What changed in this filing

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Item 1A. Risk Factors

2025-03-28 compared with 2024-03-26 · 501 added, 486 removed, 1053 unchanged (48% of the section changed)

Related to Our Business and Financial Condition

independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern as of

December 31, 2023.

management and independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going

concern as of December 31, 2024.

We will be unable to continue to operate for the foreseeable future without additional capital.

Our independent registered public accounting firm issued a report dated

March 25, 2024 in connection with the audit of our consolidated financial statements as of December 31, 2023, which included an explanatory

paragraph describing the existence of conditions that raise substantial doubt about our ability to continue as a going concern including

our recurring losses, cash used in operations, and need to raise additional funds to meet our obligations and sustain our operations.

In addition, the notes to our financial statements for the year ended December 31, 2023, included in this Annual Report on Form 10-K,

contain a disclosure describing the existence of conditions that raise substantial doubt about our ability to continue as a going concern.

Our ability to continue as a going concern is dependent upon our ability to obtain substantial additional funding in connection with our

continuing operations.

Adequate additional financing may not be available to us in the necessary timeframe, in the amounts we require,

on terms that acceptable to us, or at all.

If we are unable to raise additional capital our business, prospectus, financial condition

and results of operations will be materially and adversely affected and we may be unable to continue as a going concern.

we anticipate that our existing cash, including funds raised during the first quarter of 2024, will enable us to maintain our current

operations into the fourth quarter of fiscal year 2024, but not beyond.

If we are not able to continue as a going concern, we may have

to liquidate our assets and may receive less than the value at which those assets are carried on our consolidated financial statements

and/or seek protection under federal bankruptcy law, and it is likely that holders of our common stock and holders of securities convertible

into our common stock will lose all of their investment.

If we seek additional financing to fund our business activities in the future

and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling

to provide additional funding on commercially reasonable terms or at all.

independent registered public accounting firm issued a report dated March 28, 2025 in connection with the audit of our consolidated financial

statements as of December 31, 2024, which included an explanatory paragraph describing the existence of conditions that raise substantial

doubt about our ability to continue as a going concern including our recurring losses, cash used in operations, and need to raise additional

funds to meet our obligations and sustain our operations.

In addition, the notes to our financial statements for the year ended December

31, 2024, included in this Annual Report on Form 10-K, contain a disclosure describing the existence of conditions that raise substantial

doubt about our ability to continue as a going concern.

Our ability to continue as a going concern is dependent upon our ability to obtain

substantial additional funding in connection with our continuing operations.

Adequate additional financing may not be available to us

in the necessary timeframe, in the amounts we require, on terms that acceptable to us, or at all.

If we are unable to raise additional

capital our business, prospectus, financial condition and results of operations will be materially and adversely affected and we may

be unable to continue as a going concern.

If we are not able to continue as a going concern, we may have to liquidate our assets and

may receive less than the value at which those assets are carried on our consolidated financial statements and/or seek protection under

federal bankruptcy law, and it is likely that holders of our common stock and holders of securities convertible into our common stock

will lose all of their investment.

If we seek additional financing to fund our business activities in the future and there remains substantial

doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding

on commercially reasonable terms or at all.

such, there is uncertainty regarding our ability to maintain liquidity sufficient to operate our business effectively, which raises substantial

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success will depend on our ability to successfully develop and commercialize our prospective product candidates through our development

We intend to develop at least two product candidates, currently EB-003 and EB-002, by undergoing the long, costly clinical-trial

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

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

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

protocols, and other applicable regulations and related requirements.

We may never be able to develop products which are commercially

viable or receive regulatory approval in the U.S.

We intend to develop at least one product candidate, EB-003, by undergoing the long, costly clinical-trial process under an

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

In order to proceed with development

of our pharmaceutical product candidates under the NDA pathway, we must obtain the FDA’s approval of our IND application and conduct

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

and related requirements.

We may never be able to develop products which are commercially viable or receive regulatory approval in the

or elsewhere.

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

will approve of our current or future product candidates.

There can be no assurance that the FDA or any other regulatory authority will approve of our current or future product

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

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generally involves the following:

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

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

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

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

of preclinical laboratory tests, animal studies, and formulation studies according to Good

Laboratory Practices and other applicable regulations;

to the FDA of an IND application, which must become effective before human clinical trials

may begin in the United States;

● Performance

of adequate and well-controlled human clinical trials according to the FDA’s current

good clinical practices, or GCPs, which sufficiently demonstrate the safety and efficacy

of the proposed drug or biologic for its intended uses;

to the FDA of a New Drug Application, or an NDA, for a new drug product;

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

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

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

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

● Satisfactory

completion of an FDA inspection of the manufacturing facility or facilities where the drug

or biologic is to be produced to assess compliance with the FDA’s current good manufacturing

practice standards, or cGMP, to assure that the facilities, methods and controls are adequate

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

FDA audit of the nonclinical and clinical trial sites that generated the data in support

of the NDA or biologics license application;

review and, potentially, approval of the NDA.

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

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

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

of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial

sites and hospital staff supporting the conduct of our clinical trials;

of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by

federal or state governments, employers and others;

in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees

or their families or the desire of employees to avoid contact with large groups of people;

in receiving approval from local regulatory authorities to initiate our planned clinical trials;

in clinical sites receiving the supplies and materials needed to conduct our clinical trials;

in global shipping that may affect the transport of clinical trial materials, such as investigational drug product used in our clinical

in local regulations as part of a response to a catastrophic event which may require us to change the ways in which our clinical

trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;

in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations

in employee resources or forced furlough of government employees;

in the timing of interactions with the FDA due to absenteeism by federal employees or by the diversion of their efforts and attention

to approval of other therapeutics or other activities related ;

of the FDA to accept data from clinical trials in affected geographies outside the United States.

delays or difficulties

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

delays or difficulties

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

diversion of healthcare

resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and

hospital staff supporting the conduct of our clinical trials;

interruption of key clinical

trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state

governments, employers and others;

limitations in employee

resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their

families or the desire of employees to avoid contact with large groups of people;

delays in receiving approval

from local regulatory authorities to initiate our planned clinical trials;

delays in clinical sites

receiving the supplies and materials needed to conduct our clinical trials;

interruption in global

shipping that may affect the transport of clinical trial materials, such as investigational drug product used in our clinical trials

local regulations as part of a response to a catastrophic event which may require us to change the ways in which our clinical trials

are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;

delays in necessary interactions

with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or

forced furlough of government employees;

delay in the timing of

interactions with the FDA due to absenteeism by federal employees or by the diversion of their efforts and attention to approval

of other therapeutics or other activities related ;

refusal of the FDA to accept

data from clinical trials in affected geographies outside the United States.

addition, a catastrophic event could disrupt our operations due to absenteeism by infected or ill members of management or other employees,

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amount and timing of our future funding requirements will depend on many factors, including, but not limited to:

scope, number, initiation, progress, timing, costs, design, duration, delays (if any), and results of preclinical and clinical studies

for our current or future product candidates;

outcome, timing and cost of regulatory reviews, approvals or other actions to meet regulatory requirements established by the FDA,

and comparable foreign regulatory authorities;

timing and amount of revenue generated or received, including any revenue from grants or other sources;

rate of progress and cost of our clinical trials and other product development programs;

of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights associated with our current

and future product candidates;

effect of competing technological and market developments;

facilities and equipment requirements;

terms and timing of any additional collaborative, licensing, co-promotion or other arrangements that we may establish.

the scope, number, initiation, progress,

timing, costs, design, duration, delays (if any), and results of preclinical and clinical studies for our current or future product

the outcome, timing and cost of regulatory reviews,

approvals or other actions to meet regulatory requirements established by the FDA, and comparable foreign regulatory authorities;

the timing and amount of revenue generated or received,

including any revenue from grants or other sources;

the rate of progress and cost of our clinical trials

and other product development programs;

costs of filing, prosecuting, defending and enforcing

any patent claims and other intellectual property rights associated with our current and future product candidates;

the effect of competing technological and market developments;

personnel, facilities and equipment requirements;

the terms and timing of any additional collaborative,

licensing, co-promotion or other arrangements that we may establish.

we expect to fund our future capital requirements from financing arrangements, we cannot assure you that any such financing arrangements

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

Even if we can raise funds from financing arrangements, the amounts raised may

not be sufficient to meet our future capital requirements.

Additionally, the Company does not have sufficient unreserved, authorized

shares to secure an equity investment of a sufficient amount, based on the Company’s currently traded price per share, and the

Company will require shareholder approval to increase the amount of authorized shares.

If we are not able to raise capital, we could

be required to postpone, scale back or eliminate some, or all, of our development objectives or commercialization efforts.

In the first quarter of 2025, we engaged in a best efforts public offering, which

locked-up our ability to issue securities or file registration statements for a period of 60 days following February 3, 2025, and engage

in variable-rate transactions for a period of one year following February 3, 2025, each subject to limited exceptions.

Even if we can

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

Additionally,

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

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

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

objectives or commercialization efforts.

depend on our current key personnel.

have consolidated our employee base to save capital and focus on development of our leading candidates EB-002 and EB-303.

As of the date

of this report, we employ 7 full-time employees.

We are highly dependent on our current management and scientific personnel, including

Joseph Tucker, Ph.D., Peter Facchini, Ph.D., and Kevin Coveney, CPA.

have consolidated our employee base to save capital and focus on development of our leading candidate EB-003.

As of the date of this

report, we employ five full-time employees and one part-time employee.

We are highly dependent on our current management and scientific

personnel, including Joseph Tucker, Peter Facchini, and Kevin Coveney.

The inability to hire or retain experienced management personnel

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

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

with our understanding and belief regarding the medical benefits, viability, safety, efficacy, dosing, and social acceptance of psychedelics.

relating to the medical benefits, viability, safety, efficacy, and dosing of psychedelics remains in relatively early stages.

been few clinical trials on the benefits of psychedelics conducted by us or by others.

Future research and clinical trials may draw opposing

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

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

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

has been limited study on the effects of psychedelic- inspired drug candidates, and future clinical research studies may lead to conclusions

that dispute or conflict with our understanding and belief regarding the medical benefits, viability, safety, efficacy, dosing, and social

acceptance of psychedelics.

relating to the medical benefits, viability, safety, efficacy, and dosing of psychedelic-inspired drug candidates remains in relatively

early stages.

There have been few clinical trials on the benefits of psychedelic-inspired drug candidates conducted by us or by others.

Future research and clinical trials may draw opposing conclusions to statements contained in the articles, reports and studies we have

relied on, or could reach different or negative conclusions regarding the medical benefits, viability, safety, efficacy, dosing or other

facts and perceptions related to psychedelic-inspired drug candidates, which could adversely affect social acceptance of such molecules

and the demand for our product candidates.

limited resources have lead us to focus on a particular candidate.

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may be more profitable or for which there is a greater likelihood of medical and commercial success.

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

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

we have identified as most likely to succeed.

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are conducting, or may conduct, preclinical and/or clinical studies outside the United States.

For example, we have conducted preclinical

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

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

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

the FDA’s acceptance of the data is subject to certain conditions.

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

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

The trial population

must also adequately represent the intended U.S.

To the extent we do not conduct these

clinical trials in accordance under an IND application, the FDA may not accept data from such trials.

Although the FDA may accept data

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

of the data is subject to certain conditions.

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

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

The trial population must also adequately represent

the intended U.S.

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

population and U.S.

practice in ways that the FDA deems clinically meaningful.

In general, the patient population for any clinical trials conducted outside

of the United States must be representative of the population for whom we intend to market the product candidate in the United States,

In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance of the data will be dependent

upon our ability to verify the data and our determination that the trials also complied with all applicable U.S.

medical practice in ways that the FDA deems

clinically meaningful.

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

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

In addition, while these clinical

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

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

laws and regulations.

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

regulations requires the expenditure of substantial time and financial resources.

The process of obtaining regulatory approvals

and the subsequent compliance with appropriate federal, state and foreign statutes and regulations requires the expenditure of substantial

time and financial resources.

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

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

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

or to have harmful or problematic side effects;

to receive the necessary regulatory approvals or a delay in receiving such approvals.

Among other things, such delays may be caused

by slow enrollment in clinical studies, length of time to achieve study endpoints, additional time requirements for data analysis

or an IND and later NDA, preparation, discussions with the FDA, an FDA request for additional preclinical or clinical data or unexpected

safety or manufacturing issues;

manufacturing

costs, pricing, or reimbursement issues or other factors that make the product not economical;

proprietary rights of others and their competing products and technologies that may prevent the product from being commercialized.

preclinical study results that may

show the product to be less effective than desired (e.g., the study failed to meet our primary objectives) or to have harmful or

problematic side effects;

failure to receive the necessary regulatory approvals

or a delay in receiving such approvals.

Among other things, such delays may be caused by slow enrollment in clinical studies, length

of time to achieve study endpoints, additional time requirements for data analysis or an IND and later NDA, preparation, discussions

with the FDA, an FDA request for additional preclinical or clinical data or unexpected safety or manufacturing issues;

manufacturing costs, pricing, or reimbursement issues

or other factors that make the product not economical;

the proprietary rights of others and their competing

products and technologies that may prevent the product from being commercialized.

positive results from our preclinical testing of our prospective product candidates may not necessarily be predictive of the results

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Misconduct by employees could include intentional failures to comply with

FDA, SEC or Office of Inspector General regulations, or regulations of any other applicable regulatory authority, failure to provide

accurate information to the FDA or the SEC, comply with applicable manufacturing standards, other federal, state or foreign laws and

regulations, report information or data accurately or disclose unauthorized activities.

Employee misconduct could also involve the improper

use of confidential or protected information, including information obtained in the course of clinical trials, or illegal pre-approval

promotion of drug candidates, which could result in government investigations, enforcement actions and serious harm to our reputation.

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

FDA, SEC or Office of Inspector General of the Department of Health and Human Services, or regulations of any other applicable regulatory

authority, failure to provide accurate information to the FDA or the SEC, comply with applicable manufacturing standards, other federal,

state or foreign laws and regulations, report information or data accurately or disclose unauthorized activities.

Employee misconduct

could also involve the improper use of confidential or protected information, including information obtained in the course of clinical

trials, or illegal pre-approval promotion of drug candidates, which could result in government investigations, enforcement actions and

serious harm to our reputation.

We have adopted a Corporate Code of Conduct and Ethics and Whistleblower Policy, but employee misconduct

is not always possible to identify and deter.

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

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

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

Unauthorized access,

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

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

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

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

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

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

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

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

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

operating results may vary significantly in future periods.

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Our financial results are unpredictable and may fluctuate, for among other reasons, due to:

scope, number, progress, duration, endpoints, cost, results, and timing of our preclinical testing and clinical studies of current

or potential future product candidates;

ability to obtain additional funding to develop product candidates;

in the commencement, enrollment and timing of clinical studies.

number, progress, duration, endpoints, cost, results, and timing of our preclinical testing and clinical studies of current or potential

future product candidates;

our ability to obtain additional

funding to develop product candidates;

delays in the commencement, enrollment and timing of

clinical studies.

high portion of our costs are predetermined on an annual basis, due in part to our significant research and development costs.

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

development and testing of psychedelic molecular derivatives.

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

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

development and testing of psychedelic-inspired drug candidates.

In addition, the Company expects to incur significant ongoing costs

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

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

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

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

corporate partners or others who may require the Company to relinquish significant rights to its psychedelic-inspired drug candidates

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

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materially or adversely affected.

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

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

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

addition, future changes in regulations, changes in legal status of psychedelic and/or psychedelic-inspired products, more vigorous enforcement

thereof or other unanticipated events could require extensive changes to the Company’s operations, increased compliance costs or

give rise to material liabilities, which could have a material adverse effect on the business, results of operations and financial condition

of the Company.

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

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

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

development activities with our Psychedelic Derivatives and other product candidates.

Preclinical activities include “in vivo”

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

Clinical development

activities include trial design, regulatory submissions, clinical patient recruitment, clinical trial monitoring, clinical data management

and analysis, safety monitoring and project management.

If there is any dispute or disruption in its relationship with third parties,

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

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

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

development activities with our psychedelic-inspired drug candidates and other product candidates.

Preclinical activities include “in

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

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

data management and analysis, safety monitoring and project management.

If there is any dispute or disruption in its relationship with

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

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

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

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

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

reliance on third-party contract manufacturers.

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

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

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

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

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

We intend to rely on CMOs

to supply APIs in compliance with local GMP regulations applicable to its Psychedelic Derivatives.

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

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

candidate molecules are required, we intend to synthesize the required psychedelic molecules in our laboratories in Calgary or at other

third-party contract research organizations (“CROs”) that provide synthetic chemistry services.

We have limited control over

these third-party CROs.

When larger quantities and higher quality psychedelic molecules are required (e.g., for animal model testing),

we intend to contract with appropriate third-party contract manufacturing organizations (“CMOs”), over which we may have

limited control to, among other things, supply the active pharmaceutical ingredient (“API”) used in our drug candidates.

We intend to rely on CMOs to supply APIs and formulated drug products in compliance with GMP regulations.

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

compliance with GMP regulations.

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

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

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

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

In addition, the API they

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

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

it may delay the development of its Psychedelic Derivatives and could have a material adverse effect on our business operations and financial

The GMP regulations for drug candidates contain minimum requirements for the methods, facilities and

controls used in manufacturing, processing and packing of APIs and formulated a drug products.

There can be no assurances that CMOs will

be able to meet our timetable and requirements or carry out their contractual obligations in accordance with the applicable regulations.

In addition, the API and/or formulated drug product that they supply to us may not meet our specifications and quality policies and procedures

or they may not be able to supply the API and/or formulated drug product in commercial quantities.

If we are unable to arrange for alternative

third-party supply sources on commercially reasonable terms or in a timely manner, it may delay the development of our drug candidates

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

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

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

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

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

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

our dependence upon third parties for the supply of our APIs and formulated drug products may adversely affect profit margins and our

ability to develop and deliver viable drug candidates on a timely and competitive basis.

or non-renewal of key licenses and agreements.

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Until Enveric obtains its own Dealer’s License or Section 56 Exemption necessary

for its business, the termination, non-renewal or hinderance of use of the Facchini Drug License would have a material adverse effect

on Enveric’s ability to develop Psychedelic Derivatives, conduct research or operate its business as it currently does.

have a material adverse impact on Enveric’s financial condition.

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

for its business, the termination, non-renewal or hindrance of use of the Facchini Drug License would have a material adverse effect

on Enveric’s ability to develop psychedelic-inspired drug candidate, conduct research or operate its business as it currently does.

This could have a material adverse impact on Enveric’s financial condition.

results from clinical trials or studies of others and adverse safety events involving our drug candidates.

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

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The publication of negative results of studies

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

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

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

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

otherwise produce positive results

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

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

Psychedelic Derivatives will be required.

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

complete and has uncertain outcomes.

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

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

A number of companies in the pharmaceutical,

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

safety profiles, notwithstanding promising results in earlier trials.

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

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

Derivatives in any jurisdiction.

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

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

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

or clinical trials or adverse safety events related to the psychedelic compounds similar to those used by us in the development of our

psychedelic-inspired drug candidates, or the therapeutic areas in which our drug candidates compete, could adversely affect our share

price and our ability to finance future development of our drug candidates, and our business and financial results could be materially

and adversely affected.

trials of our drug candidates may fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or not otherwise

produce positive results.

we or third parties (who may license or acquire our drug candidates) are able to obtain marketing approval from regulatory authorities

for the sale of products containing our drug candidates, the completion of preclinical studies in animals and extensive clinical trials

in humans to demonstrate the safety and efficacy of the drug candidates will be required.

Clinical testing is expensive and difficult

to design and implement, can take many years to complete and has uncertain outcomes.

The outcome of preclinical studies and early clinical

trials may not predict the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final

A number of companies in the pharmaceutical, NHP and biotechnology industries have suffered significant setbacks in advanced

clinical trials due to lack of efficacy or unacceptable safety profiles, notwithstanding promising results in earlier trials.

know whether the clinical trials that we or third parties may conduct will demonstrate adequate efficacy and safety to result in regulatory

approval to market any products containing our drug candidates in any jurisdiction.

A product/compound candidate may fail for safety

or efficacy reasons at any stage of the testing process.

A major risk we face is the possibility that none of the products containing

our drug candidates will successfully gain market approval from Health Canada, the FDA or other regulatory authorities, resulting in

our inability to derive any royalty-based revenue from them.

materials requiring regulatory approval

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

Canada and the FDA have not yet determined whether our Psychedelic Derivatives will be scheduled as controlled substances.

Health Canada or the FDA determine that these products are controlled substances and therefore, require regulatory approval, (a) our

licensees will be required to obtain such approval;

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

regulatory approval.

Canada, the FDA or other regulatory authorities in foreign jurisdictions have not yet determined whether our psychedelic-inspired drug

candidates will be scheduled as controlled substances.

Based on preclinical and/or clinical abuse liability studies, Health Canada, the

FDA or other regulatory authorities may determine that our products are controlled substances and therefore, require additional regulatory

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

Health Canada or the FDA require that we perform additional preclinical studies, or if we determine that additional preclinical studies

are required for our Psychedelic Derivatives, our expenses would further increase beyond what is currently expected and the anticipated

timing of any potential approval of our Psychedelic Derivatives or licensing out agreements would likely be delayed.

Further, if Health Canada,

the FDA or other regulatory authorities require that we perform additional preclinical or clinical studies, or if we determine that additional

preclinical or clinical studies are required for our drug candidates, our expenses would further increase beyond what is currently expected

and the anticipated timing of any potential approval of our drug candidates or licensing out agreements would likely be delayed.

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

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

Since inception, we have an accumulated deficit of $96.5 million and accumulated other comprehensive losses of $0.6 million.

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

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

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

to increase as we continue our product development activities.

If our Psychedelic Derivatives and other products developed do not achieve

market acceptance, we may never become profitable.

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

cash flows for the foreseeable future.

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

on our stockholders’ equity and working capital.

As of December 31, 2024, we had an accumulated deficit of $106.1 million and accumulated other comprehensive losses of $0.6 million.

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

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

generated no reportable revenues since inception through December 31, 2024, we expect to continue to incur losses for the foreseeable

future, and expect these losses to increase as we continue our product development activities.

If our drug candidates and other products

developed do not achieve market acceptance, we may never become profitable.

As a result of the foregoing, we expect to continue to experience

net losses and negative cash flows for the foreseeable future.

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

have, an adverse effect on our stockholders’ equity and working capital.

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

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In addition, our expenses could increase if we are required

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

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

The amount of future

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

by the FDA, Health Canada or other regulatory authorities in foreign jurisdictions to perform preclinical studies or clinical trials

in addition to those currently expected, or if there are any delays in completing our preclinical studies or the development of any of

our drug candidates or other products.

The amount of future net losses will depend, in part, on the rate of future growth of our expenses

and our ability to generate revenues.

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

enter into acceptable third-party sales and marketing transactions.

have no licensing, marketing or distribution experience.

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

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

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

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

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

If we use third

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

activities on which our future revenues may depend.

have no commercial licensing, marketing or distribution experience.

To develop commercial licensing, distribution and marketing capabilities,

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

confirmation that our drug candidates will be approved by the FDA, Health Canada or other regulatory authorities in foreign jurisdictions.

Where we decide to perform commercial licensing, marketing and distribution functions itself or through third parties, we could face

a number of additional risks, including that we or our third-party collaborators may not be able to build and maintain an effective marketing

or sales force.

If we use third parties to market and distribute any products arising from our drug candidates, we may have limited or

no control over our commercial licensing, marketing and distribution activities on which our future revenues may depend.

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

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

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

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

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

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to manage growth

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

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

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

In addition, to meet obligations as

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

and reporting procedures.

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

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

our operating infrastructure.

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

our gross profit or operating expenses.

we advance our drug candidates through preclinical studies and early clinical development and seek business arrangements and partnerships

with third parties to advance our drug candidates through later stage clinical development, we will need to increase our research and

development personnel, scientific, management, and administrative headcount to manage these programs and partnerships.

In addition, to

meet obligations as a public company, we may need to increase our general and administrative capabilities and improve our operational

and financial controls and reporting procedures.

Our management, personnel and systems currently in place may not be adequate to support

this future growth.

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

and over-expanding our operating infrastructure.

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

may negatively impact our gross profit or operating expenses.

and uninsured risks

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in our favor we may be adversely affected.

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

psychedelic- inspired medicines industry and market are relatively new in this industry and the market may not continue to exist or grow

as anticipated.

operate our business in a relatively new industry and market.

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

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

our business, financial conditions and results of operations.

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

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

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

Any marketing efforts by us would need to overcome

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

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

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

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

psychedelic and psychedelic-inspired medicine market will face specific marketing challenges given the psychedelic products’ status

as a controlled substance which resulted in past and current public perception that the products have negative health and lifestyle effects

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

Any marketing efforts

by us would need to overcome this perception to build consumer confidence, brand recognition and goodwill

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

operate our business in a relatively new industry and market.

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

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

Nevertheless,

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

therapeutic purposes remains highly regulated and narrow in scope.

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

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

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

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

We have committed and expect to continue committing significant

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

As a category of products, medical-grade psychedelics

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

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

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

whose business model we can emulate.

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

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

psychedelic product candidates may generate public controversy.

Adverse publicity or public perception regarding the psychedelic APIs

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

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

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

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

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

therapies and other products.

The use of psychedelic-inspired medicines for medicinal purposes has shown

promise in various studies and we believe that both regulators and the public have an increasing awareness and acceptance of this promising

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

use for research and therapeutic purposes remains highly regulated and narrow in scope.

There is no assurance that the industry and market

will continue to grow as currently estimated or anticipated or function and evolve in the manner consistent with management’s expectations

and assumptions.

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

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

We have committed and expect to continue

committing significant resources and capital to the development of psychedelic-inspired products for therapeutic uses.

As a category

of products, medical-grade psychedelics raw materials and psychedelic-derived APIs, and research into such substances, represent relatively

untested offerings in the marketplace, and we cannot provide assurance that psychedelics as a category, or that our prospective psychedelic-inspired

products, in particular, will achieve market acceptance.

Moreover, as a relatively new industry, there are not many established players

in the psychedelic-inspired medicines industry whose business model we can emulate.

Similarly, there is little information about comparable

companies available for potential investors to review in making a decision about whether to invest in our common shares.

psychedelic-inspired drug candidates may generate public controversy.

Adverse publicity or public perception regarding the psychedelic-inspired

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

ability to establish and grow our business is substantially dependent on the success of the emerging market for psychedelic-inspired

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

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

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

medicines and other products.

containing controlled substances may generate public controversy.

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

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

expansion of the use of psychedelic-inspired medicines in the medical industry may require new clinical research into effective medical

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

of psychedelic and psychoactive products remains in early stages.

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

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

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

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

Given these risks,

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

Future research studies and clinical

trials may draw opposing conclusions to those stated in this Annual Report on Form 10-K or reach negative conclusions regarding the medical

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

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

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

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

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

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

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

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

whether to invest in us.

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

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

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

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

in competitors, consolidation and formation of strategic relationships.

Acquisitions or other consolidating transactions could harm us

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

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

threats, all of which could harm our operating results.

of psychedelic-inspired products remains in early stages.

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

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

dosing and social acceptance of psychedelic-inspired products, future research and clinical trials may prove such statements to be incorrect,

or could raise concerns regarding, and perceptions relating to, psychedelic-inspired products.

Given these risks, uncertainties and assumptions,

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

Future research studies and clinical trials may draw opposing conclusions

to those stated in this Annual Report or reach negative conclusions regarding the medical benefits, viability, safety, efficacy, dosing,

social acceptance or other facts and perceptions related to psychedelic-inspired products, which could have a material adverse effect

on the demand for our drug candidates with the potential to lead to a material adverse effect on the Company’s business, financial

condition and results of operations.

psychedelic-inspired medicine industry is difficult to quantify and investors will be reliant on their own estimates of the accuracy

of market data.

the psychedelic-inspired medicine industry is in a nascent stage with uncertain boundaries, there is a lack of information about comparable

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

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

Accordingly, investors will have to rely on their own estimates

in deciding about whether to invest in us.

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

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

psychedelic-inspired medicine and biotechnology industries are experiencing rapid growth and increased competition.

psychedelic-inspired medicine and biotechnology industries are undergoing rapid growth and substantial change, which has resulted in

an increase in competitors, consolidation and formation of strategic relationships.

Acquisitions or other consolidating transactions

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

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

additional competitive threats, all of which could harm our operating results.

Additionally,

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and research institutions.

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

We cannot predict the timing

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

Such competing Psychedelic Derivatives may

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

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

Established pharmaceutical companies

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

Psychedelic Derivatives that we develop obsolete.

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

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

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

competitors may introduce new psychedelic-inspired medicines or develop technological advances that compete with us.

We cannot predict

the timing or impact of competitors introducing new psychedelic-inspired medicines or technological advances.

Such competing psychedelic-inspired

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

than our psychedelic-inspired drug candidates, and this could negatively impact our business and results of operations.

Established pharmaceutical

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

make the psychedelic-inspired drug candidates that we develop obsolete.

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

in obtaining patent protection or discovering, developing and commercializing psychedelic-inspired medicines before we do or may develop

psychedelic-inspired medicines that are deemed to be more effective or gain greater market acceptance than those of the Company.

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

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

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

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

could render our Psychedelic Derivatives obsolete or non-competitive.

If our competitors market Psychedelic Derivatives that are more

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

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

Our competitors may succeed in developing, acquiring or licensing on an exclusive basis, technologies and psychedelic-inspired medicines

that are more effective or less costly than any of the psychedelic-inspired drug candidates that we are currently developing or that

we may develop, which could render our psychedelic-inspired drug candidates obsolete or non-competitive.

If our competitors market psychedelic-inspired

medicines that are more effective, safer or less expensive or that reach the market sooner than our psychedelic-inspired drug candidates,

if any, we may not achieve commercial success.

In addition, because of our limited resources, it may be difficult for us to stay abreast

of the rapid changes in each technology.

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

Technological advances or products

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

Technological advances or products developed by our competitors may render our technologies or psychedelic-inspired drug candidates obsolete,

less competitive or not economical.

in legislation, regulations and guidelines.

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

In addition to FDA and Health Canada restrictions on

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

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

or other potential referral sources.

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

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

The risks to the business of the Company

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

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

In addition to FDA or Health Canada restrictions on the

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

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

potential referral sources.

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

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

The risks to the business of the Company represented by

this or similar risks are that they could significantly reduce the addressable market for our psychedelic-inspired drug candidates and

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

Related to Regulatory Matters

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In these product

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

MDMA, will be the active pharmaceutical ingredients.

candidates and synthetic molecules based on psychedelics, such as psilocybin, mescaline and MDMA, will be the active pharmaceutical ingredients.

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

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operates, or private citizens or criminal charges.

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

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

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

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

the DEA as a Schedule I substances under the CSA.

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

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

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

Pharmaceutical products approved

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

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

Schedule I and II

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

and criteria for importation.

psychedelic-inspired drug candidates we are developing or may develop in the future may be subject to controlled substance laws and regulations

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

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

the United States, psychedelics, such as psilocybin (and its active metabolite, psilocin), N,N-Dimethyltryptamine (“DMT”),

mescaline and MDMA, are classified by the DEA as a Schedule I substances under the CSA.

The DEA regulates chemical compounds as Schedule

I, II, III, IV or V substances.

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

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

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

considered to present the highest potential for abuse or dependence and Schedule V substances the lowest relative risk of abuse among

such substances.

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

quotas, security requirements and criteria for importation.

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

For example, they may not be refilled

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

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

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

For any product containing active ingredients

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

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

the path to market.

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

Even assuming categorization as

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

determinations under state laws and regulations.

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

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

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

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

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

For example, they may not be refilled without a new prescription and may have a black box warning.

For any product containing active

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

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

further delay the path to market.

There can be no assurance that the DEA will make a favorable scheduling decision about our psychedelic-inspired

drug candidates.

Even assuming categorization as a Schedule II or lower controlled substance (i.e., Schedule III, IV or V), at the federal

level, such substances would also require scheduling determinations under state laws and regulations.

approval is also a prerequisite to commercialization, and the controlled-substance status, currently undetermined, of our psychedelic-inspired

APIs may negatively impact the FDA’s decision regarding whether to approve the applicable product candidates.

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

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

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

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

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

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

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

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

from our importer.

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

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

The abuse liability potential of our psychedelic-inspired drug candidates has not yet been studied.

A Human Abuse Potential

(HAP) study or an equivalent study may determine that, upon regulatory approval, our drug candidate will be a Schedule I controlled

Therefore, any future research or development activities with the approved drug may require submission of a preclinical

or clinical protocols to the DEA and obtaining and maintaining a DEA license for each site that uses the approved drug.

In that situation,

if the DEA delays or denies the grant of a researcher registration to one or more research sites, future clinical trials could be

significantly delayed, and we could lose clinical trial sites.

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

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

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

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

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

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

by most states and foreign governments.

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

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

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

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

requirements).

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

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

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

or prison time.

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

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

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

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

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

It is also illegal to aid or abet

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

An investor’s contribution to and involvement in such activities

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

fines and/or imprisonment.

the psychedelic-inspired APIs and formulated drug products that we intend to utilize in the future are determined to be Schedule I controlled

substances under the CSA in the United States and under similar controlled-substance legislation in other countries, any significant

violations of these laws and regulations, or changes in the laws and regulations, may result in interruptions to our development activity

or business continuity.

psychedelic-inspired APIs we intend to utilize have not yet been studied in preclinical or clinical abuse liability studies and may be

categorized as Schedule I controlled substances under the CSA or the state or foreign equivalent and would likely be.

illegal without

the requisite regulatory authorizations (e.g., to allow for the use of such substances in clinical trials under an IND and in compliance

with all applicable FDA, DEA, and other regulatory requirements).

Violations of any federal, state or foreign laws and regulations could

result in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted

by either the federal government or private citizens, or criminal charges and penalties, including, but not limited to, disgorgement

of profits, cessation of business activities, divestiture or prison time.

If such were to occur, this could have a material adverse effect

on us, including on our reputation and ability to conduct business, our financial position, operating results, profitability or liquidity,

the potential listing of our shares or the market price of our shares.

In addition, it is difficult for us to estimate the time or resources

that would be needed for the investigation or defense of any such matters or our final resolution because, in part, the time and resources

that may be needed are dependent on the nature and extent of any information requested by the applicable authorities involved, and such

time or resources could be substantial.

It is also illegal to aid or abet such activities or to conspire or attempt to engage in such

An investor’s contribution to and involvement in such activities may result in federal civil and/or criminal prosecution,

including, but not limited to, forfeiture of his, her or its entire investment, fines and/or imprisonment.

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

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to differing interpretations.

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

of cancer, including anxiety.

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

After completing the requisite preclinical testing, submissions to FDA (namely IND applications), internal review board (“IRB”)

review, and any other applicable obligations that must be completed before clinical testing may begin in the United States, we must conduct

extensive clinical trials to demonstrate the safety and efficacy of our product candidates.

Clinical testing is expensive, time consuming,

and uncertain as to outcome.

We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, or at

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

currently have one drug candidate that is in preclinical development for indications such as depression and anxiety.

We intend to develop

additional drug candidates targeting other indications, including, for example, addiction and PTSD.

After completing the requisite preclinical

testing, submissions to the FDA (namely IND applications), internal review board (“IRB”) review, and any other applicable

obligations that must be completed before clinical testing may begin in the United States, we must conduct extensive clinical trials

to demonstrate the safety and efficacy of our product candidates.

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

We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, or at all.

Failures in connection

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

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

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to design appropriate clinical trial protocols;

concerns with psychedelics, generally, and the potential for abuse;

concerns with psychedelics or psychedelic-inspired drug candidates, generally, and the potential for abuse;

data to support regulatory approval;

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

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

handling and processing of controlled substances;

or failure to supply psychedelic-inspired drug candidate for use in clinical trials due to cross-border or inter-continental shipment

or customs handling and processing of controlled substances;

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

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

I substance, should such be required.

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

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

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

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

for any approved product.

There have been judicial challenges to certain aspects of the ACA and numerous legislative attempts to repeal

and/or replace the ACA in whole or in part, and we expect there will be additional challenges and amendments to the ACA in the future.

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

An expansion in the government’s

role in the U.S.

healthcare industry may cause general downward pressure on the prices of prescription drug products, lower reimbursements

or any other product for which we obtain regulatory approval, reduce product utilization and adversely affect our business and results

of operations.

Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments

from private payors.

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

prior to raising prices and to justify price increases.

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

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

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

The implementation of such cost

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

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

expansion in the government’s role in the U.S.

healthcare industry may cause general downward pressure on the prices of prescription

drug products, lower reimbursements or any other product for which we obtain regulatory approval, reduce product utilization and adversely

affect our business and results of operations.

Any reduction in reimbursement from Medicare or other government programs may result in

a similar reduction in payments from private payors.

The implementation of such cost containment measures and other healthcare reforms

may prevent us from being able to generate revenue, attain profitability, or commercialize any of our future product candidates for which

we may receive regulatory approval.

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

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developed for pediatric indications.

Additionally,

in light of the recent budget and staffing cuts at the FDA, the FDA may experience delays reviewing or approving our prospective products

or current or future product candidates, which could impair our ability to commercialize our prospective products or current or future

product candidates and have a material adverse effect on the business, financial condition and operating results of the Company.

may voluntarily suspend or terminate our clinical trials if at any time we believe that the product candidates present an unacceptable

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

risks related to Psychedelic Derivatives

risks related to psychedelic-inspired drug candidates

execution of our strategy is contingent, in part, upon compliance with regulatory requirements from time to time enacted by governmental

authorities and obtaining all regulatory approvals, where necessary, for the development and license of our Psychedelic Derivatives.

Health Canada and the FDA have not yet determined whether our Psychedelic Derivatives will be scheduled as controlled substances.

psychedelic therapy 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.

In the event Health Canada or the FDA

determine that our Psychedelic Derivatives are controlled substances and therefore, require regulatory approval, to the extent that we

produce Psychedelic Derivatives, we will be required to obtain such regulatory approval.

we may not be able to predict the time required to secure all appropriate regulatory approvals for our Psychedelic Derivatives, or the

extent of testing and documentation that may, from time to time, be required by governmental authorities.

The impact of compliance regimes,

any delays in obtaining, or failure to obtain regulatory approvals may significantly delay or impact the development of markets, our

business and Psychedelic Derivatives, and licensing initiatives and could have a material adverse effect on the business, financial condition

and operating results of the Company.

authorities and obtaining all regulatory approvals, where necessary, for the development of our psychedelic-inspired drug candidates.

The abuse liability potential of our psychedelic-inspired drug candidates has not yet been studied in preclinical or clinical studies.

Therefore, Health Canada or the FDA have not yet determined whether our psychedelic-inspired drug candidates will be scheduled as controlled

Based on the studies Health Canada or the FDA or other regulatory authorities may determine that our psychedelic-inspired

drug candidates are controlled substances and therefore, would require classification as a controlled substance with all the requisite

we may not be able to predict the time required to secure all appropriate regulatory approvals for our psychedelic-inspired drug candidates,

or the extent of testing and documentation that may, from time to time, be required by governmental authorities.

The impact of compliance

regimes, any delays in obtaining, or failure to obtain regulatory approvals may significantly delay or impact the development of markets,

our business and psychedelic-inspired drug candidates, and licensing initiatives and could have a material adverse effect on the business,

financial condition and operating results of the Company.

will incur ongoing costs and obligations related to regulatory compliance.

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Based on this assessment, management

concluded that our internal control over financial reporting was not effective as of December 31, 2023 due to the material weakness related

to segregation of duties.

As of December 31, 2023, there were control deficiencies which constituted a material weakness in our internal

control over financial reporting.

Management has taken, and is taking steps to strengthen our internal control over financial reporting:

we have conducted evaluation of the material weakness to determine the appropriate remedy and have established procedures for documenting

disclosures and disclosure controls.

concluded that our internal control over financial reporting was not effective as of December 31, 2024 and December 31, 2023 due to the

material weakness related to segregation of duties.

As of December 31, 2024 and December 31, 2023, there were control deficiencies which

constituted a material weakness in our internal control over financial reporting.

Management has taken, and is taking steps to strengthen

our internal control over financial reporting:

we have conducted evaluation of the material weakness to determine the appropriate remedy

and have established procedures for documenting disclosures and disclosure controls.

to the small size of our Company, we do not maintain sufficient segregation of duties to ensure the processing, review and authorization

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Related to the Ownership of Our Common Stock

common stock could be delisted from The Nasdaq Capital Market.

common stock is currently listed on Nasdaq.

However, we cannot assure you that we will be able to comply with the continued listing standards

If we fail to comply with the continued listing standards of Nasdaq, our common stock may become subject to delisting.

Nasdaq delists our common stock from trading on its exchange for failure to meet the continued listing standards, we and our stockholders

could face significant material adverse consequences including, without limitation:

limited availability of market quotations for our securities;

determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere

to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

limited amount of analyst coverage;

decreased ability for us to issue additional securities or obtain additional financing in the future.

market price of our common stock may be subject to significant fluctuations and volatility, and our stockholders may be unable to resell

their shares at a profit and incur losses.

market price our common stock could be subject to significant fluctuation.

market price of our common stock could be subject to significant fluctuation.

Market prices for securities of life sciences and biopharma

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capital appreciation, if any, of our common stock will be our stockholders’ sole source of gain, if any, for the foreseeable future.

the event that we fail to regain compliance with the listing requirements of The Nasdaq Capital Market or satisfy any of the listing

requirements of Nasdaq, our common stock may be delisted, which could affect our market price and liquidity.

common stock is listed on Nasdaq.

For continued listing on Nasdaq, we will be required to comply with the continued listing requirements,

including the minimum market capitalization standard, the stockholders’ equity requirement, the corporate governance requirements

and the minimum closing bid price requirement, among other requirements.

On November 21, 2023, we received a letter from the Nasdaq staff

indicating that, based on our reported stockholders’ equity of $2,435,646 reported on Form 10-Q for the period ended September

30, 2023, we were not in compliance with the stockholders’ equity requirement of at least $2,500,000 pursuant to Listing Rule 5550(b)(1).

We intend to regain compliance with Listing Rule 5550(b)(1).

On February 6, 2024, the Nasdaq staff notified us that based on a review

of the materials submitted by the Company to Nasdaq, we were granted us an extension to regain compliance with the minimum stockholders’

equity requirement.

The Company must regain compliance by May 20, 2024 and further evidence its compliance upon filing its periodic report

for June 30, 2024.

the event that we fail to regain compliance with Listing Rule 5550(b)(1) or satisfy any of the listing requirements of Nasdaq, our common

stock may be delisted.

We will have an opportunity to appeal the determination to a Hearings Panel, but we cannot guarantee that such

appeal will be successful.

If we are unable to list on Nasdaq, we would likely be more difficult to trade in or obtain accurate quotations

as to the market price of our common stock.

If our common stock is delisted from trading on Nasdaq, and we are not able to list our common

stock on another exchange or to have it quoted on Nasdaq, our securities could be quoted on the OTC Bulletin Board or on the “pink

sheets.” As a result, we could face significant adverse consequences including, without limitation:

limited availability of market quotations for our securities;

determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere

to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

limited amount of news and analyst coverage for our Company;

decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3 or obtain

additional financing in the future).

may not be able to maintain an active trading market for our common stock.

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we do not view the risk as material to our financial condition.

However, as the FDIC continues to address the situation with SVB, Signature

Bank and other similarly situated banking institutions, the risk of loss in excess of insurance limitations has generally increased.

Any material loss that we may experience in the future could have an adverse effect on our ability to pay our operational expenses or

make other payments and may require us to move our accounts to other banks, which could cause a temporary delay in making payments to

our vendors and employees and cause other operational inconveniences.

However, if such a situation arises again with a financial institution

we bank with, the risk of loss in excess of insurance limitations has generally increased.

Any material loss that we may experience in

the future could have an adverse effect on our ability to pay our operational expenses or make other payments and may require us to move

our accounts to other banks, which could cause a temporary delay in making payments to our vendors and employees and cause other operational

inconveniences.

may acquire businesses or products, or form strategic alliances, in the future, and may not realize the benefits of such acquisitions.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors