-MPAR, and nafamostat[119]. - Research and development expenses for Q3 2024 were $1.7 million, down from $1.9 million in Q3 2023, representing a decrease of $0.2 million[136]. - Research and development expenses for the nine months ended September 30, 2024, were $3.4 million, down from $5.4 million in 2023, representing a decrease of $2 million[142]. - The company has not yet completed any pivotal clinical trials or obtained regulatory approvals for its product candidates[96]. - The company anticipates a substantial increase in expenses related to ongoing preclinical activities and clinical trials, as well as costs associated with operating as a public company[155]. Grants and Collaborations - The company has received federal grants from the NIH for the development of its MPAR® overdose prevention technology[113]. - Federal grant funding for Q3 2024 was $3.4 million, a significant increase from $0.4 million in Q3 2023, reflecting a change of $2.98 million[135]. - Federal grant funding for the nine months ended September 30, 2024, totaled $3.9 million, compared to $1.7 million for the same period in 2023, an increase of $2.19 million[141]. - The company may have to relinquish valuable rights to technologies or future revenue streams if it raises additional funds through collaborations[100]. Operating Expenses - General and administrative expenses for Q3 2024 were $1.1 million, a decrease of $0.1 million compared to $1.2 million in Q3 2023[137]. - Total operating expenses for Q3 2024 were $2.8 million, down from $3.1 million in Q3 2023, indicating a reduction of $0.37 million[134]. - General and administrative expenses for the nine months ended September 30, 2024, were $3.6 million, a decrease of $0.3 million from $3.9 million in 2023[143]. - As of September 30, 2024, the company had approximately $13.3 million in commitments related to open purchase orders and contractual obligations for research studies[156]. - The company expects future funding requirements to depend significantly on the progress and costs of research and development, regulatory reviews, and commercialization efforts[157].