ENSC 10-K & 10-Q changes, risk factors and insider trading
Ensysce Biosciences, Inc. · Nasdaq · Pharmaceutical Preparations · CIK 1716947 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “If we are unable to regain and maintain compliance with the listing standards of Nasdaq, our common stock could be delisted and may become subject to “penny stock” rules, which could have a material adverse effect on the liquidity of our common stock, the ability of investors to sell their shares and our ability to raise funding.”
Removed heading “If we are unable to maintain compliance with the listing standards of Nasdaq, our common stock could be delisted and may become subject to “penny stock” rules, which could have a material adverse effect on the liquidity of our common stock, the ability of investors to sell their shares and our ability to raise funding.”
Largest changes
“If we are unable to regain and maintain compliance with the listing standards of Nasdaq, our common stock could be delisted and may become subject to “penny stock” rules, which could have a material adverse effect on the liquidity of our common stock, the ability of investors to sell their shares and our ability to raise funding.”see in full comparison
“If we are unable to maintain compliance with the listing standards of Nasdaq, our common stock could be delisted and may become subject to “penny stock” rules, which could have a material adverse effect on the liquidity of our common stock, the ability of investors to sell their shares and our ability to raise funding.”see in full comparison
“On November 14, 2024, we received notice from Nasdaq stating that we had demonstrated compliance with the $2.5 million stockholders’ equity requirement set forth in Nasdaq Listing Rule 5550(b)(1) as of September 30, 2024. On December 20, 2024, we received notice from Nasdaq that we had regained compliance with the bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). As of September 30, 2025, we were not in compliance with that stockholders’ equity requirement but on November 14, 2025, we raised additional capital and our stockholders’ equity then exceeded the requirement. …”see in full comparison
“On November 14, 2024, we received notice from Nasdaq stating that we had demonstrated compliance with the $2.5 million stockholders’ equity requirement set forth in Nasdaq Listing Rule 5550(b)(1) as of September 30, 2024. On December 20, 2024, we received notice from Nasdaq that we had regained compliance with the bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). There can be no assurance that we will be able to maintain compliance with such Nasdaq Listing Rules and our common stock could be delisted.”see in full comparison
We currentlysee in full comparisononlyhaveseveneight full-timeemployees, one part-time employeeemployees andonetwoconsultant and we expect to add additionalpart-time employees. Our future success also depends on our ability to identify, attract, hire or engage, retain and motivate other well-qualified managerial, technical, clinical and regulatory personnel.
Full comparison: every changed paragraph (7)
We require substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce or terminate our product discovery and development programs or commercialization efforts.
We
currently only have seveneight full-time employees, one part-time employeeemployees and onetwo consultant and we expect to add additionalpart-time employees. Our
future success also depends on our ability to identify, attract,
hire or engage, retain and motivate other well-qualified managerial,
technical, clinical and regulatory personnel.
Debt
financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability
to take specific actions, such as incurring additional debt, making acquisitions, engaging in acquisition, merger or collaboration transactions,
selling or licensing our assets, making capital expenditures, redeeming our stock, making certain investments, declaring dividends or
encumbering our assets to secure future indebtedness. Such restrictions could adversely impact our ability to conduct our operations
and execute our business plan. TheCertain Investorwarrants Noteswe have issued contain such restrictions including a pledge of substantially all of our
tangible and
intangible assets, including our intellectual property.
If we are unable to regain and maintain compliance with the listing standards of Nasdaq, our common stock could be delisted and may become subject to “penny stock” rules, which could have a material adverse effect on the liquidity of our common stock, the ability of investors to sell their shares and our ability to raise funding.
On November 14, 2024, we received notice from Nasdaq stating that we had demonstrated compliance with the $2.5 million stockholders’ equity requirement set forth in Nasdaq Listing Rule 5550(b)(1) as of September 30, 2024. On December 20, 2024, we received notice from Nasdaq that we had regained compliance with the bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). As of September 30, 2025, we were not in compliance with that stockholders’ equity requirement but on November 14, 2025, we raised additional capital and our stockholders’ equity then exceeded the requirement. On February 25, 2026, we received notice from Nasdaq that we are no longer in compliance with the bid price requirement because the price of our common stock has remained below $1.00 for more than 30 consecutive business days. We have until August 24, 2026, and possibly longer, to regain compliance with the bid price requirement. There can be no assurance that we will be able to regain and/or maintain compliance with such Nasdaq Listing Rules and our common stock could be delisted.
If
we are unable to maintain compliance with the listing standards of Nasdaq, our common stock could be delisted and may become subject
to “penny stock” rules, which could have a material adverse effect on the liquidity of our common stock, the ability of investors
to sell their shares and our ability to raise funding.
On
November 14, 2024, we received notice from Nasdaq stating that we had demonstrated compliance with the $2.5 million stockholders’
equity requirement set forth in Nasdaq Listing Rule 5550(b)(1) as of September 30, 2024. On December 20, 2024, we received notice from
Nasdaq that we had regained compliance with the bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). There can be no assurance
that we will be able to maintain compliance with such Nasdaq Listing Rules and our common stock could be delisted.
Management's Discussion & Analysis (MD&A)
New heading “Series B Preferred Stock Financing”
New heading “2025 April Warrant Inducement”
New heading “2025 Registered Direct Offering and 2025 March Warrant Offering”
Removed heading “2023 May Offering”
Removed heading “2023 February Offering”
Removed heading “2022 December Offering”
Removed heading “Change in fair value of convertible notes”
Largest changes
Full comparison: every changed paragraph (44)
Series B Preferred Stock Financing
On November 13, 2025, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor (the “Purchaser”) providing for (i) a registered direct offering and (ii) a concurrent private placement (collectively, the “Offerings”). The registered direct offering closed on November 14, 2025.
In the registered direct offering, the Company issued 1,513 shares of Series B Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), convertible into 665,922 shares of common stock, par value $0.0001 per share (the “Common Stock”, the “Underlying Shares”). The Preferred Stock has a stated value of $1,100 per share, was sold at $1,000 per share, and is convertible into Common Stock at a conversion price of $2.50 per share, subject to customary anti-dilution adjustments. The Preferred Stock and the Underlying Shares were issued pursuant to an effective registration statement on Form S-3.
In the concurrent private placement, the Company issued 2,487 unregistered shares of Preferred Stock convertible into up to 1,094,078 shares of Common Stock, subject to adjustment, as well as warrants (the “Warrants”) to purchase up to 880,000 shares of Common Stock, subject to adjustment. The Warrants have an exercise price of $2.50 per share, subject to customary anti-dilution adjustments, are exercisable beginning six months after issuance, and expire on the fifth anniversary of the later of (i) the effectiveness of a resale registration statement covering the Warrants and (ii) receipt of required stockholder approval (“Stockholder Approval”).
The Company evaluated the terms of the Series B Preferred Stock for embedded features that may require bifurcation as derivative instruments under ASC 815. Certain features were identified that met the definition of a derivative. However, the Company concluded that the fair value of such features was not material to the financial statements and accordingly did not recognize them as separate derivative liabilities. The Company will continue to reassess this conclusion at each reporting period.
2025 April Warrant Inducement
In April 2025, we entered into an Inducement Letter with certain warrant holders for the exercise of certain outstanding warrants to purchase up to an aggregate of 630,376 share of our common stock, par value $0.0001 per share. The warrants were issued in March 2025 with an exercise price of $3.24 share. The shares of common stock issuable upon exercise of such outstanding warrants are registered pursuant to an effective register statement on Form S-3.
In consideration for the immediate exercise of the warrants for cash and the payment of an additional $0.125 per new unregistered warrant (an additional $157,594 included in our gross proceeds), pursuant to the Inducement Agreement, we agreed to issue and sell unregistered warrants to purchase shares of common stock. The new warrants (the “Common Warrants”) are exercisable for an aggregate of up to 1,260,752 shares of common stock. The Common Warrants have an exercise price of $1.90 per share and are immediately exercisable for shares of common stock. One half of the Common Warrants will expire after eighteen (18) months and the other half will expire after five (5) years. Our gross proceeds from the exercise of the warrants and payment for Common Warrants was approximately $2.2 million, prior to deducting placement agent fees and estimated offering expenses.
We utilized a placement agent for the 2025 April Warrant Inducement and incurred approximately $0.3 million in legal fees and other closing costs. Additionally, we issued to the placement agent as compensation unregistered warrants to purchase up to 44,126 shares of common stock, equal to 7.0% of the aggregate number of shares of Common Stock (or warrants) placed in the transaction. The placement agent warrants expire on April 24, 2030, and have an exercise price of $4.05 per share of common stock. The closing of the offering occurred on April 24, 2025.
2025 Registered Direct Offering and 2025 March Warrant Offering
In March 2025, we entered into a Stock Purchase Agreement with certain institutional investors, pursuant to which we agreed to issue and sell in a registered direct offering, (i) an aggregate of 239,594 shares of common stock, par value $0.0001 per share at an offering price of $3.49 per share, (ii) pre-funded warrants to purchase up to 75,594 shares of common stock, at a price per pre-funded warrant equal to $3.4899, the price per share less $0.0001, for gross proceeds of approximately $1.1 million before the deduction of placement agent fees and offering expenses. The pre-funded warrants were fully exercised as of March 31, 2025, and the related common shares were issued in April 2025.
In a concurrent private placement, pursuant to the terms of the SPA, we also agreed to issue and sell unregistered warrants to purchase up to 315,188 shares of Common Stock (the “Series A-5 Warrants”), and Series A-6 warrants to purchase up to 315,188 shares of Common Stock (the “Series A-6 Warrants”), to purchase up to an aggregate 630,376 shares of Common Stock. The warrants have an exercise price of $3.24 per share and are exercisable immediately. The Series A-5 Warrants will expire eighteen (18) months after issuance and the Series A-6 Warrants will expire five (5) years after issuance. The warrants contain customary anti-dilution adjustments to the exercise price, including for share splits, share dividends, rights offering and pro rata distributions.
We agreed to pay the placement agent a cash fee equal to 7% of the aggregate gross proceeds of the offerings or $77,000. We also agreed to pay the placement agent $65,950 for expenses. We also issued to the placement agent warrants to purchase up to 22,063 shares of common stock. These warrants have an exercise price equal to $4.3625 per share and are exercisable for five years.
2023
Notes
On
October 23, 2023, we entered into a Securities Purchase Agreement (the “SPA”) for an aggregate financing of $1.7 million
with investors, including $0.2 million with a board member. At the first closing under the SPA, which occurred on October 25, 2023, we
issued to the investors (i) senior secured convertible promissory notes in the aggregate principal amount of $612,000 for an aggregate
purchase price of $566,667 and (ii) warrants to purchase 83,714 shares of our common stock in the aggregate. At the second closing under
the SPA, which occurred on November 28, 2023, we issued to the investors referenced above, (i) additional notes in the aggregate principal
amount of $1,224,000 for an aggregate purchase price of $1,133,333 and (i) additional warrants to purchase 167,427 shares of the common
stock in the aggregate. The notes matured on April 25, 2024 and May 28, 2024, respectively.
The
combined notes are subject to an original issue discount of 8%, have a term of six months from their respective date of issuance and
accrue interest at the rate of 6.0% per annum. The notes are convertible into common stock, at a per share conversion price equal to
$23.51. Beginning ninety days following issuance of the notes at the first closing and second closing, respectively, we are obligated
to redeem monthly one third of the original principal amount under the applicable note, plus accrued but unpaid interest, liquidated
damages and any other amounts then owing to the holder of such note. We are required to pay the redemption amount in cash with a premium
of 10% or, at the election of the investor at any time, some or all of the principal amount and interest may be paid by conversion of
shares under the note into common stock based on a conversion price equal to $23.51. Conversions and repayments of principal and interest
on the notes in January and February 2024 totaled $1.7 million.
The
warrants have an exercise price of $23.51 and are exercisable for five years following issuance on each of the first and second closing
dates under the SPA. Warrants for 88,261 shares of common stock were exercised in January 2024.
2023
May Offering
On
May 12, 2023, we completed a public offering of an aggregate of 120,059 shares of its common stock at par value $0.0001 per share (including
pre-funded warrants in lieu thereof), Series A-1 warrants to purchase up to 120,059 shares of common stock and Series A-2 warrants to
purchase up to 120,059 shares of common stock, at a combined public offering price of $58.31 per share (or pre-funded warrant in lieu
thereof) and accompanying warrants. The Series A-1 warrants have an exercise price of $54.60 per share, are exercisable immediately upon
issuance and expire five years from the date of issuance, and the Series A-2 warrants have an exercise price of $54.60 per share, are
exercisable immediately upon issuance and expire eighteen months from the date of issuance. A holder
of a warrant issued in the offering will not have the right to exercise any portion of its warrants if the holder, together with its
affiliates, would beneficially own in excess of 4.99% (or 9.99% at the election of the holder prior to the date of issuance) of the number
of shares of Common Stock outstanding immediately after giving effect to such exercise; provided, however, that upon 61 days’ prior
notice us, the holder may increase or decrease the beneficial ownership limitation, provided that in no event shall the beneficial ownership
limitation exceed 9.99%. Gross proceeds from this offering are approximately $7.0 million before the deduction of placement agent
fees and related costs of $0.7 million. The Series A-1 and Series A-2 warrants were repriced to $19.65 per share and exercised in February
2024.
H.C.
Wainwright & Co. acted as the exclusive placement agent for the offering. We also registered warrants issued to the placement agent
to purchase 8,404 shares of common stock at a per share exercise price of $72.882, which is 125% of the price of the shares in the offering.
In
connection with the offering, we amended certain existing warrants to purchase up to an aggregate of 14,006 shares of our common stock
that were previously issued in September 2021 through December 2022 to purchasers in the offering at exercise prices ranging from $252.00
to $2,808.00 per share, such that the amended warrants have a reduced exercise price of $54.60 per share, at an additional offering price
of $1.875 per amended warrant.
2023
February Offering
On
February 2, 2023, we entered into a definitive Securities Purchase Agreement with certain institutional investors , pursuant to which
we agreed to issue and sell in a registered direct offering, priced “at-the-market” under the rules of The Nasdaq Stock Market,
an aggregate of 19,842 shares of our common stock, par value $0.0001 per share, at an offering price of $151.2 per share, for gross proceeds
of approximately $3.0 million before the deduction of placement agent fees and related costs of $0.3 million. The closing of the Offering
occurred on February 6, 2023.
In
a concurrent private placement, we issued to the institutional investors, for each share of common stock purchased in the offering, a
common warrant to purchase one share of common stock. The common warrants are exercisable immediately upon issuance and terminate five
and one-half years following issuance. The common warrants have an exercise price of $128.70 per share and are exercisable to purchase
an aggregate of up to 19,842 shares of Common Stock and expire on August 7, 2028. A holder of a common warrant will not have the right
to exercise any portion of its warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or 9.99%
at the election of the holder prior to the date of issuance) of the number of shares of common stock outstanding immediately after giving
effect to such exercise; provided, however, that upon 61 days’ prior notice to us, the holder may increase or decrease the beneficial
ownership limitation, provided that in no event shall the beneficial ownership limitation exceed 9.99%.
H.C.
Wainwright & Co. acted as the exclusive placement agent (the “Placement Agent”) for the offering. We issued placement
agent warrants to purchase up to 1,389 shares of common stock to the Placement Agent (including its designees). These warrants have an
exercise price equal to $189.00 per share and are exercisable for five years from the commencement of sales in the offering. The common
warrants and placement agent warrants and the shares of our common stock issuable upon the exercise of the common warrants and placement
agent warrants are not being registered under the Securities Act of 1933, as amended, are not being offered pursuant to the Registration
Statement, and are being offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act of 1933 and Rule 506(b).
In
the Securities Purchase Agreement, we agreed not to issue, enter into any agreement to issue or announce the issuance or proposed issuance
of any shares of common stock or any securities convertible into or exercisable or exchangeable for Common Stock for a period of 30 days
following the closing of the offering. Our officers and directors agreed, subject to limited exceptions, for a period of 90 days after
the closing of the offering, to not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of, directly or indirectly,
or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, with respect to, any shares of common stock or securities convertible, exchangeable
or exercisable into, shares of common stock beneficially owned, held or thereafter acquired by them.
2022
December Offering
On
December 7, 2022, we entered into an underwriting agreement with Lake Street Capital Management, LLC (the “Underwriter”),
pursuant to which we agreed to issue and sell (i) 12,667 shares of our common stock, par value $0.0001 per share, (ii) pre-funded warrants
to purchase 3,445 shares of common stock and (iii) warrants to purchase 32,223 shares of common stock to the Underwriter in a public
offering. In addition, we granted the Underwriter the option, for 45 days from the closing of the offering, to purchase up to 1,900 additional
shares of common stock and common warrants to purchase up to an additional 4,834 shares of common stock. The Underwriter agreed to purchase
our shares pursuant to at a price of $234.30 per share.
In
lieu of a purchase of common stock that would otherwise result in an investor’s beneficial ownership exceeding 4.99% (or, at the
election of the investor, 9.99%) of the outstanding common stock, a pre-funded warrant was offered, each of which enables the investor
to purchase one share of common stock at an exercise price of $0.0001. Each pre-funded warrant was exercisable upon issuance and will
expire when exercised in full (all pre-funded warrants were exercised immediately upon issuance). Each pre-funded warrant was sold with
a common warrant to purchase two shares of common stock. The public purchase price of one share of common stock and accompanying common
warrant to purchase two shares of Common Stock is $252.00 and the combined purchase price of one pre-funded warrant and accompanying
common warrant to purchase two shares of common stock is $252.00.
Each
common warrant is exercisable immediately at an exercise price of $252.00 per share and will expire five years following the date of
issuance. The offering closed on December 9, 2022 and we received aggregate gross proceeds of approximately $4.1 million from the Offering.
2022
Notes
On
June 30, 2022, we entered into an $8.0 million convertible financing agreement with institutional investors. The agreement provided for
two closings, each for notes payable of $4.24 million (resulting in gross cash proceeds of $4.0 million). Funds were received for the
first closing on July 1, 2022 and for the second closing on August 9, 2022. The remaining amount of principal and interest on the 2022
Notes was repaid in the first quarter of 2023. We were obligated under the 2022 Notes to pay additional cash as true-up payments for
interest or redemption amounts that we paid in shares of common stock that were valued below $361.05 or the lower conversion price of
$135.15 in effect between January 12, 2023 and May 12, 2023. The true-up payments compensate the holder for the difference between the
value of a share and the conversion price in effect at the time of redemption, multiplied by the number of shares paid. The true-up payments
totaling $0.6 million were paid on May 12, 2023.
In
connection with each of the first and second closings of the 2022 Notes we also issued warrants to purchase 2,594 shares of our common
stock. The warrants have a current exercise price of $54.60 and are exercisable for five years following issuance of the 2022 Notes.
Change
in fair value of convertible notes
The
2022 Notes were accounted for under ASC 480 – Distinguishing Liabilities from Equity, due to share settlement features contained
within the notes. We used a discounted cash flow model and a Monte Carlo simulation to estimate the fair value of the notes, both of
which rely on unobservable Level 3 inputs. Changes in the fair value of the notes are recognized through earnings for each reporting
period.
Interest
expense consists of interest accrued on our financed directors’ and officers’ insurance, and interest from the 2023 Notes
based on the stated interest rate. In addition, the 2023 Notes reflects amortization of the debt discount from the original issuance
and a discount associated with the warrant issuances and amortization of the associated debt issuance costs that are all recorded as
interest expense. Interest expense related to the 2022 Notes was included in the estimate of fair value of the convertible notes.
Beginning
in 2022, the Tax Cuts and Jobs Act, or the Tax Act, eliminated the option to deduct research and development expenditures currently and
requires taxpayers to capitalize and amortize them over five or fifteen years pursuant to Internal Revenue Code Section 174. This has
not impacted our effective tax rate or our cash tax payable in 2024; however, if the requirement to capitalize Section 174 expenditures
is not modified, it may also impact our effective tax rate and our cash tax liability in future years.
Revenue
from federal grants totaled $5.1 million for the year ended December 31, 2025, compared to $5.2 million for the year ended December 31,
2024, compared to $2.2 million for the year ended December 31,
2023, respectively. The $3.0$0.1 million difference is due to the timing of research activities eligible for funding,funding withunder increasedthe activitiesOUD and MPAR
grants. A decrease of $2.1 million in funding under the OUD grant followingthat theended selectionin August 2024 was offset by an increase of a$2.0 lead drug candidate million
in June 2024 and funding under the newly awarded MPAR grant which
began in September 2024.
Research
and development expenses were $7.2$10.4 million for the year ended December 31, 2024,2025, compared to $7.6$7.2 million for the year ended December
31, 2023,2024, respectively, representing a decreaseincrease of $0.4$3.2 million. The decreaseincrease was primarily the result of reduced external research and development
development costs related to increased clinical and pre-clinical programs for PF614 and PF614-MPAR,PF614-MPAR. withWe decreasedexpect future research and development expenses
to increase once we begin the Phase 3 clinical trial activityfor forPF614, with such timing dependent upon our ability to raise capital sufficient
bothto programsfund inthese the 2024 period. We do not currently track expenses on a program-by-program basis.expenses.
General
and administrative expenses were $4.7$4.9 million for the year ended December 31, 2024,2025, compared to $5.4$4.7 million for the year ended December
31, 20232024 respectively, representing aan decreaseincrease of $0.6$0.2 million. The decrease was primarily a result of reduced stock-based compensation
expenses. We expect future general and administrative expenses to approximate
current levels.
Other
income and expense for the year ended December 31, 2025, consisted primarily of interest income from cash and cash equivalents. Other
income and expense for the year ended December 31, 2024, consisted primarily of interest expense associated with the amortization of
the original issue discount and the debt issuance costs for the 2023 Notes and represented a net change in other income and expense of
$1.3 million compared to the year ended December 31, 2023. The comparative period for 2023 consisted primarily of changes in fair value
associated with the 20222023 Notes and the liability-classified warrants.Notes.
During
the years ended December 31, 20242025 and 2023,2024, we used cash in operating activities of $7.5$7.8 million and $10.8$7.5 million, respectively. The
decreaseincrease primarily resultedresult from additionalthe revenuetiming cashof inflowvendor from grant fundinginvoicing and a reduction in research and development activities
in 2024.payments.
During the year ended December 31, 2025, net cash provided by financing activities was $8.7 million, primarily consisting of net proceeds from Series B Preferred stock financing, warrant inducements, a public offering of common stock and warrant exercises. During the year ended December 31, 2024, net cash provided by financing activities was $9.9 million, primarily consisting of net proceeds from the August 2024 public offering, warrant exercises and warrant inducements, net of transaction costs, less repayment of convertible notes of million and financed insurance premiums.
During
the year ended December 31, 2024, net cash provided by financing activities was $9.9 million, primarily consisting of net proceeds from
the August 2024 public offering $1.7 million, warrant exercises and warrant inducements of $9.1 million, net of transaction costs, less
repayment of convertible notes of $0.5 million and financed insurance premiums of $0.4 million. During the year ended December 31, 2023,
net cash provided by financing activities was $8.8 million, primarily consisting of net proceeds from 2023 February and 2023 May offerings
of $8.7 million and net proceeds from 2023 Notes of $1.6 million, less the repayment of financed insurance premiums of $0.5 million and
cash payment of 2022 Notes of $1.0 million.
What changed in the latest 10-Q
Risk Factors
While we attempt to identify, manage and mitigate risks and uncertainties associated with our business to the extent practical, under the circumstances, some level of risk and uncertainty will always be present. Part I, Item 1A. Risk Factors of our 2025 Annual Report on Form 10-K includes a detailed discussion of our risk factors. Those risks and uncertainties have the potential to materially affect our financial condition and results of operations.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Cy Biopharma Inc. Acquisition”
New heading “Results of Operations”
New heading “Comparison of the six months ended June 30, 2026 and 2025:”
New heading “Federal grant funding”
New heading “Research and development expenses”
New heading “General and administrative expenses”
New heading “Other income and expense”
Largest changes
Full comparison: every changed paragraph (31)
We
require substantial additional funding to support our continuing operations and pursue our growth strategy. Until we can generate significant
revenue from product sales, if ever, we expect to finance our operations through a combination of private and public equity offerings,
debt financings or other capital sources, which may include collaborations with other companies or other strategic transactions.transactions, including
a product development and manufacturing collaboration that we entered into previously. To the
extent that we raise additional capital
through the sale of private or public equity or convertible debt securities, existing ownership
interests will be diluted, and the terms
of these securities may include liquidation or other preferences that adversely affect the rights
of our equity holders.
Debt
financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take
specific actions, such as incurring additional debt, issuing additional equity, making acquisitions or capital expenditures or declaring
dividends. If we raise additional funds through collaborations or other strategic transactions with third parties, we may have to relinquish
valuable rights to our technologies, future revenue streams, research programs or drug candidates, or grant licenses on terms that may
not be favorable to us.us and our stockholders may suffer significant dilution in any such transaction. We may be unable to raise additional
funds or enter into such other agreements or arrangements when needed on
favorable terms, or at all. If we fail to raise capital or enter
into such agreements as and when needed, we may have to significantly
delay, scale back or discontinue the development and commercialization
of one or more of our product candidates or delay our pursuit
of potential in-licenses or acquisitions.
We
have generated limited revenues and have incurred significant operating losses since our inception and expect to continue to incur operating
losses for the foreseeable future. These factors raise substantial doubt about our ability to continue as a going concern. Our future
viability is dependent on our ability to raise additional capital to finance our operations. Without raising additional capital through
a future offering, we believe that current cash on hand is sufficient to fund operations through late secondthird quarter of 2026. We based
this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.
See “— Liquidity and Capital Resources.” Our future viability beyond the twelve months is dependent on our ability
to raise additional capital to finance our operations.
Cy Biopharma Inc. Acquisition
On August 5, 2026, we completed the acquisition of Cy Biopharma, Inc., a clinical-stage biotechnology company focused on the development of therapies for chronic pain. Its lead product candidate, for the treatment of Complex Regional Pain Syndrome (CRPS) Type 1, has received Orphan Drug Designation from the U.S. Food and Drug Administration. The acquisition consideration consisted primarily of shares of our Series C Preferred Stock issued to the former equity holders of Cy Biopharma. Concurrent with the acquisition, we entered into a private placement financing for gross proceeds of approximately $21.5 million, with the potential for an additional financing tranche of up to approximately $38.6 million upon the achievement of specified clinical development milestones.
On
April 6, 2026, the Companywe closed a private placement with anthe same institutional investor pursuant to athe Securities Purchase Agreement originally
entered into on November 13, 2025. The Company issued 2,000 shares of Series B Preferred Stock convertible into up to 4,363,636 shares
of common stock at a conversion price of $0.55 per share, for gross proceeds of $2.0 million before fees and expenses. In connection
with the closing, the Company also issued (i) warrants to purchase up to 4,363,637 shares of common stock exercisable for 18 months and
(ii) warrants to purchase up to 4,363,636 shares of common stock exercisable for five years, in each case at an exercise price of $0.55
per share and exercisable immediately upon issuance. Additionally, warrants to purchase up to 261,818 shares of common stock were issued
to the Company’s financial advisor. All warrants are subject to customary anti-dilution adjustments. In connection with closing,
the closing, the
Company amended its Certificate of Designation to increase the stated value per share of all outstanding Series B Preferred Stock from
from $1,100 to $1,200 per share.
Research
and development activities are central to our business model. Product candidates in later stages of clinical development generally have
higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage
clinical trials. As a result, we expect that our research and development expenses will remain elevated as we continue our existing,
and commence additional, planned clinical trials for PF614,PF614 and PF614-MPAR® and nafamostat,, as well as conduct other preclinical and clinical
clinical development, including submitting regulatory filings for our other product candidates, subject to our ability to obtain financing. We
We also expect our related personnel costs to increase and, as a result, we expect our research and development expenses, including costs
associated with stock-based compensation, to remain elevated. In addition, we may incur additional expenses related to milestone and
royalty payments payable to third parties with whom we may enter into license, acquisition and option agreements to acquire the rights
to future product candidates.
We
account for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included in the financial statements or our tax returns. Deferred tax
assets and liabilities are determined based on difference between the financial statement carrying amounts and tax bases of existing
assets and liabilities and for loss and credit carryforwards, which are measured using the enacted tax rates and laws in effect in the
years in which the differences are expected to reverse. The realization of our deferred tax assets is dependent upon the generation of
future taxable income, the amount and timing of which are uncertain. Valuation allowances are provided, if, based upon the weight of
available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of MarchJune 31,30, 2026,
and December 31, 2025, we continue to maintain a full valuation allowance against all of our deferred tax assets based on our evaluation
of all available evidence.
Comparison
of the Three Months Ended MarchJune 31,30, 2026 and 2025:
Revenue
from federal grants totaled $1.0$1.2 million for the three months ended MarchJune 31,30, 2026, compared to $1.3$1.4 million for the three months ended
MarchJune 31,30, 2025, respectively. This $0.3$0.2 million decrease is primarily due to the timing of research activities eligible for funding under
the MPAR grant.
Research
and development expenses were $3.3$2.5 million for the three months ended MarchJune 31,30, 2026, compared to $1.9 million for the three months ended
MarchJune 31,30, 2025, representing an increase of $1.5$0.5 million. The increase was primarily the result of external research and development costs
costs related to increased clinical activity for PF614. We expect future research and development expenses to fluctuate with activity under
under the Phase 3 clinical trial for PF614, with such timing dependent upon our ability to raise capital sufficient to fund these expenses.
General
and administrative expenses were $1.2$1.3 million for the three months ended MarchJune 31,30, 2026 and $1.4$1.2 million the three months ended MarchJune 30,
31, 2025, representing aan decreaseincrease of $0.2$0.1 million. We expect future general and administrative expenses to approximate current levels.
Other
income and expense for the three months ended MarchJune 31,30, 2026, consisted primarily of interest income from cash and cash equivalents.
For the comparative period for 2025, other income and expense included changes in the fair value of the warrant liabilities recognized
through earnings.
Results of Operations
Comparison of the six months ended June 30, 2026 and 2025:
Federal grant funding
Funding from federal grants for the six months ended June 30, 2026 and 2025 totaled $2.1 million and $2.7 million, respectively. The decrease of approximately $0.6 million is primarily due to the timing of research activities eligible for funding under the MPAR grant.
Research and development expenses
Research and development expenses for the six months ended June 30, 2026, and 2025 were $5.8 million and $3.8 million, respectively, representing an increase of $2.0 million. The increase was primarily the result of external research and development costs related to increased clinical activity for PF614.
General and administrative expenses
General and administrative expenses for the six months ended June 30, 2026, and 2025 were $2.4 million and $2.6 million, respectively, representing a decrease of $0.2 million.
Other income and expense
Other income and expense for the six months ended June 30, 2026 and 2025, consisted primarily of interest income from cash and cash equivalents.
As
of MarchJune 31,30, 2026, we had $0.7 million of cash and cash equivalents. In AprilAugust 2026, thewe Companyacquired issuedCy 2,000Biopharma, sharesInc. and completed a
private placement financing which together provided aggregate cash of Seriesapproximately B$31 Preferred,
formillion, gross proceedsnet of $2.0transaction million.expenses. Since
inception, we have generated limited revenues and have incurred significant operating losses
and negative cash flows from our
operations, and we anticipate that we will continue to incur losses for at least the foreseeable future.
We have not yet
commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidate for
for several years, if at all.
We have funded our operations to date primarily with proceeds from the sale of common and preferred equity, exercise of warrants for common equity, funding under federal research grants and borrowings under convertible promissory notes. To fund future operations, we will need to raise additional capital. The amount and timing of future funding requirements will depend on many factors, including the timing and results of our ongoing research and development efforts and related general and administrative support. We anticipate that we will fund our operations through public or private equity or debt financings or other sources, such as potential collaboration agreements. We cannot make assurances that anticipated additional financing will be available to us on favorable terms, if at all.
The
remaining funding under the MPAR federal research grant totaled $6.0$5.3 million at MarchJune 31,30, 2026, and is expected to be utilized by May
31, 2027. Pursuant to the terms and conditions, we are required to submit progress reports to NIDA on an annual basis and a final research
performance progress report within 120 days of the performance period end date.
We
have generated limited revenues and have incurred significant operating losses since our inception. We expect to continue to incur significant
expenses and operating losses for the foreseeable future. Without capital raised through financing transactions, existing cash resources
are sufficient to allow us to fund current planned operations through late secondthird quarter of 2026, which raises substantial doubt about
our ability to continue as a going concern.
Cash
Flows for the three months ended MarchJune 31,30, 2026, and 20252026
During
the threesix months ended MarchJune 31,30, 2026 and 2025, we used cash in operating activities of $3.5$5.5 million and $1.7$4.4 million, respectively. The
The increase primarily resulted from the timing of vendor invoicing and payments, particularly related to the Phase 3 clinical trial for
for PF614.
During
the threesix months ended MarchJune 31,30, 2026, net cash used in financing activities was $0.1$1.8 million, primarily from $1.9 million of net proceeds
from issuance of Series B Preferred Stock and $0.1 million repayments of financed
insurance premiums. During the threesix months ended March 31,June
30, 2025, net cash provided by financing activities was $1.3$3.1 million, primarily
consisting of net proceeds from warrant inducements,
a public offering of common stock and warrant exercises.exercise
Our
commitments as of MarchJune 31,30, 2026, included an estimated $17.0$15.6 million related to open purchase orders and contractual obligations that
occurred in the ordinary course of business, including commitments with contract research organizations for multi-year pre-clinical and
clinical research studies. Although open purchase orders are considered enforceable and legally binding, the terms generally allow us
the option to cancel, reschedule, and adjust requirements based on our business needs prior to the delivery of goods or the performance
of services.
ENSC insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 2 trade dates, 908,614 shares, about $444.1K) and open-market sales in 0 filings. Net open-market shares: 908,614 (purchases minus sales); net value about $444.1K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-07 | Gower Bob G |
Open-market purchase | 400,000 | $0.50 | $200.0K |
| 2026-04-23 | Gower Bob G |
Open-market purchase | 508,614 | $0.48 | $244.1K |
Well-known investors holding ENSC (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 86,193 | $25.0K | 0.0% | Added 50% |