What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2026-03-27 compared with 2025-03-28 · 824 added, 758 removed, 69 unchanged (96% of the section changed)

were incorporated under the laws of the State of Delaware in February 1994 as Spatializer Audio Laboratories, Inc., which was a shell

company immediately prior to the completion of a “reverse merger” transaction on May 26, 2015, whereby Ameri100 Acquisition,

Inc., a Delaware corporation and newly created, wholly owned subsidiary, was merged with and into Ameri and Partners Inc., a Delaware

Company Information

We were incorporated under

the laws of the State of Delaware in February 1994 as Spatializer Audio Laboratories, Inc., which was a shell company immediately prior

to the completion of a “reverse merger” transaction on May 26, 2015, whereby Ameri100 Acquisition, Inc., a Delaware corporation

and newly created, wholly owned subsidiary, was merged with and into Ameri and Partners Inc.

(“Ameri and Partners”), a Delaware

corporation (the “2015 Merger”).

In connection with the 2015 Merger, we changed our name to AMERI Holdings, Inc.

Ameri business ceased to be part of the Company on December 30, 2020, pursuant to a spin-off transaction.

On December 30, 2020, we completed

a tender offer to purchase all of the outstanding common shares of Jay Pharma Inc., a Canada corporation, for shares of Company common

stock or certain preferred stock, and changed our name to “Enveric Biosciences, Inc.”

May 24, 2021, the Company entered into an Amalgamation Agreement (the “Amalgamation Agreement”) with 1306432 B.C.

corporation existing under the laws of the Province of British Columbia and a wholly-owned subsidiary of the Company (“HoldCo”),

Ltd., a corporation existing under the laws of the Province of British Columbia and a wholly-owned subsidiary of HoldCo

(“Purchaser”), and MagicMed Industries Inc., a corporation existing under the laws of the Province of British Columbia (“MagicMed”),

pursuant to which, among other things, the Company, indirectly through Purchaser, acquired all of the outstanding securities of MagicMed

in exchange for securities of the Company by way of an amalgamation under the British Columbia Business Corporations Act, upon the terms

and conditions set forth in the Amalgamation Agreement, such that, upon completion of the amalgamation, the amalgamated corporation (“Amalco”)

became an indirect wholly-owned subsidiary of the Company.

The Ameri business ceased

to be part of the Company on December 30, 2020, pursuant to a spin-off transaction.

On December 30, 2020, we completed a tender offer

to purchase all of the outstanding common shares of Jay Pharma Inc., a Canada corporation, for shares of Company common stock or certain

preferred stock, and changed our name to “Enveric Biosciences, Inc.”

On May 24, 2021, we

entered into an Amalgamation Agreement (the “Amalgamation Agreement”) with 1306432 B.C.

Ltd., a corporation existing under

the laws of the Province of British Columbia and a wholly-owned subsidiary of the Company (“HoldCo”), 1306436 B.C.

corporation existing under the laws of the Province of British Columbia and a wholly-owned subsidiary of HoldCo (“Purchaser”),

and MagicMed Industries Inc., a corporation existing under the laws of the Province of British Columbia (“MagicMed”), pursuant

to which, among other things, we, indirectly through Purchaser, acquired all of the outstanding securities of MagicMed in exchange

for securities of the Company by way of an amalgamation under the British Columbia Business Corporations Act (the “Amalgamation”),

upon the terms and conditions set forth in the Amalgamation Agreement, such that, upon completion of the Amalgamation, the amalgamated

corporation (“Amalco”) became an indirect wholly-owned subsidiary of the Company.

The Amalgamation was completed on September

March 21, 2023, the Company established Enveric Therapeutics Pty.

Ltd., an Australia-based subsidiary (“Enveric Therapeutics”),

to support the Company’s plans to advance the EVM201 Series, comprised of the next generation synthetic prodrugs of the active

metabolite, psilocin, towards the clinic.

Enveric Therapeutics was established to oversee the Company’s intended preclinical, clinical,

and regulatory activities in Australia, including interactions with the local Human Research Ethics Committees (“HREC”) and

the Therapeutic Goods Administration, Australia’s regulatory authority.

Enveric has since out-licensed the EVM201 Series asset

to MycoMedica Life Sciences, Inc.

and is not currently performing activities in Australia.

are required to file Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q with the Securities and Exchange Commission (the

“SEC”) on a regular basis, and are required to disclose certain material events in Current Reports on Form 8-K.

The SEC maintains

an Internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically

with the SEC.

The SEC’s Internet website is located at http://www.sec.gov.

We also make available, free of charge, our Annual Report

on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to these reports on our website at https://www.enveric.com/

as soon as reasonably practicable after those reports and other information is electronically filed with, or furnished to, the SEC.

internet address is https://www.enveric.com/, and the information included in, or linked to our website is not part of this Annual Report

on Form 10-K.

We have included our website address in this Annual Report on Form 10-K solely as a textual reference.

are a biotechnology company dedicated to the development of novel neuroplastogenic small-molecule therapeutics for the treatment of depression,

anxiety, addiction, and other psychiatric disorders.

Leveraging our unique discovery and development platform, the Psybrary™, which

houses proprietary information on the use and development of existing and novel molecules for specific mental health indications, Enveric

seeks to develop a robust intellectual property portfolio of novel drug candidates.

lead program, the EVM301 Series, and its lead drug candidate, EB-003, are intended to offer a first-in-class, new approach to the treatment

of difficult-to-address mental health disorders, mediated by the promotion of neuroplasticity and without also inducing hallucinations

in the patient.

Enveric unveiled its EVM401 Series on February 25, 2025, which is intended to broaden Enveric’s pipeline with additional

non-hallucinogenic molecules and strengthen its ability to target addiction and neuropsychiatric disorders for patients with limited

Previously, Enveric was developing the EVM201 Series, and its lead drug candidate EB-002 (formerly EB-373), for the treatment

of neuropsychiatric disorders.

The EVM201 Series comprised next generation synthetic prodrugs of the active metabolite, psilocin.

Enveric out-licensed the EVM201 Series program to MycoMedica Life Sciences, who will seek to develop, manufacture, and commercialize

EB-002, in exchange for certain development and milestone payments to Enveric.

principal corporate office is located at Enveric Biosciences, Inc., 245 First Street, Riverview II, 18th Floor, Cambridge, MA 02142,

telephone (617) 444-8400.

Our internet address is https://www.enveric.com/, and the information included in, or linked to our website

is not part of this Annual Report.

We have included our website address in this Annual Report solely as a textual reference.

Business Overview

We are a biotechnology company

focused on developing next-generation, small-molecule neuroplastogenic therapeutics that address unmet needs in psychiatric and neurological

By leveraging a differentiated drug discovery platform and a growing library of patent protected chemical structures, we are

advancing a pipeline of novel compounds designed to promote neuroplasticity without hallucinogenic effects.

Our lead candidate, EB-003,

is the first known compound designed to selectively engage both 5-HT 2A and 5-HT 1B receptors with the potential to

deliver fast-acting, durable antidepressant and anxiolytic effects with outpatient convenience.

Our lead program, the EVM301

Series, and its lead drug candidate, EB-003, are intended to offer a first-in-class, new approach to the treatment of difficult-to-address

mental health disorders, mediated by the promotion of neuroplasticity and without also inducing hallucinations in the patient.

is a novel derivative of N,N-Dimethyltryptamine (“DMT”).

It is currently advancing through preclinical studies with the aim of initiating first-in-human studies

to assess safety and tolerability including non-hallucinogenic properties, followed by clinical trials targeting the treatment of depression

or other neuropsychiatric disorders.

We intend to assemble a team

of clinical experts and principal investigators with experience across multiple mental health and central nervous system indications to

be responsible for the management, monitoring, and integrity of the clinical research.

We plan to submit filings including IND applications

and, eventually, NDAs to seek approval with the FDA and with responsible regulatory agencies in other jurisdictions, in connection with

our product candidates.

The selection, timing, duration, and design of any prospective studies are subject to regulatory filings, approval

and finalization of commercial plans.

Our EB-003 program has completed short-term dose-range finding toxicology studies and is now ready

to advance into IND-enabling, GLP compliant safety pharmacology, ADMET and longer-term toxicology studies.

We unveiled an EVM401 Series on February 25, 2025,

which is intended to broaden our pipeline with additional non-hallucinogenic molecules and strengthen our ability to target addiction

and neuropsychiatric disorders for patients with limited options.

While we intend to pursue development of the EVM401 Series, our primary

focus is to develop our lead asset EB-003 in the EVM301 Series.

Neuroplastogens

our amalgamation with MagicMed in September 2021, we have continued to pursue the development of MagicMed’s proprietary library,

the Psybrary™, which we believe will help us to identify and develop the right drug candidates needed to address mental health

challenges, including depression, anxiety, and addiction disorders.

We synthesize novel phenylalkylamines and indolethylamines, using

a mixture of chemistry and synthetic biology, resulting in the expansion of the Psybrary™, which currently includes 20 patent families

with claims covering a million potential molecular structures, over one thousand of which we have so far synthesized in sufficient quantities

to identify and hundreds of which we have screened for receptor binding and other relevant activities.

Company developed certain intellectual property rights around the trademark PsyAI™ for potential use.

On March 6, 2025, Enveric

announced it is soliciting Requests-For Proposals (“RFPs”) for the license or sale of its PsyAI™ trademark portfolio

as a means of maximizing value for an asset which is no longer strategic given the Company’s focus on drug development.

portfolio of US and Canadian trademark assets is held by its subsidiary, Enveric Biosciences Canada, Inc.

Enveric expects the period

for RFPs to remain open until August 31, 2025, with a decision to follow within three (3) months thereafter.

this stage, we have entered into several non-binding term sheets with strategic partners to out-license certain molecules from the Psybrary™.

Going forward, in order to build a pipeline of product candidates, we intend to both continue to internally develop new drug candidates

with associated intellectual property and to acquire, through in-licensing, additional intellectual property from pharmaceutical and

biotechnology companies and research institutions.

The in-licensed assets could include both research stage and clinical stage drug candidates.

we intend to pursue development of the EVM401 Series, our primary focus is to develop our lead asset EB-003 in the EVM301 Series.

development status of EB-003 is shown in the table below:

Following the Amalgamation

with MagicMed in September 2021, we have continued to pursue the development of MagicMed’s proprietary library, the Psybrary™,

which we believe will help us to identify and develop the right drug candidates needed to address mental health challenges, including

depression, anxiety, and addiction disorders.

We synthesize novel phenylalkylamines and indolethylamines, using a mixture of chemistry

and synthetic biology, resulting in the expansion of the Psybrary™, which currently includes 20 patent families with claims covering

a million potential molecular structures, over one thousand of which we have so far synthesized in sufficient quantities to identify and

hundreds of which we have screened for receptor binding and other relevant activities.

We developed certain

intellectual property rights around the trademark PsyAI™ for potential use.

On March 6, 2025, we announced that we were soliciting

Requests-For Proposals (“RFPs”) for the license or sale of its PsyAI™ trademark portfolio as a means of maximizing value

for an asset which is no longer strategic given our focus on drug development.

This limited portfolio of US and Canadian

trademark assets is held by its subsidiary, Enveric Biosciences Canada, Inc.

We expected the period for RFPs to remain open until

August 31, 2025, with a decision to follow within three (3) months thereafter.

No satisfactory offer for the PsyAI trademark portfolio

was made during the RFP period.

Accordingly, the PsyAI trademark remains an asset of Enveric Biosciences Canada, Inc.

and is being further

evaluated in view of the importance of the term “ AI ” in commerce.

At this stage, we have entered

into several non-binding term sheets with strategic partners to out-license certain molecules from the Psybrary™ platform.

Biosciences, Inc.

licensed out its EVM201 portfolio to MycoMedica Life Sciences, PBC on November 7, 2024, as announced at https://www.enveric.com/news/enveric-biosciences-signs-out-licensing-agreement-with-mycomedica-life-sciences-for-eb-002/.

There are no outstanding term sheets pending for any molecules in the Psybrary platform.

The development status of

EB-003 is shown in the table below:

Product Candidates

1 unchanged sentence

Expected Next Steps

Psychedelic-inspired drug candidate

Mental health indication

Preclinical Development

Psychedelic-inspired drug candidate

are a party to certain license agreements as described below, to build a pipeline of product candidates going forward, we intend to both

continue to internally develop new drug candidates with associated intellectual property and to acquire, through in-licensing, additional

intellectual property from pharmaceutical and biotechnology companies and research institutions.

The in-licensed assets could include

both research stage and clinical stage drug candidates.

current focus of Enveric’s intellectual property is in neuroplastogens, including multiple portfolios of psychedelic-inspired compounds

and formulations and methods of making, using, and treating mental and neurological disorders.

In addition, Enveric has intellectual

property related to computer assisted methods of discovering promising novel psychedelic-inspired compounds.

Psychedelic-Inspired

own rights to 20 active patent families related to compounds that are phenylalkylamine and indolethylamine derivatives.

The 20 patent

families are represented by a total of 17 issued United States patents and 47 pending United States and non-United States patent applications

for treatment of mental disorders, such as depression, anxiety, addiction, and other neuropsychiatric conditions.

patent portfolio includes the following published and unpublished applications:

Psilocybin Derivatives and Methods of Using (WO 2022/040802)

Halogenated Psilocybin

Derivatives and Methods of Using (WO2022/047579)

Hydroxylated Psilocybin

Derivatives and Methods of Using (WO2022/047580)

Nitrated Psilocybin

Derivatives and Methods of Using (WO 2022/047583)

Aminated Psilocybin

Derivatives and Methods of Using (WO2023/044556)

Nitrilated Psilocybin

Derivatives and Methods of Using (WO2022/104475)

Psilocybin Derivatives and Methods of Using (WO2022/115944)

Aldehyde and Ketone

Derivatives of Psilocybin and Methods of Using (WO2022/115960)

Prenylated Psilocybin

Derivatives and Methods of Using (WO2022/155751)

Multi-substituent Psilocybin

Derivatives and Methods of Using (WO2022/170438)

N-Heterocycle Substituted

Tryptamine Derivatives and Methods of Using (Unpublished PCT/CA2024/050312)

Tri-Halo-Alkoxy-Substituted

Tryptamine Derivatives (Unpublished PCT/CA2024/050242)

C-4 Substituted Tryptamine

Derivatives and Methods of Using (WO2023/173227)

C-4 Carboxylic Acid

Substituted Tryptamine Derivatives and Methods of Using (WO2023/173196)

C-4 Carbanothioate Substituted

Tryptamine Derivatives and Methods of Using (WO2023/173197)

Salts of C4-Carboxylic

Acid and C4-Carbonothioate-substituted Tryptamine Derivatives and Methods of Using (WO 2023/173229)

Fused Heterocyclic Mescaline

Derivatives ( WO2024/026568A1)

C1-Substituted Isopropylamine

Fused Heterocyclic Mescaline Derivatives (WO2024/086933)

Substituted N- Propylamine

Fused Heterocyclic Mescaline Derivatives (WO2024/103185)

Substituted Ethylamine

Fused Heterocyclic Mescaline Derivatives (WO2024/124353)

Conjugates and Formulations

own rights held by our wholly-owned subsidiary Akos Biosciences, Inc.

to 2 active patent families related to cannabinoids.

family relates to cannabinoid crème formulations for treatment of radiation dermatitis and is licensed to Aries Science &

Technology, LLC, and comprises 1 United States patent and 2 pending non-United States patents applications.

The other patent family relates

to cannabinoid conjugates in combination with COX-2 inhibitors for treatment of pain and joint disease and is the subject of a pending

license term sheet with a third party and comprises 3 United States patents, and 3 pending United States and non-United States patent

Intellectual Property

We are a party to certain

license agreements as described below, to build a pipeline of product candidates going forward, we intend to both continue to internally

develop new drug candidates with associated intellectual property and to acquire, through in-licensing, additional intellectual property

from pharmaceutical and biotechnology companies and research institutions.

The in-licensed assets could include both research stage and

clinical stage drug candidates.

The current focus of our

intellectual property is in neuroplastogens, including multiple portfolios of psychedelic-inspired compounds and formulations and

methods of making, using, and treating mental and neurological disorders.

In addition, we have intellectual property related to

computer assisted methods of discovering promising novel psychedelic-inspired compounds.

Psychedelic-Inspired Compounds

We own rights to 19 active

patent families related to compounds that are phenylalkylamine and indolethylamine derivatives.

The 19 patent families are represented

by a total of 24 issued United States patents and 59 pending United States and non-United States patent applications for treatment of

mental disorders, such as depression, anxiety, addiction, and other neuropsychiatric conditions.

The active patent portfolios

include the following published and unpublished applications:

● Glycosylated Psilocybin Derivatives and Methods of Using (WO 2022/040802)

● Halogenated Psilocybin Derivatives and Methods of Using (WO2022/047579)

● Hydroxylated Psilocybin Derivatives and Methods of Using (WO2022/047580)

● Nitrated Psilocybin Derivatives and Methods of Using (WO 2022/047583)

● Aminated Psilocybin Derivatives and Methods of Using (WO2023/044556)

● Nitrilated Psilocybin Derivatives and Methods of Using (WO2022/104475)

● Carboxylated Psilocybin Derivatives and Methods of Using (WO2022/115944)

● Aldehyde and Ketone Derivatives of Psilocybin and Methods of Using (WO2022/115960)

● Prenylated Psilocybin Derivatives and Methods of Using (WO2022/155751)

● Multi-substituent Psilocybin Derivatives and Methods of Using (WO2022/170438)

● N-Heterocycle Substituted Tryptamine Derivatives and Methods of Using (WO2025/189271)

● C-4 Substituted Tryptamine Derivatives and Methods of Using (WO2023/173227)

● C-4 Carboxylic Acid Substituted Tryptamine Derivatives and Methods of Using (WO2023/173196)

● C-4 Carbanothioate Substituted Tryptamine Derivatives and Methods of Using (WO2023/173197)

● Salts of C4-Carboxylic Acid and C4-Carbonothioate-substituted Tryptamine Derivatives and Methods of

Using (WO 2023/173229)

● Fused Heterocyclic Mescaline Derivatives ( WO2024/026568A1)

● C1-Substituted Isopropylamine Fused Heterocyclic Mescaline Derivatives (WO2024/086933)

● Substituted N- Propylamine Fused Heterocyclic Mescaline Derivatives (WO2024/103185)

● Substituted Ethylamine Fused Heterocyclic Mescaline Derivatives (WO2024/124353)

Cannabinoid Conjugates and Formulations

We own rights held by our

wholly owned subsidiary Akos Biosciences, Inc.

to two active patent families related to cannabinoids.

Both patent families are licensed

out to unrelated third parties.

One patent family relates to cannabinoid crème formulations for treatment of radiation dermatitis,

is licensed to Aries Science & Technology, LLC, and comprises one United States patent, one Australian patent, and one pending European

patent application.

See https://www.enveric.com/news/aries-science-technology-and-enveric-biosciences-announce-licensing-agreement/.

other patent family relates to cannabinoid conjugates in combination with COX-2 inhibitors for treatment of pain and joint disease, is

licensed under two separate licenses for pharmaceutical and non-pharmaceutical uses to Restoration Biologics, LLC, and comprises three

United States patents, and three pending patent applications in the United States and other countries.

A portfolio of cannabinoid conjugate

technology licensed in from Diverse Biotech, Inc., is sublicensed to Restoration Biologics, LLC as part of the licenses to Restoration

Biologics, LLC.

See https://www.enveric.com/news/enveric-biosciences-and-restoration-biologics-announce-licensing-agreements-to-treat-joint-disease/

The active cannabinoid patent

portfolios include the following published and unpublished applications:

● Compositions for topical treatment of radiation dermatitis (WO2023154264)

● Cannabinoid Conjugate Molecules (WO2023150057)

Diverse Biotech, Inc.

In-License, sublicensed

out to Restoration Biologics, LLC

We hold limited rights to

patent applications owned by Diverse Biotech, Inc.

for the use of cannabinoids in conjugate form with five existing, standard-of-care

drugs (celecoxib and four selected steroids) via Diverse Biotech’s patent pending conjugate drug delivery platform.

Rights granted

by Diverse Biotech to Enveric have been assigned to our wholly owned subsidiary, Akos Biosciences, Inc.

Those rights extend to all fields

The intended target for development of such conjugates is alleviating pain, specifically the pain of osteoarthritis, rheumatoid

arthritis, and cancer, with the goal of achieving improved and novel therapeutic outcomes for patients.

The license from Diverse Biotech

is paid-up and no further liability to Diverse Biotech should arise from any commercialization activities by Akos Biosciences, Inc.

its sublicensees.

The in-licensed Diverse Biotech,

portfolio includes two patent families comprising two issued United States patents and 14 pending United States and non-United States

applications.

for topical treatment of radiation dermatitis (WO2023154264)

Cannabinoid Conjugate

Molecules (WO2023150057)

Biotech, Inc.

hold limited rights to patent applications owned by Diverse Biotech, Inc.

for the use of cannabinoids in conjugate form with five existing,

standard-of-care drugs (celecoxib and four selected steroids) via Diverse Biotech’s patent pending conjugate drug delivery platform.

Our rights extend to all fields of use.

The intended target for development of such conjugates is alleviating pain, specifically the

pain of osteoarthritis, rheumatoid arthritis, and cancer, with the goal of achieving improved and novel therapeutic outcomes for patients.

in-licensed Diverse Biotech, Inc.

portfolio includes two patent families comprising 2 issued United States patents and 13 pending United

States and non-United States applications.

Those patents and applications disclose conjugate chemistry that combines cannabinoids with

existing drugs in conjugate form that we believe will provide differentiation in use and efficacy from combination therapy of drugs and

cannabinoids.

The license extends for as long as Enveric intends to develop and commercialize the licensed Agents and Products.

applications, should they issue, may expire as late as 2040.

& Development

view of the urgent need for new and more effective mental health treatments, we intend to combine innovative scientific discoveries and

bio-chemical synthesis, along with accelerated clinical development plans to create, develop and progress novel therapies using psychedelic-inspired

medications and similar compounds.

Our current research and development efforts are focused on developing novel molecules structurally

related to certain naturally occurring psychedelics with improved pharmaceutical characteristics.

Some of the naturally occurring psychedelic

molecules are currently being investigated by researchers around the world as potential treatments for a broad range of psychiatric and

neurologic disorders.

are currently pursuing drug discovery and preclinical activities in order to advance a number of novel psychedelic-inspired molecules

towards the clinic.

Enveric’s lead development candidate is EB-003.

Those patents and applications disclose conjugate chemistry that combines cannabinoids with existing drugs in conjugate

The issued and pending claims of patents in the Diverse Biotech portfolio all appear to be for different conjugates than those for

which the portfolio was originally licensed in from Diverse Biotech.

Regardless, we believe that the licensed-in conjugates have the potential

for efficacy that will differentiate their performance against target diseases over simple combination therapies of drugs and cannabinoids.

The license extends for as long as Akos Biosciences and its sublicensee intend to develop and commercialize the licensed Agents and Products.

Issued patents in the Diverse Biotech portfolio may expire as late as 2040.

Research & Development

In view of the urgent need

for new and more effective mental health treatments, we intend to combine innovative scientific discoveries and bio-chemical synthesis,

along with accelerated clinical development plans to create, develop and progress novel therapies using psychedelic-inspired medications

and similar compounds.

Our current research and development efforts are focused on developing novel molecules structurally related to

certain naturally occurring psychedelics with improved pharmaceutical characteristics.

Some of the naturally occurring psychedelic molecules

are currently being investigated by researchers around the world as potential treatments for a broad range of psychiatric and neurologic

Clinical Studies

We are currently pursuing

drug discovery and preclinical activities in order to advance a number of novel psychedelic-inspired molecules towards the clinic.

lead development candidate is EB-003.

EB-003 is a novel derivative of DMT.

It is the lead drug candidate

from the EVM301 Series currently advancing through preclinical studies with the aim of initiating first-in-human studies to assess safety

and tolerability including non-hallucinogenic properties, followed by clinical trials targeting the treatment of depression or other

neuropsychiatric disorders.

intend to assemble a team of clinical experts and principal investigators with experience across multiple mental health and central nervous

system indications to be responsible for the management, monitoring, and integrity of the clinical research.

plan to submit filings including Clinical Trial Applications (“CTA”), Investigational New Drug (“IND”) applications

and, eventually, new drug applications (“NDA”) to seek approval with the US FDA and with responsible regulatory agencies

in other jurisdictions, in connection with our product candidates.

The selection, timing, duration, and design of any prospective studies

are subject to regulatory filings, approval and finalization of commercial plans.

next step is to advance EB-003 into formal preclinical development studies in support of a future IND filing.

Advisory Board

have established a scientific advisory board and plan to seek advice and input from these experienced clinical leaders on matters related

to our research and development programs.

The members of our scientific advisory board consist of experts across a range of key disciplines

relevant to our programs.

We intend to continue to leverage the broad expertise of our advisors by seeking their counsel on important

topics relating to our product development and clinical development programs.

scientific advisors are not our employees and do have commitments to, or consulting or advisory contracts with, other entities that may

limit their availability to us.

In addition, our scientific advisors may have arrangements with other companies to assist those companies

in developing products or technologies that may compete with us.

All of our scientific advisors are affiliated with other entities and

devote a limited portion of their time to us.

current scientific advisors are set forth in the table below:

It is the lead drug candidate from the EVM301 Series currently

advancing through preclinical studies with the aim of initiating first-in-human studies to assess safety and tolerability including non-hallucinogenic

properties, followed by clinical trials targeting the treatment of depression or other neuropsychiatric disorders.

We intend to assemble a team

of clinical experts and principal investigators with experience across multiple mental health and central nervous system indications to

be responsible for the management, monitoring, and integrity of the clinical research.

We plan to submit filings

including Clinical Trial Applications (“CTA”), IND applications and, eventually, NDAs to seek approval with the US FDA and

with responsible regulatory agencies in other jurisdictions, in connection with our product candidates.

The selection, timing, duration,

and design of any prospective studies are subject to regulatory filings, approval and finalization of commercial plans.

Our EB-003 program has completed

short-term dose-range finding toxicology studies and is now ready to advance into IND-enabling, GLP compliant safety pharmacology, ADMET

and longer-term toxicology studies.

Scientific Advisory Board

We have established a scientific

advisory board and plan to seek advice and input from these experienced clinical leaders on matters related to our research and development

The members of our scientific advisory board consist of experts across a range of key disciplines relevant to our programs.

We intend to continue to leverage the broad expertise of our advisors by seeking their counsel on important topics relating to our product

development and clinical development programs.

Our scientific advisors are

not our employees and do have commitments to, or consulting or advisory contracts with, other entities that may limit their availability

In addition, our scientific advisors may have arrangements with other companies to assist those companies in developing products

or technologies that may compete with us.

All of our scientific advisors are affiliated with other entities and devote a limited portion

of their time to us.

Our current scientific

advisors are set forth in the table below:

Specialization

Director of the Clinical Trials Network and Institute

Maurizio Fava, M.D.

Executive Director of the Clinical Trials Network and Institute

Clinical Research

Stahl, M.D., Ph.D.

of Psychopharmacology for the California Department of State Hospitals

Krystal, M.D.

of Yale Center for Clinical Investigation

Liebowitz, M.D.

of Psychiatry;

Director of Psychopharmacology for the California Department of State Hospitals

Clinical Research

John Krystal, M.D.

Director of Yale Center for Clinical Investigation

Clinical Research

Michael Liebowitz, M.D.

Professor of Psychiatry;

Director at Medical Research Network

Clinical Research

Maurizio Fava, M.D.

has served as a Scientific Advisor of Enveric since 2022.

Maurizio Fava is Chair, Mass General Brigham Academic Centers

Psychiatry Department, Psychiatrist-in-Chief of the Massachusetts General Hospital (MGH), executive director of the Clinical Trials Network

and Institute, (MGH), associate dean for clinical and translational research, and the Slater Family Professor of Psychiatry at Harvard

Maurizio Fava is Chair, Mass General Brigham Academic Centers Psychiatry

Department, Psychiatrist-in-Chief of the Massachusetts General Hospital (“MGH”), executive director of the Clinical Trials

Network and Institute, associate dean for clinical and translational research, and the Slater Family Professor of Psychiatry at Harvard

Medical School.

9 unchanged sentences

academic CRO specialized in the coordination of multi-center clinical trials in psychiatry.

Stahl, M.D., Ph.D.

has served as a Scientific Advisor of Enveric since 2022.

Stephen Stahl has held faculty positions at Stanford

University, the University of California at Los Angeles, the Institute of Psychiatry London, the Institute of Neurology London, and,

currently, as Clinical Professor of Psychiatry and Neuroscience at the University of California Riverside, Adjunct Professor of Psychiatry

at the University of California San Diego and as Honorary Fellow in Psychiatry at the University of Cambridge.

Stahl serves as editor-in-chief

of CNS Spectrums and is Senior Academic Advisor and Director of Psychopharmacology for the California Department of State Hospitals (DSH)

where he has a leadership role in addressing violence and decriminalization of the seriously mentally ill.

Author of over 575 articles

and chapters with an H index of 69, and more than 2000 scientific presentations and abstracts, Dr.

Stahl is an internationally renowned

clinician, researcher, and teacher in psychiatry with subspecialty expertise in psychopharmacology.

Stahl has written over 50 textbooks

and edited 15 others, including the best-selling and award-winning textbook, Stahl’s Essential Psychopharmacology, now in its fifth

edition, and the best-selling and award-winning clinical manual, Essential Psychopharmacology Prescriber’s Guide, now in its seventh

Krystal, M.D.

has served as a Scientific Advisor of Enveric since 2022.

Stephen Stahl has held faculty positions at Stanford University,

the University of California at Los Angeles, the Institute of Psychiatry London, the Institute of Neurology London, and, currently, as

Clinical Professor of Psychiatry and Neuroscience at the University of California Riverside, Adjunct Professor of Psychiatry at the University

of California San Diego and as Honorary Fellow in Psychiatry at the University of Cambridge.

Stahl serves as editor-in-chief of CNS

Spectrums and is Senior Academic Advisor and Director of Psychopharmacology for the California Department of State Hospitals where he

has a leadership role in addressing violence and decriminalization of the seriously mentally ill.

Author of over 575 articles and chapters

with an H index of 69, and more than 2000 scientific presentations and abstracts, Dr.

Stahl is an internationally renowned clinician,

researcher, and teacher in psychiatry with subspecialty expertise in psychopharmacology.

Stahl has written over 50 textbooks and edited

15 others, including the best-selling and award-winning textbook, Stahl’s Essential Psychopharmacology, now in its fifth edition,

and the best-selling and award-winning clinical manual, Essential Psychopharmacology Prescriber’s Guide, now in its seventh edition.

John Krystal, M.D.

served as a Scientific Advisor of Enveric since 2022.

John Krystal is the Robert L.

McNeil, Jr., Professor

of Translational Research;

McNeil, Jr., Professor of Translational Research;

Professor of Psychiatry, Neuroscience, and Psychology;

Chair of the Department of Psychiatry at Yale University;

and Chief of Psychiatry and Behavioral Health at Yale-New Haven Hospital.

He is a graduate of the University of Chicago, Yale School

of Medicine, and the Yale Psychiatry Residency Training Program.

He has published extensively on the neurobiology and treatment of schizophrenia,

alcoholism, PTSD, and depression.

and Chief of Psychiatry

and Behavioral Health at Yale-New Haven Hospital.

He is a graduate of the University of Chicago, Yale School of Medicine, and the Yale

Psychiatry Residency Training Program.

He has published extensively on neurobiology and treatment of schizophrenia, alcoholism, PTSD,

and depression.

Notably, his laboratory discovered the rapid antidepressant effects of ketamine in humans.

directs/co-directs the Yale Center for Clinical Investigation (CTSA), NIAAA Center for the Translational Neuroscience of Alcoholism,

and Clinical Neuroscience Division of the National Center for PTSD (VA).

Krystal directs/co-directs

the Yale Center for Clinical Investigation (CTSA), NIAAA Center for the Translational Neuroscience of Alcoholism, and Clinical Neuroscience

Division of the National Center for PTSD (VA).

He is a member of the U.S.

National Academy of Medicine;

of the Neuroscience Forum of the U.S.

co-director of the Neuroscience

Forum of the U.S.

National Academies of Sciences, Engineering, and Medicine;

Fellow of the American Association for

the Advancement of Science (AAAS);

Fellow of the American Association for the Advancement of

and editor of Biological Psychiatry (IF=13.382).

Previously, Dr.

Krystal chaired the NIMH Board of

Scientific Counselors and has served as a member of the NIMH National Mental Health Advisory Council and the NIAAA National Alcohol Advisory

He also previously served as the president of the American College of Neuropsychopharmacology (ACNP) and the International College

of Neuropsychopharmacology (CINP).

Krystal chaired the NIMH Board of Scientific Counselors and

has served as a member of the NIMH National Mental Health Advisory Council and the NIAAA National Alcohol Advisory Council.

He also previously

served as the president of the American College of Neuropsychopharmacology and the International College of Neuropsychopharmacology.

Liebowitz, M.D.

1 unchanged sentence

Michael Liebowitz is a Professor of Psychiatry at Columbia

University and New York State Psychiatric Institute (NYSPI) and is currently Director at Medical Research Network where he is engaged

in clinical trials for depression, anxiety, binge eating, ADHD, PTSD, and borderline personality disorders.

Liebowitz completed his

fellowship in psychopharmacology at the Depression Evaluation Service at NYSPI, where he helped develop and validate the DSM criteria

for atypical depression.

Liebowitz established the Anxiety Disorders Clinic at NYSPI, the first research clinic to specialize in

anxiety disorders in the United States.

University and New York State Psychiatric Institute (“ NYSPI ”) and is currently Director

at Medical Research Network where he is engaged in clinical trials for depression, anxiety, binge eating, ADHD, PTSD, and borderline

personality disorders.

Liebowitz completed his fellowship in psychopharmacology at the Depression Evaluation Service at NYSPI, where

he helped develop and validate the DSM criteria for atypical depression.

Liebowitz established the Anxiety Disorders Clinic at NYSPI,

the first research clinic to specialize in anxiety disorders in the United States.

Over the next two decades, Dr.

Liebowitz and colleagues helped refine treatments for panic disorder,

broadened the diagnostic criteria and established medication treatment for social anxiety disorder, and collaborated in clinical trials

comparing medications and behavioral treatments for several anxiety disorders.

Liebowitz developed the Liebowitz Social Anxiety Scale

(LSAS) which has been the primary outcome measure for several registration programs in social anxiety disorder and is used worldwide

as a research and clinical measure.

have also established relationships with certain academic partners, who we believe have the potential to accelerate our product development,

market entry, data collection, analysis and advancement of clinical trials.

primary academic partner is the University of Calgary which brings excellence into advancing brain and mental health research and education.

biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis

on proprietary products.

While we believe that our scientific knowledge and technology and development experience provide us with competitive

advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology

companies, academic institutions, governmental agencies, and public and private research institutions.

Any product candidates that we

successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.

intend to focus on the development of novel and viable psychedelic-inspired drug candidates for mental illnesses and unmet medical needs,

and partner with pharmaceutical and other drug development and biotechnology companies in developing and commercializing psychedelic-inspired

medicines for diverse psychological and neuropsychiatric indications, which will be fundamentally composed of the psychedelic-inspired

drug candidates contained in the Psybrary™.

While we believe that our technology, knowledge and experience as well as the scientific

resources at our disposal provide us with significant competitive advantages, we face potential competition from many different sources.

Any product candidates we successfully identify will compete not only with existing therapies but also new therapies that may become

available in the future

commercial opportunities could be reduced or eliminated if our competitors develop and commercialize medicines that are safer, more effective,

have fewer or less severe side effects, are more convenient or are less expensive than any product candidates that we may develop.

competitors also may obtain approval from the FDA or other regulatory agencies for their medicines more rapidly than us, which could

result in our competitors establishing a strong market position before we are able to enter the market.

our Psybrary™ and the intellectual property kept and developed therein, our success depends on our ability to protect our intellectual

property and our ability to achieve and maintain key partnerships aimed at the development, licensing and marketing of psychedelic-inspired

medicines without infringing on the proprietary rights of others.

Patent positions within the pharmaceutical field can be highly uncertain

and involve complex legal, scientific and factual questions for which important legal principles remain unresolved.

Patents issued to

us may be challenged, invalidated or circumvented.

Regulation and Product Approvals

Pharmaceutical

companies are subject to extensive regulation by the federal government, principally by the FDA under the Federal Food, Drug and Cosmetic

Act, or the FDCA, and, to a lesser extent, by state and local governments.

Before our prescription products may be marketed in the U.S.,

they must be approved by the FDA for commercial distribution.

Certain OTC products must comply with applicable FDA regulations, known

as OTC Monographs, in order to be marketed, but do not have the benefit of FDA review and approval before marketing.

We are also subject

to regulation under federal, state and local laws, including requirements regarding occupational safety, laboratory practices, environmental

protection and hazardous substance control, and may be subject to other present and future local, state, federal and foreign regulations.

We cannot predict the extent to which we may be affected by legislative and other regulatory developments concerning our products and

the healthcare industry in general.

FDCA and other federal and state statutes and regulations govern the testing, manufacture, quality control, export and import, labeling,

storage, record keeping, approval, pricing, advertising, promotion, sale and distribution of pharmaceutical products.

Noncompliance with

applicable requirements both before and after approval, can subject us, our third party manufacturers and other collaborative partners

to administrative and judicial sanctions, such as, among other things, warning letters, fines and other monetary payments, recall or

seizure of products, criminal proceedings, suspension or withdrawal of regulatory approvals, interruption or cessation of clinical trials,

total or partial suspension of production or distribution, injunctions, limitations on or the limitation of claims we can make for our

products, and refusal of the government to enter into supply contracts for distribution directly by governmental agencies, or delay in

approving or refusal to approve new drug applications.

Liebowitz and colleagues

helped refine treatments for panic disorder, broadened the diagnostic criteria and established medication treatment for social anxiety

disorder, and collaborated in clinical trials comparing medications and behavioral treatments for several anxiety disorders.

developed the Liebowitz Social Anxiety Scale which has been the primary outcome measure for several registration programs in social anxiety

disorder and is used worldwide as a research and clinical measure.

Academic Partners

We have also established relationships

with certain academic partners, who we believe have the potential to accelerate our product development, market entry, data collection,

analysis and advancement of clinical trials.

Our primary academic partner

is the University of Calgary which brings excellence into advancing brain and mental health research and education.

The biotechnology and pharmaceutical

industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products.

we believe that our scientific knowledge and technology and development experience provide us with competitive advantages, we face potential

competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic

institutions, governmental agencies, and public and private research institutions.

Any product candidates that we successfully develop

and commercialize will compete with existing therapies and new therapies that may become available in the future.

We intend to focus on the

development of novel and viable psychedelic-inspired drug candidates for mental illnesses and unmet medical needs, and partner with pharmaceutical

and other drug development and biotechnology companies in developing and commercializing psychedelic-inspired medicines for diverse psychological

and neuropsychiatric indications, which will be fundamentally composed of the psychedelic-inspired drug candidates contained in the Psybrary™.

While we believe that our technology, knowledge and experience as well as the scientific resources at our disposal provide us with significant

competitive advantages, we face potential competition from many different sources.

Any product candidates we successfully identify will

compete not only with existing therapies but also new therapies that may become available in the future.

Our commercial opportunities

could be reduced or eliminated if our competitors develop and commercialize medicines that are safer, more effective, have fewer or less

severe side effects, are more convenient or are less expensive than any product candidates that we may develop.

Our competitors also may

obtain approval from the FDA or other regulatory agencies for their medicines more rapidly than us, which could result in our competitors

establishing a strong market position before we are able to enter the market.

Regarding our Psybrary™

and the intellectual property kept and developed therein, our success depends on our ability to protect our intellectual property and

our ability to achieve and maintain key partnerships aimed at the development, licensing and marketing of psychedelic-inspired medicines

without infringing on the proprietary rights of others.

Patent positions within the pharmaceutical field can be highly uncertain and involve

complex legal, scientific and factual questions for which important legal principles remain unresolved.

Patents issued to us may be challenged,

invalidated or circumvented.

Government Regulation and Product Approvals

Pharmaceutical companies in

are subject to extensive regulation by the federal government, principally by the FDA under the Federal Food, Drug and Cosmetic

Act, (“FDCA”) and its implementing regulations, and, to a lesser extent, by state and local governments.

Before our prescription

drug products may be marketed in the U.S., they must be reviewed and approved by the FDA for commercial sale and distribution.

also subject to regulation under federal, state and local laws, including requirements regarding occupational safety, laboratory practices,

environmental protection and hazardous substance control, and may be subject to other present and future local, state, federal and foreign

We cannot predict the extent to which we may be affected by legislative and other regulatory developments, including regulator

enforcement priorities concerning our products and the healthcare industry in general.

The FDCA and other federal

and state laws, govern the testing, manufacture, quality control, export and import, labeling, storage, record keeping, approval, pricing,

advertising, promotion, sale and distribution of pharmaceutical products, including investigational drugs.

Noncompliance with applicable

requirements both before and after approval by FDA, can subject us, our third party manufacturers and other collaborative partners to

administrative and judicial sanctions, such as, among other things, warning letters, civil and criminal fines and other monetary payments,

recall or seizure of products, criminal proceedings, suspension or withdrawal of regulatory approvals, interruption or cessation of clinical

trials, total or partial suspension of production or distribution, injunctions, limitations on or the limitation of claims we can make

for our products, and refusal of the government to enter into supply contracts for distribution directly by governmental agencies, or

delay in approving or refusal to approve NDAs.

The FDA also has the authority to revoke or withhold approvals of new drug applications.

approval is required before any “new drug,” can be marketed.

Our products are new drugs and require prior FDA approval.

approval must be based on extensive information and data submitted in a NDA, including, but not limited to, adequate and well controlled

FDA must review and approve

any “new drug,” for it to be legally marketed in the U.S.

Our products are new drugs and require prior FDA review and approval.

Such approval must be based on extensive data and evidence submitted in a NDA, including, but not limited to, adequate and well controlled

laboratory and clinical investigations to demonstrate the safety and effectiveness of the drug product for its intended use(s) as well

as the manufacturing suitability of the product.

In addition to providing required safety and effectiveness data for FDA approval, a

drug manufacturer’s practices and procedures must comply with current Good Manufacturing Practices (“cGMPs”), which

In addition to providing required safety and effectiveness data for FDA review and approval,

a drug manufacturer’s practices and procedures must comply with current Good Manufacturing Practices (“CGMPs”), which

apply to manufacturing, receiving, holding and shipping, and include, among other things, demonstration of product purity, consistent

7 unchanged sentences

Enforcement Administration (“DEA”), which inspections may or may not be announced in advance.

intellectual property kept and developed in our Psybrary™ is focused solely on developing and commercializing non-hallucinogenic

synthetic derivatives of psychedelic substances.

While we use psychedelic-inspired compounds and classic psychedelics as our starting

point for our research and identification of compounds, we do not have any direct or indirect involvement in the illegal selling, production

or distribution of any substances in the jurisdictions in which we operate.

Enveric is a neuro-pharmaceutical scientific company and

as such we do not advocate for the legalization of psychedelic substances nor do we deal with psychedelic substances except within laboratory

and clinical trial settings conducted within approved regulatory frameworks.

Our products will not be commercialized prior to applicable

regulatory approval and this approval will only be granted if clinical evidence of safety and efficacy for the specific intended use

is successfully developed.

execution of our strategy is in part contingent upon compliance with regulatory requirements enacted by governmental authorities and

obtaining regulatory approvals for the development and license of our psychedelic-inspired drug candidates.

The psychedelic-inspired

medicine 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.

The impact of compliance regimes, any delays in

obtaining, or failure to obtain regulatory approvals may significantly delay or impact our development of markets, our business, psychedelic-inspired

medicines, and licensing initiatives and could have a material adverse effect on our business, financial condition and operating results.

New Drug Approval Process

the U.S., pharmaceutical products are subject to extensive regulation by the FDA.

The Federal Food, Drug, and Cosmetic Act, or the FDCA,

and other federal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage,

recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import

and export of pharmaceutical products.

Failure to comply with applicable U.S.

requirements may subject a company to a variety of administrative

or judicial sanctions, such as imposition of clinical holds, FDA refusal to approve pending NDAs, warning letters, product recalls, product

seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution,

disgorgement, civil penalties and criminal prosecution.

Pharmaceutical

product development in the U.S.

typically involves pre-clinical laboratory and animal tests and the submission to the FDA of an IND,

which must become effective before clinical testing may commence.

For commercial approval, the sponsor must submit adequate tests by

all methods reasonably applicable to show that the drug is safe for use under the conditions prescribed, recommended or suggested in

the proposed labeling.

The sponsor must also submit substantial evidence, generally consisting of adequate, well-controlled clinical

trials to establish that the drug will have the effect it purports or is represented to have under the conditions of use prescribed,

Inspections may result in enforcement

actions, such as Form FDA 483s, and other consequences of noncompliance with federal laws, as described above.

The intellectual property

kept and developed in our Psybrary™ is focused solely on developing and commercializing non-hallucinogenic synthetic derivatives

of psychedelic substances.

While we use psychedelic-inspired compounds and classic psychedelics as our starting point for our research

and identification of compounds, we do not have any direct or indirect involvement in the illegal selling, production or distribution

of any substances in the jurisdictions in which we operate.

Enveric is a neuro-pharmaceutical scientific company and as such we do not

advocate for the legalization of psychedelic substances nor do we deal with psychedelic substances except within laboratory and clinical

trial settings conducted within approved regulatory frameworks.

Our products will not be commercialized prior to applicable regulatory

approval and this approval will only be granted if clinical evidence of safety and efficacy for the specific intended use is successfully

Successful execution of our

strategy is in part contingent upon compliance with regulatory requirements enacted by governmental authorities and obtaining regulatory

approvals for the development and license of our psychedelic-inspired drug candidates.

The psychedelic-inspired medicine industry is a

new and emerging industry with ambiguous existing regulations and uncertainty as to future regulations;

we cannot predict the impact of

the ever-evolving compliance regime in respect of this industry.

The impact of compliance regimes, any delays in obtaining, or failure

to obtain regulatory approvals may significantly delay or impact our development of markets, our business, psychedelic-inspired medicines,

and licensing initiatives and could have a material adverse effect on our business, financial condition and operating results.

FDA New Drug Approval Process

In the U.S., pharmaceutical

products are subject to extensive regulation by the FDA.

The FDCA and its implementing regulations, and other federal and state laws,

govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and

marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical products.

comply with applicable U.S.

requirements may subject a company to a variety of administrative or judicial sanctions, such as imposition

of clinical holds, FDA refusal to approve pending NDAs, warning letters, product recalls, product seizures, total or partial suspension

of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement, civil penalties and criminal

Pharmaceutical product development

typically involves pre-clinical laboratory and animal tests and the submission to the FDA of an IND, which must become effective

before clinical research involving human subjects may commence.

The premarket approval process requires, the sponsor to submit adequate

tests by all methods reasonably applicable to show that the investigational drug is safe for use under the conditions prescribed, recommended

or suggested in the proposed labeling.

The sponsor must also submit substantial evidence, generally consisting of adequate, well-controlled

clinical trials to establish that the drug will have the effect it purports or is represented to have under the conditions of use prescribed,

recommended or suggested in the proposed labeling.

In certain cases, the FDA may determine that a drug is effective based on one clinical

study plus confirmatory evidence.

Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time

required may vary substantially based upon the type, complexity and novelty of the product or disease.

tests include laboratory evaluation of product chemistry, formulation and toxicity, as well as animal trials to assess the characteristics

and potential safety and efficacy of the product.

The conduct of the pre-clinical tests must comply with federal regulations and requirements,

including the FDA’s good laboratory practices regulations and the U.S.

Department of Agriculture’s (USDA’s) regulations

implementing the Animal Welfare Act.

The results of pre-clinical testing are submitted to the FDA as part of an IND application along

with other information, including information about product chemistry, manufacturing and controls, and a proposed clinical trial protocol.

Long-term pre-clinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may continue after the IND application

is submitted.

30-day waiting period after the submission of each IND application is required prior to the commencement of clinical testing in humans.

If the FDA has not imposed a clinical hold on the IND application or otherwise commented or questioned the IND application within this

30-day period, the clinical trial proposed in the IND application may begin.

trials involve the administration of the IND to healthy volunteers or patients under the supervision of a qualified investigator.

Satisfaction of FDA premarket approval requirements typically takes many years and

the actual time required may vary substantially based upon the type, complexity and novelty of the investigational drug or disease.

Pre-clinical tests include

laboratory evaluation of product chemistry, formulation and toxicity, as well as animal trials to assess the characteristics and potential

safety and efficacy of the investigational drug.

The conduct of the pre-clinical tests must comply with federal regulations, including

the FDA’s Good Laboratory Practices regulations and the U.S.

Department of Agriculture’s (“USDA”) regulations implementing

the Animal Welfare Act.

The results of pre-clinical testing are submitted to the FDA as part of an IND application along with supporting

information, including, for example information about chemistry, manufacturing and controls for the investigational drug, and a proposed

clinical trial protocol.

Long-term pre-clinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may continue

after an IND application is submitted.

A 30-day waiting period after

the submission of each IND application is required prior to the commencement of clinical research involving human subjects.

has not imposed a clinical hold on the IND application or otherwise commented or questioned the IND application within this 30-day period,

the clinical trial proposed in the IND application may begin.

Clinical trials involve the

administration of the investigational drug to healthy volunteers or patients under the supervision of a qualified investigator.

trials must be conducted:

6 unchanged sentences

to the FDA as part of the IND application.

FDA may order the temporary, or permanent, discontinuation of a clinical trial at any time or impose other sanctions if it believes that

the clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical

trial patients.

The trial protocol and informed consent information for patients in clinical trials must also be submitted to an institutional

review board, or IRB, for approval.

An IRB may also require the clinical trial at the site to be halted, either temporarily or permanently,

for failure to comply with the IRB’s requirements or may impose other conditions.

trials to support NDAs for marketing approval are typically conducted in three sequential phases, but the phases may overlap.

in Phase 1, the initial introduction of the drug into healthy human subjects or patients, the drug is tested to assess metabolism, pharmacokinetics,

The FDA may order the temporary,

or permanent, discontinuation of a clinical trial at any time or impose other sanctions if it believes that the clinical trial either

is not being conducted in accordance with FDA regulations or presents an unacceptable risk to the clinical trial subjects.

trial protocol and informed consent information for subjects in clinical trials must also be submitted to an institutional review board,

or IRB, for approval.

An IRB may also require the clinical trial at the site to be halted, either temporarily or permanently, for failure

to comply with the IRB requirements or requests, may impose other conditions on the conduct of the study.

Clinical trials to support

NDAs are typically conducted in three sequential phases, but the phases may overlap.

In general, in Phase 1, the initial introduction

of the investigational drug into healthy human subjects, the investigational drug is typically tested to assess metabolism, pharmacokinetics,

pharmacological actions, side effects associated with increasing doses and, if possible, early evidence on effectiveness.

Phase 2 usually

involves trials in a limited patient population to determine the effectiveness of the drug for a particular indication, dosage tolerance

and optimum dosage, and to identify common adverse effects and safety risks.

a compound demonstrates evidence of effectiveness and an acceptable safety profile in Phase 2 evaluations, Phase 3 trials are undertaken

to obtain the additional information about clinical efficacy and safety in a larger number of patients, typically at geographically dispersed

clinical trial sites, to permit the FDA to evaluate the overall benefit-risk relationship of the drug and to provide adequate information

for the labeling of the drug.

In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate

the efficacy of the drug.

The FDA may, however, determine that a drug is effective based on one clinical study plus confirmatory evidence.

Only a small percentage of investigational drugs complete all three phases and obtain marketing approval.

In some cases, the FDA may

require post-market studies, known as Phase 4 studies, to be conducted as a condition of approval in order to gather additional information

involves clinical trials in a limited subject population to determine the effectiveness of the investigational drug for a particular indication,

dosage tolerance and optimum dosage, and to identify adverse effects and safety risks.

If an investigational drug

demonstrates evidence of effectiveness and an acceptable safety profile in Phase 2, Phase 3 trials are undertaken to obtain the additional

information about clinical efficacy and safety in a larger number of patients, typically at geographically dispersed clinical trial sites,

to permit the FDA to evaluate the overall benefit-risk relationship of the drug and to provide adequate information for the labeling of

In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate efficacy.

percentage of investigational drugs complete all three phases and subsequently obtain marketing approval via an NDA.

In some cases, the

FDA may require post-market studies, known as Phase 4 studies, to be conducted as a condition of approval to gather additional information

on the drug’s effect in various populations and any side effects associated with long-term use.

Depending on the risks posed by

the drugs, other post-market requirements may be imposed.

completion of the required clinical testing, an NDA is prepared and submitted to the FDA.

The FDA approval of the NDA is required before

marketing of the product may begin in the U.S.

The NDA must include the results of all pre-clinical, clinical, and other testing and

a compilation of data relating to the product’s pharmacology, chemistry, manufacture, and controls.

The cost of preparing and submitting

an NDA is substantial.

Under federal law, the submission of most NDAs is additionally subject to a substantial application user fee.

FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing based on the agency’s

threshold determination that it is sufficiently complete to permit substantive review.

Once the submission is accepted for filing, the

FDA begins an in-depth review.

Under the statute and implementing regulations, the FDA has 180 days (the initial review cycle) from the

date of filing to issue either an approval letter or a complete response letter, unless the review period is adjusted by mutual agreement

between the FDA and the applicant or as a result of the applicant submitting a major amendment.

In practice, the performance goals established

pursuant to the Prescription Drug User Fee Act have effectively extended the initial review cycle beyond 180 days.

The FDA’s current

performance goals call for the FDA to complete review of 90 percent of standard (non-priority) NDAs within 10 months of receipt and within

six months for priority NDAs, but two additional months of review are added to standard and priority NDAs for a new molecular entity

FDA may also refer applications for novel drug products, or drug products that present difficult questions of safety or efficacy, to

an advisory committee, which is typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation

as to whether the application should be approved.

The FDA is not bound by the recommendation of an advisory committee, but it generally

follows such recommendations.

Before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance

Additionally, the FDA will inspect the facility or the facilities at which the drug is manufactured.

The FDA will not approve

the product unless compliance with current GMP is satisfactory and the NDA contains data that provide substantial evidence that the drug

is safe and effective in the indication studied.

the FDA evaluates the NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter.

response letter generally outlines the deficiencies in the submission and may require substantial additional testing, or information,

in order for the FDA to reconsider the application.

If, or when, those deficiencies have been addressed to the FDA’s satisfaction

in a resubmission of the NDA, the FDA will issue an approval letter.

The FDA has committed to reviewing 90 percent of resubmissions within

two to six months depending on the type of information included.

approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

As a condition

of NDA approval, the FDA may require a risk evaluation and mitigation strategy, or REMS, to help ensure that the benefits of the drug

outweigh the potential risks.

REMS can include medication guides, communication plans for health care professionals, and elements to

assure safe use, or ETASU.

ETASU can include, but are not limited to, special training or certification for prescribing or dispensing,

dispensing only under certain circumstances, special monitoring, and the use of patient registries.

The requirement for a REMS can materially

affect the potential market and profitability of the drug.

Moreover, product approval may require substantial post-approval testing and

surveillance to monitor the drug’s safety or efficacy.

Once granted, product approvals may be withdrawn if compliance with regulatory

standards is not maintained or problems are identified following initial marketing.

of Clinical Trial Information

of clinical trials of certain FDA-regulated products, including prescription drugs, are required to register and disclose certain clinical

trial information on a public website maintained by the U.S.

the drugs, other post-market requirements may be imposed by FDA as a condition of approval.

After successful completion

of the required clinical testing, an NDA is prepared and submitted to FDA.

FDA approval of the NDA is required before lawful marketing

may begin in the U.S.

The NDA must include the results of all pre-clinical, clinical, and other testing and a compilation of data relating

to the product’s pharmacology, chemistry, manufacture, and controls.

The cost of preparing and submitting an NDA is substantial.

Under federal law, the submission of most NDAs is additionally subject to substantial application and program user fees to FDA.

The FDA has 60 days from its

receipt of an NDA to determine whether the application will be accepted for filing based on the agency’s threshold determination

that it is sufficiently complete to permit substantive review.

Once the submission is accepted for filing, the FDA begins an in-depth

Under federal law, the FDA has 180 days (i.e., the initial review cycle) from the date of filing to issue either an approval letter

or a complete response letter, unless the review period is adjusted by mutual agreement between the FDA and the applicant or as a result

of the applicant submitting a major amendment.

In practice, the performance goals established pursuant to the Prescription Drug User Fee

Act have effectively extended the initial review cycle beyond 180 days.

The FDA’s current performance goals call for the FDA to

complete review of 90 percent of standard (non-priority) NDAs within 10 months of receipt and within six months for priority NDAs, but

two additional months of review are added to standard and priority NDAs for a new molecular entity (NME).

The FDA may also refer applications

for novel drug products, or drug products that present difficult questions of safety or efficacy, to an advisory committee, which is typically

a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be

The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations.

Before approving

an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP.

Additionally, the FDA will inspect the

facility or the facilities at which the drug is manufactured.

The FDA will not approve the product unless compliance with CGMPs is satisfactory

and the NDA contains data that provide substantial evidence that the drug is safe and effective in the indication studied.

After the FDA evaluates the

NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter.

A complete response letter generally

outlines the deficiencies in the submission and may require substantial additional testing, or information, for the FDA to reconsider

the application.

If, or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the

FDA will issue an approval letter.

The FDA has committed to reviewing 90 percent of resubmissions within two to six months depending on

the type of information included.

An approval letter authorizes

commercial marketing of the drug with specific prescribing information for specific indications.

As a condition of NDA approval, the FDA

may require a risk evaluation and mitigation strategy, or REMS, to help ensure that the benefits of the drug outweigh the potential risks.

REMS can include medication guides, communication plans for health care professionals, and elements to assure safe use, or ETASU.

can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances,

special monitoring, and the use of patient registries.

The requirement for a REMS can materially affect the potential market and profitability

Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety

Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are

identified following initial marketing.

Disclosure of Clinical Trial Information

Sponsors of clinical trials

of certain FDA-regulated products, including prescription drugs, are required to register and disclose certain clinical trial information

on a public website maintained by the U.S.

National Institutes of Health.

Information related to the product, patient

population, phase of investigation, study sites and investigator, and other aspects of the clinical trial is made public as part of the

registration.

Sponsors are also obligated to disclose the results of these trials after completion.

Disclosure of the results of these

trials can be delayed for up to two years if the sponsor certifies that it is seeking approval of an unapproved product or that it will

file an application for approval of a new indication for an approved product within one year.

Competitors may use this publicly available

information to gain knowledge regarding the design and progress of our development programs.

Protocol Assessment

company may reach an agreement with the FDA under the Special Protocol Assessment, or “SPA”, process as to the required design

and size of clinical trials intended to form the primary basis of an efficacy claim.

According to its performance goals, the FDA is supposed

to evaluate the protocol within 45 days of the request to assess whether the proposed trial is adequate, and that evaluation may result

in discussions and a request for additional information.

A SPA request must be made before the proposed trial begins, and all open issues

must be resolved before the trial begins.

If a written agreement is reached, it will be documented and made part of the administrative

Under the FDCA and FDA guidance implementing the statutory requirement, an SPA is generally binding upon the FDA except in limited

circumstances, such as if the FDA identifies a substantial scientific issue essential to determining safety or efficacy after the study

begins, public health concerns emerge that were unrecognized at the time of the protocol assessment, the sponsor and the FDA agree to

the change in writing, or if the study sponsor fails to follow the protocol that was agreed upon with the FDA.

and Promotion

promotion of investigational drug candidates is prohibited by the FDA.

Therefore, sponsors must ensure that any pre-approval communications

disseminated about its drug candidates do not state or imply that such candidates have been proven safe or effective for the applicable

use(s) or that they have been approved for commercialization in the United States.

Further, once an NDA for a given candidate is approved,

if ever, the product will be subject to certain post-approval requirements.

For instance, the FDA closely regulates the post-approval

marketing and promotion of drugs.

may be marketed only for the approved indications and in accordance with the provisions of the approved labeling.

Changes to some of

the conditions established in an approved application, including changes in indications, labeling, or manufacturing processes or facilities,

require submission and FDA approval of a new NDA or NDA supplement before the change can be implemented.

An NDA supplement for a new

indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions

in reviewing NDA supplements as it does in reviewing NDAs.

Event Reporting and GMP Compliance

event reporting and submission of periodic reports is required following FDA approval of an NDA.

The FDA also may require post-marketing

testing, known as Phase 4 testing, may require under a REMS special communication regarding the safety of the drug or heightened surveillance

to monitor the effects of an approved product, or the FDA may place conditions on an approval that could restrict the distribution or

use of the product.

In addition, quality-control, drug manufacture, packaging, and labeling procedures must continue to conform to GMP,

after approval.

Drug manufacturers and certain of their subcontractors are required to register their establishments with the FDA and

certain state agencies.

Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the

agency inspects manufacturing facilities to assess compliance with GMP.

Accordingly, manufacturers must continue to expend time, money

and effort in the areas of production and quality control to maintain compliance with GMP.

Regulatory authorities may withdraw product

approvals or request product recalls if a company fails to comply with regulatory standards, if it encounters problems following initial

marketing or if previously unrecognized problems are subsequently discovered.

Exclusivity and Pediatric Use

Best Pharmaceuticals for Children Act, or “BPCA”, provides NDA holders a six-month period of exclusivity attached to any

other exclusivity listed with the FDA — patent or non-patent — for a drug, if certain conditions

Conditions for pediatric exclusivity include a determination by the FDA that information relating to the use of a new drug in

the pediatric population may produce health benefits in that population;

Information related to the product, patient population, phase

of investigation, study sites and investigator, and other aspects of the clinical trial is made public as part of the registration.

are also obligated to disclose the results of these trials after completion.

Disclosure of the results of these trials can be delayed

for up to two years if the sponsor certifies that it is seeking approval of an unapproved product or that it will file an application

for approval of a new indication for an approved product within one year.

Competitors may use this publicly available information to gain

knowledge regarding the design and progress of our development programs.

Special Protocol Assessment

A company may reach an agreement

with the FDA under the Special Protocol Assessment, or “SPA”, process as to the required design and size of clinical trials

intended to form the primary basis of an efficacy claim.

According to its performance goals, the FDA is supposed to evaluate the protocol

within 45 days of the request to assess whether the proposed trial is adequate, and that evaluation may result in discussions and a request

for additional information.

A SPA request must be made before the proposed trial begins, and all open issues must be resolved before the

trial begins.

If a written agreement is reached, it will be documented and made part of the administrative record.

Under the FDCA and

FDA guidance implementing the statutory requirement, an SPA is generally binding upon the FDA except in limited circumstances, such as

if the FDA identifies a substantial scientific issue essential to determining safety or efficacy after the study begins, public health

concerns emerge that were unrecognized at the time of the protocol assessment, the sponsor and the FDA agree to the change in writing,

or if the study sponsor fails to follow the protocol that was agreed upon with the FDA.

Advertising and Promotion

Pre-approval promotion of

investigational drug candidates is prohibited by the FDA.

Therefore, among other considerations sponsors must ensure that any pre-approval

communications disseminated about its drug candidates do not state or imply that such candidates have been proven safe or effective for

the applicable use(s) or that they have been approved for commercialization in the U.S.

Failure to do so may result in enforcement actions

Further, once an NDA for a given candidate is approved, if ever, the product will be subject to certain post-approval requirements.

For instance, the FDA closely regulates the post-approval marketing and promotion of drugs.

Drugs may be marketed only

for the approved indications and in accordance with the provisions of the approved labeling.

Changes to some of the conditions established

in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, require submission and

FDA approval of a new NDA or NDA supplement before the change can be implemented.

An NDA supplement for a new indication typically requires

clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewing NDA supplements

as it does in reviewing NDAs.

Adverse Event Reporting and CGMP Compliance

Adverse event reporting and

submission of periodic reports is required following FDA approval of an NDA.

The FDA also may require post-marketing testing, known as

Phase 4 testing, may require under a REMS special communication regarding the safety of the drug or heightened surveillance to monitor

the effects of an approved product, or the FDA may place conditions on an approval that could restrict the distribution or use of the

In addition, quality-control, drug manufacture, packaging, and labeling procedures must continue to conform to the CGMPs, after

Drug manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain

state agencies.

Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agency inspects

manufacturing facilities to assess compliance with the CGMPs.

Accordingly, manufacturers must continue to expend time, money and effort

in the areas of production and quality control to maintain compliance with the CGMPs.

Regulatory authorities may withdraw product approvals

or request product recalls if a company fails to comply with regulatory standards, if it encounters problems following initial marketing

or if previously unrecognized problems are subsequently discovered.

Pediatric Exclusivity and Pediatric Use

The Best Pharmaceuticals for

Children Act, or “BPCA”, provides NDA holders a six-month period of exclusivity attached to any other exclusivity listed with

the FDA — patent or non-patent — for a drug, if certain conditions are met.

Conditions for pediatric

exclusivity include a determination by the FDA that information relating to the use of a new drug in the pediatric population may produce

health benefits in that population;

a written request by the FDA for pediatric studies;

and agreement

by the applicant to perform the requested studies and the submission to the FDA, completion of the studies in accordance with the written

request, and the acceptance by the FDA, of the reports of the requested studies within the statutory time frame.

Applications under the

BPCA are treated as priority applications.

addition, under the Pediatric Research Equity Act, or “PREA”, NDAs or supplements to NDAs must contain data to assess the

safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration

for each pediatric subpopulation for which the drug is safe and effective, unless the sponsor has received a deferral or waiver from

Unless otherwise required by regulation, PREA does not apply to any drug for an indication for which orphan designation has

been granted.

The sponsor or the FDA may request a deferral of pediatric studies for some or all of the pediatric subpopulations.

may be granted for several reasons, including a finding that the drug is ready for approval for use in adults before pediatric studies

are complete or that additional safety or effectiveness data need to be collected before the pediatric studies begin.

Under PREA, the

FDA must send a noncompliance letter requesting a response within 45 days to any sponsor that fails to submit the required assessment,

keep a deferral current or fails to submit a request for approval of a pediatric formulation.

federal Controlled Substances Act of 1970, or “CSA”, and its implementing regulations establish a “closed system”

of regulations for controlled substances.

The CSA imposes registration, security, recordkeeping and reporting, storage, manufacturing,

distribution, importation and other requirements under the oversight of the Drug Enforcement Agency (“DEA”).

The DEA is the

federal agency responsible for regulating controlled substances, and requires those individuals or entities that manufacture, import,

export, distribute, research, or dispense controlled substances to comply with the regulatory requirements in order to prevent the diversion

of controlled substances to illicit channels of commerce.

DEA categorizes controlled substances into one of five schedules — Schedule I, II, III, IV or V — with

varying qualifications for listing in each schedule.

Schedule I substances by definition have a high potential for abuse, have no currently

accepted medical use in treatment in the U.S., and lack accepted safety for use under medical supervision.

Marijuana and psychedelics

such as psilocybin, DMT, mescaline and MDMA are currently Schedule I controlled substances, which means that no preclinical or clinical

studies of product candidates containing these substances may be conducted in the United States without the required DEA registration(s)

and related approvals, as applicable.

Pharmaceutical products having a currently accepted medical use that are otherwise approved for

marketing may be listed as Schedule II, III, IV or V substances, with Schedule II substances presenting the highest potential for abuse

and physical or psychological dependence, and Schedule V substances presenting the lowest relative potential for abuse and dependence.

that manufacture, distribute, import, or export any controlled substance must register annually with the DEA.

The DEA registration is

specific to the particular location, activity(ies) and controlled substance schedule(s).

For example, separate registrations are required

for importation and manufacturing activities, and each registration authorizes which schedules of controlled substances the registrant

However, certain coincidental activities are permitted without obtaining a separate DEA registration, such as distribution

of controlled substances by the manufacturer that produces them.

DEA inspects all manufacturing facilities to review security, recordkeeping, reporting, and handling prior to issuing a controlled substance

registration.

The specific security requirements vary by the type of business activity and the schedule and quantity of controlled substances

The most stringent requirements apply to manufacturers of Schedules I and Schedule II substances.

Required security measures

commonly include background checks on employees and physical control of controlled substances through storage in approved vaults, safes

and cages, and through use of alarm systems and surveillance cameras.

An application for a manufacturing registration as a bulk manufacturer

(not a dosage form manufacturer or a repacker/relabeler) for a Schedule I or II substance must be published in the Federal Register,

and is open for 60 days to permit interested persons to submit comments, objections or requests for a hearing.

A copy of the notice of

the Federal Register publication is simultaneously forwarded by DEA to all those registered, or applicants for registration, as bulk

manufacturers of that substance.

registered, manufacturing facilities must maintain records documenting the manufacture, receipt and distribution of all controlled substances.

Manufacturers must submit periodic reports to the DEA of the distribution of Schedules I and II controlled substances, Schedule III narcotic

substances, and other designated substances.

Registrants must also report any controlled substance thefts or significant losses, and

must obtain authorization to destroy or dispose of controlled substances.

with applications for registration as a bulk manufacturer, an application for an importer registration for a Schedule I or II substance

must also be published in the Federal Register, which remains open for 30 days for comments.

Imports of Schedules I and II controlled

substances for commercial purposes are generally restricted to substances not already available from a domestic supplier or where there

is not adequate competition among domestic suppliers.

In addition to an importer or exporter registration, importers and exporters must

obtain a permit for every import or export of a Schedules I and II substance or Schedules III, IV and V narcotic, and submit import or

export declarations for Schedules III, IV and V non-narcotics.

In some cases, Schedule III non-narcotic substances may be subject to

the import/export permit requirement, if necessary to ensure that the U.S.

complies with its obligations under international drug control

drugs manufactured in the U.S., the DEA establishes annually an aggregate quota for the amount of substances within Schedules I and II

that may be manufactured or produced in the U.S.

based on the DEA’s estimate of the quantity needed to meet legitimate medical,

scientific, research and industrial needs.

states also maintain separate controlled substance laws and regulations, including licensing, recordkeeping, security, distribution,

and dispensing requirements.

State Authorities, including Boards of Pharmacy, regulate use of controlled substances in each state.

to maintain compliance with applicable requirements, particularly as manifested in the loss or diversion of controlled substances, can

result in enforcement action that could have a material adverse effect on our business, operations and financial condition.

seek civil penalties, refuse to renew necessary registrations, or initiate proceedings to revoke those registrations.

In certain circumstances,

violations could lead to criminal prosecution.

of World Government Regulation

addition to regulations in the U.S., we are and will be subject, either directly or through our distribution partners, to a variety of

regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales (including pricing and reimbursement)

and distribution of our product candidates, if approved.

or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in non-U.S.

prior to the commencement of clinical trials or marketing of the product in those countries.

the European Union, medicinal products are subject to extensive pre- and post-marketing regulation by regulatory authorities at both

the European Union and national levels.

Additional rules also apply at the national level to the manufacture, import, export, storage,

distribution and sale of controlled substances.

In many European Union member states the regulatory authority responsible for medicinal

products is also responsible for controlled substances.

and agreement by the applicant to perform the

requested studies and the submission to the FDA, completion of the studies in accordance with the written request, and the acceptance

by the FDA, of the reports of the requested studies within the statutory time frame.

Applications under the BPCA are treated as priority

applications.

In addition, under the Pediatric

Research Equity Act, or “PREA”, NDAs or supplements to NDAs must contain data to assess the safety and effectiveness of the

drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric

subpopulation for which the drug is safe and effective, unless the sponsor has received a deferral or waiver from the FDA.

Unless otherwise

required by regulation, PREA does not apply to any drug for an indication for which orphan designation has been granted.

The sponsor or

the FDA may request a deferral of pediatric studies for some or all of the pediatric subpopulations.

A deferral may be granted for several

reasons, including a finding that the drug is ready for approval for use in adults before pediatric studies are complete or that additional

safety or effectiveness data need to be collected before the pediatric studies begin.

Under PREA, the FDA must send a noncompliance letter

requesting a response within 45 days to any sponsor that fails to submit the required assessment, keep a deferral current or fails to

submit a request for approval of a pediatric formulation.

Controlled Substances

The federal Controlled Substances

Act of 1970, or “CSA”, and its implementing regulations establish a “closed system” of regulations for controlled

The CSA imposes registration, security, recordkeeping and reporting, storage, manufacturing, distribution, importation and

other requirements under the oversight of the Drug Enforcement Agency (“DEA”).

The DEA is the federal agency responsible for

regulating controlled substances, and requires those individuals or entities that manufacture, import, export, distribute, research, or

dispense controlled substances to comply with the regulatory requirements in order to prevent the diversion of controlled substances to

illicit channels of commerce.

The DEA categorizes controlled

substances into one of five schedules — Schedule I, II, III, IV or V — with varying qualifications

for listing in each schedule.

Schedule I substances by definition have a high potential for abuse, have no currently accepted medical

use in treatment in the U.S., and lack accepted safety for use under medical supervision.

Marijuana and psychedelics such as psilocybin,

DMT, mescaline and MDMA are currently Schedule I controlled substances, which means that no preclinical or clinical studies of product

candidates containing these substances may be conducted in the U.S.

without the required DEA registration(s) and related approvals, as

Pharmaceutical products having a currently accepted medical use that are otherwise approved for marketing may be listed as

Schedule II, III, IV or V substances, with Schedule II substances presenting the highest potential for abuse and physical or psychological

dependence, and Schedule V substances presenting the lowest relative potential for abuse and dependence.

Facilities that manufacture,

distribute, import, or export any controlled substance must register annually with the DEA.

The DEA registration is specific to the particular

location, activity(ies) and controlled substance schedule(s).

For example, separate registrations are required for importation and manufacturing

activities, and each registration authorizes which schedules of controlled substances the registrant may handle.

However, certain coincidental

activities are permitted without obtaining a separate DEA registration, such as distribution of controlled substances by the manufacturer

that produces them.

The DEA inspects all manufacturing

facilities to review security, recordkeeping, reporting, and handling prior to issuing a controlled substance registration.

security requirements vary by the type of business activity and the schedule and quantity of controlled substances handled.

The most stringent

requirements apply to manufacturers of Schedules I and Schedule II substances.

Required security measures commonly include background

checks on employees and physical control of controlled substances through storage in approved vaults, safes and cages, and through use

of alarm systems and surveillance cameras.

An application for a manufacturing registration as a bulk manufacturer (not a dosage form manufacturer

or a repacker/relabeler) for a Schedule I or II substance must be published in the Federal Register, and is open for 60 days to permit

interested persons to submit comments, objections or requests for a hearing.

A copy of the notice of the Federal Register publication

is simultaneously forwarded by DEA to all those registered, or applicants for registration, as bulk manufacturers of that substance.

Once registered, manufacturing

facilities must maintain records documenting the manufacture, receipt and distribution of all controlled substances.

Manufacturers must

submit periodic reports to the DEA of the distribution of Schedules I and II controlled substances, Schedule III narcotic substances,

and other designated substances.

Registrants must also report any controlled substance thefts or significant losses, and must obtain authorization

to destroy or dispose of controlled substances.

As with applications for registration

as a bulk manufacturer, an application for an importer registration for a Schedule I or II substance must also be published in the Federal

Imports of Schedules I and II controlled substances for commercial purposes are

generally restricted to substances not already available from a domestic supplier or where there is not adequate competition among domestic

In addition to an importer or exporter registration, importers and exporters must obtain a permit for every import or export

of a Schedules I and II substance or Schedules III, IV and V narcotic, and submit import or export declarations for Schedules III, IV

and V non-narcotics.

In some cases, Schedule III non-narcotic substances may be subject to the import/export permit requirement, if necessary

to ensure that the U.S.

complies with its obligations under international drug control treaties.

For drugs manufactured in

the U.S., the DEA establishes annually an aggregate quota for the amount of substances within Schedules I and II that may be manufactured

or produced in the U.S.

based on the DEA’s estimate of the quantity needed to meet legitimate medical, scientific, research and

industrial needs.

The states also maintain separate

controlled substance laws and regulations, including licensing, recordkeeping, security, distribution, and dispensing requirements.

Authorities, including Boards of Pharmacy, regulate use of controlled substances in each state.

Failure to maintain compliance with applicable

requirements, particularly as manifested in the loss or diversion of controlled substances, can result in enforcement action that could

have a material adverse effect on our business, operations and financial condition.

The DEA may seek civil penalties, refuse to renew

necessary registrations, or initiate proceedings to revoke those registrations.

In certain circumstances, violations could lead to criminal

Europe/Rest of World Government Regulation

In addition to regulations

in the U.S., we are and will be subject, either directly or through our distribution partners, to a variety of regulations in other jurisdictions

governing, among other things, clinical trials and any commercial sales (including pricing and reimbursement) and distribution of our

product candidates, if approved.

Whether or not we obtain FDA

approval for a product, we must obtain the requisite approvals from regulatory authorities in non-U.S.

countries prior to the commencement

of clinical trials or marketing of the product in those countries.

In the European Union, medicinal

products are subject to extensive pre- and post-marketing regulation by regulatory authorities at both the European Union and national

Additional rules also apply at the national level to the manufacture, import, export, storage, distribution and sale of controlled

In many European Union member states the regulatory authority responsible for medicinal products is also responsible for controlled

Responsibility is, however, split in some member states.

Generally, any company

manufacturing or distributing a medicinal product containing a controlled substance in the European Union will need to hold a controlled

substances license from the competent national authority and will be subject to specific record-keeping and security obligations.

import or export certificates are required for each shipment into or out of the member state.

Trials and Marketing Approval

or not we obtain FDA approval for a product, we would need to obtain the necessary approvals by the comparable regulatory authorities

of foreign countries before we can commence clinical trials or marketing of the product in those countries.

The approval process varies

from country to country and can involve additional product testing and additional administrative review periods.

The time required to

obtain approval in other countries might differ from and be longer than that required to obtain FDA approval.

Regulatory approval in

one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country may

negatively impact the regulatory process in others.

countries outside of the U.S.

have a process that requires the submission of a clinical trial application much like an IND application

prior to the commencement of human clinical trials.

In Europe, for example, a clinical trial application, or “CTA”, must

be submitted to the competent national health authority and to independent ethics committees in each country in which a company intends

to conduct clinical trials.

Once the CTA is approved in accordance with a country’s requirements and a company has received favorable

ethics committee approval, clinical trial development may proceed in that country.

requirements and process governing the conduct of clinical trials, product licensing, pricing, and reimbursement vary from country to

country, even though there is already some degree of legal harmonization in the European Union member states resulting from the national

implementation of underlying European Union legislation.

In all cases, the clinical trials must be conducted in accordance with the International

Conference on Harmonization, or “ICH”, guidelines on GCP and other applicable regulatory requirements.

obtain regulatory approval to place a drug on the market in European Union countries, Enveric must submit a marketing authorization application.

This application is similar to the NDA in the U.S., with the exception of, among other things, country-specific document requirements.

All application procedures require an application in the common technical document, or CTD, format, which includes the submission of

detailed information about the manufacturing and quality of the product, and nonclinical and clinical trial information.

authorized in the European Union by using (i) the centralized authorization procedure, (ii) the mutual recognition procedure, (iii) the

decentralized procedure, or (iv) national authorization procedures.

European Commission created the centralized procedure for the approval of human drugs to facilitate marketing authorizations that are

valid throughout the European Union and, by extension (after national implementing decisions) in Iceland, Liechtenstein and Norway, which,

together with the European Union Member States, comprise the European Economic Area, or “EEA”.

Applicants file marketing

authorization applications with the EMA (European Medicines Agency), where they are reviewed by a relevant scientific committee, in most

cases the Committee for Medicinal Products for Human Use (the “CHMP”).

The EMA forwards CHMP opinions to the European Commission,

which uses them as the basis for deciding whether to grant a marketing authorization.

This procedure results in a single marketing authorization

granted by the European Commission that is valid across the European Union, as well as in Iceland, Liechtenstein and Norway.

The centralized

procedure is compulsory for human drugs that are:

(i) derived from biotechnology processes, such as genetic engineering, (ii) contain

a new active substance indicated for the treatment of certain diseases, such as HIV/AIDS, cancer, diabetes, neurodegenerative diseases,

autoimmune and other immune dysfunctions and viral diseases, (iii) officially designated “orphan drugs” (drugs used for rare

human diseases), and (iv) advanced-therapy medicines, such as gene-therapy, somatic cell-therapy or tissue-engineered medicines.

centralized procedure may at the voluntary request of the applicant also be used for human drugs that do not fall within the above-mentioned

categories if the CHMP agrees that the human drug (a) contains a new active substance not yet approved on November 20, 2005;

(b) constitutes

a significant therapeutic, scientific or technical innovation, or (c) authorization under the centralized procedure is in the interests

of patients at the European Union level.

the centralized procedure in the European Union, the maximum time frame for the evaluation of a marketing authorization application by

the EMA is 210 days (excluding clock stops, when additional written or oral information is to be provided by the applicant in response

to questions asked by the CHMP), with adoption of the actual marketing authorization by the European Commission thereafter.

evaluation might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public health interest

from the point of view of therapeutic innovation, defined by three cumulative criteria:

Generally, any company manufacturing or distributing a medicinal

product containing a controlled substance in the European Union will need to hold a controlled substances license from the competent national

authority and will be subject to specific record-keeping and security obligations.

Separate import or export certificates are required

for each shipment into or out of the member state.

Clinical Trials and Marketing Approval

Whether or not we obtain FDA

approval for a product, we would need to obtain the necessary approvals by the comparable regulatory authorities of foreign countries

before we can commence clinical trials or marketing of the product in those countries.

The approval process varies from country to country

and can involve additional product testing and additional administrative review periods.

The time required to obtain approval in other

countries might differ from and be longer than that required to obtain FDA approval.

Regulatory approval in one country does not ensure

regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country may negatively impact the regulatory

process in others.

Certain countries outside

have a process that requires the submission of a clinical trial application much like an IND application prior to the commencement

of human clinical trials.

In Europe, for example, a clinical trial application, or “CTA”, must be submitted to the competent

national health authority and to independent ethics committees in each country in which a company intends to conduct clinical trials.

Once the CTA is approved in accordance with a country’s requirements and a company has received favorable ethics committee approval,

clinical trial development may proceed in that country.

The requirements and process

governing the conduct of clinical trials, product licensing, pricing, and reimbursement vary from country to country, even though there

is already some degree of legal harmonization in the European Union member states resulting from the national implementation of underlying

European Union legislation.

In all cases, the clinical trials must be conducted in accordance with the International Conference on Harmonization,

or “ICH”, guidelines on GCP and other applicable regulatory requirements.

To obtain regulatory approval

to place a drug on the market in European Union countries, Enveric must submit a marketing authorization application.

This application

is similar to the NDA in the U.S., with the exception of, among other things, country-specific document requirements.

All application

procedures require an application in the common technical document, or CTD, format, which includes the submission of detailed information

about the manufacturing and quality of the product, and nonclinical and clinical trial information.

Drugs can be authorized in the European

Union by using (i) the centralized authorization procedure, (ii) the mutual recognition procedure, (iii) the decentralized procedure,

or (iv) national authorization procedures.

The European Commission created

the centralized procedure for the approval of human drugs to facilitate marketing authorizations that are valid throughout the European

Union and, by extension (after national implementing decisions) in Iceland, Liechtenstein and Norway, which, together with the European

Union Member States, comprise the European Economic Area, or “EEA”.

Applicants file marketing authorization applications with

the EMA (European Medicines Agency), where they are reviewed by a relevant scientific committee, in most cases the Committee for Medicinal

Products for Human Use (the “CHMP”).

The EMA forwards CHMP opinions to the European Commission, which uses them as the basis

for deciding whether to grant a marketing authorization.

This procedure results in a single marketing authorization granted by the European

Commission that is valid across the European Union, as well as in Iceland, Liechtenstein and Norway.

The centralized procedure is compulsory

for human drugs that are:

(i) derived from biotechnology processes, such as genetic engineering, (ii) contain a new active substance indicated

for the treatment of certain diseases, such as HIV/AIDS, cancer, diabetes, neurodegenerative diseases, autoimmune and other immune dysfunctions

and viral diseases, (iii) officially designated “orphan drugs” (drugs used for rare human diseases), and (iv) advanced-therapy

medicines, such as gene-therapy, somatic cell-therapy or tissue-engineered medicines.

The centralized procedure may at the voluntary request

of the applicant also be used for human drugs that do not fall within the above-mentioned categories if the CHMP agrees that the human

drug (a) contains a new active substance not yet approved on November 20, 2005;

(b) constitutes a significant therapeutic, scientific

or technical innovation, or (c) authorization under the centralized procedure is in the interests of patients at the European Union level.

Under the centralized procedure

in the European Union, the maximum time frame for the evaluation of a marketing authorization application by the EMA is 210 days (excluding

clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP),

with adoption of the actual marketing authorization by the European Commission thereafter.

Accelerated evaluation might

be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public health interest from the point

of view of therapeutic innovation, defined by three cumulative criteria:

the seriousness of the disease to be treated;

the absence of an appropriate alternative therapeutic approach, and anticipation of exceptional high therapeutic benefit.

In this circumstance,

EMA ensures that the evaluation for the opinion of the CHMP is completed within 150 days and the opinion issued thereafter.

those medicinal products for which the centralized procedure is not available, the applicant must submit marketing authorization applications

to the national medicines regulators through one of three procedures:

(i) the mutual recognition procedure (which must be used if the

product has already been authorized in at least one other European Union member state, and in which the European Union member states

are required to grant an authorization recognizing the existing authorization in the other European Union member state, unless they identify

a serious risk to public health), (ii) the decentralized procedure (in which applications are submitted simultaneously in two or more

European Union member states), or (iii) national authorization procedures (which results in a marketing authorization in a single European

Union member state).

Recognition Procedure

mutual recognition procedure, or “MRP”, for the approval of human drugs is an alternative approach to facilitate individual

national marketing authorizations within the European Union.

Fundamentally, the MRP may be applied for all human drugs for which the

centralized procedure is not obligatory.

The MRP is applicable to the majority of conventional medicinal products, and must be used if

the product has already been authorized in one or more European Union member states.

MRP functions by building on an already-existing marketing authorization in a member state of the European Union which is used as a reference

in order to obtain marketing authorizations in other European Union member states.

Under the MRP, if a marketing authorization for a

drug already exists in one or more member states of the European Union and subsequently marketing authorization applications are made

in other European Union member states by referring to the initial marketing authorization.

The member state in which the marketing authorization

was first granted will then act as the reference member state.

The member states where the marketing authorization is subsequently applied

for act as concerned member states.

The concerned member states are required to grant an authorization recognizing the existing authorization

in the reference member state, unless they identify a serious risk to public health.

MRP is based on the principle of the mutual recognition by European Union member states of their respective national marketing authorizations.

Based on a marketing authorization in the reference member state, the applicant may apply for marketing authorizations in other member

In such case, the reference member state shall update its existing assessment report about the drug in 90 days.

After the assessment

is completed, copies of the report are sent to all member states, together with the approved summary of product characteristics, labeling

and package leaflet.

The concerned member states then have 90 days to recognize the decision of the reference member state and the summary

of product characteristics, labeling and package leaflet.

National marketing authorizations shall be granted within 30 days after acknowledgement

of the agreement.

any European Union member state refuse to recognize the marketing authorization by the reference member state, on the grounds of potential

serious risk to public health, the issue will be referred to a coordination group.

Within a time frame of 60 days, member states shall,

within the coordination group, make all efforts to reach a consensus.

If this fails, the procedure is submitted to an EMA scientific

committee for arbitration.

The opinion of this EMA Committee is then forwarded to the European Commission, for the start of the decision-making

As in the centralized procedure, this process entails consulting various European Commission Directorates General and the Standing

Committee on Human Medicinal Products.

the European Union, marketing authorization applications for generic medicinal products do not need to include the results of pre-clinical

and clinical trials, but instead can refer to the data included in the marketing authorization of a reference product for which regulatory

data exclusivity has expired.

If a marketing authorization is granted for a medicinal product containing a new active substance, that

product benefits from eight years of data exclusivity, during which generic marketing authorization applications referring to the data

of that product may not be accepted by the regulatory authorities, and a further two years of market exclusivity, during which such generic

products may not be placed on the market.

The two-year period may be extended to three years if during the first eight years a new therapeutic

indication with significant clinical benefit over existing therapies is approved.

Medicinal Products

EMA’s Committee for Orphan Medicinal Products (“COMP”) may recommend orphan medicinal product designation to promote

the development of products that are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating

conditions affecting not more than 5 in 10,000 persons in the European Union.

Additionally, designation is granted for products intended

for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition and when, without

incentives, it is unlikely that sales of the product in the European Union would be sufficient to justify the necessary investment in

developing the medicinal product.

The COMP may only recommend orphan medicinal product designation when the product in question offers

a significant clinical benefit over existing approved products for the relevant indication.

Following a positive opinion by the COMP,

the European Commission adopts a decision granting orphan status.

The COMP will reassess orphan status in parallel with EMA review of

a marketing authorization application and orphan status may be withdrawn at that stage if it no longer fulfills the orphan criteria (for

instance because in the meantime a new product was approved for the indication and no convincing data are available to demonstrate a

significant benefit over that product).

Orphan medicinal product designation entitles a party to financial incentives such as reduction

of fees or fee waivers and ten years of market exclusivity is granted following marketing authorization.

During this period, the competent

authorities may not accept or approve any similar medicinal product, unless it offers a significant clinical benefit.

This period may

be reduced to six years if the orphan medicinal product designation criteria are no longer met, including where it is shown that the

product is sufficiently profitable not to justify maintenance of market exclusivity.

the European Union, companies developing a new medicinal product must agree to a Pediatric Investigation Plan, or “PIP”,

with the EMA and must conduct pediatric clinical trials in accordance with that PIP unless a waiver applies, for example, because the

relevant disease or condition occurs only in adults.

The marketing authorization application for the product must include the results

of pediatric clinical trials conducted in accordance with the PIP, unless a waiver applies, or a deferral has been granted, in which

case the pediatric clinical trials must be completed at a later date.

Products that are granted a marketing authorization on the basis

of the pediatric clinical trials conducted in accordance with the PIP are eligible for a six-month extension of the protection under

a supplementary protection certificate (if the product covered by it qualifies for one at the time of approval).

This pediatric reward

is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted.

we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension of clinical

trials, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

addition, most countries are parties to the Single Convention on Narcotic Drugs 1961, which governs international trade and domestic

control of narcotic substances.

Countries may interpret and implement their treaty obligations in a way that creates a legal obstacle

to us obtaining marketing approval for our product candidates in those countries.

These countries may not be willing or able to amend

or otherwise modify their laws and regulations to permit our product candidates to be marketed, or achieving such amendments to the laws

and regulations may take a prolonged period of time.

In that case, we would be unable to market our product candidates in those countries

in the near future or perhaps at all.

have consolidated our employee base to save capital and focus on development of our leading candidates EB-003.

As of the date of this

report, we employ five full-time employees and one part-time employee.

We also work with scientific advisors, consultants and service

providers, mainly through academic institutions and contract research organizations.

have never had a work stoppage and none of its employees are covered by collective bargaining agreements or represented by a labor union.

We believe that we have good relationships with our employees.

the absence of

an appropriate alternative therapeutic approach, and anticipation of exceptional high therapeutic benefit.

In this circumstance, EMA ensures

that the evaluation for the opinion of the CHMP is completed within 150 days and the opinion issued thereafter.

For those medicinal products

for which the centralized procedure is not available, the applicant must submit marketing authorization applications to the national medicines

regulators through one of three procedures:

(i) the mutual recognition procedure (which must be used if the product has already been authorized

in at least one other European Union member state, and in which the European Union member states are required to grant an authorization

recognizing the existing authorization in the other European Union member state, unless they identify a serious risk to public health),

(ii) the decentralized procedure (in which applications are submitted simultaneously in two or more European Union member states), or

(iii) national authorization procedures (which results in a marketing authorization in a single European Union member state).

Mutual Recognition Procedure

The mutual recognition procedure,

or “MRP”, for the approval of human drugs is an alternative approach to facilitate individual national marketing authorizations

within the European Union.

Fundamentally, the MRP may be applied for all human drugs for which the centralized procedure is not obligatory.

The MRP is applicable to the majority of conventional medicinal products, and must be used if the product has already been authorized

in one or more European Union member states.

The MRP functions by building

on an already-existing marketing authorization in a member state of the European Union which is used as a reference in order to obtain

marketing authorizations in other European Union member states.

Under the MRP, if a marketing authorization for a drug already exists

in one or more member states of the European Union and subsequently marketing authorization applications are made in other European Union

member states by referring to the initial marketing authorization.

The member state in which the marketing authorization was first granted

will then act as the reference member state.

The member states where the marketing authorization is subsequently applied for act as concerned

member states.

The concerned member states are required to grant an authorization recognizing the existing authorization in the reference

member state, unless they identify a serious risk to public health.

The MRP is based on the principle

of the mutual recognition by European Union member states of their respective national marketing authorizations.

Based on a marketing

authorization in the reference member state, the applicant may apply for marketing authorizations in other member states.

In such case,

the reference member state shall update its existing assessment report about the drug in 90 days.

After the assessment is completed, copies

of the report are sent to all member states, together with the approved summary of product characteristics, labeling and package leaflet.

The concerned member states then have 90 days to recognize the decision of the reference member state and the summary of product characteristics,

labeling and package leaflet.

National marketing authorizations shall be granted within 30 days after acknowledgement of the agreement.

Should any European Union

member state refuse to recognize the marketing authorization by the reference member state, on the grounds of potential serious risk to

public health, the issue will be referred to a coordination group.

Within a time frame of 60 days, member states shall, within the coordination

group, make all efforts to reach a consensus.

If this fails, the procedure is submitted to an EMA scientific committee for arbitration.

The opinion of this EMA Committee is then forwarded to the European Commission, for the start of the decision-making process.

centralized procedure, this process entails consulting various European Commission Directorates General and the Standing Committee on

Human Medicinal Products.

Data Exclusivity

In the European Union, marketing

authorization applications for generic medicinal products do not need to include the results of pre-clinical and clinical trials, but

instead can refer to the data included in the marketing authorization of a reference product for which regulatory data exclusivity has

If a marketing authorization is granted for a medicinal product containing a new active substance, that product benefits from

eight years of data exclusivity, during which generic marketing authorization applications referring to the data of that product may not

be accepted by the regulatory authorities, and a further two years of market exclusivity, during which such generic products may not be

placed on the market.

The two-year period may be extended to three years if during the first eight years a new therapeutic indication

with significant clinical benefit over existing therapies is approved.

Orphan Medicinal Products

The EMA’s Committee

for Orphan Medicinal Products (“COMP”) may recommend orphan medicinal product designation to promote the development of products

that are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions affecting not

more than 5 in 10,000 persons in the European Union.

Additionally, designation is granted for products intended for the diagnosis, prevention

or treatment of a life-threatening, seriously debilitating or serious and chronic condition and when, without incentives, it is unlikely

that sales of the product in the European Union would be sufficient to justify the necessary investment in developing the medicinal product.

The COMP may only recommend orphan medicinal product designation when the product in question offers a significant clinical benefit over

existing approved products for the relevant indication.

Following a positive opinion by the COMP, the European Commission adopts a decision

granting orphan status.

The COMP will reassess orphan status in parallel with EMA review of a marketing authorization application and

orphan status may be withdrawn at that stage if it no longer fulfills the orphan criteria (for instance because in the meantime a new

product was approved for the indication and no convincing data are available to demonstrate a significant benefit over that product).

Orphan medicinal product designation entitles a party to financial incentives such as reduction of fees or fee waivers and ten years of

market exclusivity is granted following marketing authorization.

During this period, the competent authorities may not accept or approve

any similar medicinal product, unless it offers a significant clinical benefit.

This period may be reduced to six years if the orphan

medicinal product designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not

to justify maintenance of market exclusivity.

Pediatric Development

In the European Union, companies

developing a new medicinal product must agree to a Pediatric Investigation Plan, or “PIP”, with the EMA and must conduct pediatric

clinical trials in accordance with that PIP unless a waiver applies, for example, because the relevant disease or condition occurs only

The marketing authorization application for the product must include the results of pediatric clinical trials conducted in

accordance with the PIP, unless a waiver applies, or a deferral has been granted, in which case the pediatric clinical trials must be

completed at a later date.

Products that are granted a marketing authorization on the basis of the pediatric clinical trials conducted

in accordance with the PIP are eligible for a six-month extension of the protection under a supplementary protection certificate (if the

product covered by it qualifies for one at the time of approval).

This pediatric reward is subject to specific conditions and is not automatically

available when data in compliance with the PIP are developed and submitted.

If we fail to comply with

applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension of clinical trials, suspension

or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

In addition, most countries

are parties to the Single Convention on Narcotic Drugs 1961, which governs international trade and domestic control of narcotic substances.

Countries may interpret and implement their treaty obligations in a way that creates a legal obstacle to us obtaining marketing approval

for our product candidates in those countries.

These countries may not be willing or able to amend or otherwise modify their laws and

regulations to permit our product candidates to be marketed, or achieving such amendments to the laws and regulations may take a prolonged

period of time.

In that case, we would be unable to market our product candidates in those countries in the near future or perhaps at

We have consolidated our employee

base to save capital and focus on development of our leading candidate EB-003.

As of the date of this Annual Report, we employ five full-time

employees and one part-time employee.

We also work with scientific advisors, consultants and service providers, mainly through academic

institutions and contract research organizations.

We have never had a work stoppage

and none of its employees are covered by collective bargaining agreements or represented by a labor union.

We believe that we have good

relationships with our employees.

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 1. Business