Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 09, 2022 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-38306 | |
Entity Registrant Name | Ensysce Biosciences, Inc. | |
Entity Central Index Key | 0001716947 | |
Entity Tax Identification Number | 82-2755287 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 7946 Ivanhoe Avenue | |
Entity Address, Address Line Two | Suite 201 | |
Entity Address, City or Town | La Jolla | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92037 | |
City Area Code | (858) | |
Local Phone Number | 263-4196 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 34,560,952 | |
Common Stock [Member] | ||
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
Trading Symbol | ENSC | |
Security Exchange Name | NASDAQ | |
Warrants [Member] | ||
Title of 12(b) Security | Warrants to purchase one share of Common Stock | |
Trading Symbol | ENSCW |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 8,440,952 | $ 12,264,736 |
Unbilled receivable | 808,601 | 441,721 |
Right-of-use asset | 17,609 | 24,721 |
Prepaid expenses and other current assets | 2,391,240 | 2,931,415 |
Total current assets | 11,658,402 | 15,662,593 |
Property and equipment, net | ||
Other assets | 713,090 | 754,756 |
Total assets | 12,371,492 | 16,417,349 |
Current liabilities: | ||
Accounts payable | 959,630 | 301,104 |
Accrued expenses and other liabilities | 1,751,506 | 3,407,533 |
Lease liability | 17,716 | 24,874 |
Notes payable and accrued interest ($6,073,057 and $12,358,886 at fair value at March 31, 2022 and December 31, 2021, respectively) | 6,073,057 | 12,748,155 |
Total current liabilities | 8,801,909 | 16,481,666 |
Long-term liabilities: | ||
Notes payable, net of current portion (at fair value) | 1,586,901 | 4,440,951 |
Other long-term liabilities | 871,409 | 3,652,790 |
Total long-term liabilities | 2,458,310 | 8,093,741 |
Total liabilities | 11,260,219 | 24,575,407 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity (deficit) | ||
Preferred stock, $0.0001 par value, 1,500,000 shares authorized, no shares issued and outstanding at March 31, 2022 (unaudited) and December 31, 2021 | ||
Common stock, $0.0001 par value, 150,000,000 shares authorized; 29,968,787 and 24,662,904 shares issued at March 31, 2022 (unaudited) and December 31, 2021, respectively; 29,949,032 and 24,643,149 shares outstanding at March 31, 2022 (unaudited) and December 31, 2021, respectively | 2,995 | 2,464 |
Additional paid-in capital | 88,900,164 | 77,964,860 |
Accumulated deficit | (87,512,253) | (85,845,567) |
Total Ensysce Biosciences, Inc. stockholders’ equity (deficit) | 1,390,906 | (7,878,243) |
Noncontrolling interests in stockholders’ equity (deficit) | (279,633) | (279,815) |
Total stockholders’ equity (deficit) | 1,111,273 | (8,158,058) |
Total liabilities and stockholders’ equity (deficit) | $ 12,371,492 | $ 16,417,349 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Fair value of notes payable, current | $ 6,073,057 | $ 12,358,886 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,500,000 | 1,500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 29,968,787 | 24,662,904 |
Common stock, shares outstanding | 29,949,032 | 24,643,149 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Federal grants | $ 603,098 | $ 250,576 |
Operating expenses: | ||
Research and development | 3,140,096 | 284,378 |
General and administrative | 2,265,806 | 490,471 |
Total operating expenses | 5,405,902 | 774,849 |
Loss from operations | (4,802,804) | (524,273) |
Other income (expense): | ||
Change in fair value of derivative liabilities | (39,585) | |
Change in fair value of convertible notes | 2,767,178 | |
Change in fair value of liability classified warrants | 2,794,398 | |
Loss on debt conversions | (1,702,642) | |
Interest expense | (15,021) | (347,834) |
Other income and expense, net | 7,966 | |
Total other income (expense), net | 3,851,879 | (387,419) |
Net income (loss) | (950,925) | (911,692) |
Net income (loss) attributable to noncontrolling interests | 182 | (3,961) |
Deemed dividend related to warrants down round provision | 715,579 | |
Net loss attributable to common stockholders | $ (1,666,686) | $ (907,731) |
Net loss per share: | ||
Net loss per share attributable to common stockholders, basic and diluted | $ (0.06) | $ (0.06) |
Weighted average common shares outstanding, basic and diluted | 27,287,618 | 15,834,185 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Previously Reported [Member]Common Stock [Member] | Previously Reported [Member]Additional Paid-in Capital [Member] | Previously Reported [Member]Retained Earnings [Member] | Previously Reported [Member]Noncontrolling Interest [Member] | Previously Reported [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2019 | $ 5,987 | $ 49,511,927 | $ (55,958,716) | $ (217,625) | $ (6,658,427) | |||||
Balance, shares at Dec. 31, 2019 | 239,465,160 | |||||||||
Retroactive application of recapitalization | $ (4,410) | $ 4,410 | ||||||||
Retroactive application of recapitalization, shares | (223,696,435) | |||||||||
Balance at Dec. 31, 2020 | $ 1,577 | $ 49,516,337 | $ (55,958,716) | $ (217,625) | $ (6,658,427) | |||||
Balance, shares at Dec. 31, 2020 | 15,768,725 | |||||||||
Exercise of stock options | $ 28 | 262,834 | 262,862 | |||||||
Exercise of stock options, shares | 284,825 | |||||||||
Stock-based compensation | 43,820 | 43,820 | ||||||||
Net loss | (907,731) | (3,961) | (911,692) | |||||||
Balance at Mar. 31, 2021 | $ 1,605 | 49,822,991 | (56,866,447) | (221,586) | (7,263,437) | |||||
Balance, shares at Mar. 31, 2021 | 16,053,550 | |||||||||
Balance at Dec. 31, 2021 | $ 2,464 | 77,964,860 | (85,845,567) | (279,815) | $ (8,158,058) | |||||
Balance, shares at Dec. 31, 2021 | 24,643,149 | |||||||||
Exercise of stock options, shares | ||||||||||
Stock-based compensation | 2,090,663 | $ 2,090,663 | ||||||||
Net loss | (951,107) | 182 | (950,925) | |||||||
Consultant compensation | $ 5 | 54,245 | 54,250 | |||||||
Consultant compensation, shares | 50,000 | |||||||||
Conversions of convertible notes | $ 471 | 8,074,872 | 8,075,343 | |||||||
Conversions of convertible notes, shares | 4,708,525 | |||||||||
Settlement of restricted stock units | $ 55 | (55) | ||||||||
Settlement of restricted stock units, shares | 547,358 | |||||||||
Deemed dividend related to warrants down round provision | 715,579 | (715,579) | ||||||||
Balance at Mar. 31, 2022 | $ 2,995 | $ 88,900,164 | $ (87,512,253) | $ (279,633) | $ 1,111,273 | |||||
Balance, shares at Mar. 31, 2022 | 29,949,032 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (950,925) | $ (911,692) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 51 | |
Gain on sale of asset | (4,500) | |
Accrued interest | 15,021 | 173,422 |
Accretion of discounts on promissory notes | 174,413 | |
Change in fair value of embedded derivative | 39,586 | |
Change in fair value of liability classified warrants | (2,794,398) | |
Change in fair value of convertible notes | (2,767,178) | |
Stock-based compensation | 402,434 | 43,820 |
Lease cost | (46) | (589) |
Loss on debt conversions | 1,702,642 | |
Changes in operating assets and liabilities: | ||
Unbilled receivable | (366,880) | |
Prepaid expenses and other assets | 581,840 | 51,244 |
Accounts payable | 658,526 | (92,184) |
Accrued expenses and other liabilities | 86,450 | 4,780 |
Net cash used in operating activities | (3,437,014) | (517,149) |
Cash flows from investing activities: | ||
Proceeds from sale of asset | 4,500 | |
Net cash provided by investing activities | 4,500 | |
Cash flows from financing activities: | ||
Proceeds from issuance of promissory notes | 50,000 | |
Proceeds from issuance of promissory notes to related parties | 300,000 | |
Proceeds from exercise of stock options | 262,862 | |
Repayment of financed insurance premiums | (391,270) | |
Net cash (used in) provided by financing activities | (391,270) | 612,862 |
Increase (decrease) in cash and cash equivalents | (3,823,784) | 95,713 |
Cash and cash equivalents beginning of period | 12,264,736 | 194,214 |
Cash and cash equivalents end of period | 8,440,952 | 289,927 |
Supplemental cash flow information: | ||
Income tax payments | 1,600 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Fair value of embedded derivative at issuance | 3,052 | |
Deferred transaction costs in accounts payable | 596,975 | |
Deferred transaction costs in accrued expenses and other liabilities | 200,927 | |
Stock-based compensation | 1,742,479 | |
Conversions of convertible notes into common stock | 6,372,701 | |
Deemed dividend related to warrants down round provision | $ 715,579 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES Ensysce Biosciences, Inc. (“Ensysce”), along with its subsidiary, Covistat Inc. (“Covistat”) and its wholly owned subsidiaries EBI Operating, Inc. and EBI OpCo, Inc. (collectively, the “Company”), is a clinical-stage biotech company using its two novel proprietary technology platforms to develop what the Company believe to be safer prescription drugs. The primary focus of the Company is developing abuse and overdose resistant pain drugs, with a clinical stage program for the abuse resistant, TAAP (Trypsin Activated Abuse Protection) opioid product candidate, PF614. In addition, the Company is developing its MPAR TM TM On January 31, 2021, Leisure Acquisition Corp., a Delaware corporation (“LACQ”), entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with Ensysce Biosciences, Inc., a Delaware corporation (“Former Ensysce”), and EB Merger Sub, Inc., a Delaware corporation and wholly-owned, direct subsidiary of LACQ (“Merger Sub”). Pursuant to the Merger Agreement, on June 30, 2021 (the “Closing Date”), Merger Sub was merged with and into Former Ensysce, with Former Ensysce surviving the merger (“Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). In connection with the closing of the Business Combination on the Closing Date (the “Closing”), Former Ensysce became a wholly owned subsidiary of LACQ and the stockholders of Former Ensysce, as of immediately prior to the effective time of the Merger, received shares of LACQ and hold a portion of the shares of Common Stock, par value $ 0.0001 On the Closing Date, at the effective time of the Merger, LACQ changed its name from “Leisure Acquisition Corp.” to “Ensysce Biosciences, Inc.” Unless the context otherwise requires, “we,” “us,” “our” and the “Company” refer to Ensysce and the combined company and its subsidiaries following the Closing. Unless the context otherwise requires, references to “LACQ” refer to Leisure Acquisition Corp., a Delaware corporation, prior to the Closing. In connection with the Business Combination, outstanding shares of common stock of Former Ensysce (including shares resulting from the conversion of Former Ensysce’s convertible debt prior to Closing) were converted into the right to receive shares of Ensysce at an exchange ratio of 0.06585 71.8% In June 2020, the Company commenced an initiative to develop a therapeutic for the treatment of certain coronavirus infections through the formation of a separate entity, Covistat, Inc., a Delaware corporation. Pursuant to the articles of incorporation, Covistat was authorized to issue 1,000,000 0.001 100,000 0.001 79.2% 19.8% 1.0% In March 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a new coronavirus as a “pandemic”. First identified in late 2019 and known now as COVID-19, the outbreak has impacted millions of individuals worldwide. In response, many countries have implemented measures to combat the outbreak which have impacted global business operations. The Company’s operations have not been significantly impacted; however, the Company continues to monitor the situation. No impairments were recorded as of the balance sheet date as no triggering events or changes in circumstances had occurred as of year-end; however, due to significant uncertainty surrounding the situation, management’s judgment regarding this could change in the future. In addition, while the Company’s results of operations, cash flows and financial condition could be negatively impacted, the extent of the impact cannot be reasonably estimated at this time. 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. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | 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. In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the consolidated financial statements. Operating results for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The interim unaudited consolidated financial statements have been prepared under the presumption that users of the interim financial information have either read or have access to the audited consolidated financial statements for the fiscal year ended December 31, 2021, which may be found in the Company’s Form 10-K filed with the SEC on March 31, 2022. Business Combination The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, LACQ was identified as the acquired company for financial reporting purposes, primarily because the stockholders of Former Ensysce control the majority of the voting power of the combined company, Former Ensysce’s board of directors comprise a majority of the governing body of the combined company, and Former Ensysce’s senior management comprise the leadership of the combined company. Accordingly, for accounting purposes, the transaction was treated as the equivalent of Former Ensysce issuing shares for the net assets of LACQ, accompanied by a recapitalization. The net assets of LACQ, primarily consisting of cash of $ 7.8 1.1 0.06585 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 and had an accumulated deficit of $ 87.5 million at March 31, 2022. There is no assurance that profitable operations will ever be achieved, and, if achieved, could 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. In December 2020, the Company executed a share subscription facility with an investment group. Under the agreement, the investor agreed to provide the Company with a share subscription facility of up to $ 60.0 1,106,108 10.01 1.2 800,000 400,000 In September 2021, the Company entered into a $ 15.9 The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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 research and development services, the valuation allowance of deferred tax assets resulting from net operating losses, the valuation of common stock, warrants, options to purchase the Company’s common stock, and the notes payable. 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 may exceed federally insured limits. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash and cash equivalents are held. The Company has no financial instruments with off-balance sheet risk of loss. 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. No 51 Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company will recognize an impairment loss only if the carrying amount is not recoverable through its undiscounted cash flows and measure any impairment loss based on the difference between the carrying amount and estimated fair value. There were no such losses for the three months ended March 31, 2022 and 2021. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks. The Company evaluates all of its financial instruments, including notes payable, to determine whether such instruments are derivatives or contain features that qualify as embedded derivatives. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract and the features of the derivatives. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the consolidated statement of operations each period. Bifurcated embedded derivatives are classified with the related host contract in the Company’s consolidated balance sheet. Fair Value Measurement ASC 820, Fair Value Measurements 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. 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 March 31, 2022 and December 31, 2021, 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 Warrants In 2021, the Company issued liability classified warrants in connection with the issuance of the 2021 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. The following tables present assets and liabilities measured and recorded at fair value on the Company’s consolidated balance sheet as of March 31, 2022 and December 31, 2021. SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE March 31, 2022 Total Level 1 Level 2 Level 3 Fair value of convertible note $ 7,659,958 $ - $ - $ 7,659,958 Liability classified warrants 509,190 - - 509,190 Total $ 8,169,148 $ $ $ 8,169,148 December 31, 2021 Total Level 1 Level 2 Level 3 Fair value of convertible note $ 16,799,837 $ - $ - $ 16,799,837 Liability classified warrants 3,303,588 - - 3,303,588 Total $ 20,103,425 $ $ $ 20,103,425 The following table summarizes the change in fair value of the Company’s Level 3 assets and liabilities: SCHEDULE OF CHANGE IN FAIR VALUE OF COMPANY’S LEVEL 3 Total Convertible notes Liability classified warrants Fair value, December 31, 2021 $ 20,103,425 $ 16,799,837 $ 3,303,588 Conversions (6,372,701 ) (6,372,701 ) - Change in fair value (5,561,576 ) (2,767,178 ) (2,794,398 ) Fair value, March 31, 2022 $ 8,169,148 $ 7,659,958 $ 509,190 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 TM 5.4 3.2 2.2 1.1 5.1 2.1 3.0 2.8 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 TM 5.4 The Company recognizes revenue when costs related to the grants are incurred. The Company believes this policy is consistent with the overarching premise in Accounting Standards Codification Topic 606, Revenue from Contracts with The revenue recognized under the MPAR Grant and OUD Grant was as follows: SCHEDULE OF REVENUE RECOGNIZATION UNDER GRANTS Three Months Ended March 31, 2022 2021 MPAR $ 504,470 $ 73,726 OUD 98,628 176,850 Total $ 603,098 $ 250,576 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. Research 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. General and Administrative Expenses General 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 Compensation 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. For the three months ended March 31, 2022 and 2021, stock-based compensation costs are recorded in general and administrative expenses and research and development 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 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. 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. A reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations follows: SCHEDULE OF EARNINGS PER SHARE RECONCILIATION Three Months Ended March 31, 2022 2021 Numerator: Net income (loss) attributable to common stockholders $ (1,666,686 ) $ (907,731 ) Denominator: Weighted average shares outstanding, basic 27,287,618 15,834,185 Weighted average dilutive stock options - - Weighted average shares outstanding, diluted 27,287,618 15,834,185 Net income (loss) per share attributable to common stockholders, basic and diluted $ (0.06 ) $ (0.06 ) 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: SCHEDULE OF WEIGHTED AVERAGE SHARES OF ANTI-DILUTIVE SECURITIES Three Months Ended March 31, 2022 2021 Stock options 5,786,814 4,614,059 Warrants 21,090,873 19,755 Total 26,877,687 4,633,814 Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance is effective for fiscal years beginning after December 31, 2021 and interim periods within that year. On January 1, 2022, the Company adopted ASU 2019-12 and did not have a significant impact on the consolidated financial statements. 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. Entities must adopt the guidance as of the beginning of its annual fiscal year and a modified retrospective or fully retrospective transition approach is permitted. The Company is evaluating the impact of ASU 2020-06 on the consolidated financial statements. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Prepaid Expenses And Other Current Assets | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS March 31, December 31, 2022 2021 Prepaid insurance $ 1,793,164 $ 2,124,008 Prepaid research and development 455,472 733,234 Other prepaid expenses 142,604 74,173 Total prepaid expenses and other current assets $ 2,391,240 $ 2,931,415 |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | NOTE 5 – ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consisted of the following: SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES March 31, December 31, 2022 2021 Share subscription facility commitment fees $ 800,000 $ 800,000 Accrued research and development 398,618 388,997 Professional fees 266,228 138,086 Bonus accrual 134,413 610,000 Accrued scientific advisory board fees 60,032 60,032 Consultant stock compensation expenses - 1,342,479 Other accrued liabilities 92,215 67,939 Total accrued expenses and other liabilities $ 1,751,506 $ 3,407,533 Other long-term liabilities consisted of the following: SCHEDULE OF OTHER LONG-TERM LIABILITIES 2022 2021 March 31, December 31, 2022 2021 Share subscription facility commitment fees $ 362,219 $ 349,202 Liability classified warrants 509,190 3,303,588 Total other long-term liabilities $ 871,409 $ 3,652,790 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 6 - COMMITMENTS AND CONTINGENCIES Purchase Commitments As of March 31, 2022, the Company’s commitments included an estimated $ 15.8 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 March 31, 2022 and December 31, 2021, 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 In August 2020, the Company entered into an agreement to lease office space. The lease commencement date was October 1, 2020 and was subsequently amended to extend the term of the lease through October 31, 2022 with no option to renew. The amendment resulted in a modification of the lease under ASC 842 and the Company remeasured the lease liability as of the amendment date. As of March 31, 2022, the future lease payments totaled $ 17,716 The Company recognized total rent expense of $ 7,834 12,379 Compensation 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 500,000 shares of common stock with a five-year term and an exercise price of $ 6.28 each, 50,000 shares of common stock each, and 200,000 restricted stock units each. The restricted stock units vest over one year 50% and 50% 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, whereby 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 $ 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. During the three months ended March 31, 2022 the Company reclassified the existing balance of the liability to equity and recorded an additional $ 87,208 of consultant compensation to general and administrative expense as a result of the vesting schedule of the restricted stock units. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 7 - NOTES PAYABLE The following table provides a summary of the Company’s outstanding debt as of March 31, 2022: SCHEDULE OF DEBT Principal balance Accrued interest Fair value adjustment Net debt balance 2021 Notes $ 7,627,778 $ 78,509 $ (46,329 ) $ 7,659,958 Total $ 7,627,778 $ 78,509 $ (46,329 ) $ 7,659,958 The following table provides a summary of the Company’s outstanding debt as of December 31, 2021: Principal balance Accrued interest Fair value Adjustment Net debt balance 2021 Notes $ 13,647,341 $ 159,435 $ 2,993,061 $ 16,799,837 Finance Insurance 385,187 4,082 - 389,269 Total $ 14,032,528 $ 163,517 $ 2,993,061 $ 17,189,106 The interest expense recognized for notes payable (excluding the 2021 Notes) was as follows: SCHEDULE OF INTEREST EXPENSE DEBT 2022 2021 Three months ended March 31, 2022 2021 Stated interest accrual $ 2,004 $ 109,381 Debt discount amortization - 174,412 Total $ 2,004 $ 283,793 2021 Notes On September 24, 2021, the Company entered into an agreement with institutional investors to issue the 2021 Notes. The agreement provides for two closings: the first closing for $ 5.3 4.6 10.6 9.4 The proceeds of the 2021 Notes shall be used for working capital purposes subject to certain customary restrictions and secured by the Company’s rights to its patents and licenses. The Company may not issue any additional debt or equity without the prior written consent of the holders. The 2021 Notes mature on June 23, 2023 August 4, 2023 5% 6% 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 Company recorded total issuance costs of $ 1.9 million representing investment banking and legal fees of $ 1.0 million and original issue discounts of $ 0.9 million. After multiple conversions since issuance, the Company remeasured the fair value as of March 31, 2022 and recognized a gain of $ 2.8 million as the fair value of the 2021 Notes had decreased to $ 7.7 million due to a decrease in the value of the conversion option resulting from a decrease in the price of the Company’s common stock. The March 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 total amount of interest expense (after consideration of the conversions) at March 31, 2022 would be $ 123,220 . The 2021 Notes may be converted into the Company’s common stock at the option of the holder in whole or in part at the conversion price of $ 5.87 beneficial ownership limitation of 4.99% At the Company’s option, the Company may redeem some or all of the then-outstanding principal amount of the 2021 Notes for cash in an amount equal to 100% of the principal to be redeemed, plus accrued but unpaid interest, plus all other amounts due with respect to the 2021 Notes. Beginning January 1, 2022 for the First Closing, and February 1, 2022 for the Second Closing, and the first of each subsequent month, terminating upon the full redemption of the 2021 Notes (each a “Monthly Redemption Date”), the Company shall redeem the Monthly Redemption Amount (defined below), payable in cash or shares. The number of shares to be settled shall be based on a conversion price equal to the lesser of (a) $5.87 and (b) 92% 0.78 The Monthly Redemption Amount is defined as 1/18 th If, at any time while the 2021 Notes are outstanding, the Company carries out one or more capital raises in excess of $ 5.0 20% The following table provides a summary of the Company’s 2021 Notes conversions during the three months period ending March 31, 2022: SCHEDULE OF CONVERSIONS DEBT Shares Conversion Price Conversion Value January 3, 2022 535,249 $ 2.83 $ 1,517,054 February 3, 2022 1,354,423 $ 1.58 2,145,135 March 1, 2022 2,818,853 $ 0.96 2,710,512 Total 4,708,525 $ 6,372,701 During the three months ending March 31, 2022, the company recognized $ 1.7 million of loss on debt conversions related to the monthly conversions, resulting from the difference between the conversion price and the average of the high and low stock price on the date of conversion. Such expense is reported under other income (expense), net in the consolidated statements of operations. Financed insurance premiums During the year ended December 31, 2021, the Company financed its director and officer liability insurance in the amount of $ 867,300 2,004 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | 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 1,500,000 0.0001 no Common Stock On June 30, 2021, in connection with the Closing, the following common stock activity occurred: ● 16,053,550 ● 6,219,268 ● 1,357,968 5.8 ● 19,755 ● 500,000 ● 125,000 Warrants On March 31, 2022, outstanding warrants to purchase shares of common stock are as follows: SCHEDULE OF OUTSTANDING WARRANT Reference Shares Underlying Outstanding Warrants Exercise Price Description Classification (a) 18,901,290 $ 10.00 11.50 LACQ warrants Equity (b) 1,106,108 $ 0.96 Share subscription facility Equity (c) 361,158 $ 7.63 Convertible note Liability (d) 722,317 $ 7.63 Convertible note Liability 21,090,873 a) On June 30, 2021, as a result of the closing of the Business Combination, the Company assumed a total of 18,901,290 10.00 11.50 June 30, 2026 10,000,000 8,901,290 On August 3, 2021, the Company entered into an agreement with an existing warrant holder to reduce the exercise price of 500,000 warrants issued on June 30, 2021 from $ 11.50 to $ 10.00. b) On July 2, 2021, upon public listing of the Company’s shares, the Company issued 1,106,108 three 10.01 14.49 11.6 On December 28, 2021, January 3, 2022, February 1, 2022 and March 1, 2022 the exercise price of the warrants adjusted to $ 4.50 2.83 1.58 0.96 c) On September 24, 2021, the Company issued 361,158 7.63 September 23, 2026 d) On November 5, 2021, the Company issued 722,317 7.63 November 4, 2026 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: SCHEDULE OF WARRANTS FAIR VALUE ESTIMATION ASSUMPTIONS (a) LACQ warrants (grant date varies) (b) Share subscription facility (grant date 7/2/2021) (b) Share subscription facility (remeasurement date varies) Stock price $ 14.49 $ 14.49 $ 1.26 - 4.29 Exercise price $ 10.0 11.50 $ 10.01 $ 0.96 2.83 Expected term (years) 3.00 3.00 2.34 2.49 Volatility 110.0 % 110.0 % 113.8 117.2 Risk free rate 0.5 % 0.5 % 1.04 1.47 (c) Liability classified warrants (grant date 9/24/2021) (c) Liability classified warrants (remeasured at 3/31/22) (d) Liability classified warrants (grant date 11/5/2021) (d) Liability classified warrants (remeasured at 3/31/22) Stock price $ 4.49 $ 1.14 $ 2.25 $ 1.14 Exercise price $ 7.63 $ 7.63 $ 7.63 $ 7.63 Expected term (years) 5.00 4.50 5.00 4.60 Volatility 94.1 % 99.4 % 94.1 % 98.6 % Risk free rate 1.0 % 2.4 % 1.0 % 2.4 % |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 9 - STOCK-BASED COMPENSATION In 2016, Former Ensysce adopted the Ensysce Biosciences, Inc. 2016 Stock Incentive Plan (the “2016 Plan”). The 2016 Plan, as amended, allowed for the issuance of non-statutory stock options, incentive stock options and other equity awards to Former Ensysce’s employees, directors, and consultants. In March 2019, Former Ensysce adopted the 2019 Directors Plan, which was amended in August 2020. The 2019 Directors Plan, as amended, allowed for the issuance of shares of Former Ensysce’s common stock pursuant to the grant of non-statutory stock options. In addition to the 2016 Plan and the 2019 Directors Plan, the Company has two legacy equity incentive plans (the “Legacy Plans”). No additional equity awards may be made under the Legacy Plans and the outstanding options will expire if unexercised by certain dates through August 2024. 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 4,444,068 1,000,000 3,000,000 The Company recognized within general and administrative expense stock-based compensation expense of $ 373,944 43,820 28,490 0 Option Activity During the three months ended March 31, 2022, the Company granted stock options to purchase an aggregate of 1,986,000 shares of common stock to employees, consultants and members of the Board. The options vest over periods between 0 and 4 years and have an exercise price of between $ 1.08 and $ 6.28 per share. There were no stock option grants in 2021. The following table summarizes the Company’s stock option activity during the three months ended March 31, 2022: SCHEDULE OF STOCK OPTION ACTIVITY Weighted average Options Exercise price Remaining contractual Intrinsic value Outstanding at December 31, 2021 4,444,068 $ 2.40 6.00 $ 10,207,306 Granted 1,986,000 4.33 - - Exercised - - - - Expired / Forfeited - - - - Outstanding at March 31, 2022 6,430,068 3.00 7.02 960 Exercisable at March 31, 2022 5,469,714 3.11 6.54 - Vested and expected to vest 6,430,068 3.00 7.02 960 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 (there were no grants issued in 2021): SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS Three Months Ended March 31, 2022 Stock price $ 1.08 1.61 Exercise price $ 1.08 6.28 Expected stock price volatility 76.12 - 95.87% Expected term (years) 5.19 – 10.00 Risk-free interest rate 1.52 % - 2.20 % Expected dividend yield 0% ● Expected stock-price volatility. ● Expected term. ● Risk-free interest rate. ● Expected dividend yield. The weighted-average grant date fair value of options granted during the three months ended March 31, 2022 was $ 1.01 As of March 31, 2022, the Company had an aggregate of $ 924,175 of unrecognized share-based compensation cost, which is expected to be recognized over the weighted average period of 1.6 years. Restricted Stock Units During the three months ended March 31, 2022, the Company granted 927,358 restricted stock unit (“RSU”) awards (weighted-average fair value per share of $ 1.04 547,358 shares of common stock for vested RSU awards (weighted average fair value per share of $ 1.23 50,000 RSU awards. The remaining 330,000 RSU awards (weighted average fair value per share of $ 0.88 Shares Reserved for Future Issuance The following shares of common stock are reserved for future issuance: SCHEDULE OF COMMON STOCK FUTURE ISSUANCE March 31, 2022 Awards outstanding under the 2021 Omnibus Incentive Plan 6,760,068 Awards available for future grant under 2021 Omnibus Incentive Plan 1,136,642 Warrants outstanding 21,090,873 Total shares of common stock reserved for future issuance 28,987,583 |
RELATED PARTIES
RELATED PARTIES | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 10 - RELATED PARTIES The Company paid cash compensation during the three months ended March 31, 2021 of $ 33,146 no |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 11 - SUBSEQUENT EVENTS In the second quarter of 2022, in connection with the monthly redemption schedule (described in Note 7), the Company issued 4,511,920 shares of common stock as a result of monthly conversions of $ 4.3 million of the 2021 Notes. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Use of Estimates and Assumptions | 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 research and development services, the valuation allowance of deferred tax assets resulting from net operating losses, the valuation of common stock, warrants, options to purchase the Company’s common stock, and the notes payable. |
Cash and Cash Equivalents | 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 | 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 may exceed federally insured limits. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash and cash equivalents are held. The Company has no financial instruments with off-balance sheet risk of loss. |
Property and Equipment | 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. No 51 Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company will recognize an impairment loss only if the carrying amount is not recoverable through its undiscounted cash flows and measure any impairment loss based on the difference between the carrying amount and estimated fair value. There were no such losses for the three months ended March 31, 2022 and 2021. |
Derivative Financial Instruments | Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks. The Company evaluates all of its financial instruments, including notes payable, to determine whether such instruments are derivatives or contain features that qualify as embedded derivatives. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract and the features of the derivatives. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the consolidated statement of operations each period. Bifurcated embedded derivatives are classified with the related host contract in the Company’s consolidated balance sheet. |
Fair Value Measurement | Fair Value Measurement ASC 820, Fair Value Measurements 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. 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 March 31, 2022 and December 31, 2021, 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 | 2021 Notes In 2021, the Company issued convertible notes with a face value of $ 15.9 |
Warrants | Warrants In 2021, the Company issued liability classified warrants in connection with the issuance of the 2021 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. The following tables present assets and liabilities measured and recorded at fair value on the Company’s consolidated balance sheet as of March 31, 2022 and December 31, 2021. SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE March 31, 2022 Total Level 1 Level 2 Level 3 Fair value of convertible note $ 7,659,958 $ - $ - $ 7,659,958 Liability classified warrants 509,190 - - 509,190 Total $ 8,169,148 $ $ $ 8,169,148 December 31, 2021 Total Level 1 Level 2 Level 3 Fair value of convertible note $ 16,799,837 $ - $ - $ 16,799,837 Liability classified warrants 3,303,588 - - 3,303,588 Total $ 20,103,425 $ $ $ 20,103,425 The following table summarizes the change in fair value of the Company’s Level 3 assets and liabilities: SCHEDULE OF CHANGE IN FAIR VALUE OF COMPANY’S LEVEL 3 Total Convertible notes Liability classified warrants Fair value, December 31, 2021 $ 20,103,425 $ 16,799,837 $ 3,303,588 Conversions (6,372,701 ) (6,372,701 ) - Change in fair value (5,561,576 ) (2,767,178 ) (2,794,398 ) Fair value, March 31, 2022 $ 8,169,148 $ 7,659,958 $ 509,190 |
Federal Grants | 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 TM 5.4 3.2 2.2 1.1 5.1 2.1 3.0 2.8 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 TM 5.4 The Company recognizes revenue when costs related to the grants are incurred. The Company believes this policy is consistent with the overarching premise in Accounting Standards Codification Topic 606, Revenue from Contracts with The revenue recognized under the MPAR Grant and OUD Grant was as follows: SCHEDULE OF REVENUE RECOGNIZATION UNDER GRANTS Three Months Ended March 31, 2022 2021 MPAR $ 504,470 $ 73,726 OUD 98,628 176,850 Total $ 603,098 $ 250,576 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. |
Research and Development Costs | Research 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. |
General and Administrative Expenses | General and Administrative Expenses General 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 Compensation | Stock-based Compensation 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. For the three months ended March 31, 2022 and 2021, stock-based compensation costs are recorded in general and administrative expenses and research and development 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 Income taxes are recorded in accordance with ASC 740, Income Taxes 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. |
Earnings per Share | 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. A reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations follows: SCHEDULE OF EARNINGS PER SHARE RECONCILIATION Three Months Ended March 31, 2022 2021 Numerator: Net income (loss) attributable to common stockholders $ (1,666,686 ) $ (907,731 ) Denominator: Weighted average shares outstanding, basic 27,287,618 15,834,185 Weighted average dilutive stock options - - Weighted average shares outstanding, diluted 27,287,618 15,834,185 Net income (loss) per share attributable to common stockholders, basic and diluted $ (0.06 ) $ (0.06 ) 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: SCHEDULE OF WEIGHTED AVERAGE SHARES OF ANTI-DILUTIVE SECURITIES Three Months Ended March 31, 2022 2021 Stock options 5,786,814 4,614,059 Warrants 21,090,873 19,755 Total 26,877,687 4,633,814 |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance is effective for fiscal years beginning after December 31, 2021 and interim periods within that year. On January 1, 2022, the Company adopted ASU 2019-12 and did not have a significant impact on the consolidated financial statements. 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. Entities must adopt the guidance as of the beginning of its annual fiscal year and a modified retrospective or fully retrospective transition approach is permitted. The Company is evaluating the impact of ASU 2020-06 on the consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE | The following tables present assets and liabilities measured and recorded at fair value on the Company’s consolidated balance sheet as of March 31, 2022 and December 31, 2021. SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE March 31, 2022 Total Level 1 Level 2 Level 3 Fair value of convertible note $ 7,659,958 $ - $ - $ 7,659,958 Liability classified warrants 509,190 - - 509,190 Total $ 8,169,148 $ $ $ 8,169,148 December 31, 2021 Total Level 1 Level 2 Level 3 Fair value of convertible note $ 16,799,837 $ - $ - $ 16,799,837 Liability classified warrants 3,303,588 - - 3,303,588 Total $ 20,103,425 $ $ $ 20,103,425 |
SCHEDULE OF CHANGE IN FAIR VALUE OF COMPANY’S LEVEL 3 | The following table summarizes the change in fair value of the Company’s Level 3 assets and liabilities: SCHEDULE OF CHANGE IN FAIR VALUE OF COMPANY’S LEVEL 3 Total Convertible notes Liability classified warrants Fair value, December 31, 2021 $ 20,103,425 $ 16,799,837 $ 3,303,588 Conversions (6,372,701 ) (6,372,701 ) - Change in fair value (5,561,576 ) (2,767,178 ) (2,794,398 ) Fair value, March 31, 2022 $ 8,169,148 $ 7,659,958 $ 509,190 |
SCHEDULE OF REVENUE RECOGNIZATION UNDER GRANTS | The revenue recognized under the MPAR Grant and OUD Grant was as follows: SCHEDULE OF REVENUE RECOGNIZATION UNDER GRANTS Three Months Ended March 31, 2022 2021 MPAR $ 504,470 $ 73,726 OUD 98,628 176,850 Total $ 603,098 $ 250,576 |
SCHEDULE OF EARNINGS PER SHARE RECONCILIATION | SCHEDULE OF EARNINGS PER SHARE RECONCILIATION Three Months Ended March 31, 2022 2021 Numerator: Net income (loss) attributable to common stockholders $ (1,666,686 ) $ (907,731 ) Denominator: Weighted average shares outstanding, basic 27,287,618 15,834,185 Weighted average dilutive stock options - - Weighted average shares outstanding, diluted 27,287,618 15,834,185 Net income (loss) per share attributable to common stockholders, basic and diluted $ (0.06 ) $ (0.06 ) |
SCHEDULE OF WEIGHTED AVERAGE SHARES OF ANTI-DILUTIVE SECURITIES | 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: SCHEDULE OF WEIGHTED AVERAGE SHARES OF ANTI-DILUTIVE SECURITIES Three Months Ended March 31, 2022 2021 Stock options 5,786,814 4,614,059 Warrants 21,090,873 19,755 Total 26,877,687 4,633,814 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Prepaid Expenses And Other Current Assets | |
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS | Prepaid expenses and other current assets consisted of the following: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS March 31, December 31, 2022 2021 Prepaid insurance $ 1,793,164 $ 2,124,008 Prepaid research and development 455,472 733,234 Other prepaid expenses 142,604 74,173 Total prepaid expenses and other current assets $ 2,391,240 $ 2,931,415 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES | Accrued expenses and other liabilities consisted of the following: SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES March 31, December 31, 2022 2021 Share subscription facility commitment fees $ 800,000 $ 800,000 Accrued research and development 398,618 388,997 Professional fees 266,228 138,086 Bonus accrual 134,413 610,000 Accrued scientific advisory board fees 60,032 60,032 Consultant stock compensation expenses - 1,342,479 Other accrued liabilities 92,215 67,939 Total accrued expenses and other liabilities $ 1,751,506 $ 3,407,533 |
SCHEDULE OF OTHER LONG-TERM LIABILITIES | Other long-term liabilities consisted of the following: SCHEDULE OF OTHER LONG-TERM LIABILITIES 2022 2021 March 31, December 31, 2022 2021 Share subscription facility commitment fees $ 362,219 $ 349,202 Liability classified warrants 509,190 3,303,588 Total other long-term liabilities $ 871,409 $ 3,652,790 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF DEBT | The following table provides a summary of the Company’s outstanding debt as of March 31, 2022: SCHEDULE OF DEBT Principal balance Accrued interest Fair value adjustment Net debt balance 2021 Notes $ 7,627,778 $ 78,509 $ (46,329 ) $ 7,659,958 Total $ 7,627,778 $ 78,509 $ (46,329 ) $ 7,659,958 The following table provides a summary of the Company’s outstanding debt as of December 31, 2021: Principal balance Accrued interest Fair value Adjustment Net debt balance 2021 Notes $ 13,647,341 $ 159,435 $ 2,993,061 $ 16,799,837 Finance Insurance 385,187 4,082 - 389,269 Total $ 14,032,528 $ 163,517 $ 2,993,061 $ 17,189,106 |
SCHEDULE OF INTEREST EXPENSE DEBT | The interest expense recognized for notes payable (excluding the 2021 Notes) was as follows: SCHEDULE OF INTEREST EXPENSE DEBT 2022 2021 Three months ended March 31, 2022 2021 Stated interest accrual $ 2,004 $ 109,381 Debt discount amortization - 174,412 Total $ 2,004 $ 283,793 |
SCHEDULE OF CONVERSIONS DEBT | The following table provides a summary of the Company’s 2021 Notes conversions during the three months period ending March 31, 2022: SCHEDULE OF CONVERSIONS DEBT Shares Conversion Price Conversion Value January 3, 2022 535,249 $ 2.83 $ 1,517,054 February 3, 2022 1,354,423 $ 1.58 2,145,135 March 1, 2022 2,818,853 $ 0.96 2,710,512 Total 4,708,525 $ 6,372,701 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
SCHEDULE OF OUTSTANDING WARRANT | On March 31, 2022, outstanding warrants to purchase shares of common stock are as follows: SCHEDULE OF OUTSTANDING WARRANT Reference Shares Underlying Outstanding Warrants Exercise Price Description Classification (a) 18,901,290 $ 10.00 11.50 LACQ warrants Equity (b) 1,106,108 $ 0.96 Share subscription facility Equity (c) 361,158 $ 7.63 Convertible note Liability (d) 722,317 $ 7.63 Convertible note Liability 21,090,873 a) On June 30, 2021, as a result of the closing of the Business Combination, the Company assumed a total of 18,901,290 10.00 11.50 June 30, 2026 10,000,000 8,901,290 On August 3, 2021, the Company entered into an agreement with an existing warrant holder to reduce the exercise price of 500,000 warrants issued on June 30, 2021 from $ 11.50 to $ 10.00. b) On July 2, 2021, upon public listing of the Company’s shares, the Company issued 1,106,108 three 10.01 14.49 11.6 On December 28, 2021, January 3, 2022, February 1, 2022 and March 1, 2022 the exercise price of the warrants adjusted to $ 4.50 2.83 1.58 0.96 c) On September 24, 2021, the Company issued 361,158 7.63 September 23, 2026 d) On November 5, 2021, the Company issued 722,317 7.63 November 4, 2026 |
SCHEDULE OF WARRANTS FAIR VALUE ESTIMATION ASSUMPTIONS | 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: SCHEDULE OF WARRANTS FAIR VALUE ESTIMATION ASSUMPTIONS (a) LACQ warrants (grant date varies) (b) Share subscription facility (grant date 7/2/2021) (b) Share subscription facility (remeasurement date varies) Stock price $ 14.49 $ 14.49 $ 1.26 - 4.29 Exercise price $ 10.0 11.50 $ 10.01 $ 0.96 2.83 Expected term (years) 3.00 3.00 2.34 2.49 Volatility 110.0 % 110.0 % 113.8 117.2 Risk free rate 0.5 % 0.5 % 1.04 1.47 (c) Liability classified warrants (grant date 9/24/2021) (c) Liability classified warrants (remeasured at 3/31/22) (d) Liability classified warrants (grant date 11/5/2021) (d) Liability classified warrants (remeasured at 3/31/22) Stock price $ 4.49 $ 1.14 $ 2.25 $ 1.14 Exercise price $ 7.63 $ 7.63 $ 7.63 $ 7.63 Expected term (years) 5.00 4.50 5.00 4.60 Volatility 94.1 % 99.4 % 94.1 % 98.6 % Risk free rate 1.0 % 2.4 % 1.0 % 2.4 % |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | The following table summarizes the Company’s stock option activity during the three months ended March 31, 2022: SCHEDULE OF STOCK OPTION ACTIVITY Weighted average Options Exercise price Remaining contractual Intrinsic value Outstanding at December 31, 2021 4,444,068 $ 2.40 6.00 $ 10,207,306 Granted 1,986,000 4.33 - - Exercised - - - - Expired / Forfeited - - - - Outstanding at March 31, 2022 6,430,068 3.00 7.02 960 Exercisable at March 31, 2022 5,469,714 3.11 6.54 - Vested and expected to vest 6,430,068 3.00 7.02 960 |
SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS | 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 (there were no grants issued in 2021): SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS Three Months Ended March 31, 2022 Stock price $ 1.08 1.61 Exercise price $ 1.08 6.28 Expected stock price volatility 76.12 - 95.87% Expected term (years) 5.19 – 10.00 Risk-free interest rate 1.52 % - 2.20 % Expected dividend yield 0% |
SCHEDULE OF COMMON STOCK FUTURE ISSUANCE | The following shares of common stock are reserved for future issuance: SCHEDULE OF COMMON STOCK FUTURE ISSUANCE March 31, 2022 Awards outstanding under the 2021 Omnibus Incentive Plan 6,760,068 Awards available for future grant under 2021 Omnibus Incentive Plan 1,136,642 Warrants outstanding 21,090,873 Total shares of common stock reserved for future issuance 28,987,583 |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details Narrative) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Jan. 31, 2021 | Jun. 30, 2020 |
Restructuring Cost and Reserve [Line Items] | |||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Common stock, shares authorized | 150,000,000 | 150,000,000 | 150,000,000 | ||
Preferred stock, shares authorized | 1,500,000 | 1,500,000 | 1,500,000 | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Former Ensysce [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Common stock, par value | $ 0.0001 | ||||
Debt instrument, conversion price | $ 0.06585 | $ 0.06585 | |||
Ownership percentage | 71.80% | ||||
Covistat [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Common stock, par value | $ 0.001 | ||||
Ownership percentage | 79.20% | ||||
Common stock, shares authorized | 1,000,000 | ||||
Preferred stock, shares authorized | 100,000 | ||||
Preferred stock, par value | $ 0.001 | ||||
Covistat [Member] | Key Personnel [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Ownership percentage | 19.80% | ||||
Covistat [Member] | Unrelated Party [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Ownership percentage | 1.00% |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) - USD ($) | 1 Months Ended | |||||||||||
Jun. 30, 2021 | Mar. 31, 2022 | Mar. 01, 2022 | Feb. 01, 2022 | Jan. 03, 2022 | Dec. 31, 2021 | Dec. 28, 2021 | Nov. 05, 2021 | Sep. 30, 2021 | Sep. 24, 2021 | Jan. 31, 2021 | Dec. 31, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Accumulated deficit | $ 87,512,253 | $ 85,845,567 | ||||||||||
Common stock, subscriptions value | $ 6,000,000 | |||||||||||
Warrants issued | 18,901,290 | 722,317 | 361,158 | |||||||||
Warrant, exercise price | $ 0.96 | $ 1.58 | $ 2.83 | $ 4.50 | $ 7.63 | $ 7.63 | ||||||
Debt instrument, face amount | 7,627,778 | $ 14,032,528 | ||||||||||
Convertible Note Financing Agreement [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Debt instrument, face amount | $ 15,900,000 | |||||||||||
Investor [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Warrants issued | 1,106,108 | |||||||||||
Warrant, exercise price | $ 10.01 | |||||||||||
Commitment fees | $ 1,200,000 | |||||||||||
Investor [Member] | First Anniversary [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Commitment fees | 800,000 | |||||||||||
Investor [Member] | 18 Month Anniversary [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Commitment fees | $ 400,000 | |||||||||||
Former Ensysce [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Cash | 7,800,000 | |||||||||||
Prepaid expense | $ 1,100,000 | |||||||||||
Debt Instrument, conversion price | $ 0.06585 | $ 0.06585 |
SCHEDULE OF ASSETS AND LIABILIT
SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of convertible note | $ 7,659,958 | $ 16,799,837 |
Liability classified warrants | 509,190 | 3,303,588 |
Total | 8,169,148 | 20,103,425 |
Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of convertible note | ||
Liability classified warrants | ||
Total | ||
Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of convertible note | ||
Liability classified warrants | ||
Total | ||
Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of convertible note | 7,659,958 | 16,799,837 |
Liability classified warrants | 509,190 | 3,303,588 |
Total | $ 8,169,148 | $ 20,103,425 |
SCHEDULE OF CHANGE IN FAIR VALU
SCHEDULE OF CHANGE IN FAIR VALUE OF COMPANY’S LEVEL 3 (Details) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | $ 20,103,425 |
Conversions | (6,372,701) |
Change in fair value | (5,561,576) |
Ending balance | 8,169,148 |
Convertible notes [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | 16,799,837 |
Conversions | (6,372,701) |
Change in fair value | (2,767,178) |
Ending balance | 7,659,958 |
Liability classified warrants [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | 3,303,588 |
Conversions | |
Change in fair value | (2,794,398) |
Ending balance | $ 509,190 |
SCHEDULE OF REVENUE RECOGNIZATI
SCHEDULE OF REVENUE RECOGNIZATION UNDER GRANTS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Product Information [Line Items] | ||
Total | $ 603,098 | $ 250,576 |
MPAR [Member] | ||
Product Information [Line Items] | ||
Total | 504,470 | 73,726 |
OUD [Member] | ||
Product Information [Line Items] | ||
Total | $ 98,628 | $ 176,850 |
SCHEDULE OF EARNINGS PER SHARE
SCHEDULE OF EARNINGS PER SHARE RECONCILIATION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net income (loss) attributable to common stockholders | $ (1,666,686) | $ (907,731) |
Denominator: | ||
Weighted average shares outstanding, basic | 27,287,618 | 15,834,185 |
Weighted average dilutive stock options | ||
Weighted average shares outstanding, diluted | 27,287,618 | 15,834,185 |
Net income (loss) per share attributable to common stockholders, basic and diluted | $ (0.06) | $ (0.06) |
SCHEDULE OF WEIGHTED AVERAGE SH
SCHEDULE OF WEIGHTED AVERAGE SHARES OF ANTI-DILUTIVE SECURITIES (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 26,877,687 | 4,633,814 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 5,786,814 | 4,614,059 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 21,090,873 | 19,755 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2018 | |
Depreciation expense | $ 51 | ||||||
Proceeds from issuance of debt | $ 15,900,000 | ||||||
Grants receivable | $ 5,400,000 | $ 5,100,000 | $ 5,400,000 | ||||
Year 1 [Member] | |||||||
Grants receivable | 2,100,000 | 3,200,000 | |||||
Contribution of grants | 1,100,000 | ||||||
Year 2 [Member] | |||||||
Grants receivable | $ 3,000,000 | $ 2,200,000 | |||||
Year 3 [Member] | |||||||
Grants receivable | $ 2,800,000 |
SCHEDULE OF PREPAID EXPENSES AN
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Prepaid Expenses And Other Current Assets | ||
Prepaid insurance | $ 1,793,164 | $ 2,124,008 |
Prepaid research and development | 455,472 | 733,234 |
Other prepaid expenses | 142,604 | 74,173 |
Total prepaid expenses and other current assets | $ 2,391,240 | $ 2,931,415 |
SCHEDULE OF ACCRUED EXPENSES AN
SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Share subscription facility commitment fees | $ 800,000 | $ 800,000 |
Accrued research and development | 398,618 | 388,997 |
Professional fees | 266,228 | 138,086 |
Bonus accrual | 134,413 | 610,000 |
Accrued scientific advisory board fees | 60,032 | 60,032 |
Consultant stock compensation expenses | 1,342,479 | |
Other accrued liabilities | 92,215 | 67,939 |
Total accrued expenses and other liabilities | $ 1,751,506 | $ 3,407,533 |
SCHEDULE OF OTHER LONG-TERM LIA
SCHEDULE OF OTHER LONG-TERM LIABILITIES (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Total other long-term liabilities | $ 871,409 | $ 3,652,790 |
Commitment Fees [Member] | ||
Total other long-term liabilities | 362,219 | 349,202 |
Warrant Liabilities [Member] | ||
Total other long-term liabilities | $ 509,190 | $ 3,303,588 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||||
Jul. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 01, 2022 | Feb. 01, 2022 | Jan. 03, 2022 | Dec. 31, 2021 | Dec. 28, 2021 | Nov. 05, 2021 | Sep. 24, 2021 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||||||||
Contractual obligation | $ 15,800,000 | |||||||||
Operating lease, payments | 17,716 | |||||||||
Rent expense | 7,834 | $ 12,379 | ||||||||
Warrant, exercise price | $ 0.96 | $ 1.58 | $ 2.83 | $ 4.50 | $ 7.63 | $ 7.63 | ||||
Consultant compensation expenses | $ 1,342,479 | |||||||||
Investors [Member] | ||||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||||||||
Common stock issuable upon exercise warrants | 500,000 | |||||||||
Warrant, exercise price | $ 6.28 | |||||||||
Shares issued, share based compensation shares | 50,000 | |||||||||
Stock issued, restricted stock shares | 200,000 | |||||||||
Vesting period | 1 year | |||||||||
Share based payment award, vesting rights, percentage | 50.00% | |||||||||
Consultant compensation expenses | $ 87,208 | $ 1,342,479 |
SCHEDULE OF DEBT (Details)
SCHEDULE OF DEBT (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Short-Term Debt [Line Items] | ||
Principal balance | $ 7,627,778 | $ 14,032,528 |
Accrued interest | 78,509 | 163,517 |
Fair value adjustment | (46,329) | 2,993,061 |
Net debt balance | 7,659,958 | 17,189,106 |
2021 Notes [Member] | ||
Short-Term Debt [Line Items] | ||
Principal balance | 7,627,778 | |
Accrued interest | 78,509 | |
Fair value adjustment | (46,329) | |
Net debt balance | $ 7,659,958 | |
2021 Convertible Notes [Member] | ||
Short-Term Debt [Line Items] | ||
Principal balance | 13,647,341 | |
Accrued interest | 159,435 | |
Fair value adjustment | 2,993,061 | |
Net debt balance | 16,799,837 | |
Financed Insurance [Member] | ||
Short-Term Debt [Line Items] | ||
Principal balance | 385,187 | |
Accrued interest | 4,082 | |
Fair value adjustment | ||
Net debt balance | $ 389,269 |
SCHEDULE OF INTEREST EXPENSE DE
SCHEDULE OF INTEREST EXPENSE DEBT (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Debt Disclosure [Abstract] | ||
Stated interest accrual | $ 2,004 | $ 109,381 |
Debt discount amortization | 174,412 | |
Total | $ 2,004 | $ 283,793 |
SCHEDULE OF CONVERSIONS DEBT (D
SCHEDULE OF CONVERSIONS DEBT (Details) | 3 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | |
Short-Term Debt [Line Items] | |
Total shares | shares | 4,708,525 |
Total Conversion Value | $ | $ 6,372,701 |
Note one [Member] | |
Short-Term Debt [Line Items] | |
Conversion date | Jan. 3, 2022 |
Total shares | shares | 535,249 |
Conversion price | $ / shares | $ 2.83 |
Total Conversion Value | $ | $ 1,517,054 |
Note two [Member] | |
Short-Term Debt [Line Items] | |
Conversion date | Feb. 3, 2022 |
Total shares | shares | 1,354,423 |
Conversion price | $ / shares | $ 1.58 |
Total Conversion Value | $ | $ 2,145,135 |
Note three [Member] | |
Short-Term Debt [Line Items] | |
Conversion date | Mar. 1, 2022 |
Total shares | shares | 2,818,853 |
Conversion price | $ / shares | $ 0.96 |
Total Conversion Value | $ | $ 2,710,512 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Nov. 05, 2021 | Sep. 24, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Short-Term Debt [Line Items] | |||||
Debt Instrument, Fair Value Disclosure | $ 509,190 | $ 3,303,588 | |||
Loss on debt conversions | 1,700,000 | ||||
Proceeds from financed insurance premiums net | 867,300 | ||||
Interest expense | 15,021 | $ 347,834 | |||
Measurement Input, Control Premium [Member] | |||||
Short-Term Debt [Line Items] | |||||
Interest expense | $ 2,004 | ||||
2021 Convertible Notes Payable [Member] | |||||
Short-Term Debt [Line Items] | |||||
Convertible notes payable, current | $ 10,600,000 | $ 5,300,000 | |||
Proceeds from convertible debt | $ 9,400,000 | $ 4,600,000 | |||
Debt instrument, maturity date | Aug. 4, 2023 | Jun. 23, 2023 | |||
Debt instrument, interest rate | 5.00% | ||||
Debt instrument original issue discount | 6.00% | ||||
Payments of Stock Issuance Costs | $ 1,900,000 | ||||
Legal Fees | 1 | ||||
Debt Instrument, Unamortized Discount | $ 900,000 | ||||
[custom:PercentageOfCashSettlementPremium] | 8.00% | ||||
Convertible notes payable | $ 123,220 | ||||
Debt instrument, conversion price | $ 5.87 | ||||
Debt instrument, convertible, terms of conversion feature | beneficial ownership limitation of 4.99% | ||||
Debt instrument, redemption, description | The number of shares to be settled shall be based on a conversion price equal to the lesser of (a) $5.87 and (b) 92% of the average of the three lowest volume-weighted average prices (“VWAP”) during the 10 consecutive trading days prior to the applicable Monthly Redemption Date. The Company may not pay the Monthly Redemption Amount in shares unless the applicable conversion price is greater than or equal to $0.78 and the Company has been in compliance with customary requirements under the agreement, unless waived in writing by the holder | ||||
Debt instrument, redemption price, percentage | 92.00% | ||||
Debt instrument conversion price per share | $ 0.78 | ||||
Convertible debt | $ 5,000,000 | ||||
2021 Convertible Notes Payable [Member] | Maximum [Member] | |||||
Short-Term Debt [Line Items] | |||||
Debt instrument, redemption price, percentage | 20.00% | ||||
2021 Convertible Notes Payable [Member] | General and Administrative Expense [Member] | |||||
Short-Term Debt [Line Items] | |||||
Debt Instrument, Fair Value Disclosure | $ 15,900,000 | ||||
Gains (Losses) on Restructuring of Debt | 2,800,000 | ||||
Decrease in fair value of debt | $ 7,700,000 |
SCHEDULE OF OUTSTANDING WARRANT
SCHEDULE OF OUTSTANDING WARRANT (Details) | 3 Months Ended | |
Mar. 31, 2022$ / sharesshares | ||
Warrant [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Outstanding warrant | shares | 21,090,873 | |
Warrant One [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Outstanding warrant | shares | 18,901,290 | [1] |
Warrant description | LACQ warrants | [1] |
Warrant One [Member] | Minimum [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Exercise price | $ / shares | $ 10 | [1] |
Warrant One [Member] | Maximum [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Exercise price | $ / shares | $ 11.50 | [1] |
Warrant Two [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Outstanding warrant | shares | 1,106,108 | [2] |
Exercise price | $ / shares | $ 0.96 | [2] |
Warrant description | Share subscription facility | [2] |
Warrant Three [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Outstanding warrant | shares | 361,158 | [3] |
Exercise price | $ / shares | $ 7.63 | [3] |
Warrant description | Convertible note | [3] |
Warrant Four [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Outstanding warrant | shares | 722,317 | [4] |
Exercise price | $ / shares | $ 7.63 | [4] |
Warrant description | Convertible note | [4] |
[1] | On June 30, 2021, as a result of the closing of the Business Combination, the Company assumed a total of 18,901,290 10.00 11.50 June 30, 2026 10,000,000 8,901,290 | |
[2] | On July 2, 2021, upon public listing of the Company’s shares, the Company issued 1,106,108 three 10.01 14.49 11.6 | |
[3] | On September 24, 2021, the Company issued 361,158 7.63 September 23, 2026 | |
[4] | On November 5, 2021, the Company issued 722,317 7.63 November 4, 2026 |
SCHEDULE OF OUTSTANDING WARRA_2
SCHEDULE OF OUTSTANDING WARRANT (Details) (Parenthetical) - USD ($) $ / shares in Units, $ in Millions | Nov. 05, 2021 | Sep. 24, 2021 | Jul. 02, 2021 | Jun. 30, 2021 | Mar. 01, 2022 | Feb. 01, 2022 | Jan. 03, 2022 | Dec. 28, 2021 | Aug. 03, 2021 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Warrants issued | 722,317 | 361,158 | 18,901,290 | ||||||
Warrants and rights outstanding, maturity date | Jun. 30, 2026 | ||||||||
Warrants, exercise price | $ 7.63 | $ 7.63 | $ 0.96 | $ 1.58 | $ 2.83 | $ 4.50 | |||
Warrants and Rights Outstanding, Term | 3 years | ||||||||
Debt instrument expiration date | Nov. 4, 2026 | Sep. 23, 2026 | |||||||
General and Administrative Expense [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Warrants, exercise price | $ 10.01 | ||||||||
Grant date fair value of warrants price per share | $ 14.49 | ||||||||
Fair value adjustment of warrants | $ 11.6 | ||||||||
Subscription Arrangement [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Warrants issued | 1,106,108 | 500,000 | |||||||
Public Warrant [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Class of warrant or right, outstanding | 10,000,000 | ||||||||
Private Warrant [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Remaining of cashless warrant shares | 8,901,290 | ||||||||
Minimum [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Sale of stock, price per share | $ 10 | ||||||||
Warrants, exercise price | $ 11.50 | ||||||||
Maximum [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Sale of stock, price per share | 11.50 | ||||||||
Warrants, exercise price | $ 10 |
SCHEDULE OF WARRANTS FAIR VALUE
SCHEDULE OF WARRANTS FAIR VALUE ESTIMATION ASSUMPTIONS (Details) | Mar. 31, 2022$ / shares | Nov. 05, 2021$ / shares | Sep. 24, 2021$ / shares | Jul. 02, 2021$ / shares |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Expected term years | 3 years | |||
Leisure Acquisition Corp A Delaware Corporation [Member] | Measurement Input, Share Price [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 14.49 | |||
Leisure Acquisition Corp A Delaware Corporation [Member] | Measurement Input, Exercise Price [Member] | Minimum [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 10 | |||
Leisure Acquisition Corp A Delaware Corporation [Member] | Measurement Input, Exercise Price [Member] | Maximum [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 11.50 | |||
Leisure Acquisition Corp A Delaware Corporation [Member] | Measurement Input, Expected Term [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Expected term years | 3 years | |||
Leisure Acquisition Corp A Delaware Corporation [Member] | Measurement Input, Price Volatility [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 1.100 | |||
Leisure Acquisition Corp A Delaware Corporation [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 0.005 | |||
Share Subscription Facility [Member] | Measurement Input, Share Price [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 14.49 | |||
Share Subscription Facility [Member] | Measurement Input, Share Price [Member] | Minimum [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 1.26 | |||
Share Subscription Facility [Member] | Measurement Input, Share Price [Member] | Maximum [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 4.29 | |||
Share Subscription Facility [Member] | Measurement Input, Exercise Price [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 10.01 | |||
Share Subscription Facility [Member] | Measurement Input, Exercise Price [Member] | Minimum [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 0.96 | |||
Share Subscription Facility [Member] | Measurement Input, Exercise Price [Member] | Maximum [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 2.83 | |||
Share Subscription Facility [Member] | Measurement Input, Expected Term [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Expected term years | 3 years | |||
Share Subscription Facility [Member] | Measurement Input, Expected Term [Member] | Minimum [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 0.0104 | |||
Expected term years | 2 years 4 months 2 days | |||
Share Subscription Facility [Member] | Measurement Input, Expected Term [Member] | Maximum [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 0.0147 | |||
Expected term years | 2 years 5 months 26 days | |||
Share Subscription Facility [Member] | Measurement Input, Price Volatility [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 110 | |||
Share Subscription Facility [Member] | Measurement Input, Price Volatility [Member] | Minimum [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 1.138 | |||
Share Subscription Facility [Member] | Measurement Input, Price Volatility [Member] | Maximum [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 1.172 | |||
Share Subscription Facility [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 0.5 | |||
Liability Classified Warrants Grant Date [Member] | Measurement Input, Share Price [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 2.25 | 4.49 | ||
Liability Classified Warrants Grant Date [Member] | Measurement Input, Exercise Price [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 7.63 | 7.63 | ||
Liability Classified Warrants Grant Date [Member] | Measurement Input, Expected Term [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Expected term years | 5 years | 5 years | ||
Liability Classified Warrants Grant Date [Member] | Measurement Input, Price Volatility [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 0.941 | 0.941 | ||
Liability Classified Warrants Grant Date [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 0.010 | 1 | ||
Liability Classified Warrants Remeasured [Member] | Measurement Input, Share Price [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 1.14 | |||
Liability Classified Warrants Remeasured [Member] | Measurement Input, Exercise Price [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 7.63 | |||
Liability Classified Warrants Remeasured [Member] | Measurement Input, Expected Term [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Expected term years | 4 years 6 months | |||
Liability Classified Warrants Remeasured [Member] | Measurement Input, Price Volatility [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 99.4 | |||
Liability Classified Warrants Remeasured [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 2.4 | |||
Liability Classified Warrants Remeasured1 [Member] | Measurement Input, Share Price [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 1.14 | |||
Liability Classified Warrants Remeasured1 [Member] | Measurement Input, Exercise Price [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 7.63 | |||
Liability Classified Warrants Remeasured1 [Member] | Measurement Input, Expected Term [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Expected term years | 4 years 7 months 6 days | |||
Liability Classified Warrants Remeasured1 [Member] | Measurement Input, Price Volatility [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 98.6 | |||
Liability Classified Warrants Remeasured1 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Estimating fair value of warrants | 2.4 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | ||
Jun. 30, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | |||
Common stock, shares authorized | 150,000,000 | 150,000,000 | 150,000,000 |
Preferred stock, shares authorized | 1,500,000 | 1,500,000 | 1,500,000 |
Preferred stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock, shares, issued | 29,968,787 | 24,662,904 | |
Common stock, shares outstanding | 29,949,032 | 24,643,149 | |
Stock issued to settlement of convertible debt | 1,357,968 | ||
Stock issued to settlement amount of convertible debt | $ 5.8 | ||
Common stock issued to settlement of termination agreement | 500,000 | ||
Common stock issued to settelment of underwriting costs | 125,000 | ||
SPAC [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Common stock, shares outstanding | 6,219,268 | ||
Former Ensysce [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Common stock, shares, issued | 16,053,550 | ||
Stock issued during period shares purchase of assets | 19,755 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) | 3 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | |
Share-Based Payment Arrangement [Abstract] | |
Option outstanding, beginning balance | shares | 4,444,068 |
Weighted average exercise price. beginning balance | $ 2.40 |
Weighted average remaining contractual term, beginning balance | 6 years |
Aggregate intrinsic value, beginning balance | $ | $ 10,207,306 |
Option outstanding, granted | shares | 1,986,000 |
Weighted average exercise price, granted | $ 4.33 |
Aggregate intrinsic value, granted | |
Option outstanding, exercised | shares | |
Weighted average exercise price, exercised | |
Option outstanding, Expired or Forfeited | shares | |
Weighted average exercise price, expired / forfeited | |
Option outstanding, ending balance | shares | 6,430,068 |
Weighted average exercise price, ending balance | $ 3 |
Weighted average remaining contractual term, ending balance | 7 years 7 days |
Aggregate intrinsic value, ending balance | $ | $ 960 |
Option, exercisable | shares | 5,469,714 |
Weighted average exercise price, exercisable | $ 3.11 |
Weighted average remaining contractual term, exercisable | 6 years 6 months 14 days |
Aggregate intrinsic value, ending exercisable | $ | |
Option vested or expected to vest | shares | 6,430,068 |
Weighted average exercise price, vested or expected to vest | $ 3 |
Weighted average remaining contractual term in years, options | 7 years 7 days |
Aggregate intrinsic value, vested or expected to vest | $ | $ 960 |
SCHEDULE OF SHARE-BASED PAYMENT
SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS (Details) | 3 Months Ended |
Mar. 31, 2022$ / shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Expected dividend rate | 0.00% |
Minimum [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Stock price | $ 1.08 |
Exercise price | $ 1.08 |
Expected stock price volatility | 76.12% |
Expected term (years) | 5 years 2 months 8 days |
Risk-free interest rate | 1.52% |
Maximum [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Stock price | $ 1.61 |
Exercise price | $ 6.28 |
Expected stock price volatility | 95.87% |
Expected term (years) | 10 years |
Risk-free interest rate | 2.20% |
SCHEDULE OF COMMON STOCK FUTURE
SCHEDULE OF COMMON STOCK FUTURE ISSUANCE (Details) | Mar. 31, 2022shares |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Common Stock, capital shares reserved for future issuance | 28,987,583 |
Warrant Outstanding [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Common Stock, capital shares reserved for future issuance | 21,090,873 |
Share-Based Payment Arrangement, Option [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Common Stock, capital shares reserved for future issuance | 6,760,068 |
Share-Based Payment Arrangement, Option [Member] | Stock Option Available For Future Grant Under 2021 Omnibus Incentive Plan [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Common Stock, capital shares reserved for future issuance | 1,136,642 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Jan. 26, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Option, outstanding | 6,430,068 | 4,444,068 | ||
Stock reserved for future issuance | 28,987,583 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 1,986,000 | |||
Exercise price per share vested | $ 3 | |||
Weighted-average fair value per share , grant | $ 1.01 | |||
Unrecognized stock based compensation | $ 924,175 | |||
Weighted average period | 1 year 7 months 6 days | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 927,358 | |||
Weighted-average fair value per share , grant | $ 1.04 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested, Number of Shares | 547,358 | |||
Weighted-average fair value per share, vest | $ 1.23 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period | 50,000 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Period Increase (Decrease) | 330,000 | |||
Weighted-average fair value per share oustanding | $ 0.88 | |||
Board Of Members [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 1,986,000 | |||
Board Of Members [Member] | Minimum [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Option, vesting period | 0 years | |||
Exercise price per share vested | $ 1.08 | |||
Board Of Members [Member] | Maximum [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Option, vesting period | 4 years | |||
Exercise price per share vested | $ 6.28 | |||
General and Administrative Expense [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share based compensation expense | $ 373,944 | $ 43,820 | ||
Research and Development Expense [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share based compensation expense | $ 28,490 | $ 0 | ||
2021 Omnibus Incentive Plan [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Option, outstanding | 4,444,068 | |||
Stock reserved for future issuance | 1,000,000 | 3,000,000 |
RELATED PARTIES (Details Narrat
RELATED PARTIES (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Share based compensation | $ 402,434 | $ 43,820 |
Chief Executive Officer [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Share based compensation | $ 0 | $ 33,146 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] $ in Millions | 3 Months Ended |
Jun. 30, 2022USD ($)shares | |
Subsequent Event [Line Items] | |
Shares issued, shares | shares | 4,511,920 |
Proceeds from issuance of common stock | $ | $ 4.3 |