What changed in this filing

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Item 1A. Risk Factors

2022-03-31 compared with 2021-04-01 · 1057 added, 370 removed, 645 unchanged (69% of the section changed)

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We intend to develop at least three product candidates by undergoing the long, costly clinical-trial process for each candidate

under an Investigational New Drug Application (“IND”) and, eventually, obtaining FDA approval under a New Drug Application

(“NDA”) before proceeding to market.

In order to proceed with development of our pharmaceutical product candidates under

the NDA pathway, we must obtain the FDA’s approval of our IND application and conduct preclinical and clinical trials in compliance

with the applicable IND regulations, clinical-study protocols, and other applicable regulations and related requirements.

be able to develop products which are commercially viable or receive regulatory approval in the U.S.

under an IND application and, eventually, obtaining FDA approval under an NDA before proceeding to market.

proceed with development of our pharmaceutical product candidates under the NDA pathway, we must obtain the FDA’s approval of our

IND application and conduct preclinical and clinical trials in compliance with the applicable IND regulations, clinical-study protocols,

and other applicable regulations and related requirements.

We may never be able to develop products which are commercially viable or

receive regulatory approval in the U.S.

or elsewhere.

There can be no assurance

that the FDA or any other regulatory authority will approve of our current or future product candidates.

the United States, the FDA regulates drugs under the Federal Food, Drug and Cosmetic Act, or “FDCA,”

and implementing regulations.

There can be no assurance that the FDA or any other regulatory authority will approve

of our current or future product candidates.

the United States, the FDA regulates drugs under the Federal Food, Drug and Cosmetic Act, or “FDCA,” and implementing regulations.

Drugs are also subject to other federal, state and local statutes and regulations.

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of preclinical laboratory tests, animal studies, and formulation studies according to Good Laboratory Practices and other applicable

to the FDA of an IND, which must become effective before human clinical trials may begin in the United States;

of adequate and well-controlled human clinical trials according to the FDA’s current good clinical practices, or GCPs, which

to the FDA of an IND application, which must become effective before human clinical trials may begin in the United States;

of adequate and well-controlled human clinical trials according to the FDA’s current good clinical practices, or GCPs, which

sufficiently demonstrate the safety and efficacy of the proposed drug or biologic for its intended uses;

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completion of an FDA inspection of the manufacturing facility or facilities where the drug or biologic is to be produced to assess

compliance with the FDA’s current good manufacturing practice standards, or cGMP, to assure that the facilities, methods and

controls are adequate to preserve the drug’s or biologic’s identity, strength, quality and purity;

compliance with the FDA’s current good manufacturing practice standards, or cGMP, to assure that the facilities, methods and

controls are adequate to preserve the drug’s or biologic’s identity, strength, quality and purity;

FDA audit of the nonclinical and clinical trial sites that generated the data in support of the NDA or biologics license application;

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development and IND application filings and into clinical development.

intend to advance early research programs through preclinical development and to file an IND application for human clinical trials

evaluating the prospective product candidates in our pipeline.

The preparation and submission of IND applications requires rigorous

and time-consuming preclinical testing, the results of which must be sufficiently documented to establish, among other things,

the toxicity, safety, manufacturing, chemistry and clinical protocol of the product candidates.

We may experience unforeseen difficulties

that could delay or otherwise prevent us from successfully executing our current development strategy.

In addition, our

ability to complete and file certain IND applications may depend on the support of our partners and the timely performance of

their obligations under relevant collaboration agreements.

If our relevant partners are not able to perform such obligations,

or if they otherwise delay the progress, we may not be able to prepare and file the intended IND applications on a timely

basis or at all.

Any delay, suspension or reduction of our efforts to pursue our preclinical and IND strategy could have a material

adverse effect on our business and cause our share price to decline.

intend to advance early research programs through preclinical development and to file an IND application for human clinical trials evaluating

the prospective product candidates in our pipeline.

The preparation and submission of IND applications requires rigorous and time-consuming

preclinical testing, the results of which must be sufficiently documented to establish, among other things, the toxicity, safety, manufacturing,

chemistry and clinical protocol of the product candidates.

We may experience unforeseen difficulties that could delay or otherwise prevent

us from successfully executing our current development strategy.

In addition, our ability to complete and file certain IND applications

may depend on the support of our partners and the timely performance of their obligations under relevant collaboration agreements.

our relevant partners are not able to perform such obligations, or if they otherwise delay the progress, we may not be able to prepare

and file the intended IND applications on a timely basis or at all.

Any delay, suspension or reduction of our efforts to pursue our preclinical

and IND strategy could have a material adverse effect on our business and cause our share price to decline.

novel coronavirus could adversely impact our business, including our current plans for product development, as well as any currently

ongoing preclinical studies and clinical trials and any future studies or other development or commercialization activities.

COVID-19 was initially reported to have surfaced in Wuhan, China in December 2019, it has spread globally, including countries

in which we are currently, or plans to, conduct preclinical or clinical studies or other development activities.

is significant uncertainty as to the likely effects of this pandemic.

As the ongoing COVID-19 pandemic continues, we will likely

experience disruptions that could severely impact our business, including, but not limited to, our current or future preclinical

studies, clinical trials, regulatory progress, or any other development or commercialization activities, including (among others):

or difficulties in enrolling patients in clinical trials;

COVID-19 was initially reported to have surfaced in Wuhan, China in December 2019, it has spread globally, including to countries in

which we are currently, or have plans to, conduct preclinical or clinical studies or other development activities.

There is significant

uncertainty as to the likely effects of this pandemic.

As the COVID-19 pandemic continues, we will likely experience disruptions that

could severely impact our business, including, but not limited to, our current or future preclinical studies, clinical trials, regulatory

progress, or any other development or commercialization activities, including (among others):

or difficulties in enrolling patients in clinical trials, specifically since many of the patients are considered immunocompromised;

or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

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and treat the disease.

economic, and military instability in Israel may impede our development programs, which could have a material adverse effect on our business.

plan to conduct a clinical cancer study consisting of a Phase 1/2 study in Israel of oral synthetic CBD extract, given alone or in combination

with clomiphene concurrently with dose-dense Temolozomide chemotherapy for patients with recurrent or progressive GBM, designed as an

open label, two-arm, randomized prospective study.

We are currently waiting on primary approval from the Israeli Ministry of Health,

Center for Cannabis (Yakar) to proceed with such study.

Since the establishment of the State of Israel in 1948, a number of armed conflicts

have taken place between Israel and its neighboring countries.

In May 2021, hostilities between Israel and Hamas escalated and an eleven

day war between Israel and Hamas ensued, including rocket attacks targeting Tel Aviv, where some of our key partners for the planned

GBM study are located.

Since then, the deadlock between Israel and the Palestinian movement has returned to its pre-war status quo, although

localized incidents continue to thwart the efforts to reach a stable ceasefire.

The ongoing conflict and any hostilities involving Israel

or political, economic, and military conditions in Israel and the surrounding region may directly affect our ability to obtain approvals

needed for our GBM study and cause interruptions or delays in conducting such study or future studies we may conduct in Israel for an

indeterminate time.

Any armed conflicts, terrorist activities, or political instability in the region could impeded our development programs,

which could have a material adverse effect on our business.

have significant and increasing liquidity needs and may require additional funding.

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will be available to it on favorable terms, or at all.

Further, even if we can raise funds from financing arrangements, the amounts raised

may not be sufficient to meet our future capital requirements.

The global spread of COVID-10 has created significant volatility and uncertainty

in global financial markets and may reduce our ability to access capital and negatively affect our liquidity.

Further, even if we can

raise funds from financing arrangements, the amounts raised may not be sufficient to meet our future capital requirements.

Additionally,

the Company does not have sufficient unreserved, authorized shares to secure an equity investment of a sufficient amount, based on the

Company’s currently traded price per share, and the Company will require shareholder approval to increase the amount of authorized shares.

If we are not able to raise capital, we could be required to postpone, scale back or eliminate some, or all, of our development

objectives or commercialization efforts.

depend on our current key personnel and our ability to attract and retain employees.

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We are highly dependent on our

current management and scientific personnel, including David Johnson, Avani Kanubaddi, and Dr.

Robert Wilkins.

The inability to hire

or retain experienced management personnel could adversely affect our ability to execute our business plan and harm our operating results.

Due to the specialized scientific and managerial nature of our business, we rely heavily on our ability to attract and retain qualified

scientific, technical and managerial personnel.

The competition for qualified personnel in the pharmaceutical field is intense and we

may be unable to continue to attract and retain qualified personnel necessary for the development of our business or to recruit suitable

replacement personnel.

current management and scientific personnel, including Joseph Tucker, Avani Kanubaddi, and Dr.

The inability to hire or retain

experienced management personnel could adversely affect our ability to execute our business plan and harm our operating results.

to the specialized scientific and managerial nature of our business, we rely heavily on our ability to attract and retain qualified scientific,

technical and managerial personnel.

The competition for qualified personnel in the pharmaceutical field is intense and we may be unable

to continue to attract and retain qualified personnel necessary for the development of our business or to recruit suitable replacement

has been limited study on the effects of medical cannabinoids, and future clinical research studies may lead to conclusions that dispute

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Future research and clinical trials may draw opposing

conclusions to statements contained in the articles, reports and studies We have relied on, or could reach different or negative conclusions

regarding the medical benefits, viability, safety, efficacy, dosing or other facts and perceptions related to cannabinoids, which could

adversely affect social acceptance of cannabinoids and the demand for our product candidates.

conclusions to statements contained in the articles, reports and studies we have relied on, or could reach different or negative

conclusions regarding the medical benefits, viability, safety, efficacy, dosing or other facts and perceptions related to cannabinoids,

which could adversely affect social acceptance of cannabinoids and the demand for our product candidates.

limited resources may lead us to pursue a particular candidate and fail to capitalize on product candidates that may be more profitable

or for which there is a greater likelihood of medical and commercial success.

result of our limited financial, managerial and scientific leadership resources we focus on developing product candidates that we have

identified as most likely to succeed.

As such, we may have to forego or delay the development of other candidates that may prove to have

greater potential.

Our resource allocation decisions may cause us to fail to capitalize on viable medical solutions, therapeutic enhancements

and commercial potentials for viable markets when our spending on our current and future defined candidates with the indications specified

therein may not yield any commercially viable products.

Inaccurate evaluation of potential may result in relinquishment of valuable

product candidate opportunity.

expect to face intense competition, often from companies with greater resources and experience than us.

pharmaceutical industry is highly competitive and subject to rapid change.

The industry continues to expand and evolve as an increasing

number of competitors and potential competitors enter the market.

Many of these competitors and potential competitors have substantially

greater financial, technological, managerial and research and development resources and experience than us.

Some of these competitors

and potential competitors have more experience than us in the development of pharmaceutical products, including validation procedures

and regulatory matters.

In addition, our future product candidates, if successfully developed, will compete with product offerings from

large and well-established companies that have greater marketing and sales experience and capabilities than us or our collaboration partners

pharmaceutical industry is highly competitive, with an emphasis on proprietary products and subject to rapid change.

The industry continues

to expand and evolve as an increasing number of competitors and potential competitors enter the market.

Many of these competitors and

potential competitors have substantially greater financial, technological, managerial and research and development resources and experience

Some of these competitors and potential competitors have more experience than us in the development of pharmaceutical products,

including validation procedures and regulatory matters.

In addition, our future product candidates, if successfully developed, will compete

with product offerings from large and well-established companies that have greater marketing and sales experience and capabilities than

us or our collaboration partners have.

Other companies with greater resources than we may announce similar plans in the future.

In addition, there are other non-FDA approved

CBD preparations being made available from other companies, which might attempt to compete with our future product candidates.

are unable to compete successfully, our commercial opportunities will be reduced and our business, results of operations and financial

conditions may be materially harmed.

there are other non-FDA approved CBD preparations being made available from other companies, which might attempt to compete with our

future product candidates.

In addition, small or early stage companies may prove to be competitors, particularly through collaborative

arrangements with large and established companies.

If we are unable to compete successfully, our commercial opportunities will be reduced

and our business, results of operations and financial conditions may be materially harmed.

In addition, we compete with these companies

in recruiting and retaining scientific personnel as well as establishing clinical trial sites and patient registration for clinical trials.

current and future preclinical and clinical studies may be conducted outside the United States, and the FDA may not accept data from

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studies in Israel, and plan to conduct clinical studies for one or more product candidates in Israel or other non-U.S.

the extent we do not conduct these clinical trials under an IND, the FDA may not accept data from such trials.

Although the FDA may accept

data from clinical trials conducted outside the United States that are not conducted under an IND, the FDA’s acceptance of these

data is subject to certain conditions.

For example, the clinical trial must be well designed and conducted and performed by qualified

investigators in accordance with ethical principles and all applicable FDA regulations.

The trial population must also adequately represent

the intended U.S.

population, and the data must be applicable to the U.S.

the extent we do not conduct these clinical trials in accordance under an IND application, the FDA may not accept data

from such trials.

Although the FDA may accept data from clinical trials conducted outside the United States that are not conducted under

an IND application, the FDA’s acceptance of the data is subject to certain conditions.

For example, the clinical trial must

be well designed and conducted and performed by qualified investigators in accordance with ethical principles and all applicable FDA

The trial population must also adequately represent the intended U.S.

population, and the data must be applicable to the

population and U.S.

medical practice in ways that the FDA deems

clinically meaningful.

In general, the patient population for any clinical trials conducted outside of the United States must be representative

of the population for whom we intend to market the product candidate in the United States, if approved.

In addition, while these clinical

trials are subject to the applicable local laws, FDA acceptance of the data will be dependent upon our ability to verify the data and

our determination that the trials also complied with all applicable U.S.

medical practice in ways that the FDA deems clinically meaningful.

In general, the patient population for any

clinical trials conducted outside of the United States must be representative of the population for whom we intend to market the product

candidate in the United States, if approved.

In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance

of the data will be dependent upon our ability to verify the data and our determination that the trials also complied with all applicable

laws and regulations.

We cannot guarantee that the FDA will

accept data from trials conducted outside of the United States.

If the FDA does not accept the data from such clinical trials, we would

likely result in the need for additional trials and the completion of additional regulatory steps, which would be costly and time-consuming

and could delay or permanently halt our development of our product candidates.

The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state

and foreign statutes and regulations requires the expenditure of substantial time and financial resources.

cannot guarantee that the FDA will accept data from trials conducted outside of the United States.

If the FDA does not accept the data

from such clinical trials, we would likely result in the need for additional trials and the completion of additional regulatory steps,

which would be costly and time-consuming and could delay or permanently halt our development of our product candidates.

the results of preclinical studies and earlier clinical trials are not necessarily predictive of future results, we may not have favorable

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development of therapeutic products is highly uncertain and is dependent on numerous factors, many of which are beyond our control.

candidates that appear promising in the early phases of development may fail to reach the market for several reasons including:

development involves long lead times and involves many variables of uncertainty.

Product candidates that appear promising in the early

phases of development may fail to reach the market for several reasons including, without limitation:

study results that may show the product to be less effective than desired (e.g., the study failed to meet our primary objectives)

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our business and financial prospects, would be materially adversely affected.

Similarly, undesirable side effects caused by our product

candidates could cause us or regulatory authorities to limit dosage in development or interrupt, delay or halt clinical trials and could

result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities.

Restrictive label applications may include but are not limited to a Boxed Warning, Risk Evaluation and Mitigation Strategies, or REMS,

or other limitations of use.

Drug-related side effects during one clinical trial furthermore could affect patient recruitment or the

ability of enrolled patients to complete the trial, result in potential product liability claims or our ability to ensure enrollment

for future trials.

Any of these occurrences may harm our business, financial condition and prospects significantly.

approval is limited by the FDA to those specific indications and conditions for which clinical safety and efficacy have been demonstrated,

and we may be subject to fines, penalties or injunctions if we are determined to be promoting the use of our products for unapproved

or “off-label” uses.

the FDA or comparable foreign regulatory authorities issue regulatory approval for a product candidate, the regulatory approval is limited

to those specific indications for which a product is approved.

If we are not able to obtain FDA approval for any desired future indications

for our products and product candidates, our ability to effectively market and sell our products may be reduced and our business may

be adversely affected.

While physicians may choose to prescribe drugs for uses that are not described in the product’s labeling

and for uses that differ from those tested in clinical studies and approved by the regulatory authorities, we are prohibited from marketing

and promoting the products for indications that are not specifically approved by the FDA.

“off-label” uses are common across medical specialties and may constitute an appropriate treatment for some patients in varied

circumstances.

Regulatory authorities in the United States generally do not restrict or regulate the behavior of physicians in their

choice of treatment within the practice of medicine.

Regulatory authorities do, however, restrict communications by pharmaceutical companies

on off-label use.

If the FDA determines that our promotional activities constitute promotion of an off-label use, it could request that

we modify our promotional materials or subject us to regulatory or enforcement actions by other agencies, including issuance of warning

letters, suspension or withdraw an approved product from the market, additional reporting requirements and/or oversight if we become

subject to a corporate integrity agreement or similar agreement, any of which could significantly harm our business.

interruptions could delay us in the process of developing our product candidates.

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We have adopted a Corporate Code of Conduct and Ethics and Whistleblower Policy, but employee misconduct is not always possible to identify

The precautions we take to detect and prevent these prohibited activities may not be effective in controlling unknown or unmanaged

risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance

precautions we take to detect and prevent these prohibited activities may not be effective in controlling unknown or unmanaged risks

or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance

with such laws or regulations.

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or other disruptions.

Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed,

lost or stolen.

Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under

laws that protect the privacy of personal information, regulatory penalties, disrupt our operations, damage our reputation, and cause

a loss of confidence in our products and our ability to conduct clinical trials, which could adversely affect our business and reputation

and lead to delays in gaining regulatory approvals for our future product candidates.

Although we may obtain business interruption insurance

coverage in the future, our insurance might not cover all losses from any future breaches of our systems.

such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen.

such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the

privacy of personal information, regulatory penalties, disrupt our operations, damage our reputation, and cause a loss of confidence

in our products and our ability to conduct clinical trials, which could adversely affect our business and reputation and lead to delays

in gaining regulatory approvals for our future product candidates.

Although we may obtain business interruption insurance coverage in

the future, our insurance might not cover all losses from any future breaches of our systems.

of our information technology systems, including cybersecurity attacks or other data security incidents, could significantly disrupt

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business depends on the use of information technologies.

Our ability to execute our business plan and to comply with regulators’

requirements with respect to data control and data integrity, depends, in part, on the uninterrupted performance of our information

technology systems, or IT systems and the IT systems supplied by third-party service providers.

Our IT systems are vulnerable

to damage from a variety of sources, including telecommunications or network failures, malicious human acts, natural disasters

and more sophisticated and targeted cyber-related attacks that pose a risk to the security of our information systems and networks

and the confidentiality, availability and integrity of data and information.

A successful cybersecurity attack or other data security

incident could result in the misappropriation and/or loss of confidential or personal information, create system interruptions,

or deploy malicious software that attacks our systems.

It is also possible that a cybersecurity attack might not be noticed for

some period of time.

In addition, sustained or repeated system failures or problems arising during the upgrade of any of our IT

systems that interrupt our ability to generate and maintain data could adversely affect our ability to operate our business.

occurrence of a cybersecurity attack or incident could result in business interruptions from the disruption of our IT systems,

or negative publicity resulting in reputational damage with our shareholders and other stakeholders and/or increased costs to

prevent, respond to or mitigate cybersecurity events.

In addition, the unauthorized dissemination of sensitive personal information

or proprietary or confidential information could expose us or other third-parties to regulatory fines or penalties, litigation

and potential liability, or otherwise harm our business.

Our ability to execute our business plan and to comply with regulators’

requirements with respect to data control and data integrity, depends, in part, on the uninterrupted performance of our information technology

systems, or IT systems and the IT systems supplied by third-party service providers.

Our IT systems are vulnerable to damage from a variety

of sources, including telecommunications or network failures, malicious human acts, natural disasters and more sophisticated and targeted

cyber-related attacks that pose a risk to the security of our information systems and networks and the confidentiality, availability

and integrity of data and information.

A successful cybersecurity attack or other data security incident could result in the misappropriation

and/or loss of confidential or personal information, create system interruptions, or deploy malicious software that attacks our systems.

It is also possible that a cybersecurity attack might not be noticed for some period of time.

In addition, sustained or repeated system

failures or problems arising during the upgrade of any of our IT systems that interrupt our ability to generate and maintain data could

adversely affect our ability to operate our business.

The occurrence of a cybersecurity attack or incident could result in business interruptions

from the disruption of our IT systems, or negative publicity resulting in reputational damage with our shareholders and other stakeholders

and/or increased costs to prevent, respond to or mitigate cybersecurity events.

In addition, the unauthorized dissemination of sensitive

personal information or proprietary or confidential information could expose us or other third-parties to regulatory fines or penalties,

litigation and potential liability, or otherwise harm our business.

breaches, loss of data and other disruptions could compromise sensitive information related to our business, prevent it from accessing

critical information or expose it to liability, which could adversely affect our business and its reputation.

the ordinary course of our business, we expect to collect and store sensitive data, including legally protected patient health

information, credit card information, personally identifiable information about our employees, intellectual property, and

proprietary business information.

We expect to manage and maintain its applications and data utilizing on-site systems.

applications and data encompass a wide variety of business-critical information including research and development information,

commercial information and business and financial information.

secure processing, storage, maintenance and transmission of this critical information is vital to our operations and business

strategy, and we devote significant resources to protecting such information.

Although we take measures to protect sensitive

information from unauthorized access or disclosure, our information technology and infrastructure may be vulnerable to attacks

by hackers, or viruses, breaches or interruptions due to employee error, malfeasance or other disruptions, or lapses in compliance

with privacy and security mandates.

Any such virus, breach or interruption could compromise our networks and the information stored

there could be accessed by unauthorized parties, publicly disclosed, lost or stolen.

In the future, any such access, disclosure

or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal

information, such as the Health Insurance Portability and Accountability Act and European Union General Data Protection Regulation,

government enforcement actions and regulatory penalties.

Unauthorized access, loss or dissemination could also disrupt our operations,

including our ability to process samples, provide test results, share and monitor safety data, bill payors or patients, provide

customer support services, conduct research and development activities, process and prepare company financial information, manage

various general and administrative aspects of our business and may damage our reputation, any of which could adversely affect

our business, financial condition and results of operations.

the ordinary course of our business, we expect to collect and store sensitive data, including legally protected patient health information,

credit card information, personally identifiable information about our employees, intellectual property, and proprietary business information.

We expect to manage and maintain this data utilizing on-site systems.

This data includes a wide variety of business-critical

information including research and development information, commercial information and business and financial information.

secure processing, storage, maintenance and transmission of this critical information is vital to our operations and business strategy,

and we devote significant resources to protecting such information.

Although we take measures to protect sensitive information from unauthorized

access or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers, or viruses, breaches or

interruptions due to employee error, malfeasance or other disruptions, or lapses in compliance with privacy and security mandates.

such virus, breach or interruption could compromise our networks and the information stored there could be accessed by unauthorized parties,

publicly disclosed, lost or stolen.

In the future, any such access, disclosure or other loss of information could result in legal claims

or proceedings, liability under laws that protect the privacy of personal information, such as the Health Insurance Portability and Accountability

Act and European Union General Data Protection Regulation, government enforcement actions and regulatory penalties.

Unauthorized access,

loss or dissemination could also disrupt our operations, including our ability to process samples, provide test results, share and monitor

safety data, bill payors or patients, provide customer support services, conduct research and development activities, process and prepare

company financial information, manage various general and administrative aspects of our business and may damage our reputation, any of

which could adversely affect our business, financial condition and results of operations.

operating results may vary significantly in future periods.

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small declines in revenue could disproportionately affect financial results in a quarter.

ongoing costs and obligations

a neuro-pharmaceutical drug discovery and development platform company, the Company expects to spend substantial funds on the research,

development and testing of psychedelic molecular derivatives.

In addition, the Company expects to incur significant ongoing costs and

obligations related to its investment in infrastructure and growth and for regulatory compliance, which could have a material adverse

impact on the Company’s results of operations, financial condition and cash flows.

The Company will also require significant additional

funds if it expands the scope of current plans for research and development or if it were to acquire any other assets and advance their

It is possible that future financing will not be available or, if available, may not be on favorable terms.

The availability

of financing will be affected by the achievement of the Company’s corporate goals, the results of scientific and clinical research,

the need and ability to obtain regulatory approvals and the state of the capital markets generally.

If adequate funding is not available,

the Company may be required to delay, reduce or eliminate one or more of its research and development programs, or obtain funds through

corporate partners or others who may require the Company to relinquish significant rights to its Psychedelic Derivatives or compounds

or obtain funds on less favorable terms than the Company would otherwise accept.

To the extent that external sources of capital

become limited or unavailable or available on onerous terms, the Company’s intangible assets and its ability to continue its business

plans may become impaired, and the Company’s assets, liabilities, business, financial condition and results of operations may be

materially or adversely affected.

addition, future changes in regulations, changes in legal status of psychedelic products, more vigorous enforcement thereof or other

unanticipated events could require extensive changes to the Company’s operations, increased compliance costs or give rise to material

liabilities, which could have a material adverse effect on the business, results of operations and financial condition of the Company.

The Company’s efforts to grow its business may be costlier than expected.

may rely on third parties to plan and conduct preclinical and clinical trials

may rely on third parties to conduct preclinical development activities and intends to partner with third parties who may conduct clinical

development activities with our Psychedelic Derivatives and other product candidates.

Preclinical activities include “in

vivo” studies providing access to specific disease models, pharmacology and toxicology studies, and assay development.

development activities include trial design, regulatory submissions, clinical patient recruitment, clinical trial monitoring, clinical

data management and analysis, safety monitoring and project management.

If there is any dispute or disruption in its relationship with

third parties, or if such third parties are unable to provide quality services in a timely manner and at a feasible cost, or if such

third parties fail to meet certain development milestones, our active development programs may face delays.

if any of these third parties fails to perform as wed expects or if their work fails to meet regulatory requirements, the testing and

eventual development of viable Psychedelic Derivative drug candidates could be delayed, cancelled or rendered ineffective.

reliance on third party contract manufacturers

our completion of the “in vitro” portion of the preclinical testing we intend to conduct, when only lab-grade and

lab-scale psychedelic molecules are required, we intend to manufacture the required psychedelic molecules at our facilities in Calgary.

However, when larger quantities and higher quality psychedelic molecules are required ( e.g., for animal model testing), we intend

to contract with appropriate third party contract manufacturing organizations (“CMOs”) to, among other things, supply

the active pharmaceutical ingredients (“API”) used in its Psychedelic Derivatives over which we may have limited control.

We intend to rely on CMOs to supply APIs in compliance with local GMP regulations applicable to its Psychedelic Derivatives.

applicable jurisdictions, including Health Canada, and the FDA, ensure the quality of drug products by carefully monitoring drug manufacturers’

compliance with GMP regulations.

The GMP regulations for drugs contain minimum requirements for the methods, facilities and controls

used in manufacturing, processing and packing of a drug product.

There can be no assurances that CMOs will be able to meet our timetable

and requirements or carry out their contractual obligations in accordance with the applicable regulations.

In addition, the API they

supply to us may not meet our specifications and quality policies and procedures or they may not be able to supply the API in

commercial quantities.

If we are unable to arrange for alternative third-party supply sources on commercially reasonable terms or in

a timely manner, it may delay the development of its Psychedelic Derivatives and could have a material adverse effect on our business

operations and financial condition.

the failure of CMOs to operate in compliance with GMP regulations could result in, among other things, certain product liability claims

in the event such failure to comply results in defective products (containing our Psychedelic Derivatives) that caused injury or harm.

In general, our dependence upon third parties for the supply of our APIs may adversely affect profit margins and our ability to develop

and deliver viable Psychedelic Derivatives on a timely and competitive basis.

or non-renewal of key licenses and agreements

Our business is highly dependent

on a number of key licenses and agreements which expire in a short time period.

Specifically, in conducting research and preclinical

studies in compliance with current legislation, we substantially rely on:

(i) the Facchini Drug License which expires on December 31,

and (ii) the two material contracts with the Governors of the University of Calgary, which expire on November 30, 2023

and December 31, 2022 (the “Calgary Agreements”).

Health Canada renews drug licenses annually and Dr.

has held the Facchini Drug License since October 5, 1995 and it has been renewed each year without issue.

Until MagicMed obtains its

own Dealer’s License or Section 56 Exemption necessary for its business, the termination, non-renewal or hinderance of use, as

applicable of the Facchini Drug License or the Calgary Agreements would have a material adverse effect on MagicMed’s ability to

develop Psychedelic Derivatives, conduct research or operate its business as it currently does.

This could have a material adverse impact

on MagicMed’s financial condition.

results from clinical trials or studies of others and adverse safety events involving our Psychedelic Derivatives

time to time, studies or clinical trials on various aspects of biopharmaceutical or natural health products (“NHPs”) are

conducted by academic researchers, competitors or others.

The results of these studies or trials, when published, may have a significant

effect on the market for the biopharmaceutical or NHP that is the subject of the study.

The publication of negative results of studies

or clinical trials or adverse safety events related to the psychedelic compounds used by us in the development of our Psychedelic Derivatives,

or the therapeutic areas in which our Psychedelic Derivatives compete, could adversely affect our share price and our ability to finance

future development of our Psychedelic Derivatives, and our business and financial results could be materially and adversely affected.

trials of our Psychedelic Derivatives may fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or not

otherwise produce positive results

third parties are able to obtain marketing approval from regulatory authorities for the sale of products containing our Psychedelic Derivatives,

the completion of preclinical studies in animals and extensive clinical trials in humans to demonstrate the safety and efficacy of the

Psychedelic Derivatives will be required.

Clinical testing is expensive and difficult to design and implement, can take many years to

complete and has uncertain outcomes.

The outcome of preclinical studies and early clinical trials may not predict the success of later

clinical trials, and interim results of a clinical trial do not necessarily predict final results.

A number of companies in the pharmaceutical,

NHP and biotechnology industries have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable

safety profiles, notwithstanding promising results in earlier trials.

we do not know whether the clinical trials that third parties may

conduct will demonstrate adequate efficacy and safety to result in regulatory approval to market any products containing our Psychedelic

Derivatives in any jurisdiction.

A product/compound candidate may fail for safety or efficacy reasons at any stage of the testing process.

A major risk we face is the possibility that none of the products containing our Psychedelic Derivatives will successfully gain

market approval from Health Canada, the FDA or other regulatory authorities, resulting in our inability to derive any royalty-based

revenue from them.

materials requiring regulatory approval

raw materials used by us will require regulatory approval by Health Canada because the plant or fungi may contain a controlled substance.

While we believe that we can acquire, or indirectly make use of, the requisite licenses to conduct our intended research and development

activities, there is a risk that Health Canada can either reject or require further action to approve the requisite licenses which would

cause delays or result in losses for us and could result in the abandonment of a specific research programs.

Raw materials and supplies

are generally available in quantities to meet the needs of our business.

An inability to obtain raw materials or product supply could

have a material adverse impact on our business, financial condition, and results of operations.

increase in costs beyond what is currently expected as a result of regulatory review

Canada has not yet determined whether our Psychedelic Derivatives will be scheduled as controlled substances.

In the event Health Canada

determines that these products are controlled substances and therefore, require regulatory approval, (a) our licensees will be required

to obtain such approval;

and (b) to the extent that we produce Psychedelic Derivatives, we will require similar regulatory approval.

Such additional regulatory requirements may increase our costs and cause a delay in our operations.

Further, if Health Canada requires

that we perform additional preclinical studies, or if we determine that additional preclinical studies are required for our Psychedelic

Derivatives, our expenses would further increase beyond what is currently expected and the anticipated timing of any potential approval

of our Psychedelic Derivatives or licensing out agreements would likely be delayed.

have never been profitable, have no products approved for commercial sale, and to date have not generated any revenue

have never been profitable and we do not expect to be profitable in the foreseeable future.

Neither us, nor any third-party partner,

have submitted any products containing our products for approval by regulatory authorities in Canada, the United States or elsewhere.

Since inception, we have an accumulated deficit of $60.7 million and accumulated other comprehensive losses of $0.03 million.

To date, we have devoted most of our financial resources to research and development, including drug discovery research, preclinical

development activities, patent application filing and media relation efforts, as well as corporate overhead.

have not generated any revenues since inception, we expect to continue to incur losses for the foreseeable future, and expect these losses

to increase as we continue our product development activities.

If our Psychedelic Derivatives and other products developed do not achieve

market acceptance, we may never become profitable.

As a result of the foregoing, we expect to continue to experience net losses and negative

cash flows for the foreseeable future.

These net losses and negative cash flows have had, and will continue to have, an adverse effect

on our stockholders’ equity and working capital.

of the numerous risks and uncertainties associated with drug development, we are unable to accurately predict the timing or amount of

increased expenses or when, or if, we will be able to achieve profitability.

In addition, our expenses could increase if we are required

by the FDA or Health Canada to perform preclinical studies or trials in addition to those currently expected, or if there are any delays

in completing our preclinical studies or the development of any of our Psychedelic Derivatives or other products.

The amount of

future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenues.

have no licensing, marketing or distribution experience and will have to invest significant resources to develop those capabilities or

enter into acceptable third-party sales and marketing transactions

have no licensing, marketing or distribution experience.

To develop licensing, distribution and marketing capabilities, we will have

to invest significant amounts of financial and management resources, some of which will need to be committed prior to any confirmation

that our Psychedelic Derivatives will be approved by the FDA and Health Canada for Psychedelic Derivatives where we decide to

perform licensing, marketing and distribution functions itself or through third parties, we could face a number of additional risks,

including that we or our third-party collaborators may not be able to build and maintain an effective marketing or sales force.

use third parties to market and license our Psychedelic Derivatives, we may have limited or no control over our licensing, marketing

and distribution activities on which our future revenues may depend.

may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights

may from time to time seek to enforce our intellectual property rights against infringers when we determine that a successful

outcome is probable and may lead to an increase in the value of the intellectual property.

If we choose to enforce our patent rights

against a party, then that individual or company has the right to ask the court to rule that such patents are invalid or should not be

Additionally, the validity of our patents and the patents we have licensed may be challenged if a petition for post grant proceedings

such as inter-partes review and post grant review is filed within the statutorily applicable time with the Canadian Intellectual Property

Office or the United States Patent and Trademark Office.

These lawsuits and proceedings are expensive and would consume time and resources

and divert the attention of managerial and scientific personnel even if we were successful in stopping the infringement of such patents.

addition, there is a risk that the court will decide that such patents are not valid and that we do not have the right to stop the other

party from using the inventions.

There is also the risk that, even if the validity of such patents is upheld, the court will refuse to

stop the other party on the ground that such other party’s activities do not infringe our intellectual property rights.

in patent law and its interpretation could diminish the value of patents in general, thereby impairing our ability to protect our Psychedelic

is the case with other NHP, biotechnology and pharmaceutical companies, our success is heavily dependent on intellectual property rights,

particularly patents.

Obtaining and enforcing patents in the biopharmaceutical industry involves technological and legal complexity,

and obtaining and enforcing biopharmaceutical patents is costly, time consuming and inherently uncertain.

The Supreme Court of Canada

Supreme Court have ruled on several patent cases in recent years, either narrowing the scope of patent protection available

in certain circumstances or weakening the rights of patent owners in certain situations.

In addition to increasing uncertainty with regard

to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents,

once obtained.

Depending on decisions by the Canadian House of Representative, the Federal Court of Canada, the Canadian Intellectual

Property Office, U.S.

Congress, the federal courts, and the U.S.

Patent and Trademark Office and international treaties entered into

by these nations, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain

patents or to enforce patents we may obtain in the future.

to manage growth

we advance our Psychedelic Derivatives through preclinical studies and seek business arrangements and partnerships with third parties

to advance our Psychedelic Derivatives through clinical development, we will need to increase our preclinical development, scientific,

management and administrative headcount to manage these programs and negotiate these arrangements.

In addition, to meet obligations as

a public company, we may need to increase our general and administrative capabilities and improve our operational and financial controls

and reporting procedures.

Our management, personnel and systems currently in place may not be adequate to support this future growth.

In managing our growing operations, we are also subject to the risks of over-hiring and/or overcompensating our employees and over-expanding

our operating infrastructure.

As a result, we may be unable to manage our expenses effectively in the future, which may negatively impact

our gross profit or operating expenses.

and uninsured risks

business is subject to a number of risks and hazards generally, including adverse preclinical trial results, accidents, labor disputes

and changes in the regulatory environment.

Such occurrences could result in damage to assets, personal injury or death, environmental

damage, delays in operations, monetary losses and possible legal liability.

insurance may not cover all the potential risks associated with our operations.

We may also be unable to maintain insurance to cover

these risks at economically feasible premiums.

Insurance coverage may not be available or may not be adequate to cover any resulting

Moreover, insurance against risks such as environmental pollution or other hazards encountered in our operations is not generally

available on acceptable terms.

We might also become subject to liability for pollution or other hazards which may not be insured against

or which we may elect not to insure against because of premium costs or other reasons.

Losses from these events or any significant uninsured

liability may require us to pay substantial amounts, which would adversely affect our financial position and results of operations.

may become party to litigation from time to time in the ordinary course of business which could adversely affect our business.

any litigation in which we become involved be determined against us such a decision could adversely affect our ability to continue operating

and the market price for our shares and could use significant resources.

Even if we are involved in litigation and win, litigation can

redirect significant company resources.

of our directors and officers do not devote their full time to the affairs of the Company and certain of our directors and officers are

also directors, officers and shareholders of other biotechnology and research and development companies or other public companies in

general, and as a result they may find themselves in a position where their duty to another company conflicts with their duty to the

There is no assurance that any such conflicts will be resolved in favor of the Company.

If any such conflicts are not resolved

in our favor we may be adversely affected.

psychedelic therapy industry and market are relatively new and this industry and market may not continue to exist or grow as anticipated

operate our business in a relatively new industry and market.

In addition to being subject to general business risks, we must continue

to build brand awareness in this industry and market through significant investments in our strategy, our operational capacity, quality

assurance and compliance with regulations.

In addition, there is no assurance that the industry and market will continue to exist and

grow as currently estimated or anticipated or function and evolve in the manner consistent with management’s expectations and assumptions.

Any event or circumstance that adversely affects the psychedelic therapy industry and market could have a material adverse effect on

our business, financial conditions and results of operations.

psychedelic medicine market will face specific marketing challenges given the products’ status as a controlled substance which

resulted in past and current public perception that the products have negative health and lifestyle effects and have the potential to

cause physical and social harm due to psychoactive and potentially addictive effects.

Any marketing efforts by us would need to overcome

this perception to build consumer confidence, brand recognition and goodwill.

psychedelics industry and market are relatively new, and the industry may not succeed in the long term.

operate our business in a relatively new industry and market.

The use of psychedelics for medicinal purposes has shown promise in various

studies and we believe that both regulators and the public have an increasing awareness and acceptance of this promising field.

Nevertheless,

psychedelics remain a controlled substance in the United States, Canada, and most other jurisdictions and their use for research and

therapeutic purposes remains highly regulated and narrow in scope.

There is no assurance that the industry and market will continue to

grow as currently estimated or anticipated or function and evolve in the manner consistent with management’s expectations and assumptions.

Any event or circumstance that adversely affects the psychedelic manufacturing and medicines industry and market could have a material

adverse effect on our business, financial condition and results of operations.

We have committed and expect to continue committing significant

resources and capital to the development of psychedelic products for therapeutic uses.

As a category of products, medical-grade psychedelics

raw materials and psychedelic-derived APIs, and research into such substances, represent relatively untested offerings in the marketplace,

and we cannot provide assurance that psychedelics as a category, or that our prospective products, in particular, will achieve market

Moreover, as a relatively new industry, there are not many established players in the psychedelic-based medicines industry

whose business model we can emulate.

Similarly, there is little information about comparable companies available for potential investors

to review in making a decision about whether to invest in our common shares.

psychedelic product candidates may generate public controversy.

Adverse publicity or public perception regarding the psychedelic APIs

we intend to utilize may negatively influence our success and that of our prospective investigational therapies.

ability to establish and grow our business is substantially dependent on the success of the emerging market for psychedelics-based medicines,

which will depend upon, among other matters, pronounced and rapidly changing public preferences, factors which are difficult to predict

and over which we have little, if any, control.

We and our clients will be highly dependent upon consumer perception of psychedelic-based

therapies and other products.

containing controlled substances may generate public controversy.

Political and social pressures and adverse publicity could lead to

delays in approval of, and increased expenses for any future therapeutic candidates we may develop.

Opponents of these therapies may

seek restrictions on marketing and withdrawal of any regulatory approvals.

In addition, these opponents may seek to generate negative

publicity in an effort to persuade the medical community to reject these therapies.

For example, we may face media-communicated criticism

directed at our clinical development program.

Adverse publicity from psilocybin misuse may adversely affect the commercial success or

market penetration achievable by our product candidates.

Anti-psychedelic protests have historically occurred and may occur in the future

and generate media coverage.

Political pressures and adverse publicity could lead to delays in, and increased expenses for, and limit

or restrict the introduction and marketing of any future therapeutic candidates.

expansion of the use of psychedelics in the medical industry may require new clinical research into effective medical therapies

in Canada and internationally regarding the medical benefits, viability, safety, efficacy, addictiveness, dosing and social acceptance

of psychedelic and psychoactive products remains in early stages.

There have been relatively few clinical trials on the benefits of such

Although we believe that the articles, reports and studies support our beliefs regarding the medical benefits, viability, safety,

efficacy, dosing and social acceptance of psychedelic and psychoactive products, future research and clinical trials may prove such statements

to be incorrect, or could raise concerns regarding, and perceptions relating to, psychedelic and psychoactive products.

Given these risks,

uncertainties and assumptions, readers should not place undue reliance on such articles and reports.

Future research studies and clinical

trials may draw opposing conclusions to those stated in this proxy statement/prospectus or reach negative conclusions regarding the medical

benefits, viability, safety, efficacy, dosing, social acceptance or other facts and perceptions related to psychedelic and psychoactive

products, which could have a material adverse effect on the demand for our Psychedelic Derivatives with the potential to lead to a material

adverse effect on the Company’s business, financial condition and results of operations.

psychedelic therapy industry is difficult to quantify and investors will be reliant on their own estimates of the accuracy of market

the psychedelic therapy industry is in a nascent stage with uncertain boundaries, there is a lack of information about comparable companies

available for potential investors to review in deciding about whether to invest in us and, few, if any, established companies whose business

model we can follow or upon whose success we can build.

Accordingly, investors will have to rely on their own estimates in deciding about

whether to invest in us.

There can be no assurance that our estimates are accurate or that the market size is sufficiently large for

our business to grow as projected, which may negatively impact our financial results.

psychedelic therapy and biotechnology industries are experiencing rapid growth and increased competition

psychedelic therapy and biotechnology industries are undergoing rapid growth and substantial change, which has resulted in an increase

in competitors, consolidation and formation of strategic relationships.

Acquisitions or other consolidating transactions could harm us

in a number of ways, including, without limitation, by losing strategic partners if they are acquired by or enter into relationships

with a competitor, losing customers, revenue and market share, or forcing us to expend greater resources to meet new or additional competitive

threats, all of which could harm our operating results.

Additionally,

the biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change.

We have competitors in Canada, the United States, Europe and other jurisdictions, including, without limitation, major multinational

pharmaceutical companies, established biotechnology companies, specialty pharmaceutical and generic drug companies and universities and

other research institutions.

Many of our competitors have greater financial and other resources, such as larger research and development

staff and more experienced marketing and manufacturing organizations than we do.

Large pharmaceutical companies, in particular, have

extensive experience in, and substantial capital resources for, conducting research, molecular derivative development, obtaining regulatory

approvals, obtaining intellectual property protection and establishing key relationships.

These companies also have significantly greater

sales and marketing capabilities and experience in completing collaborative transactions in our target markets with leading companies

and research institutions.

competitors may introduce new Psychedelic Derivatives or develop technological advances that compete with us.

We cannot predict the timing

or impact of competitors introducing new Psychedelic Derivatives or technological advances.

Such competing Psychedelic Derivatives may

be safer, more effective, more effectively marketed, licensed or sold or have lower prices or superior performance features than our

Psychedelic Derivatives, and this could negatively impact our business and results of operations.

Established pharmaceutical companies

may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make the

Psychedelic Derivatives that we develop obsolete.

As a result of all of these factors, our competitors may succeed in obtaining patent

protection and/or Health Canada or discovering, developing and commercializing Psychedelic Derivatives before we do or may develop Psychedelic

Derivatives that are deemed to be more effective or gain greater market acceptance than those of the Company.

or early-stage companies may also prove to be significant competitors, particularly through collaborative transactions with large, established

In addition, many universities and private and public research institutes may become active in the development of novel compounds.

Our competitors may succeed in developing, acquiring or licensing on an exclusive basis, technologies and Psychedelic Derivatives that

are more effective or less costly than any of the Psychedelic Derivatives that we are currently developing or that we may develop, which

could render our Psychedelic Derivatives obsolete or non-competitive.

If our competitors market Psychedelic Derivatives that are more

effective, safer or less expensive or that reach the market sooner than our Psychedelic Derivatives, if any, we may not achieve commercial

In addition, because of our limited resources, it may be difficult for us to stay abreast of the rapid changes in each technology.

If we fail to stay at the forefront of technological change, we may be unable to compete effectively.

Technological advances or products

developed by our competitors may render our technologies or Psychedelic Derivatives obsolete, less competitive or not economical.

in legislation, regulations and guidelines

operations are subject to various laws, regulations and guidelines relating to, among other things, drug research, development, marketing

practices, health and safety, the conduct of operations and preclinical trials.

In addition to FDA and Health Canada restrictions

on the marketing of pharmaceutical products, several other types of state and federal laws have been applied to restrict certain marketing

practices in the pharmaceutical and medical industries in recent years, as well as consulting or other service agreements with physicians

or other potential referral sources.

While to the knowledge of management, we are currently in compliance with all such laws, changes

to applicable laws, regulations and guidelines may cause adverse effects to its operations.

The risks to the business of the Company

represented by this or similar risks are that they could significantly reduce the addressable market for our Psychedelic Derivatives

and could materially and adversely affect the business, financial condition and results of our operations.

Related to Regulatory Matters

current and prospective product candidates, and the development thereof, are or will be subject to the various federal and state laws

and regulations relating to the safety and efficacy of health products, such as drugs and medical devices.

are in the process of developing investigational new drugs for which we intend to pursue FDA approval via the NDA process.

In these product

candidates, cannabinoid(s) and synthetic molecules based on psychedelics, such as psilocybin, N,N-dimethyltryptamine (DMT), mescaline

and MDMA, will be the active pharmaceutical ingredients.

connection with our development and future commercialization (if applicable) of our prospective products, we, and each contemplated product

candidate, are subject to the Federal Food Drug and Cosmetic Act (FDCA).

The FDCA is intended to assure the consumer, in part, that drugs

and devices are safe and effective for their intended uses and that all labeling and packaging is truthful, informative, and not deceptive.

The FDCA and the U.S.

Food and Drug Administration (FDA) regulations define the term “drug,” in part, by reference to its

intended use, as “articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease” and

“articles (other than food) intended to affect the structure or any function of the body of man or other animals.” The definition

also includes components of drugs, such as active pharmaceutical ingredients.

To be lawfully marketed in the United States, drugs must

generally either receive premarket approval by FDA through the NDA process or conform to a “monograph” for a particular drug

category, as established by FDA’s Over-the-Counter (OTC) Drug Review.

If the FDA does not award premarket approval for our product

candidates through the NDA process, this will have a material adverse effect on our business, financial condition and results of operations.

Additionally,

the nature of the active ingredients we intend to utilize in our product candidates subjects us and our development and future commercialization

(as applicable) activities to additional regulatory scrutiny and oversight.

In connection with our development and future commercialization

(if applicable) of psychedelic-based product candidates, we and each contemplated product candidate will be subject to the federal Controlled

Substances Act (CSA) and the Controlled Substances Import and Export Act in the United States and analogous state and foreign laws.

Additionally,

with regard to our cannabinoid pipeline, one or more product candidates will be developed using synthetic cannabidiol (CBD), which may

subject such product candidates to increased regulatory scrutiny or uncertainty.

While we currently believe that our candidates containing

(or that will be developed using) synthetic CBD are not subject to the CSA because they are THC-free, this is an evolving regulatory

area that is subject to uncertainty.

The DEA may change its position or disagree with ours and classify any synthetic-CBD product candidates

that we may develop as Schedule I controlled substances, in which case, additional regulatory authorizations may be needed (such as,

for example, DEA registrations for facilities testing or otherwise handling Schedule I controlled substances), and there may be increased

expenses and/or challenges in connection therewith.

is no guarantee that any of our investigational drugs will ever be approved as medicines in any jurisdiction in which the Company operates,

as there are currently very few FDA-approved drugs containing the psychedelic ingredients we intend to utilize as active ingredients

and only one FDA-approved drug containing CBD as the active ingredient (and three containing synthetic cannabinoids).

And, the laws and

regulations generally applicable to the industry in which the Company is involved are subject to constant evolution and may change in

ways currently unforeseen.

Any amendment to or replacement of existing laws or regulations, including the re-classification of the substances

the Company is developing or with which it is working, which are matters beyond the Company’s control, may cause the Company’s

business, financial condition, results of operations and prospects to be adversely affected or may cause the Company to incur significant

costs in complying with such changes or it may be unable to comply therewith.

A violation of any applicable laws and regulations of the

jurisdictions in which the Company operates could result in significant fines, penalties, administrative sanctions, convictions or settlements

arising from civil proceedings initiated by either government entities in the jurisdictions in which the Company operates, or private

citizens or criminal charges.

psychedelic-derived therapeutic candidates we are developing or may develop in the future are subject to controlled substance laws and

regulations in the United States and other countries where the product will be marketed, and failure to comply with these laws and regulations,

or the cost of compliance with these laws and regulations, may adversely affect the results of our business operations and our financial

the United States, psychedelics, such as psilocybin (and its active metabolite, psilocin), DMT, mescaline and MDMA, are classified by

the DEA as a Schedule I substances under the CSA.

The DEA regulates chemical compounds as Schedule I, II, III, IV or V substances.

I substances by-definition have a high potential for abuse, have no currently accepted medical use in the United States, lack

accepted safety for use under medical supervision, and may not be prescribed marketed or sold in the United States.

Pharmaceutical products

approved for use in the United States may be listed as Schedule II, III, IV or V, with Schedule II substances considered to present the

highest potential for abuse or dependence and Schedule V substances the lowest relative risk of abuse among such substances.

I and II substances are subject to the strictest controls under the CSA, including manufacturing and procurement quotas, security requirements

and criteria for importation.

In addition, dispensing of Schedule II substances is further restricted.

For example, they may not be refilled

without a new prescription and may have a black box warning.

Further, most, if not all, state laws in the United States classify the

psychedelic active ingredients we intend to utilize as Schedule I controlled substances.

For any product containing active ingredients

that are Schedule I controlled substances to be available for commercial marketing in the United States, the product must be scheduled

by the DEA to Schedule II, III, IV or V, which requires scheduling-related legislative or administrative action, which can further delay

the path to market.

There can be no assurance that the DEA will make a favorable scheduling decision.

Even assuming categorization as

a Schedule II or lower controlled substance (i.e., Schedule III, IV or V), at the federal level, such substances would also require scheduling

determinations under state laws and regulations.

approval is also a prerequisite to commercialization, and the controlled-substance status of our psychedelic APIs may negatively impact

the FDA’s decision regarding whether to approve the applicable product candidates.

the pre-market review process, the FDA may determine that additional data is needed for one or more of our psychedelic candidates, either

from non-clinical or clinical studies, including with respect to whether, or to what extent, the substance has abuse potential.

may introduce a delay into the approval and any potential rescheduling process.

addition, therapeutic candidates containing controlled substances are subject to DEA regulations relating to manufacturing, storage,

distribution and physician prescription procedures, including:

registration and inspection of facilities.

Facilities conducting research, manufacturing, distributing, importing or exporting, or

dispensing controlled substances must be registered (licensed) to perform these activities and have the security, control, recordkeeping,

reporting and inventory mechanisms required by the DEA to prevent drug loss and diversion.

All these facilities must renew their

registrations annually, except dispensing facilities, which must renew every three years.

The DEA conducts periodic inspections of

certain registered establishments that handle controlled substances.

Obtaining and maintaining the necessary registrations may result

in delay of the importation, manufacturing or distribution of product candidates.

Furthermore, failure to maintain compliance with

the CSA, particularly non-compliance resulting in loss or diversion, can result in regulatory action that could have a material adverse

effect on our business, financial condition and results of operations.

The DEA may seek civil penalties, refuse to renew necessary

registrations, or initiate proceedings to restrict, suspend or revoke those registrations.

In certain circumstances, violations could

lead to criminal proceedings.

controlled-substances laws.

Individual U.S.

states have also established controlled substance laws and regulations.

Though state-controlled

substances laws often mirror federal law, because the states are separate jurisdictions, they may separately schedule product candidates.

While some states automatically schedule a drug based on federal action, other states schedule drugs through rule making or a legislative

State scheduling may delay commercial sale of any product for which we obtain federal regulatory approval and adverse scheduling

could have a material adverse effect on the commercial attractiveness of such product.

We or any partners must also obtain separate

state registrations, permits or licenses in order to be able to obtain, handle, and distribute controlled substances for clinical

trials or commercial sale, and failure to meet applicable regulatory requirements could lead to enforcement and sanctions by the

states in addition to those from the DEA or otherwise arising under federal law.

Because some of our current and future product candidates contain Schedule I controlled substances, to conduct clinical trials

in the United States prior to approval, each of our research sites must submit a research protocol to the DEA and obtain and maintain

a DEA researcher registration that will allow those sites to handle and dispense such product candidates and to obtain the product

from our importer.

If the DEA delays or denies the grant of a researcher registration to one or more research sites, the clinical

trial could be significantly delayed, and we could lose clinical trial sites.

If any of our product candidates is approved and classified as a Schedule II, III or IV substance, an importer can only import it

for commercial purposes if it obtains an importer registration and files an application for an import permit for each import.

DEA provides annual assessments/estimates to the International Narcotics Control Board, which guides the DEA in the amounts of controlled

substances that the DEA authorizes to be imported.

The failure to identify an importer or obtain the necessary import authority,

including specific quantities, could affect the availability of our product candidates and have a material adverse effect on our

business, results of operations and financial condition.

In addition, an application for a Schedule II importer registration must

be published in the Federal Register, and there is a waiting period for third-party comments to be submitted.

It is always possible

that adverse comments may delay the grant of an importer registration.

If, because of a Schedule II classification or voluntarily, we were to conduct manufacturing or repackaging/relabeling in the United

States, our contract manufacturers would be subject to the DEA’s annual manufacturing and procurement quota requirements.

Distribution.

If any of our product candidates is approved for marketing and scheduled under Schedule II, III or IV, we would also need to identify

wholesale distributors with the appropriate DEA registrations and authority to possess and distribute or dispense such products.

psychedelic APIs we intend to utilize are listed as Schedule I controlled substances under the CSA in the United States and under similar

controlled-substance legislation in other countries, and any significant violations of these laws and regulations, or changes in the

laws and regulations, may result in interruptions to our development activity or business continuity.

psychedelic APIs we intend to utilize are categorized as Schedule I controlled substances under the CSA and are similarly categorized

by most states and foreign governments.

Even assuming any future therapeutic candidates containing such APIs are approved and scheduled

by regulatory authorities to allow their commercial marketing, the ingredients in such therapeutic candidates will likely continue to

be listed under Schedule I, or the state or foreign equivalent and, thus, illegal without the requisite regulatory authorizations (e.g.,

to allow for the use of such substances in clinical trials under an IND and in compliance with all applicable FDA, DEA, and other regulatory

requirements).

Violations of any federal, state or foreign laws and regulations could result in significant fines, penalties, administrative

sanctions, convictions or settlements arising from civil proceedings conducted by either the federal government or private citizens,

or criminal charges and penalties, including, but not limited to, disgorgement of profits, cessation of business activities, divestiture

or prison time.

This could have a material adverse effect on us, including on our reputation and ability to conduct business, our financial

position, operating results, profitability or liquidity, the potential listing of our shares or the market price of our shares.

it is difficult for us to estimate the time or resources that would be needed for the investigation or defense of any such matters or

our final resolution because, in part, the time and resources that may be needed are dependent on the nature and extent of any information

requested by the applicable authorities involved, and such time or resources could be substantial.

It is also illegal to aid or abet

such activities or to conspire or attempt to engage in such activities.

An investor’s contribution to and involvement in such activities

may result in federal civil and/or criminal prosecution, including, but not limited to, forfeiture of his, her or its entire investment,

fines and/or imprisonment.

federal, state, provincial and local laws govern our business in any jurisdictions in which we may operate, and to which we may export

our products, including laws relating to health and safety, the conduct of our operations, and the production, storage, sale and distribution

of our products.

Complying with these laws requires that we comply concurrently with complex federal, state, provincial and/or local

These laws change frequently and may be difficult to interpret and apply.

To ensure our compliance with these laws, we will need

to invest significant financial and managerial resources.

It is impossible for us to predict the cost of such laws or the effect they

may have on our future operations.

A failure to comply with these laws could negatively affect our business and harm our reputation.

Changes to these laws could negatively affect our competitive position and the markets in which we operate, and there is no assurance

that various levels of government in the jurisdictions in which we operate will not pass legislation or regulation that adversely impacts

our business.

addition, even if we or third parties were to conduct activities in compliance with U.S.

state or local laws or the laws of other countries

and regions in which we conduct activities, potential enforcement proceedings could involve significant restrictions being imposed upon

us or third parties, while diverting the attention of key executives.

Such proceedings could have a material adverse effect on our business,

revenue, operating results and financial condition as well as on our reputation and prospects, even if such proceedings conclude successfully

in our favor.

In the extreme case, such proceedings could ultimately involve the criminal prosecution of our key executives, the seizure

of corporate assets, and consequently, our inability to continue business operations.

Strict compliance with state and local laws with

respect to psilocybin and psilocin does not absolve us of potential liability under U.S.

federal law, the Canadian law or EU law,

nor provide a defense to any proceeding which may be brought against us.

Any such proceedings brought against us may adversely affect

our operations and financial performance.

prospective products will be subject to the various federal and state laws and regulations relating to health and safety.

are in the process of developing investigational new drugs for which we intend to pursue FDA approval via the New Drug Application (“NDA”)

In these product candidates, cannabinoid(s) will be the active pharmaceutical ingredient.

are in the process of developing investigational new drugs for which we intend to pursue FDA approval via the NDA process.

In these product

candidates, cannabinoid(s) will be the active pharmaceutical ingredient.

connection with our development and future commercialization (if applicable) of the above-described prospective products, we and each

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and not deceptive.

The FDCA and FDA regulations define the term “drug,”

in part, by reference to its intended use, as “articles

intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease”

and “articles (other than food)

intended to affect the structure or any function of the body of man or other animals.”

Therefore, almost any ingested or topical

The FDCA and FDA regulations define the term “drug,” in part, by reference to its intended use, as “articles

intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease” and “articles (other than food)

intended to affect the structure or any function of the body of man or other animals.” Therefore, almost any ingested or topical

or injectable product that, through its label or labeling (including internet websites, promotional pamphlets, and other marketing material),

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Drugs must generally either receive premarket approval by FDA through the NDA process or conform

to a “monograph”

for a particular drug category, as established by FDA’s Over-the-Counter (OTC) Drug Review.

to a “monograph” for a particular drug category, as established by FDA’s Over-the-Counter (OTC) Drug Review.

FDA does not award premarket approval for our product candidates through the NDA process, this could have a material adverse effect on

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to differing interpretations.

currently have two potential product candidates that are in preclinical development as an investigational

combination therapy for GBM and other forms of cancer and intends to pursue preclinical and clinical development for other prospective

candidates as well, including, but not limited to, a candidate targeting radiodermatitis.

After completing the requisite preclinical

testing, IND submission, internal review board (“IRB”) review, and any other applicable early-development obligations,

we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates.

Clinical testing is

expensive, time consuming, and uncertain as to outcome.

We cannot guarantee that any clinical trials will be conducted as planned

or completed on schedule, or at all.

Failures in connection with one or more clinical trials can occur at any stage of testing.

agencies may analyze or interpret the results of clinical trials differently than us.

Even if the results of our clinical trials are

favorable, the clinical trials for a number of our product candidates are expected to continue for several years and may take significantly

longer to complete.

Events that may prevent successful or timely completion of clinical development include:

currently have four product candidates that are in preclinical development for indications such as Radiation Dermatitis and other side-effects

of cancer, including cancer-related distress.

We intend to develop additional drug candidates targeting other indications, including,

for example, pain and post-traumatic-stress disorder (PTSD).

After completing the requisite preclinical testing, submissions to FDA (namely

IND applications), internal review board (“IRB”) review, and any other applicable obligations that must be completed before

clinical testing may begin in the United States, we must conduct extensive clinical trials to demonstrate the safety and efficacy of

our product candidates.

Clinical testing is expensive, time consuming, and uncertain as to outcome.

We cannot guarantee that any clinical

trials will be conducted as planned or completed on schedule, or at all.

Failures in connection with one or more clinical trials can

occur at any stage of testing.

FDA and other applicable regulatory agencies may analyze or interpret the results of clinical trials differently than us.

results of our clinical trials are favorable, the clinical trials for a number of our product candidates are expected to continue for

several years and may take significantly longer to complete.

Events that may prevent successful or timely completion of clinical development

include (without limitation):

in reaching a consensus with regulatory authorities on trial design;

in reaching agreement on acceptable terms with prospective contract research organization (“CRO”) and clinical trial

in sourcing materials and research animals for preclinical testing and correlated testing windows at the appropriate CRO facilities;

in opening clinical trial sites or obtaining required IRB or independent ethics committee approval at each clinical trial site;

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of or changes in our manufacturing process or product candidate formulation;

in obtaining regulatory authorization s, such as INDs and any others that must be obtained, maintained, and/or satisfied to commence

a clinical trial, including “clinical holds”

or delays requiring suspension or termination of a trial by a regulatory

in obtaining regulatory authorizations, such as INDs and any others that must be obtained, maintained, and/or satisfied to commence

a clinical trial, including “clinical holds” or delays requiring suspension or termination of a trial by a regulatory

agency, such as the FDA, before or after a trial is commenced;

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or failure to supply product for use in clinical trials which conforms to regulatory specification;

results from ongoing pre-clinical studies and clinical trials;

results from ongoing preclinical studies and clinical trials;

of our CROs, or other third-party contractors to comply with all contractual requirements or to perform their services in a timely

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to design appropriate clinical trial protocols;

concerns with cannabinoid products, generally, and the potential for abuse;

concerns with cannabinoid products or psychedelics, generally, and the potential for abuse;

data to support regulatory approval;

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in maintaining contact with patients during or after treatment, which may result in incomplete data;

clinical holds placed on company by regulatory agencies during review process;

or failure to supply psychedelic product for use in clinical trials due to cross-border or inter-continental shipment or customs

handling and processing of controlled substances;

finding clinical trials sites whose investigators possess the requisite credentials to oversee clinical trials involving a Schedule

of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

third-parties we rely on to conduct our operations are subject to regulatory requirements

rely on third parties to conduct our preclinical studies and clinical trials.

We rely on CROs and clinical data management organizations

to design, conduct, supervise and monitor our preclinical studies and clinical trials.

We and our CROs are required to comply with various

regulations, including GCP, which are enforced by regulatory agencies, to ensure that the health, safety and rights of patients are protected

in clinical development and clinical trials, and that trial data integrity is assured.

Regulatory authorities ensure compliance with

these requirements through periodic inspections of trial sponsors, principal investigators and trial sites.

Our reliance on third parties

that we do not control does not relieve us of these responsibilities and requirements.

If we or any of our CROs fail to comply with applicable

requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or other comparable foreign regulatory

authorities may require us to perform additional clinical trials before approving our marketing applications.

Because we rely on third

parties, our internal capacity to perform these functions is limited.

Outsourcing these functions involves risk that third parties may

not perform to our standards, may not produce results in a timely manner or may fail to perform at all.

rely on third parties to supply the materials for, and manufacture, our research and development, and preclinical and clinical trial

supplies and APIs, and we expect to continue to rely on third-party

manufacturers if we receive regulatory approval for any product candidate.

To the extent that we have existing, or enter into future,

manufacturing arrangements with third parties, we will depend on these third parties to perform their obligations in a timely manner

consistent with contractual and regulatory requirements, including those related to quality control and assurance.

or delays in enrolling patients in clinical trials may result in delay or prevention of necessary regulatory approvals.

we are unable to locate and enroll a sufficient number of eligible patients to participate in our clinical trials for our product candidates

as required by the FDA or similar regulatory authorities outside the United States, we may not be able to initiate or conduct our trials.

Our inability to enroll a sufficient number of patients for our trials would result in significant delays could require us to postpone

or abandon clinical trials.

Enrollment delays may result in increased development costs for our product candidates.

failure by us to comply with existing regulations could harm our reputation and operating results.

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in which we plan to sell our product candidates.

We must adhere to all regulatory requirements, including FDA’s Good Laboratory

Practice (“GLP”), GCP, and GMP requirements, pharmacovigilance requirements, advertising and promotion restrictions, reporting

We must adhere to all regulatory requirements, including FDA’s Good Laboratory

Practice (“GLP”), GCP, and GMP requirements, pharmacovigilance requirements, advertising and promotion restrictions, reporting

and recordkeeping requirements, and their European equivalents.

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Even if a drug

is approved by the FDA or other competent authorities, regulatory authorities may impose significant restrictions on a product’s

indicated uses or marketing or impose ongoing requirements for potentially costly post-marketing trials.

Any of our product candidates

which may be approved in the U.S.

will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage,

distribution, import, export, advertising, promotion, sampling, recordkeeping and submission of safety and other post-market information,

including both federal and state requirements.

In addition, manufacturers and manufacturers’

facilities are required to comply

with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform to GMP.

As such, we and

our contract manufacturers (in the event contract manufacturers are appointed in the future) are subject to continual review and periodic

inspections to assess compliance with GMP.

Accordingly, we and others with whom we work will have to spend time, money and effort in

all areas of regulatory compliance, including manufacturing, production, quality control and quality assurance.

We will also be required

to report certain adverse reactions and production problems, if any, to the FDA, and to comply with requirements concerning advertising

and promotion for our products.

Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory

restrictions and must be consistent with the information in the product’s approved label.

Similar restrictions and requirements

exist in the European Union and other markets where we operate.

of our product candidates which may be approved in the U.S.

will be subject to ongoing regulatory requirements for manufacturing, labeling,

packaging, storage, distribution, import, export, advertising, promotion, sampling, recordkeeping and submission of safety and other

post-market information, including both federal and state requirements.

In addition, manufacturers and manufacturers’ facilities

are required to comply with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform

As such, we and our contract manufacturers (in the event contract manufacturers are appointed in the future) are subject to continual

review and periodic inspections to assess compliance with GMP.

Accordingly, we and others with whom we work will have to spend time,

money and effort in all areas of regulatory compliance, including manufacturing, production, quality control and quality assurance.

will also be required to report certain adverse reactions and production problems, if any, to the FDA, and to comply with requirements

concerning advertising and promotion for our products.

Promotional communications with respect to prescription drugs are subject to a

variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved label.

restrictions and requirements exist in the European Union and other markets where we operate.

a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency,

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restrictions on our operations, including by requiring us to enter in to a Corporate Integrity Agreement or closing our contract

manufacturers’

facilities, if any;

manufacturers’ facilities, if any;

or detain products or require a product recall.

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Any action against us for violation of these laws, even if we are ultimately successful in our defense, will cause us to incur significant

legal expenses and divert our management’s attention away from the operation of our business.

In addition, in many foreign countries,

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reimbursement and pricing arrangements for any of our products.

Historically, products launched in the European Union do not follow price

structures of the U.S.

In the European Union, the downward pressure on healthcare costs in general, particularly prescription medicines,

has become intense.

As a result, barriers to entry of new products are becoming increasingly high and patients are unlikely to use a

drug product that is not reimbursed by their government.

Historically,

products launched in the European Union do not follow price structures of the U.S..

In the European Union, the downward pressure on healthcare

costs in general, particularly prescription medicines, has become intense.

As a result, barriers to entry of new products are becoming

increasingly high and patients are unlikely to use a drug product that is not reimbursed by their government.

may face competition from lower-priced products in foreign countries that have placed price controls on pharmaceutical products.

the importation of foreign products may compete with any future product that we may market, which could negatively impact our profitability.

in the U.S., we expect that the 2010 Affordable Care Act (“ACA”), as well as other healthcare reform measures that may be

adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we may receive

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At this time, the full effect that the ACA will have on our business in the future remains unclear.

An expansion in the government’s

role in the U.S.

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from private payors.

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate

revenue, attain profitability, or commercialize any of our future product candidates for which we may receive regulatory approval.

Several states have adopted or are considering adopting laws that require pharmaceutical companies to provide notice

prior to raising prices and to justify price increases.

We expect that additional healthcare reform measures will be adopted in the future,

any of which could limit the amounts that federal and state governments will pay for healthcare products and services, and in turn could

significantly reduce the projected value of certain development projects and reduce our profitability.

The implementation of such cost

containment measures and other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize

any of our future product candidates for which we may receive regulatory approval.

is a high rate of failure for drug candidates proceeding through clinical trials.

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Delays in obtaining FDA or any other necessary

regulatory approvals of any proposed drug and failure to receive such approvals would have an adverse effect on the drug’s potential

commercial success and on our business, prospects, financial condition and results of operations.

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authorities may require certain labeling statements, such as warnings or contraindications or limitations on the indications for

use, and/or impose restrictions on distribution in the form of a Risk Evaluation and Mitigation Strategy (“REMS”) in

connection with approval or post-approval;

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completing preclinical testing and obtaining the requisite regulatory authorizations, as applicable, we may voluntarily suspend or terminate

our clinical trials for any number of reasons, including if we believe that a product’s use, or a person’s exposure to it,

may cause adverse health consequences or death.

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or contraindications.

In addition, such events or labeling could prevent us or our partners from achieving or maintaining market acceptance

of the affected product and could substantially increase the costs of commercializing our future product candidates and impair our ability

to generate revenue from the commercialization of these products either by us or by our collaboration partners.

addition, such events or labeling could prevent us or our partners from achieving or maintaining market acceptance of the affected product

and could substantially increase the costs of commercializing our future product candidates and impair our ability to generate revenue

from the commercialization of these products either by us or by our collaboration partners.

success of our prospective product candidates and future approved products, if any, especially those containing hemp-derived CBD, is

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and/or cannabis more generally.

Agriculture Improvement Act of 2018, or the “2018 Farm Bill,”

was signed into law on December 20, 2018.

Agriculture Improvement Act of 2018, or the “2018 Farm Bill,” was signed into law on December 20, 2018.

This 2018 Farm Bill

expressly excluded “hemp”

from the federal Controlled Substances Act of 1970 and the Controlled Substances Import and Export

Act’s, as amended (the “CSA”)’s definition of marijuana and, accordingly, declassified substances derived from

expressly excluded “hemp” from the federal Controlled Substances Act of 1970 and the Controlled Substances Import and Export

Act’s, as amended (the “CSA”)’s definition of marijuana and, accordingly, declassified substances derived from

or containing any part(s) of the cannabis plant containing not more than 0.3% THC on a dry-weight basis from Schedule I.

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and applicable FDCA provisions, including any implementing regulations, as interpreted and enforced by the FDA.

addition, on October 31, 2019, The U.S.

Department of Agriculture, or USDA, issued an Interim Final Rule, or IFR, establishing the Domestic

Hemp Production Program.

This program provides the parameters for federal licensing of hemp production, as well as guidelines for approval

of licensing plans established by states and Native American tribes.

Under the IFR, and confirmed by the Final Rule issued by the USDA

on January 19, 2021, hemp containing THC levels greater than 0.3 percent remains a Schedule I controlled substance.

Notwithstanding

the removal of plant-derived hemp from the CSA, the 2018 Farm Bill did not alter the FDA’s authority to regulate products containing

cannabis or cannabis-derived compounds under the FDC Act.

Hemp products including cannabinoids that qualify as drugs, food, dietary supplements,

veterinary products, and cosmetics for example, will continue to be subject to regulation by the FDA under the applicable regulatory

Following passage of the 2018 Farm Bill, the FDA reaffirmed its enforcement authority and reiterated the requirement that

a cannabis product (hemp-derived or otherwise) that is marketed with a claim of therapeutic benefit implicitly or explicitly attributed

to, or based on, the presence of the cannabinoid as an ingredient, or any other health/medical claim, be approved by the FDA for its

intended use(s) before it may be introduced into interstate commerce.

Currently, the FDA treats cannabidiol as a pharmaceutical product,

and any therapeutic product containing cannabidiol must go through the drug approval process and demonstrate the safety and efficacy

of the formulation at issue to receive FDA approval.

To date, the FDA has approved one cannabis-derived drug product, Epidiolex, and

three synthetic cannabis-related drug products (Marinol (dronabinol), Syndros (dronabinol), and Cesamet (nabilone)).

state, federal, and international hemp and CBD laws and regulations are broad in scope and subject to evolving interpretations, which

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and if promulgated, could have on our activities in the cannabis industry.

addition, the 2018 Farm Bill did not alter the FDA’s authority to regulate products containing cannabis or cannabis-derived compounds,

including cannabinoids, under the FDCA.

Hemp products, including cannabinoids, that qualify as drugs, food, dietary supplements, veterinary

products, and cosmetics, for example, are subject to regulation by the FDA.

Following passage of the 2018 Farm Bill, the FDA reaffirmed

its enforcement authority and reiterated the requirement that a product containing CBD or other cannabinoid(s) (hemp-derived or otherwise)

that is marketed with a claim of therapeutic benefit implicitly or explicitly attributed to, or based on, the presence of the cannabinoid

as an ingredient, or any other health/medical claim, must be approved by the FDA for its intended use(s) before it may be introduced

into interstate commerce.

Our prospective product candidates are currently intended for development under an IND and, eventually, approval

under an NDA, which will mean that, if approved, we can market such products with claims about their proven medical benefits for the

applicable indications for use to the extent consistent with the product’s NDA.

prospective product candidates are currently intended for development under an IND application and, eventually, approval under

an NDA, which will mean that, if approved, we can market such products with claims about their proven medical benefits for the applicable

indications for use to the extent consistent with the product’s NDA.

we believe that the 2018 Farm Bill and analogous state legislation has reduced the amount of DEA oversight of hemp-derived cannabinoids,

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manufacture, labeling and distribution of products containing CBD or other cannabinoids is governed by various federal, state and local

To the extent we are able to successfully commercialize any of our currently contemplated product candidates via the FDA’s

NDA approval pathway, the presence of cannabinoids as active or inactive ingredients, as applicable, may give rise to heightened regulatory

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affect our ability to operate our business or our financial results.

to comply with any applicable FDA requirements, relating to CBD or otherwise, may result in, among other things, injunctions, product

withdrawals, recalls, product seizures, fines and criminal prosecutions.

Our advertising is also subject to regulation by the FTC under

the Federal Trade Commission Act.

Additionally, analogous state advertising and labeling laws are often enforced by state attorneys general,

and any state or federal enforcement action based on potentially misleading or deceptive advertising is often followed by costly class-action

complaints under state consumer-protection laws.

to comply with any applicable FDA requirements, relating to CBD or otherwise, may result

in, among other things, injunctions, product withdrawals, recalls, product seizures, fines

and criminal prosecutions.

Our advertising is also subject to regulation by the Federal

Trade Commission (the “FTC”) under the Federal Trade Commission Act.

Additionally,

analogous state advertising and labeling laws are often enforced by state attorneys general,

and any state or federal enforcement action based on potentially misleading or deceptive

advertising is often followed by costly class-action complaints under state consumer-protection

FDA, on its own and in collaboration with the FTC, has issued numerous warning letters to companies offering for sale of topical, oral,

and other types of products containing CBD, which were not approved under the FDA’s NDA process, in response to their making unsubstantiated

claims on product webpages, online stores, and social media websites about the products’

purported therapeutic or other drug-like

and other types of products containing CBD, which were not approved under the FDA’s NDA process, in response to their making unsubstantiated

claims on product webpages, online stores, and social media websites about the products’ purported therapeutic or other drug-like

benefits in connection with CBD or other cannabinoids.

The FDA deemed that companies “used these online platforms to make unfounded,

egregious claims about their products’

ability to limit, treat or cure cancer, neurodegenerative conditions, autoimmune diseases,

opioid use disorder, and other serious diseases, without sufficient evidence and the legally required FDA approval.”

agency has continuously demonstrated its commitment to taking action against companies making medical claims about products containing

The FDA deemed that companies “used these online platforms to make unfounded,

egregious claims about their products’ ability to limit, treat or cure cancer, neurodegenerative conditions, autoimmune diseases,

opioid use disorder, and other serious diseases, without sufficient evidence and the legally required FDA approval.”

FDA has continuously demonstrated its commitment to taking action against companies making medical claims about products containing

CBD (as the active ingredient), as selling unapproved products with unsubstantiated therapeutic claims can put patients and consumers

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with Lennox-Gastaut syndrome or Dravet syndrome in patients 2 years of age and older.

The agency’s principal concern with CBD products

on the market that are unlawfully claiming to treat serious medical conditions is that deceptive marketing of unproven treatments may

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illegally selling products containing CBD as the active ingredient, claiming to prevent, diagnose, treat, or cure serious diseases, such

as cancer, Alzheimer’s disease, psychiatric disorders and diabetes;

illegally selling cannabis and cannabis-derived products that

can put consumers at risk;

and marketing and distributing such products in violation of the FDA’s authorities.

public perception of hemp and cannabinoid-related businesses, misconceptions about the nature of our business and regulatory uncertainties

could have a material adverse effect on our business, financial condition, and results of operations.

believe the cannabinoid industry is highly dependent upon consumer perception regarding the safety, efficacy, quality, and legality

of cannabinoid, whether derived from hemp or marijuana.

Consumer perception of cannabinoid products can be significantly influenced

by scientific research or findings, regulatory investigations, litigation, media attention, and other publicity regarding the

consumption of cannabinoid products.

There can be no assurance that future scientific research, findings, regulatory proceedings,

litigation, media attention, or other research findings or publicity will be favorable to the cannabinoid market or any particular

product, or consistent with earlier publicity.

Our dependence upon consumer perceptions means that adverse scientific research

reports, findings, regulatory proceedings, litigation, media attention, or other publicity relating to cannabinoid products, generally

or any particular cannabinoid products or derivatives, in particular, regardless of merit or accuracy, could have a material adverse

effect on our business, the demand for our product candidates or any products for which we obtain regulatory approval in the future.

Such adverse publicity or other negative media attention could arise even if the adverse effects reportedly associated with such

products resulted from consumers’

failure to consume such products appropriately or as directed.

Any adverse publicity or

other similar occurrences affecting consumer perception may have a material adverse impact on our reputation, perception of our

product candidates, our ability to obtain the necessary regulatory approvals for our product candidates, and the commercial viability

of the products for which regulatory approval is obtained in the future, if any.

believe the cannabinoid industry is highly dependent upon consumer perception regarding the safety, efficacy, quality, and legality of

cannabinoid, whether derived from hemp or marijuana.

Consumer perception of cannabinoid products can be significantly influenced by scientific

research or findings, regulatory investigations, litigation, media attention, and other publicity regarding the consumption of cannabinoid

There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention, or

other research findings or publicity will be favorable to the cannabinoid market or any particular product, or consistent with earlier

Our dependence upon consumer perceptions means that adverse scientific research reports, findings, regulatory proceedings,

litigation, media attention, or other publicity relating to cannabinoid products, generally or any particular cannabinoid products or

derivatives, in particular, regardless of merit or accuracy, could have a material adverse effect on our business, the demand for our

product candidates or any products for which we obtain regulatory approval in the future.

Such adverse publicity or other negative media

attention could arise even if the adverse effects reportedly associated with such products resulted from consumers’ failure to

consume such products appropriately or as directed.

Any adverse publicity or other similar occurrences affecting consumer perception

may have a material adverse impact on our reputation, perception of our product candidates, our ability to obtain the necessary regulatory

approvals for our product candidates, and the commercial viability of the products for which regulatory approval is obtained in the future,

risks related to Psychedelic Derivatives

execution of our strategy is contingent, in part, upon compliance with regulatory requirements from time to time enacted by governmental

authorities and obtaining all regulatory approvals, where necessary, for the development and license of our Psychedelic Derivatives.

Health Canada has not yet determined whether our Psychedelic Derivatives will be scheduled as controlled substances.

The psychedelic

therapy industry is a new and emerging industry with ambiguous existing regulations and uncertainty as to future regulations;

predict the impact of the ever-evolving compliance regime in respect of this industry.

In the event Health Canada determines that our

Psychedelic Derivatives are controlled substances and therefore, require regulatory approval, to the extent that we produce Psychedelic

Derivatives, we will be required to obtain such regulatory approval.

we may not be able to predict the time required to secure all appropriate regulatory approvals for our Psychedelic Derivatives, or the

extent of testing and documentation that may, from time to time, be required by governmental authorities.

The impact of compliance regimes,

any delays in obtaining, or failure to obtain regulatory approvals may significantly delay or impact the development of markets, our

business and Psychedelic Derivatives, and licensing initiatives and could have a material adverse effect on the business, financial condition

and operating results of the Company.

will incur ongoing costs and obligations related to regulatory compliance.

Failure to comply with regulations may result in additional

costs for corrective measures, penalties or result in restrictions on our operations.

In addition, changes in regulations, more vigorous

enforcement thereof or other unanticipated events could require extensive changes to our operations, increased compliance costs or give

rise to material liabilities, which could have a material adverse effect on the business, financial condition and operating results of

management will be required to devote a substantial time to comply with public company regulations .

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The Sarbanes-Oxley

Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as rules

implemented by the SEC and Nasdaq, impose various requirements on public companies, including those related to corporate governance

Our management and other personnel must devote a substantial amount of time to these requirements.

Moreover, these

rules and regulations increase our legal and financial compliance costs and make some activities more time consuming and costly.

Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as rules implemented

by the SEC and Nasdaq, impose various requirements on public companies, including those related to corporate governance practices.

management and other personnel must devote a substantial amount of time to these requirements.

Moreover, these rules and regulations

increase our legal and financial compliance costs and make some activities more time consuming and costly.

Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure

controls and procedures.

In particular, we must perform system and process evaluation and testing of our internal control over

financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required

by Section 404 of the Sarbanes-Oxley Act.

Our compliance with these requirements will require that we incur substantial accounting

and related expenses and expend significant management efforts.

We will likely need to hire additional accounting and financial

staff to satisfy the ongoing requirements of Section 404 of the Sarbanes-Oxley Act.

The costs of hiring such staff may be material

and there can be no assurance that such staff will be immediately available to us.

Moreover, if we are not able to comply with

the requirements of Section 404 of the Sarbanes-Oxley Act, or if we identify deficiencies in our internal control over financial

reporting that are deemed to be material weaknesses, investors could lose confidence in the accuracy and completeness of our financial

reports, the market price of our common stock could decline and we could be subject to sanctions or investigations by Nasdaq,

the SEC or other regulatory authorities, which could require additional financial and management resources.

In particular, we must perform system and process evaluation and testing of our internal control over financial

reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section

404 of the Sarbanes-Oxley Act.

Our compliance with these requirements will require that we incur substantial accounting and related expenses

and expend significant management efforts.

We will likely need to hire additional accounting and financial staff to satisfy the ongoing

requirements of Section 404 of the Sarbanes-Oxley Act.

The costs of hiring such staff may be material and there can be no assurance that

such staff will be immediately available to us.

Moreover, if we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley

Act, or if we identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, investors

could lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline and

we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities, which could require additional

financial and management resources.

have identified a material weakness in our internal control over financial reporting.

If we are unable to remediate the material

weakness, or if we experience additional material weaknesses in the future, our business may be harmed.

management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating

and reporting on the effectiveness of our system of internal control.

Internal control over financial reporting is a process used

to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements

for external purposes in accordance with generally accepted accounting principles in the United States.

As a public company, we

are required to comply with the Sarbanes-Oxley Act and other rules that govern public companies.

In particular, we are required

to certify our compliance with Section 404 of the Sarbanes-Oxley Act, which requires us to furnish annually a report by management

on the effectiveness of our internal control over financial reporting.

If we are unable to remediate the material weakness,

or if we experience additional material weaknesses in the future, our business may be harmed.

management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating and

reporting on the effectiveness of our system of internal control.

Internal control over financial reporting is a process used to provide

reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external

purposes in accordance with generally accepted accounting principles in the United States.

As a public company, we are required to comply

with the Sarbanes-Oxley Act and other rules that govern public companies.

In particular, we are required to certify our compliance with

Section 404 of the Sarbanes-Oxley Act, which requires us to furnish annually a report by management on the effectiveness of our internal

control over financial reporting.

management performed an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2021

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related to segregation of duties.

Specifically, due to the small size of our Company, we do not maintain sufficient segregation

of duties to ensure the processing, review and authorization of all transactions including non-routine transactions.

the process of remediating our material weaknesses and designing an effective internal control environment.

As of December 31, 2021, there were control deficiencies which constituted a material weakness

in our internal control over financial reporting.

Management has taken, and is taking steps to strengthen our internal control over financial

we have conducted evaluation of the material weakness to determine the appropriate remedy and have established procedures

for documenting disclosures and disclosure controls.

to the small size of our Company, we do not maintain sufficient segregation of duties to ensure the processing, review and authorization

of all transactions including non-routine transactions.

While we have taken certain actions to address the material weaknesses identified,

additional measures may be necessary as we work to improve the overall effectiveness of our internal controls over financial reporting.

efforts place a significant burden on management and add increased pressure to our financial resources and processes.

unable to successfully remediate our existing material weakness or any additional material weaknesses in our internal control

over financial reporting that may be identified in the future in a timely manner, the accuracy and timing of our financial reporting

may be adversely affected;

our liquidity, our access to capital markets, the perceptions of our creditworthiness may be adversely

we may be unable to maintain or regain compliance with applicable securities laws, the listing requirements of the Nasdaq

Stock Market;

we may be subject to regulatory investigations and penalties;

If we are unable

to successfully remediate our existing material weakness or any additional material weaknesses in our internal control over financial

reporting that may be identified in the future in a timely manner, the accuracy and timing of our financial reporting may be adversely

our liquidity, our access to capital markets, the perceptions of our creditworthiness may be adversely affected;

unable to maintain or regain compliance with applicable securities laws, the listing requirements of the Nasdaq Stock Market;

be subject to regulatory investigations and penalties;

investors may lose confidence in our financial reporting;

our reputation may be harmed;

our reputation may be

and our stock price may decline.

are subject to various taxes in either the United States or Canada or both, including, without limitation, the following:

income taxes,

payroll taxes, workers compensation, goods and services tax, sales tax, and land transfer tax.

Our tax filings will be subject to audit

by various taxation authorities.

While we intend to base its tax filings and compliance on the advice of our tax advisors, there can

be no assurance that our tax filing positions will never be challenged by a relevant taxation authority resulting in a greater than anticipated

tax liability.

Related to Our Intellectual Property

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we may not be able to realize anticipated cost savings or synergies.

third parties claim that intellectual property used by us infringes upon their intellectual property, our operating profits could be

adversely affected.

third parties claim that intellectual property used by us infringes upon their intellectual

property, our operating profits could be adversely affected.

is a substantial amount of litigation, both within and outside the U.S., involving patent and other intellectual property rights in the

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Any such claims

could also be expensive and time-consuming to defend and divert management’s attention and resources.

Our competitive position

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Thus, we cannot

guarantee that any of our future product candidates, or our commercialization thereof, does not and will not infringe any third party’s

intellectual property.

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trade secrets were to be disclosed to or independently developed by a competitor or other third-party, our competitive position would

may not be able to protect our intellectual property rights effectively outside of the United States.

prosecuting and defending patents on all of our product candidates throughout the world would be prohibitively expensive.

we choose to file applications and/or obtained patents only in key markets.

Competitors may use our technologies in jurisdictions where

we have not obtained patent protection to develop their own products and, further, may be able to export otherwise infringing products

to territories where we have patent protection but where enforcement is not as strong as that in the United States.

These products may

compete with our products in jurisdictions where we do not have any issued patents and/or our patent claims or other intellectual property

rights may not be effective or sufficient to prevent them from competing.

companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions.

The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other

intellectual property protection, particularly those relating to pharmaceuticals, which could make it difficult to stop the infringement

of our patents or marketing of competing products in violation of our proprietary rights generally.

Proceedings to enforce our patent

rights in certain foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our

business and could be unsuccessful.

financial condition would be adversely impacted if our intangible assets become impaired

are evaluated quarterly and are tested for impairment at least annually or when events or changes in circumstances indicate the carrying

value of each segment, and collectively the Company taken as a whole, might exceed its fair value.

If we determine that the value of

our intangible assets is less than the amounts reflected on our balance sheet, we will be required to reflect an impairment of our intangible

assets in the period in which such determination is made.

An impairment of our intangible assets would result in our recognizing an expense

in the amount of the impairment in the relevant period, which would also result in the reduction of our intangible assets and a corresponding

reduction in our stockholders’ equity in the relevant period.

Related to the Ownership of Our Common Stock

may not obtain the requisite votes at our special meeting to ratify our reverse stock split.

On January 21, 2021,

we received a stockholder litigation demand letter from the law firm of Purcell Julie & Lefkowitz LLP, on behalf of James

Self, a purported stockholder of our Company.

The letter demands that we (i) deem ineffective the December 30, 2020 amendment

to our Amended and Restated Certificate of Incorporation in which we effected a one-for-four reverse stock split of our common

stock (the “2020 Reverse Stock Split”) due to the manner in which non-votes by brokers were tabulated, (ii) seek appropriate

relief for damages allegedly suffered by the company and its stockholders or seek a valid stockholder approval of the amendment

and reverse stock split, and (iii) adopt adequate internal controls to prevent a recurrence of the alleged misconduct.

that the amendment was ineffective or that there were any inadequate internal controls related to the same.

However, to eliminate

any questions about the amendment, we intend to seek to ratify the amendment at a special stockholders’

meeting pursuant

to Section 204 of the Delaware General Corporation Law.

This special stockholders’

meeting is scheduled to occur on May 14, 2021.

March 19, 2021, in response to the stockholder demand letter, we filed a preliminary proxy statement on Schedule 14A, which

provided notice of a special meeting of stockholders and sought the ratification of the filing and effectiveness of the certificate

of amendment to our amended and restated certificate of incorporation filed with the Secretary of State of the State of Delaware

on December 30, 2020 to effect the 2020 Reverse Stock Split.

Should we fail to obtain the requisite votes to ratify

the 2020 Reverse Stock Split, the 2020 Reverse Stock Split will deemed to be invalid, and we will not have a requisite

amount of authorized shares of common stock.

market price of our common stock may be subject to significant fluctuations and volatility, and our stockholders may be unable to resell

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Some of the factors that may cause the market price of our common stock to fluctuate

include, without limitation,:

react negatively to the effect on our business and prospects;

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announcements

relating to strategic relationships, mergers, acquisitions, partnerships, collaborations, joint ventures, capital commitments,

or other events by us or our competitors;

relating to strategic relationships, mergers, acquisitions, partnerships, collaborations, joint ventures, capital commitments, or

other events by us or our competitors;

or trends in the life sciences and biopharma industries;

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events or factors, many of which may be out of our control.

the past, following periods of volatility in the overall market and the market prices of particular companies’

securities, securities

the past, following periods of volatility in the overall market and the market prices of particular companies’ securities, securities

class action litigations have often been instituted against these companies.

Litigation of this type, if instituted against us, could

result in substantial costs and a diversion of our management’s attention and resources.

Any adverse determination in any such

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Ameri and Jay Pharma conducted due diligence on each other prior to the completion of the Offer, there can be no assurances that their

diligence revealed all material issues that may be present in the other company’s business, that all material issues through a

customary amount of due diligence will be uncovered, or that factors outside of our control will not later arise.

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Even if due diligence successfully identifies certain risks, unexpected risks may arise, and previously known risks may materialize in

a manner not consistent with each company’s preliminary risk analysis.

Even though these charges may be non-cash items and not

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our Amended and Restated Certificate of Incorporation, we are subject to the anti-takeover provisions of the Delaware General Corporation

Law (“DGCL”), including Section 203 of the DGCL.

Under these provisions, if anyone becomes an “interested stockholder,”

we may not enter into a “business combination”

with that person for three (3) years without special approval, which could

Law (“DGCL”), including Section 203 of the DGCL.

Under these provisions, if anyone becomes an “interested stockholder,”

we may not enter into a “business combination” with that person for three (3) years without special approval, which could

discourage a third party from making a takeover offer and could delay or prevent a change of control.

For purposes of Section 203 of

the DGCL, “interested stockholder”

means, generally, someone owning fifteen percent (15%) or more of our outstanding voting

the DGCL, “interested stockholder” means, generally, someone owning fifteen percent (15%) or more of our outstanding voting

stock or an affiliate of ours that owned fifteen percent (15%) or more of our outstanding voting stock during the past three (3) years,

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current expectation is that we will retain our future earnings, if any, to fund the development and growth of our business.

capital appreciation, if any, of our common stock will be our stockholders’

sole source of gain, if any, for the foreseeable future.

the event that we fail to satisfy any of the listing requirements of NASDAQ, our common stock may be delisted, which could affect our

market price and liquidity.

capital appreciation, if any, of our common stock will be our stockholders’ sole source of gain, if any, for the foreseeable future.

the event that we fail to satisfy any of the listing requirements of Nasdaq, our common stock may be delisted, which could affect

our market price and liquidity.

common stock is listed on Nasdaq.

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among other requirements.

In the event that we fail to satisfy any of the listing requirements of NASDAQ, our common stock may be delisted.

If we are unable to list on NASDAQ, we would likely be more difficult to trade in or obtain accurate quotations as to the market price

of our common stock.

If our common stock is delisted from trading on NASDAQ, and we are not able to list our common stock on another

exchange or to have it quoted on NASDAQ, our securities could be quoted on the OTC Bulletin Board or on the “pink sheets.”

As a result, we could face significant adverse consequences including:

On February 18, 2022, we received a letter from the Listing Qualifications Department of Nasdaq indicating

that, based upon the closing bid price of the Company’s common stock for the 30 consecutive business day period between January

5, 2022, through February 17, 2022, the Company did not meet the minimum bid price of $1.00 per share required for continued listing

on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2).

The letter also indicated that the Company will be provided

with a compliance period of 180 calendar days, or until August 17, 2022 (the “Compliance Period”), in which to regain compliance

pursuant to Nasdaq Listing Rule 5810(c)(3)(A).

the event that we fail to satisfy any of the listing requirements of Nasdaq, or fail to regain compliance with Nasdaq’s minimum

bid price requirement within the Compliance Period, our common stock may be delisted.

If we are unable to list on Nasdaq, we would likely

be more difficult to trade in or obtain accurate quotations as to the market price of our common stock.

If our common stock is delisted

from trading on Nasdaq, and we are not able to list our common stock on another exchange or to have it quoted on Nasdaq, our securities

could be quoted on the OTC Bulletin Board or on the “pink sheets.” As a result, we could face significant adverse consequences

including, without limitation,:

limited availability of market quotations for our securities;

determination that our common stock is a “penny stock”

which will require brokers trading in our common stock to adhere

determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere

to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

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additional financing in the future).

active trading market for our common stock may not develop.

may not be able to maintain an active trading market for our common stock.

listing of our common stock on Nasdaq does not assure that a meaningful, consistent and liquid trading market exists.

If an active market

for our common stock does not develop, it may be difficult for investors to sell their shares without depressing the market price for

the shares or at all.

market for our common stock does continue, it may be difficult for investors to sell their shares without depressing the market

price for the shares or at all.

may acquire businesses or products, or form strategic alliances, in the future, and may not realize the benefits of such acquisitions.

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principal corporate office is located at 4851 Tamiami Trail N, Suite 200 Naples, FL 34103.

The Company believes our office is

in good condition and is sufficient to conduct our operations.

Our principal corporate office is held under a month-to-month

operating lease.

The Company believes our office is in good

condition and is sufficient to conduct our operations.

Our principal corporate office is held under a month-to-month operating lease.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors