What changed in this filing

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Item 1. Business

2023-04-26 compared with 2022-04-29 · 349 added, 460 removed, 115 unchanged (88% of the section changed)

This summary highlights information contained

elsewhere in this report This summary does not contain all the information you should consider before investing in the securities.

you should read the entire report carefully, including the “Risk Factors,” “Management’s Discussion and Analysis

of Financial Condition and Results of Operations,” and our financial statements, including the notes thereto, appearing elsewhere

in this report.

Nutriband Inc.

(the “Company”, “Nutriband”,

“we” or “us”), was incorporated in Nevada in January 2016.

Our primary business is the development of a portfolio

of transdermal pharmaceutical products.

Our lead product is our AVERSA ™ technology,

an abuse deterrent technology that can be added to a new or existing transdermal patch with the goal of deterring the abuse of certain

drugs when delivered transdermally.

Our first product under development is our AVERSA fentanyl patch (“AVERSA Fentanyl”) to

provide clinicians and patients with an extended-release, transdermal-delivered fentanyl product for use in managing chronic pain requiring

around the clock opioid therapy, combined with our AVERSA® technology to reduce the abuse and misuse of fentanyl patches.

our acquisition of 4P Therapeutics on August 1, 2018, we are planning to develop, and seek FDA approval of, a number of transdermal pharmaceutical

products under development by 4P Therapeutics.

With the acquisition of the transdermal, topical, cosmetic and nutraceutical business of

Pocono Coated Products, LLC effective August 31, 2020, we manufacture on a contract basis transdermal, topical, coated and consumer products.

Selected Risks Associated with our Business

and Operations

Our business is subject to significant risks,

which are disclosed in more detail under “Risk Factors,” which begins on page 13, as a result of which an investment in

our common stock is highly speculative and could result in the loss of your entire investment.

Significant risks include, but are not

limited to, the following:

Our business could be adversely affected by the effects of health pandemics or epidemics, including the recent outbreak of COVID-19, which was declared by the World Health Organization as a global pandemic, and is resulting in travel and other restrictions to reduce the spread of the disease, including state and local orders across the country, which, among other things, direct individuals to shelter at their places of residence, direct businesses and governmental agencies to cease non-essential operations at physical locations, prohibit certain non-essential gatherings, and order cessation of non-essential travel.

The effects of these orders, government-imposed quarantines and measures we would take, such as work-from-home policies, may negatively impact productivity, disrupt our business and could delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course.

These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition.

Further, quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact personnel at third-party manufacturing facilities in the United States and other countries, or the availability or cost of materials, which could disrupt our supply chain.

The FDA regulatory process may take longer and be more expensive than we anticipate without any assurance that we will obtain FDA approval.

If we are not able to obtain FDA approval for our lead product, we may not have the resources to develop any other product, and we may not be able to continue in business.

We may not be able to launch any products for which we receive FDA marketing approval.

We may not be able to establish a distribution network for the marketing and sale of any products for which we receive FDA approval.

We may not be able to establish manufacturing facilities in compliance with FDA good manufacturing practices or to enter into manufacturing agreements for the manufacture of our products in an FDA approved manufacturing facility.

It will be necessary to us to enter into a joint venture or other strategic relationship in order to develop, perform clinical testing for, manufacture or market any of our proposed products.

We may not be able to enter into such a relationship, and any relationship may not be successful, and the other party may have business interests and priorities that are different from ours.

We may not be able to protect our rights in our intellectual property, and we may be subject to intellectual property litigation which would be expensive and disruptive of our operations even if we eventually prevail on the merits.

Unanticipated side effects or other adverse events resulting from the use of our product could require a recall of our products and, even if no recall is required, our reputation could be impaired by side effects.

We may fail to comply with all applicable laws and regulations relating to our product.

We may have to change or adapt our operations in the event of changes in national, regional and local government regulations, taxation, controls and political and economic developments that affect our products and the market for our products;

We may be unable to accurately estimate anticipated expenses, capital requirements and needs for additional financing;

The terms of our recent financing, including the antidilution provisions of the warrants, may impair our ability to raise funds for our operations during the term of the warrants.

Our primary business is the development of a portfolio of transdermal

pharmaceutical products.

Our development pipeline consists of transdermal products that are based on our proprietary AVERSA®

abuse deterrent transdermal technology that can be incorporated into transdermal patches that contain drugs that are susceptible to abuse

Our first product under development is AVERSA Fentanyl, an abuse deterrent

fentanyl transdermal system that combines an existing generic fentanyl patch with our AVERSA technology to reduce the abuse and misuse

of fentanyl patches.

We believe that AVERSA technology can be broadly applied to various transdermal products, and our plan is to follow

the development of our abuse deterrent fentanyl transdermal system with the development of additional transdermal deterrent products for

pharmaceuticals that have a risk or history of abuse.

Specifically, we have expanded our development pipeline to include AVERSA Buprenorphine

and AVERSA Methylphenidate.

In addition, we are developing a portfolio of transdermal pharmaceutical products to deliver already approved

drugs or biologics that are typically delivered by injection but with the potential to improve compliance and therapeutic outcomes by

providing them as transdermal patches.

We have signed a feasibility agreement for with Kindeva Drug Delivery,

formerly 3M Drug Delivery, for the development of AVERSA Fentanyl using Kindeva’s FDA approved Fentanyl patch.

feasibility agreement is focused on adapting Kindeva’s commercial transdermal manufacturing process to incorporate AVERSA technology.

The product development program for AVERSA Fentanyl

includes performing preclinical and clinical studies to demonstrate the abuse deterrent properties of the product.

The program assumes

that the fentanyl transdermal system is already approved and the only change to the approved product will be to incorporate the AVERSA

technology into the patch design with no change being made to the fentanyl drug matrix or its demonstrated safety or drug release characteristics.

Preclinical studies to be performed primarily consist of laboratory-based in vitro manipulation and extraction studies in various extraction

media per FDA guidance.

Clinical evaluation primarily consists of a Phase 1 Human Abuse Liability (HAL) study to demonstrate the abuse

potential of the product per FDA guidance.

The regulatory path for FDA approval is planned to be a 505(b)(2) NDA submission to access

the safety and efficacy information on file for Duragesic ® fentanyl transdermal system as the reference-listed drug.

product development program for the additional AVERSA pipeline products, AVERSA Buprenorphine and AVERSA Methylphenidate, are similar

to that of AVERSA Fentanyl, assuming that the AVERSA technology is incorporated into an already approved transdermal patch.

Through July 31, 2018, we had not generated any

revenue from our business, which was the research and development of transdermal consumer patches.

Consumer products are products that

can be sold over-the-counter and do not require a prescription.

Most transdermal patches are considered drugs in the United States and

cannot be marketed in the United States without approval from the FDA.

We have not taken any steps to seek to obtain FDA approval for

any of our consumer products in development, and we have no plans to do so in the near term.

abuse deterrent transdermal technology that we believe can be incorporated into existing transdermal patches that contain drugs that are

susceptible to abuse and misuse.

We operate in two distinct business segments:

pharmaceuticals and medical devices.

The following is a description of the Company’s revenue types:

service revenues, which include the contracting of research and development related services with the Company’s clients in the life

sciences field on an as-needed basis;

and contract manufacturing revenues, which are derived from the manufacture and production of products

for a number of customers in the health, wellness and pharmaceutical space.

We manage and evaluate our operations, and report our financial

results, through these two business segments.

Our principal offices are located in Orlando, Florida, and we primarily

operate and derive most of our revenues in the United States.

Our lead product under development is AVERSA Fentanyl, an abuse deterrent

fentanyl transdermal system that combines an approved generic fentanyl patch with our AVERSA abuse deterrent technology to reduce the

abuse and misuse of fentanyl patches.

We believe that AVERSA technology can be broadly applied to various transdermal products, and our

plan is to follow the development of our abuse deterrent fentanyl transdermal system with the development of additional transdermal abuse

deterrent products for pharmaceuticals that have a risk or history of abuse.

Specifically, we have expanded our development pipeline to

include AVERSA Buprenorphine and AVERSA Methylphenidate.

In addition, we are developing a portfolio of transdermal pharmaceutical products

to deliver already approved drugs or biologics that are typically delivered by injection but with the potential to improve compliance

and therapeutic outcomes through transdermal delivery.

We have a feasibility agreement with Kindeva Drug Delivery, formerly

3M Drug Delivery (“Kindeva”), for the development of AVERSA Fentanyl using Kindeva’s FDA approved Fentanyl patch.

feasibility agreement is focused on adapting Kindeva’s commercial transdermal manufacturing process to incorporate AVERSA abuse

deterrent technology.

The product development program for AVERSA Fentanyl includes performing

preclinical and clinical studies to demonstrate the abuse deterrent properties of the product.

The program assumes that the fentanyl transdermal

system is already approved and the only change to the approved product will be to incorporate the AVERSA technology into the patch design

with no change being made to the fentanyl drug matrix or its demonstrated safety, patch performance or drug release characteristics.

studies to be performed primarily consist of laboratory-based in vitro manipulation and extraction studies in various extraction media

per FDA guidance.

Clinical evaluation primarily consists of a Phase 1 Human Abuse Liability (HAL) study to demonstrate the abuse potential

of the product per FDA guidance.

The regulatory path for FDA approval is planned to be a 505(b)(2) NDA submission to access the safety

and efficacy information on file for Duragesic ® fentanyl transdermal system as the reference-listed drug and to be able

to obtain approval for abuse deterrent claims as a branded pharmaceutical product.

The product development program for the additional AVERSA pipeline

products, AVERSA Buprenorphine and AVERSA Methylphenidate, are similar to that of AVERSA Fentanyl, assuming that the AVERSA technology

is incorporated into an already approved transdermal patch.

Through January 31, 2023, we had not generated any revenue from our

transdermal consumer patches.

Consumer products are products that can be sold over-the-counter and do not require a prescription.

transdermal patches are considered drugs in the United States and cannot be marketed in the United States without approval from the FDA.

We have not taken any steps to seek to obtain FDA approval for any of our consumer products in development that would permit sales of

those products in the United States, and we have no plans to do so in the near term.

Acquisition of 4P Therapeutics

Pursuant to an acquisition agreement dated April

5, 2018 between us and 4P Therapeutics, on August 1, 2018, we acquired all of the equity interest in 4P Therapeutics from Steven Damon,

the owner of 4P Therapeutics.

The purchase price of $2,250,000, consisting of 62,500 shares of common stock, valued at $1,850,000, and

cash of $400,000, and are to pay Mr.

Damon a 6% royalty on any revenue we receive or derive from our utilization or sale of the abuse

deterrent intellectual property that we acquired as a part of the assets 4P Therapeutics, including partner license milestones and development

The royalty is payable pursuant to the acquisition agreement and continues as long as we generate revenue from our utilization

or sale of the abuse deterrent intellectual property we acquired as part of the acquisition of 4P Therapeutics.

The 62,500 shares were

issued to Mr.

Damon (41,750 shares) and Dr.

Alan Smith (20,750 shares).

Pursuant to an acquisition agreement dated April 5, 2018 between us

and 4P Therapeutics, on August 1, 2018, we acquired all of the equity interest in 4P Therapeutics from Steven Damon, the owner of 4P Therapeutics.

The purchase price of $2,250,000, consisting of 62,500 shares of common stock, valued at $1,850,000, and cash of $400,000, and are to

Damon a 6% royalty on any revenue we receive or derive from our utilization or sale of the abuse deterrent intellectual property

that we acquired as a part of the assets 4P Therapeutics, including partner license milestones and development payments.

The royalty is

payable pursuant to the acquisition agreement and continues as long as we generate revenue from our utilization or sale of the abuse deterrent

intellectual property we acquired as part of the acquisition of 4P Therapeutics.

The 62,500 shares were issued to Mr.

Damon (41,750 shares

pre-split) and Dr.

Alan Smith (20,750 shares pre-split).

In connection with the acquisition, Mr.

Damon retained any cash

and accounts receivable and assumed any liabilities other than those relating to the ongoing business.

Pursuant to the acquisition agreement,

we appointed Mr.

Damon retained any cash and accounts

receivable and assumed any liabilities other than those relating to the ongoing business.

Pursuant to the acquisition agreement, we appointed

Damon to our board of directors in April 2018, when we signed the acquisition agreement, and we agreed to pay Mr.

the compensation received by independent board members.

Damon the compensation

received by independent board members.

As a result of the acquisition, the focus of our business has changed

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containing aversive agents will significantly deter the abuse and accidental misuse of fentanyl from transdermal patches.

With the acquisition of 4P Therapeutics, we acquired

a research pipeline of other transdermal products, including peptides and proteins such as exenatide for type 2 diabetes and FSH for infertility.

These drugs are off patent but are currently only available as injections, and we are evaluating the possibility of developing a transdermal

delivery system for these drugs as an alternative to injection but with improved compliance and safety.

In addition, we may develop certain

generic transdermal products where we think we can make an improvement to existing patches and where we believe we can take significant

market share with good profit margins.

One example of such a product candidate is the development of a generic scopolamine patch.

prioritization of our portfolio product candidates will be reviewed on an ongoing basis and will take into account technical progress,

market potential and commercial interest.

We cannot assure you that we will be able to develop and obtain FDA approval for any of these

potential products or that we can be successful in marketing any such products.

The FDA approval process can take many years to complete

successfully, and we will require substantial funding for each product that goes through the process.

We cannot assure you that we will

obtain FDA marketing approval for any of our products.

With the acquisition of 4P Therapeutics, we acquired a research pipeline

of other transdermal products, including peptides and proteins such as exenatide for type 2 diabetes and FSH for infertility.

are off patent but are currently only available as injections, and we are evaluating the possibility of developing a transdermal delivery

system for these drugs as an alternative to injection but with improved compliance and safety.

In addition, we may develop certain generic

transdermal products where we think we can make an improvement to existing patches and where we believe we can take significant market

share with good profit margins.

The prioritization of our portfolio product candidates will be reviewed on an ongoing basis and will take

into account technical progress, market potential and R&D funding available.

We cannot assure you that we will be able to develop

and obtain FDA approval for any of these potential products or that we can be successful in marketing any such products.

The FDA approval

process can take many years to complete successfully, and we will require substantial funding for each product that goes through the process.

We cannot assure you that we will obtain FDA marketing approval for any of our products.

In addition to performing research and development for its own products,

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Acquisition of Pocono Coated Products

On August 25, 2020, the Company formed Pocono

Pharmaceuticals Inc.(“Pocono”), a wholly owned subsidiary of the Company.

Effective August 31, 2020, the Company entered into

a Purchase Agreement (“Agreement”) with Pocono Coated Products (“PCP”), a manufacturer of Topical and transdermal

products, pursuant to which PCP agreed to sell the Company certain of the assets and liabilities associated with its Transdermal, Topical,

Cosmetic and Nutraceutical business (the “Business”), including all related equipment, intellectual property and trade secrets,

cash balances, receivables, bank accounts and inventory.

The net assets were contributed to Pocono.

Included in the transaction, the Company

acquired 100% of the membership interests of Active Intelligence LLC (“Active Intelligence”).

The purchase price for the assets

of the Business is (i) $6,000,000 paid in 608,519 shares of the Company’s common stock, based on the average price for the Company’s

common stock for the previous 90 days as of the date of Closing (the “Shares”);

(ii) a promissory note of the Company in the

principal amount of $1,500,000, which has been paid in full as of October 1, 2021.

On August 25, 2020, the Company formed Pocono Pharmaceuticals Inc.(“Pocono”),

a wholly owned subsidiary of the Company.

Effective August 31, 2020, the Company entered into a Purchase Agreement (“Agreement”)

with Pocono Coated Products (“PCP”), a manufacturer of Topical and transdermal products, pursuant to which PCP agreed to sell

the Company certain of the assets and liabilities associated with its Transdermal, Topical, Cosmetic and Nutraceutical business (the “Business”),

including all related equipment, intellectual property and trade secrets, cash balances, receivables, bank accounts and inventory.

net assets were contributed to Pocono.

Included in the transaction, the Company acquired 100% of the membership interests of Active Intelligence

LLC (“Active Intelligence”).

The purchase price for the assets of the Business is (i) $6,000,000 paid in 608,519 shares of

the Company’s common stock, based on the average price for the Company’s common stock for the previous 90 days as of the date

of Closing (the “Shares”);

(ii) a promissory note of the Company in the principal amount of $1,500,000, which has been paid

in full as of October 1, 2021.

Our Organization

We are a Nevada corporation, incorporated on January 4, 2016.

In January 2016, we acquired Nutriband Ltd, an Irish company which was formed by Gareth Sheridan, our chief executive officer,

in 2012, to enter the health and wellness market by marketing transdermal patches.

2016, we acquired Nutriband Ltd, an Irish company which was formed by Gareth Sheridan, our chief executive officer, in 2012, to enter

the health and wellness market by marketing transdermal patches.

Our corporate headquarters are located at 121 S.

Suite 1500, Orlando, Florida 32801, telephone (407) 377-6695.

Orlando, Florida 32801, telephone (407) 377-6695.

Our website is www.nutriband.com .

Information contained on or

available through our website or any other website does not constitute a portion of this annual report.

Implications of Being an Emerging Growth Company

As a company with less than $1.07 billion in revenue

during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups

Act of 2012, or the JOBS Act.

An emerging growth company may take advantage of reduced reporting requirements that are otherwise generally

applicable to public companies, although as a smaller reporting company we are taking advantage of reduced reporting requirements.

particular, as an emerging growth company, we:

may present only two years of audited financial statements and related disclosure under Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A;

are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives, which is commonly referred to as “compensation discussion and analysis”;

are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

are not required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on frequency” and “say-on-golden-parachute” votes);

are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and chief executive officer pay ratio disclosure;

are not required to conduct an evaluation of our internal control over financial reporting by our auditors.

We intend to take advantage of all of these reduced

reporting requirements and exemptions.

However, since we have already adopted certain new or revised accounting standards under §107

of the JOBS Act, we are not able to take advantage of the delayed phase in of the new or revised accounting standards.

Under the JOBS Act, we may take advantage of the

above-described reduced reporting requirements and exemptions for up to five years after our initial sale of common equity pursuant to

a registration statement declared effective under the Securities Act of 1933, as amended, or such earlier time that we no longer meet

the definition of an emerging growth company.

The JOBS Act provides that we would cease to be an “emerging growth company”

if we have more than $1.07 billion in annual revenues (as adjusted for inflation), have more than $700 million in market value of our

common stock held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.

Under current Securities and Exchange Commission, or SEC, rules however, we will continue to qualify as a “smaller reporting company”

for so long as we have either (i) a public float (i.e., the market value of common equity held by non-affiliates) of less than $250 million

as of the last business day of our most recently completed second fiscal quarter or (ii) annual revenues of less than $100 million and

a public float of less than $700 million.

Information contained on or available through

our website or any other website does not constitute a portion of this annual report.

Effects of the COVID-19 Pandemic

Our business may be affected by the COVID-19 pandemic

and the response to the pandemic.

Our business may be affected by the COVID-19 pandemic and the response

to the pandemic.

Factors which may affect our business include, but are not limited to, the following:

Our ability to raise financing for our operations and to enter into a joint venture agreement may be affected by both the willingness and ability of potential financing sources and potential joint venture partners to invest in an undercapitalized business, particularly at a time when the potential financing source or joint venture partner may need to devote its resources to existing portfolio companies or joint ventures which may be in need of financing decision by investors who would invest in early stage pharmaceutical companies to limit their financing efforts to companies that are dealing with products or services related to COVID-19 diagnosis or treatment.

The decision by investors who would invest in early-stage pharmaceutical companies to limit their financing efforts to companies that are dealing with products or services related to COVID-19 diagnosis or treatment.

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Pharmaceutical Products in Development

We have a pipeline of transdermal pharmaceutical

products that are primarily in the early stages of development.

Our current focus is on the development of AVERSA Fentanyl for which we

have signed a feasibility agreement with Kindeva Drug Delivery, a contract development and manufacturing organization.

We plan to follow

on from this with development of additional products utilizing the AVERSA abuse deterrent transdermal technology, AVERSA Buprenorphine

and AVERSA Methylphenidate.

Our lead product under development is our AVERSA

Fentanyl product which is an abuse deterrent fentanyl patch for the treatment of chronic pain.

As the United States faces an epidemic

of opioid abuse, fentanyl transdermal patches have become an attractive target for recreational drug abusers due to the high potency

of fentanyl and its ease of abuse by the oral route.

We are looking to utilize our proprietary approach to incorporate aversive agents

into the transdermal patch to deter the abuse of fentanyl patches by the oral, buccal and inhaled routes, which represent as much as

70% of all transdermal fentanyl abuse.

The technology is based on the incorporation of taste and sensory aversive agents into the patch

that have high potency, established safety, and the potential to prevent accidental misuse by children and pets.

The aversive agents

are coated onto the backing of the transdermal patch in a controlled release formulation that provides immediate and sustained release.

This provides several advantages including physical separation of the aversive agents from the drug matrix, availability of aversive

agents before and after use as well as making it difficult to separate the aversive agents from the drug by extraction.

agents are not contained in the drug matrix and are not delivered to the skin during patch wear.

In addition to the fentanyl patch, this

technology has broad applicability to any therapeutic patch where deterring abuse as well as accidental misuse by children and pets are

valuable attributes.

We believe that our abuse deterrent technology

can be broadly applied to various transdermal products and our strategy is to follow the development of our AVERSA Fentanyl with the development

of additional products for pharmaceuticals that have a risk or history of abuse.

For example, we believe that our technology can be utilized

in other transdermal products to deter the abuse of other drugs such as buprenorphine, an opioid used to treat acute pain and chronic

pain, and methylphenidate, a central nervous system stimulant.

Buprenorphine is an opioid used to treat opioid addiction, acute pain and

chronic pain.

We have a pipeline of transdermal pharmaceutical products that are

primarily in the early stages of development.

Our current focus is on the development of AVERSA Fentanyl for which we have a feasibility

agreement with Kindeva Drug Delivery, a contract development and manufacturing organization.

We plan to follow on from this with development

of additional products utilizing the AVERSA abuse deterrent transdermal technology, namely, AVERSA Buprenorphine and AVERSA Methylphenidate.

AVERSA Fentanyl is an abuse deterrent fentanyl patch for the treatment

of chronic pain.

As the United States faces an epidemic of opioid abuse, fentanyl transdermal patches have become an attractive target

for recreational drug abusers due to the high potency of fentanyl and its ease of abuse by the oral route.

We are looking to utilize our

proprietary approach to incorporate aversive agents into the transdermal patch to deter the abuse of fentanyl patches by the oral, buccal

and inhaled routes, which represent as much as 70% of all transdermal fentanyl abuse.

The technology is based on the incorporation of

taste and sensory aversive agents into the patch that are intended to make abuse a very unpleasant experience thereby deterring the recreational

abuse of fentanyl patches.

These aversive agents have high potency, established safety, and the potential to prevent accidental misuse

by children and pets.

The aversive agents are coated onto the backing of the transdermal patch in a controlled release formulation that

provides immediate and sustained release of aversive agents.

This provides several advantages including having a physical separation of

the aversive agents from the drug matrix, availability of aversive agents even after the patch is used and making it difficult to separate

the aversive agents from the drug by extraction.

The aversive agents are not contained in the drug matrix and are not delivered to the

skin during patch wear.

In addition to the fentanyl patch, this technology has broad applicability to any patch where deterring abuse

as well as accidental misuse by children and pets are valuable attributes.

We believe that our abuse deterrent technology can be broadly applied

to various transdermal products and our strategy is to follow the development of our AVERSA Fentanyl with the development of additional

products for pharmaceuticals that have a risk or history of abuse.

For example, we believe that our technology can be utilized in other

transdermal products to deter the abuse of other drugs such as buprenorphine, an opioid used to treat acute pain and chronic pain, and

methylphenidate, a central nervous system stimulant.

Buprenorphine is an opioid used to treat opioid addiction, acute pain and chronic

It can be used under the tongue, by injection, as a skin patch, or as an implant.

For opioid addiction, it is typically

only started when withdrawal symptoms have begun and for the first two days of treatment under direct observation of a health care provider.

For longer term treatment of addiction, a combination formulation of buprenorphine/naloxone is recommended to prevent misuse by injection.

Methylphenidate, sold under various trade names, such as Ritalin in oral form, and in transdermal patch form known as Daytrana, is a central

nervous system stimulant that is used in the treatment of attention deficit hyperactivity disorder and narcolepsy.

We plan to develop

transdermal delivery systems for buprenorphine and methylphenidate after we make significant progress on our abuse deterrent fentanyl

transdermal system.

For opioid addiction, it is typically only started

when withdrawal symptoms have begun and for the first two days of treatment under direct observation of a health care provider.

term treatment of addiction, a combination formulation of buprenorphine/naloxone is recommended to prevent misuse by injection.

Methylphenidate,

sold under various trade names, such as Ritalin in oral form, and in transdermal patch form known as Daytrana, is a central nervous system

stimulant that is used in the treatment of attention deficit hyperactivity disorder and narcolepsy.

We plan to develop transdermal delivery

systems for buprenorphine and methylphenidate after we make significant progress on our abuse deterrent fentanyl transdermal system.

Our research pipeline consists primarily of drug compounds which have

7 unchanged sentences

of products that we develop.

We are also exploring product applications for

our transdermal technology to deliver proteins and peptides such as exenatide for type 2 diabetes and follicle stimulating hormone (FSH)

for infertility.

Presently, these products are only available by injection or oral routes.

We believe that transdermal delivery has the

potential to improve compliance, which can lead to improved therapeutic outcomes associated with these treatments.

Exenatide (exendin-4) is a glucagon-like peptide-1

(GLP-1) receptor agonist which is approved to improve glycemic control in patients with type 2 diabetes mellitus.

Exenatide is currently

approved as a twice-daily subcutaneous injection or as a once-weekly injection.

However, many patients have a strong aversion to needles,

resist initiation of injections even when oral agents are failing to control their diabetes and struggle with compliance after starting

We have performed pre-clinical work on the development of a novel transdermal patch for administration of exenatide to match

the therapeutic plasma levels achieved by subcutaneous injections of exenatide.

However, we need substantial funds before we can continue

these efforts.

In addition to being needle-free, painless and easy-to-use, our proposed exenatide transdermal system is being designed

to incorporate compliance tracking to help providers improve patient outcomes.

We believe that the development of an exenatide patch matching

the profile of exenatide injections will follow the 505(b)(2) NDA regulatory pathway, thereby limiting the extent of safety and efficacy

trials required for FDA approval, although we cannot assure you that the FDA will agree.

Transdermal exenatide is currently in the preclinical

phase of development.

Follicle-stimulating hormone (FSH) is a gonadotropin,

a glycoprotein polypeptide hormone that is synthesized and secreted by the gonadotropic cells of the anterior pituitary gland.

stimulating hormone (FSH) is indicated for the treatment of infertility in women and is currently only approved and marketed as a subcutaneous

FSH is mainly used for ovarian hyperstimulation as part of an in vitro fertilization (IVF) regimen.

There are several purified

and recombinant FSH injections currently on the market.

We are developing a novel transdermal patch to match the pharmacokinetic profile

of FSH subcutaneous injection but without the need for painful injections.

Transdermal FSH is intended to offer a painless, easy to use

one-step application to improve patient compliance with FSH therapy.

Transdermal FSH will be offered at multiple strengths to match the

typical doses prescribed to treat infertility.

We plan to conduct a Phase 1 clinical trial to demonstrate that the transdermal patch can

match the pharmacokinetics of subcutaneous injection.

Then we plan to conduct an irritation and sensitization study to demonstrate the

skin safety of the product and a pivotal clinical efficacy trial to demonstrate that transdermal FSH is not inferior to subcutaneous injection.

We intend to seek to utilize the 505(b)(2) NDA regulatory pathway to register the product with the FDA which allows us to reference the

know safety of FSH on file at FDA for the reference listed drug and the safety information that has been published in the literature.

We have not yet communicated with the FDA on our proposed development plan or registration plan and we cannot assure you that the FDA

will agree to our use of the 505(b)(2) pathway.

Transdermal FSH is currently in the preclinical phase of development.

In addition, we may seek to develop certain generic

transdermal products where we think we can efficiently make an improvement to existing patches and potentially take significant market

share with good profit margins.

The prioritization of our portfolio of product

candidates will be reviewed on an ongoing basis and will take into account technical progress, market potential, available funding and

commercial interest.

Our ability to take any meaningful steps to the development of any of these products is determined by our ability

to provide sufficient funding for such activities.

As stated above, without additional financing or a joint venture agreement we will

not be able to take any steps to the development of any of these products.

We currently have no branded OTC or Consumer products

nor do we plan to launch any OTC or Consumer products in the near term as our focus is primarily on our pharmaceutical development pipeline

and continuing the contract services offered by both 4P Therapeutics and Pocono Pharma.

We are also exploring transdermal delivery of proteins and peptides

such as exenatide for type 2 diabetes and follicle stimulating hormone (FSH) for infertility.

Presently, these products are only available

by injection.

We believe that transdermal delivery has the potential to improve compliance, which can lead to improved therapeutic outcomes

associated with these treatments.

In addition, we may seek to develop certain generic transdermal products

where we think we can efficiently make an improvement to existing patches and potentially take significant market share with good profit

The prioritization of our portfolio of product candidates will be reviewed

on an ongoing basis and will take into account technical progress, market potential, available funding and commercial interest.

to take any meaningful steps to the development of any of these products is determined by our ability to provide sufficient funding for

such activities.

As stated above, without additional financing or a joint venture agreement we will not be able to take any steps to the

development of any of these products.

We currently have no branded OTC or consumer products nor do we plan

to launch any OTC or consumer products in the near term as our focus is primarily on our pharmaceutical development pipeline and continuing

the contract services offered by our subsidiaries.

Pharmaceutical Manufacturing and Supply

Manufacturing of our pharmaceutical transdermal

products in development will be performed in compliance with FDA current Good Manufacturing Practices (cGMP) and all applicable local

regulations by contract manufacturers.

All manufacturing processes and facilities will be subject to review by the FDA during development,

prior to approval and during subsequent routine FDA inspections.

We plan to continue to rely on contract manufacturers and, potentially,

collaboration partners to manufacture commercial quantities of our products, if and when approved for marketing by the FDA.

As of January 31, 2022, the Company has 13 full time employees, of

which five are officers of the Company.

None of our employees are represented by a labor union, and we consider our employee relations

Manufacturing of our pharmaceutical transdermal products in development

will be performed in compliance with FDA current Good Manufacturing Practices (cGMP) and all applicable local regulations by contract

manufacturers.

All manufacturing processes and facilities will be subject to review by the FDA during development, prior to approval and

during subsequent routine FDA inspections.

We plan to continue to rely on contract manufacturers and, potentially, collaboration partners

to manufacture commercial quantities of our products, if and when approved for marketing by the FDA.

Government Regulation

United States

The pharmaceutical business is subject to extensive

government regulation.

The pharmaceutical business is subject to extensive government regulation.

In the United States, we must comply with the rules and regulations of the FDA.

In other countries we must comply

with the laws and regulations of each country to legally market and sell our products.

Obtaining FDA approval does not mean that the product

will be approved in other countries.

In other countries, we must comply with the laws and regulations

of each country to legally market and sell our products.

Obtaining FDA approval does not mean that the product will be approved in other

Each country may require that additional clinical and nonclinical studies be conducted prior to approval.

The process required by the FDA to receive approval

prior to marketing and distributing a drug in the United States generally involves a preclinical phase followed by three phases of clinical

The definition of drug is broadly defined and includes the pharmaceutical products we have in development.

Even though the drug

used in each of our proposed products is currently approved by the FDA in other dosage forms, we will still need to conduct a development

program that will include preclinical and clinical trials before we receive FDA marketing approval.

The FDA also has a number of abbreviated

approval pathways which, if we are eligible, could shorten the time for approval.

For example, the regulatory path for the AVERSA products

in development is intended follow a 505(b)(2) NDA regulatory pathway which reduce the amount of clinical work that needs to be performed

to a single trial to evaluate the abuse potential of the product as the safety and efficacy of the drug has already been established.

However, we cannot be certain that we will be able to use any abbreviated approval pathway, in which event we will need to comply with

the full regulatory pathway as described below.

The full (although not typical for the AVERSA

related products) FDA regulatory pathway consists of the following phases of development.

The process required by the FDA to receive approval prior to marketing

and distributing a drug in the United States generally involves a preclinical phase followed by three phases of clinical trials.

The definition

of drug is broadly defined and includes the pharmaceutical products we have in development.

Even though the drug used in each of our proposed

products is currently approved by the FDA in other dosage forms, we will still need to conduct a development program that will include

preclinical and clinical trials before we receive FDA marketing approval.

The FDA also has a number of abbreviated approval pathways which,

if we are eligible, could shorten the time for approval.

For example, the regulatory path for the AVERSA products in development is intended

to follow a 505(b)(2) NDA regulatory pathway which reduces the amount of clinical work that needs to be performed to a single trial to

evaluate the abuse potential of the product as the safety and efficacy of the drug has already been established.

However, we cannot be

certain that we will be able to use any abbreviated approval pathway, in which event we will need to comply with the full regulatory pathway

as described below.

The full (although not typical for the AVERSA related products) FDA

regulatory pathway consists of the following phases of development.

Preclinical phase .

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For example, a transdermal patch may be compared to an injection.

New drug application .

New drug application (NDA) .

Once a drug company collects and analyzes all data from the clinical trials, it submits a new drug application to the FDA.

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From there, the FDA will either approve the drug or give the applicant a complete response letter, which explains why the drug did not get approved and what steps the applicant must take before resubmitting the application for approval.

Before approving an NDA, the FDA may inspect the

facilities where the product is being manufactured or facilities that are significantly involved in the product development and distribution

process and will not approve the product unless compliance with current good manufacturing practices is satisfactory.

Before approving an NDA, the FDA may inspect the facilities where the

product is being manufactured or facilities that are significantly involved in the product development and distribution process and will

not approve the product unless they determine that compliance with current good manufacturing practices is satisfactory.

The FDA may deny

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candidates under development.

If a product is approved, the FDA may impose limitations

on the indications for use for which the product may be marketed, may require that warning statements be included in the product labeling,

may require that additional studies or trials be conducted following approval as a condition of the approval, may impose restrictions

and conditions on product distribution, prescribing or dispensing in the form of a risk management plan, or impose other limitations.

Once a product receives FDA approval, marketing

the product for other indicated uses or making certain manufacturing or other changes related to the product will require FDA review and

approval of a supplemental NDA or a new NDA, which may require additional clinical safety and efficacy data and may require additional

In addition, further post-marketing testing and surveillance to monitor the safety or efficacy of a product may be required.

Also, product approvals may be withdrawn if compliance with regulatory standards is not maintained or if safety or manufacturing problems

occur following initial marketing.

With respect to the labeling for our abuse deterrent

transdermal fentanyl system or any other opioid transdermal patch we develop, it is likely that we will need to disclose the risks of

improper use or abuse using language required by the FDA.

If a product is approved, the FDA may impose limitations on the indications

for use for which the product may be marketed, may require that warning statements be included in the product labeling, may require that

additional studies or trials be conducted following approval as a condition of the approval, may impose restrictions and conditions on

product distribution, prescribing or dispensing in the form of a risk management plan, or impose other limitations.

Once a product receives FDA approval, marketing the product for other

indicated uses or making certain manufacturing or other changes related to the product will require FDA review and approval of a supplemental

NDA or a new NDA, which may require additional clinical safety and efficacy data and may require additional review fees.

further post-marketing testing and surveillance to monitor the safety or efficacy of a product may be required.

Also, product approvals

may be withdrawn if compliance with regulatory standards is not maintained or if safety or manufacturing problems occur following initial

With respect to the labeling for our abuse deterrent transdermal fentanyl

system or any other opioid transdermal patch we develop, it is likely that we will need to disclose the risks of improper use or abuse

using language required by the FDA.

FDA Approval Pathways

The FDA has several pathways that can be followed

to obtain FDA approval.

The FDA has several pathways that can be followed to obtain FDA approval.

A stand-alone NDA is an application submitted under Section 505(b)(1) of the Food, Drug and Cosmetic Act (“FD&C Act”) and approved under Section 505(c) of the FD&C Act that contains full reports of investigations of safety and effectiveness that were conducted by or for the applicant or for which the applicant has a right of reference or use.

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This is the pathway taken for generic drugs.

We cannot assure you that we will be able to take

advantage of any of the available abbreviated approval pathways for any of our proposed products.

We cannot assure you that we will be able to take advantage of any

of the available abbreviated approval pathways for any of our proposed products.

Post-approval requirements

Any drug products for which we receive FDA approval

will be subject to continuing regulation by the FDA.

Certain requirements include, among other things, record-keeping requirements, reporting

of adverse events with the product, providing the FDA with updated safety and efficacy information on an annual basis or more frequently

for specific events, product sampling and distribution requirements, complying with certain electronic records and signature requirements

and complying with FDA promotion and advertising requirements.

These promotion and advertising requirements include, among others, standards

for direct-to-consumer advertising, prohibitions against promoting drugs for uses or patient populations that are not described in the

drug’s approved labeling, known as “off-label use,” and other promotional activities, such as those considered to be

false or misleading.

Failure to comply with FDA regulations can have negative consequences, including the immediate discontinuation of

noncomplying materials, adverse publicity, enforcement letters from the FDA, mandated corrective advertising or communications with doctors,

and civil or criminal penalties.

Any drug products for which we receive FDA approval will be subject

to continuing regulation by the FDA.

Certain requirements include, among other things, record-keeping requirements, reporting of adverse

events with the product, providing the FDA with updated safety and efficacy information on an annual basis or more frequently for specific

events, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying

with FDA promotion and advertising requirements.

These promotion and advertising requirements include, among others, standards for direct-to-consumer

advertising, prohibitions against promoting drugs for uses or patient populations that are not described in the drug’s approved

labeling, known as “off-label use,” and other promotional activities, such as those considered to be false or misleading.

Failure to comply with FDA regulations can have negative consequences, including the immediate discontinuation of noncomplying materials,

adverse publicity, enforcement letters from the FDA, mandated corrective advertising or communications with doctors, and civil or criminal

Such enforcement may also lead to scrutiny and enforcement by other government and regulatory bodies.

Although physicians may prescribe legally available

drugs for off-label uses, manufacturers may not encourage, market or promote such off-label uses.

As a result, “off-label promotion”

has formed the basis for litigation under the Federal False Claims Act, violations of which are subject to significant civil fines and

In addition, manufacturers of prescription products are required to disclose annually to the Center for Medicaid and Medicare

any payments made to physicians and teaching hospitals in the U.S.

Although physicians may prescribe legally available drugs for off-label

uses, manufacturers may not encourage, market or promote such off-label uses.

As a result, “off-label promotion” has formed

the basis for litigation under the Federal False Claims Act, violations of which are subject to significant civil fines and penalties.

In addition, manufacturers of prescription products are required to disclose annually to the Center for Medicaid and Medicare any payments

made to physicians and teaching hospitals in the U.S.

under the federal Physician Payment Sunshine Act.

Reportable payments

may be direct or indirect, in cash or kind, for any reason, and are required to be disclosed even if the payments are not related to the

approved product.

Reportable payments may be direct

or indirect, in cash or kind, for any reason, and are required to be disclosed even if the payments are not related to the approved product.

Failure to fully disclose or not in time reporting could lead to penalties up to $1.15 million per year.

The manufacturing of any of our products will

be required to comply with the FDA’s current Good Manufacturing Practices (cGMP) regulations.

These regulations require, among other

things, quality control and quality assurance, as well as the corresponding maintenance of comprehensive records and documentation.

manufacturers and other entities involved in the manufacture and distribution of approved drugs are also required to register with the

FDA their establishments and list any products they make and to comply with related requirements in certain states.

These entities are

further subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with current good manufacturing

practices and other laws.

Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality

control to maintain cGMP compliance.

Discovery of problems with a product after approval

may result in serious and extensive restrictions on a product, manufacturer or holder of an approved NDA, as well as lead to potential

market disruptions.

These restrictions may include recalls, suspension of a product until the FDA is assured that quality standards can

be met, and continuing oversight of manufacturing by the FDA under a “consent decree,” which frequently includes the imposition

of costs and continuing inspections over a period of many years, as well as possible withdrawal of the product from the market.

changes to the manufacturing process generally require prior FDA approval before being implemented.

Other types of changes to the approved

product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval.

The FDA also may require post-marketing testing,

or Phase IV testing, as well as risk minimization action plans and surveillance to monitor the effects of an approved product or place

conditions on an approval that could otherwise restrict the distribution or use of our products.

The manufacturing of any of our products will be required to comply

with the FDA’s current Good Manufacturing Practices (cGMP) regulations.

These regulations require, among other things, quality control

and quality assurance, as well as the corresponding maintenance of comprehensive records and documentation.

Drug manufacturers and other

entities involved in the manufacture and distribution of approved drugs are also required to register with the FDA their establishments

and list any products they make and to comply with related requirements in certain states.

These entities are further subject to periodic

unannounced inspections by the FDA and certain state agencies for compliance with current good manufacturing practices and other laws.

Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP

Discovery of problems with a product after approval may result in serious

and extensive restrictions on a product, manufacturer or holder of an approved NDA, as well as lead to potential market disruptions.

restrictions may include recalls, suspension of a product until the FDA is assured that quality standards can be met, and continuing oversight

of manufacturing by the FDA under a “consent decree,” which frequently includes the imposition of costs and continuing inspections

over a period of many years, as well as possible withdrawal of the product from the market.

In addition, changes to the manufacturing

process generally require prior FDA approval before being implemented.

Other types of changes to the approved product, such as adding

new indications and additional labeling claims, are also subject to further FDA review and approval.

The FDA also may require post-marketing testing, or Phase IV testing,

as well as risk minimization action plans and surveillance to monitor the effects of an approved product or place conditions on an approval

that could otherwise restrict the distribution or use of our products.

Other Government Regulations

We may be subject to government regulations that

are applicable to businesses generally, including those relating to workers’ health and safety, environmental and waste disposal,

wage and hour and labor practices, including sexual harassment laws and regulations, and anti-discrimination laws and regulations.

In addition, we must comply with the laws and

regulations governing the research and manufacture of products containing controlled substances such as fentanyl and other opioids.

or our contract manufacturer must be licensed by the Drug Enforcement Agency (DEA) and the state(s) in which we conduct research and development

We may be subject to government regulations that are applicable to

businesses generally, including those relating to workers’ health and safety, environmental and waste disposal, wage and hour and

labor practices, including sexual harassment laws and regulations, and anti-discrimination laws and regulations.

In addition, we must comply with the laws and regulations governing

the research and manufacture of products containing controlled substances such as fentanyl and other opioids.

We or our contract manufacturer

must be licensed by the Drug Enforcement Agency (DEA) and the state(s) in which we conduct research and development activities.

Europe and Other Countries

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and commercial sales, pricing and distribution of our products.

The European medicines regulatory system is based

on a network of around 50 regulatory authorities from the 31 countries in the European Economic Area, the European Commission and

the European Medicines Agency.

The European medicines regulatory system is based on a network of around

50 regulatory authorities from the 31 countries in the European Economic Area, the European Commission and the European Medicines

All medicines must be authorized before they can be placed on the market in the European Union.

system offers different routes for authorization.

A centralized procedure allows the marketing of a medicine on the basis of a single

European Union assessment and marketing authorization which is valid throughout the European Union.

However, a majority of medicines authorized

in the European Union do not fall within the scope of the centralized procedure, and we do not know whether our proposed products will

fall within the centralized authorization.

We also do not know how the withdrawal of Great Britain from the European Union will affect

the procedure for approval of medicines in the United Kingdom.

If we are not able to use the centralized procedure, we would need to use

one of the following procedures.

One method is the decentralized procedure where we would apply for the simultaneous authorization in

more than one European Union member.

The second method is the mutual-recognition procedure where we would have a medicine authorized in

one European Union country apply for authorization to be recognized in other European Union countries.

In either case, we would be required

to complete clinical trials to demonstrate the safety and efficacy of the medicine and show and that the medicine is manufactured in accordance

with good manufacturing practices based upon European Union standards.

In countries other than the United States and

the European Union, we would be required to comply with the applicable laws of those countries, which may require us to perform additional

clinical testing.

Failure to obtain regulatory approval in any country

would prevent our product candidates from being marketed in those countries.

In order to market and sell our products in jurisdictions

other than the United States and the European Union, we must obtain separate marketing approvals and comply with numerous and varying

regulatory requirements.

The regulatory approval process outside the United States and the European Union generally includes all of the

risks associated with obtaining FDA and European Union approval but can involve additional testing.

In addition, in many countries worldwide, it is

required that the product be approved for reimbursement before the product can be approved for sale in that country.

We may not obtain

approvals from regulatory authorities outside the United States on a timely basis, if at all.

Even if we were to receive approval in the

United States or the European Union, approval by the FDA or the European Medicines Agency does not ensure approval by regulatory authorities

in other countries or jurisdictions.

Similarly, approval by one regulatory authority outside the United States would not ensure approval

by regulatory authorities in other countries or jurisdictions.

We may not be able to file for marketing approvals and may not receive

necessary approvals to commercialize our products in any market.

If we are unable to obtain approval of our product candidates by regulatory

authorities in other foreign jurisdictions, the commercial prospects of those product candidates may be significantly diminished and our

business prospects could decline.

Outside the United States, particularly in member

states of the European Union, the pricing of prescription drugs is subject to governmental control.

In these countries, pricing negotiations

or the successful completion of health technology assessment procedures with governmental authorities can take considerable time after

receipt of marketing approval for a product.

In addition, there can be considerable pressure by governments and other stakeholders on

prices and reimbursement levels, including as part of cost containment measures.

In addition to regulations in the United States,

if we market outside of the United States, we will be subject to a variety of regulations governing, among other things, clinical trials

and any commercial sales and distribution of our products.

Whether or not we obtain FDA approval for a product, we must obtain the requisite

approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in

those countries.

The European system offers different

routes for authorization.

A centralized procedure allows the marketing of a medicine on the basis of a single European Union assessment

and marketing authorization which is valid throughout the European Union.

However, a majority of medicines authorized in the European

Union do not fall within the scope of the centralized procedure, and we do not know whether our proposed products will fall within the

centralized authorization.

We also do not know how the withdrawal of Great Britain from the European Union will affect the procedure for

approval of medicines in the United Kingdom.

If we are not able to use the centralized procedure, we would need to use one of the following

One method is the decentralized procedure where we would apply for simultaneous authorization in more than one European Union

The second method is the mutual-recognition procedure where we would have a medicine authorized in one European Union country

apply for authorization to be recognized in other European Union countries.

In either case, we would be required to complete clinical

trials to demonstrate the safety and efficacy of the medicine and show that the medicine is manufactured in accordance with good manufacturing

practices based upon European Union standards.

In countries other than the United States and the European Union, we

would be required to comply with the applicable laws of those countries, which may require us to perform additional clinical testing.

Failure to obtain regulatory approval in any country would prevent

our product candidates from being marketed in those countries.

In order to market and sell our products in jurisdictions other than the

United States and the European Union, we must obtain separate marketing approvals and comply with numerous and varying regulatory requirements.

The regulatory approval process outside the United States and the European Union generally includes all of the risks associated with obtaining

FDA and European Union approval but can involve additional testing.

In addition, in many countries worldwide, it is required that the product

be approved for reimbursement before the product can be approved for sale in that country.

We may not obtain approvals from regulatory

authorities outside the United States on a timely basis, if at all.

Even if we were to receive approval in the United States or the European

Union, approval by the FDA or the European Medicines Agency does not ensure approval by regulatory authorities in other countries or jurisdictions.

Similarly, approval by one regulatory authority outside the United States would not ensure approval by regulatory authorities in other

countries or jurisdictions.

We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize

our products in any market.

If we are unable to obtain approval of our product candidates by regulatory authorities in other foreign jurisdictions,

the commercial prospects of those product candidates may be significantly diminished and our business prospects could decline.

Outside the United States, particularly in member states of the European

Union, the pricing of prescription drugs is subject to governmental control.

In these countries, pricing negotiations or the successful

completion of health technology assessment procedures with governmental authorities can take considerable time after receipt of marketing

approval for a product.

In addition, there can be considerable pressure by governments and other stakeholders on prices and reimbursement

levels, including as part of cost containment measures.

In addition to regulations in the United States, if we market outside

of the United States, we will be subject to a variety of regulations governing, among other things, clinical trials and any commercial

sales and distribution of our products.

Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from

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

Intellectual Property

The AVERSA abuse deterrent technology utilized

in our AVERSA product pipeline is covered by an international intellectual property portfolio with patents issued in 44 countries including

the United States, Europe, Japan, Korea, Russia, Mexico, and Australia and with patents pending in Canada and China.

These patents provide

patent coverage to 2035.

We continue to build on our proprietary positions in the United States and internationally for our product candidates

AVERSA Fentanyl, AVERSA buprenorphine and AVERSA methylphenidate as well as other products and technology that we may have in development.

Our policy is to pursue, maintain and defend patent rights developed internally or acquired externally and to protect the technology,

inventions and improvements that are commercially important to the development of our business.

We cannot be sure that patents will be

granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor

can we be sure that any of our existing patents or any patents granted to us in the future will be commercially useful in protecting our

We also rely on trade secrets to protect our commercial products and product candidates.

Our commercial success also depends

in part on our non-infringement of the patents or proprietary rights of third parties.

For a more comprehensive discussion of the risks

related to our intellectual property, please see “Risk Factors—Risks Related to Our Intellectual Property” appearing

elsewhere in this Form 10-K.

The AVERSA abuse deterrent technology utilized in our AVERSA product

pipeline is covered by an international intellectual property portfolio with patents issued in 45 countries including the United States,

Europe, Japan, Korea, Russia, Mexico, Canada, and Australia and pending in China.

These patents provide patent coverage to 2035.

to build on our proprietary positions in the United States and internationally for our product candidates AVERSA Fentanyl, AVERSA buprenorphine

and AVERSA methylphenidate as well as other products and technology that we may have in development.

Our policy is to pursue, maintain

and defend patent rights developed internally or acquired externally and to protect the technology, inventions and improvements that are

commercially important to the development of our business.

We cannot be sure that patents will be granted with respect to any of our pending

patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing

patents or any patents granted to us in the future will be commercially useful in protecting our technology.

We also may rely on trade

secrets to protect our commercial products and product candidates.

Our commercial success also depends in part on our non-infringement

of the patents or proprietary rights of third parties.

Further, we plan to seek trademark protection in the United States

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a notice of allowance for the AVERSA trademark for our abuse deterrent technology in the United States.

The pharmaceutical industry is highly competitive

and subject to rapid change as new products are developed and marketed.

Potential competitors include large pharmaceutical and biotechnology

companies, specialty pharmaceutical and generic drug companies, and medical technology companies.

We believe the key competitive factors

that will affect the development and commercial success of our products are product performance including safety and efficacy, level of

patient compliance, healthcare professional acceptance, and the extent of insurance reimbursement of our products.

As our development pipeline includes products

that contain opioids (AVERSA Fentanyl and AVERSA Buprenorphine), we continually monitor the market for opioid products, particularly in

the United States.

Pharmaceutical companies engaged in the distribution and sale of opioids, in particular for the treatment of chronic

pain, are promoting responsible opioid use.

Our opioid products potentially offer a unique proposition to meet the unmet needs of patients

by deterring the abuse and misuse of opioids while making opioids accessible to those patients who need them.

If approved, our AVERSA

pipeline products will compete with the currently marketed products that do not contain abuse deterrent features as well as other products

that may employ different abuse deterrent technology.

We may also have to compete with products that do not contain opioids or other drugs

that are susceptible to abuse.

We are not aware of any abuse deterrent transdermal products that are in development or being marketed

at this time.

If we obtain regulatory approval to market our products, we cannot assure you that we will be successful in the marketplace.

The pharmaceutical industry is highly competitive and subject to rapid

change as new products are developed and marketed.

Potential competitors include large pharmaceutical and biotechnology companies, specialty

pharmaceutical and generic drug companies, and medical technology companies.

We believe the key competitive factors that will affect the

development and commercial success of our products are product performance including safety and efficacy, level of patient compliance,

healthcare professional acceptance, and the extent of insurance reimbursement of our products.

As our development pipeline includes products that contain opioids

(AVERSA Fentanyl and AVERSA Buprenorphine), we continually monitor the market for opioid products, particularly in the United States.

Pharmaceutical companies engaged in the distribution and sale of opioids, in particular for the treatment of chronic pain, are promoting

responsible opioid use.

In 2022, the CDC revised its clinical practice guideline for prescribing opioids to ease the restrictions on prescribers

and encourage responsible opioid use particularly for patients with moderate to severe pain.

Our opioid products potentially offer a unique

proposition to meet the unmet needs of patients by deterring the abuse and misuse of opioids while making opioids accessible to those

patients who need them.

If approved, our AVERSA pipeline products will compete with the currently marketed products that do not contain

abuse deterrent features as well as other products that may employ different abuse deterrent technology.

We may also have to compete with

products that do not contain opioids or other drugs that are susceptible to abuse.

We are not aware of any abuse deterrent transdermal

products that are in development or being marketed at this time.

If we obtain regulatory approval to market our products, we cannot assure

you that we will be successful in the marketplace.

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

What changed 10-K

Item 1. Business