Business Context and Reporting Period
This Form 8-K is filed by Leisure Acquisition Corp. (LACQ), a Special Purpose Acquisition Company (SPAC), on June 1, 2021, reporting events occurring on May 25, 2021, and June 1, 2021. The company is in the process of a proposed business combination with Ensysce Biosciences, Inc. The filing addresses critical regulatory compliance issues with The Nasdaq Stock Market LLC regarding listing standards and periodic reporting obligations.
Key Financial Metrics and Liquidity
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. The document focuses on regulatory status rather than financial performance metrics. However, it notes that the company is required to restate financial statements to address the accounting treatment of warrants, which may involve recording non-cash fair value adjustments in earnings.
Material Changes and Regulatory Status
- Nasdaq Delisting Notice: On June 1, 2021, Nasdaq notified LACQ that trading of its securities (LACQ, LACQW, LACQU) will be suspended effective June 3, 2021, due to failure to complete a business combination by the June 1, 2021 deadline.
- Trading Venue Change: Securities are expected to trade on the OTC Markets system beginning June 3, 2021, though the company remains technically listed on Nasdaq pending appeal processes.
- Reporting Delinquency: On May 25, 2021, Nasdaq issued a separate notice regarding LACQ's failure to timely file its Form 10-Q for the period ended March 31, 2021.
- Reason for Delays: The delays in completing the merger and filing the 10-Q were caused by the need to reevaluate the accounting treatment of warrants following an April 12, 2021, SEC Staff Statement. This requires determining if warrants should be classified as liabilities measured at fair value.
Outlook, Risks, and Management Commentary
LACQ plans to appeal the Nasdaq suspension notice. Management believes that completing the merger with Ensysce will enable the company to evidence Nasdaq listing compliance by June 30, 2021. However, the filing explicitly states there can be no assurance that the merger will be completed or that securities will trade on Nasdaq upon completion. The company submitted a plan to regain compliance with filing requirements to the Nasdaq Hearings Panel on June 1, 2021. Significant risks include the potential inability to consummate the transaction, regulatory approval delays, and the uncertainty of maintaining a Nasdaq listing.
Investor Verification Checklist
- Verify the status of the merger agreement between Leisure Acquisition Corp. and Ensysce Biosciences, Inc.
- Confirm the timeline for the filing of the restated Form 10-K/A and the delayed Form 10-Q.
- Monitor the outcome of the appeal regarding the Nasdaq suspension notice.
- Review the upcoming Form S-4 registration statement and proxy materials for details on the transaction and warrant accounting adjustments.
- Check the OTC Markets ticker symbols for trading activity post-June 3, 2021.