Ensysce Biosciences(US:ENSC)2024-05-10 22:08Financial Performance - Ensysce has incurred significant operating losses since its inception and expects to continue incurring net losses for the foreseeable future[102]. - The company has not generated any revenue from product sales and may never be able to commercialize a marketable product[100]. - Net loss for Q1 2024 was $3.1 million, compared to a net loss of $2.2 million in Q1 2023, an increase of $0.9 million[137]. - Cash and cash equivalents as of March 31, 2024, were $3.4 million, with significant operating losses anticipated to continue[142]. - Net cash used in operating activities for Q1 2024 was $3.4 million, slightly down from $3.6 million in Q1 2023[147]. - General and administrative expenses for Q1 2024 were $1.4 million, down from $1.6 million in Q1 2023, reflecting a decrease of $0.2 million[140]. - Research and development expenses decreased to $0.8 million in Q1 2024 from $1.8 million in Q1 2023, a reduction of $1.0 million primarily due to lower external costs[139]. Funding and Financing - Ensysce completed a public offering on May 12, 2023, raising approximately $7.0 million before costs by selling 1,800,876 shares at $3.887 each[110]. - The company entered into a Securities Purchase Agreement on October 23, 2023, for $1.7 million in financing, with a 6.0% annual interest rate and an 8% original issue discount[113]. - Net cash provided by financing activities in Q1 2024 was $5.7 million, compared to $1.9 million in Q1 2023, indicating increased financing activity[148]. - The company may finance operations through private and public equity offerings, debt financings, or collaborations, which could dilute existing ownership interests[104]. - Remaining funding under two approved federal research grants totaled $1.9 million as of March 31, 2024, expected to be utilized by August 31, 2024[144]. - Federal grant funding for Q1 2024 was $0.3 million, down from $0.8 million in Q1 2023, due to the completion of current funding under the MPAR grant[138]. Research and Development - The lead product candidate, PF614, is in Phase 2 clinical development, while PF614-MPAR is in Phase 1b, and nafamostat is moving towards Phase 2[101]. - Ensysce expects substantial expenses for ongoing development and commercialization of product candidates, requiring significant additional funding[108]. - Research and development expenses are expected to remain elevated due to ongoing and planned clinical trials for PF614, PF614-MPAR, and nafamostat[124]. - The company is unable to estimate the exact amount of its working capital requirements due to numerous risks and uncertainties associated with research, development, and commercialization of biologic product candidates[154]. - Future funding requirements could increase significantly based on factors such as the costs of clinical trials and regulatory reviews[154]. Going Concern and Operational Risks - Ensysce has limited revenue generation and substantial doubt exists about its ability to continue as a going concern without raising additional capital[107]. - The company expects to continue incurring significant expenses and operating losses for the foreseeable future, raising doubts about its ability to continue as a going concern[145]. - Commitments as of March 31, 2024, included an estimated $17.6 million related to open purchase orders and contractual obligations[153]. - The company has no off-balance sheet arrangements during the periods presented[158]. Market and Economic Conditions - The company is classified as a "smaller reporting company," which allows it to provide reduced disclosure obligations until certain market value or revenue thresholds are met[160]. - Cash and cash equivalents as of March 31, 2024, consisted of cash and a money market fund account, with no expected material impact from sudden changes in market interest rates[162]. - Inflation and changing prices are not believed to have significantly impacted the company's results of operations for any periods presented[163].