What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-03-02 compared with 2020-03-23 · 121 added, 203 removed, 300 unchanged (52% of the section changed)

We were incorporated in the State of Nevada on March 16, 2011 as Load Guard Transportation, Inc., and subsequently changed our name to Load Guard Logistics, Inc.

On October 31, 2014, Load Guard Logistics, Inc.

(“LGL”) closed an Agreement and Plan of Merger, dated October 17, 2014 (the “Merger Agreement”), with Nemus Acquisition Corp.

(“Acquisition Sub”), Nemus Bioscience, Inc.

(“Name Change Merger Sub”), and Nemus (“Nemus”), pursuant to which Acquisition Sub merged with and into Nemus and Nemus survived as a wholly-owned subsidiary of LGL (the “Merger”).

On November 3, 2014, LGL changed its name to “Nemus Bioscience, Inc.” by merging with Name Change Merger Sub.

On October 31, 2014, immediately prior to the consummation of the Merger, we entered into an Assignment and Assumption Agreement with LGT, Inc., a wholly owned subsidiary, pursuant to which we transferred all of its assets and liabilities to LGT.

On October 31, 2014, we entered into a Share Repurchase and Cancellation Agreement with LGT, Yosbani Mendez and Francisco Mendez, pursuant to which we repurchased 5,431,460 shares of our common stock from Yosbani Mendez and Francisco Mendez for a repurchase price of all of the issued and outstanding shares of LGT.

Upon the repurchase, we cancelled all of such repurchased shares.

Prior to the Merger, we were a transportation and logistics company engaged primarily in hauling truckload shipments of general commodities in both interstate and intrastate commerce.

Following the Merger, we became a biopharmaceutical company focused on the discovery, development and commercialization of cannabinoid-based therapeutics.

In January 2018, we entered into a securities purchase agreement with Emerald Health Sciences, Inc.

(“Emerald Health Sciences”), pursuant to which Emerald Health Sciences purchased a majority of the outstanding equity in us, resulting in a change in control of the Company.

As part of the transaction, the members of Board of Directors of the Company (the “Board”), with the exception of Dr.

Brian Murphy, our CEO, tendered their resignation, and Emerald Health Sciences appointed two nominees to the Board.

In October 2018, the Board appointed Dr.

Avtar Dhillon, the Chairman, CEO and President of Emerald Health Sciences, as the Executive Chairman of the Board.

On December 17, 2019, the Board accepted the resignation of Dr.

Avtar Dhillon, who offered his resignation as the Executive Chairman of the Board and the position of Chairman of the Finance and Business Development Committee of the Board.

The Board also appointed Punit Dhillon, an existing member of the Board, as Chairman of the Board and as Chairman of the Finance and Business Development Committee of the Board, to fill the vacancies in such offices created by the resignation of Dr.

Effective March 25, 2019, we changed our name to Emerald Bioscience, Inc.

We were incorporated in the State of Nevada on March 16, 2011 in the transportation and logistics business.

We are presently a biopharmaceutical company focused on the discovery, development and commercialization of cannabinoid-based therapeutics.

Effective March 25, 2019, we changed our name from Nemus Bioscience, Inc.

to Emerald Bioscience, Inc.

and effective January 19, 2021, we changed our name to Skye Bioscience, Inc.

In August 2019, we formed a new subsidiary in Australia, EMBI Australia Pty Ltd.

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is to conduct clinical trials for our product candidates.

As of December 31, 2019, we have devoted substantially all of our efforts to securing product licenses, carrying out research and development activities, building infrastructure and raising capital.

We have not yet realized revenue from our planned principal operations.

As of December 31, 2020, we have devoted substantially all of our efforts to securing product licenses, carrying out research and development activities, planning clinical development, building infrastructure and raising capital.

We have not yet realized revenue from our planned principal operations and is a number of years away from potentially being able to do so.

Business Overview

We are a biopharmaceutical company targeting the discovery, development and commercialization of cannabinoid-based therapeutics through a number of license agreements with the University of Mississippi (“UM”).

UM holds the only contract to cultivate cannabis for research purposes on behalf of the Federal Government of the United States and has held that federal license since 1968, and it has significant expertise in cannabis cultivation and the extraction, separation, processing and manufacture of cannabis extracts as well as the chemistry and physiology of cannabinoid molecules.

We were established as, and continue to be, a development and commercialization partner of UM, working to bring the University’s proprietary cannabinoid molecules through the development process.

Our Strategic Partnership

In July 2013, we entered into a Memorandum of Understanding (the “MOU”), with UM to engage in joint research of extracting, manipulating, and studying cannabinoids in certain forms to develop intellectual property with the intention of creating and commercializing therapeutic medicines.

The MOU provided that we own all intellectual property developed solely by our employees and will jointly own all intellectual property developed jointly between Emerald Bioscience and UM employees.

The term of the MOU was five years and the parties agreed to enter into separate research agreements upon the identification of patentable technologies.

This MOU resulted in us entering into several licenses and research agreements with UM related to a prodrug of tetrahydrocannabinol (“THC”) and an analog of cannabidiol (“CBD”).

The term of the MOU expired in 2018 and was not renewed because we and UM had entered into a number of licenses for the aforementioned compounds.

UM 5050 Pro-Drug Agreements and UM 8930 Analog Agreements

In July 2018, we renewed the ocular licenses for UM 5050, related to the proprietary pro-drug formulation of tetrahydrocannabinol (“THC”), and UM 8930, related to an analog formulation of cannabidiol (“CBD”).

On May 24, 2019, the ocular delivery licenses were replaced by “all fields of use” licenses for both UM 5050 and UM 8930 (the “License Agreements”).

Pursuant to these license agreements, UM granted us an exclusive, perpetual license, including, with the prior written consent of UM, the right to sublicense, the intellectual property related to UM 5050 for tetrahydrocannabinol-valine-hemisuccinate (“THCVHS”) and UM 8930 for cannabidiol-valine-hemisuccinate (“CBDVHS”) for all fields of use.

The all fields of use licenses contain certain milestone payments, royalty and sublicensing fees payable by us, as defined therein.

Each License Agreement provides for an annual maintenance fee of $75,000 payable on the anniversary of the effective date.

The upfront payment for UM 5050 is $100,000 and the upfront payment for UM 8930 is $200,000.

Additionally, there is also a $200,000 fee due within 30 days upon receipt of the first United States Patent and Trademark Office Notice of Allowance for UM 8930.

The milestone payments payable for each license are as follows:

$100,000 paid within 30 days following the submission of the first Investigational New Drug Application to the Food and Drug Administration or an equivalent application to a regulatory agency anywhere in the world, for a product;

$200,000 paid within 30 days following the first submission of a NDA, or an equivalent application to a regulatory agency anywhere in the world, for each product that is administered in a different route of administration from that of the early submitted product(s); and

$400,000 paid within 30 days following the approval of a NDA, or an equivalent application to a regulatory agency anywhere in the world, for each product that is administered in a different route of administration from that of the early approved product(s).

The royalty percentage due on net sales under each License Agreement is in the mid-single digits.

We must also pay to UM a portion of all licensing fees received from any sublicensees, subject to a minimum royalty on net sales, and we are required to reimburse patent costs incurred by UM related to the licensed products.

We continue to be a development and commercialization partner of UM working to bring UM’s proprietary cannabinoid molecules through the development process.

UM 5050 Prodrug Agreements and UM 8930 Analog Agreements

In July 2018, we renewed our ocular licenses for UM 5050, related to the prodrug formulation of tetrahydrocannabinol (“THC”), and UM 8930, related to an analog formulation of cannabidiol (“CBD”).

On May 24, 2019, the ocular delivery licenses were replaced by “all fields of use” licenses for both UM 5050 and UM 8930 (collectively, the “License Agreements”).

Pursuant to the License Agreements, UM granted us an exclusive, perpetual license, including, with the prior written consent of UM, the right to sublicense, the intellectual property related to UM 5050 and UM 8930 for all fields of use.

The License Agreements contain certain milestone payments, annual maintenance, royalty and sublicensing fees payable by us, as defined therein.

The royalty obligations apply by country and by licensed product, and end upon the later of the date that no valid claim of a licensed patent covers a licensed product in a given country, or ten years after the first commercial sale of such licensed product in such country.

Each License Agreement continues, unless terminated, until the later of the expiration of the last to expire of the patents or patent applications within the licensed technology or the expiration of our payment obligations under the License Agreement.

UM may terminate each License Agreement, by giving written notice of termination, upon our material breach and of the License Agreements, including failure to make payments or satisfy covenants, representations or warranties without cure, noncompliance, a bankruptcy event, our dissolution or cessation of operations, our failure to make reasonable efforts to commercialize at least one product or failure to keep at least one product on the market after the first commercial sale for a continuous period of one year, other than for reasons outside our control, or our failure to meet certain pre-established development milestones.

Each License Agreement continues, unless earlier terminated, until the later of the expiration of the last to expire of the patents or patent applications within the licensed technology or the expiration of our payment obligations under the License Agreements.

UM may early terminate each License Agreement, by giving written notice of termination, upon our material breach of the License Agreements, including failure to make material payments without cure, material breach of covenants, representations or warranties without cure, material noncompliance of the license grant, a bankruptcy event, our dissolution or cessation of operations, our failure to make reasonable efforts to commercialize at least one product or failure to keep at least one product on the market after the first commercial sale for a continuous period of one year, other than for reasons outside our control, or our failure to meet certain pre-established development milestones.

We may terminate each License Agreement upon 60 days’ written notice to UM.

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In January 2017, we entered into a license agreement with UM pursuant to which UM granted us an exclusive, perpetual license, including the right to sublicense, the intellectual property related to a platform of cannabinoid-based molecules (“UM 5070”), to research, develop and commercialize products for the treatment of infectious diseases.

The license agreement culminates roughly one year of screening and target molecule identification studies especially focused on therapy-resistant infectious organisms like Methicillin-resistant Staphylococcus aureus (“MRSA”).

We paid UM an upfront license fee under the license agreement.

Under the license agreement, we are also responsible for annual maintenance fees that will be credited against royalties in the current fiscal year, contingent milestone payments upon achievement of development and regulatory milestones, and royalties on net sales of licensed products sold for commercial use.

The aggregate milestone payments due under the license agreement if all of the milestones are achieved is $700,000 and the royalty percentage due on net sales is in the mid-single digits.

We must also pay to UM a percentage of all licensing fees we receive from any sublicensees, subject to a minimum royalty on net sales by such sublicensees.

Our royalty obligations apply on a country by country and licensed product by licensed product basis, and end upon the later of the date that no valid claim of a licensed patent covers a licensed product in a given country, or ten years after first commercial sale of such licensed product in such country.

The license agreement continues, unless terminated, until the later of the expiration of the last to expire of the patents or patent applications within the licensed technology or expiration of our payment obligations under the license.

UM may terminate the license agreement, effective with the giving of notice, if:

(a) we fail to pay any material amount payable to UM under the license agreement and do not cure such failure within 60 days after UM notifies us of such failure, (b) we materially breach any covenant, representation or warranty in the license agreement and do not cure such breach within 60 days after UM notifies us of such breach, (c) we fail to comply in any material respect with the terms of the license and do not cure such noncompliance within 60 days after UM notifies us of such failure, (d) we are subject to a bankruptcy event, (e) we dissolve or cease operations or (f) if after the first commercial sale of a product during the term of the license agreement, we materially fail to make reasonable efforts to commercialize at least one product or fail to keep at least one product on the market after the first commercial sale for a continuous period of 1 year, other than for reasons outside our control.

The License Agreement contains certain milestone payments, annual maintenance, royalty and sublicensing fees payable by us, as defined therein.

The License Agreement continues, unless earlier terminated, until the later of the expiration of the last to expire of the patents or patent applications within the licensed technology or the expiration of our payment obligations under the License Agreement.

UM may early terminate each License Agreement, by giving written notice of termination, upon our material breach of the License Agreement, including failure to make material payments without cure, material breach of covenants, representations or warranties without cure, material noncompliance of the license grant, a bankruptcy event, our dissolution or cessation of operations, our failure to make reasonable efforts to commercialize at least one product or failure to keep at least one product on the market after the first commercial sale for a continuous period of one year, other than for reasons outside our control, or our failure to meet certain pre-established development milestones.

We may terminate the License Agreement upon 60 days’ written notice to UM.

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Cannabinoids are a class of chemically diverse compounds that are mainly found in extracts from the cannabis plant.

These compounds express their physiological response by binding to specific cannabinoid receptors (CB1 and CB2), which are found throughout the body.

Some cannabinoids have been observed to exert multiple effects on the human body, including, but not limited to:

impacting the immune response, nervous system function and repair, gastrointestinal maintenance and motility, motor function in muscles, pancreatic functionality, modulating inflammation and tissue repair, blood sugar regulation, and integrity of function in the eye (including the optic nerve).

Cannabis and specific cannabinoids have been studied widely, with limited published data suggesting the potential for these compounds to be used in treating many disorders or alleviating disease-associated symptoms.

We are focused on the development of early stage cannabinoid product candidates.

These compounds express their physiological response by binding to cannabinoid (CB1 and CB2) and certain other receptors found throughout the human body.

Some cannabinoids have been observed to exert multiple effects on the human body, including, but not limited to impacting the immune response, nervous system function and repair, gastrointestinal maintenance and motility, motor function in muscles, pancreatic functionality, tissue repair, blood sugar regulation, and integrity of function in the eye (including the optic nerve).

Cannabis and specific cannabinoids have been studied widely and the results suggest that there may be a potential for these compounds to be used in treating many disorders or alleviating disease-associated symptoms.

We are focused on the development of proprietary, synthetic cannabinoid-derived molecules that have been bioengineered to improve solubility, bioavailability and pharmacology of natural cannabinoids, while also providing the Company with strong intellectual property protection.

The following table summarizes certain information regarding our cannabinoid product candidates:

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Development Status

Multiple Ocular Targets

Glaucoma is an ocular neuropathy associated with the initiation of programmed cell death, known as apoptosis, of the retinal ganglion cells (“RGCs”) of the optic nerve, resulting in progressive and irreversible loss of vision.

Multiple Targets

Cannabinoid Cocktail

Anti-infective

Our lead compound initially being developed to treat ocular disease is THCVHS, a prodrug of THC.

A prodrug is a medication or compound, that after administration is metabolized into a pharmacological active drug.

The molecule has been designed to make the usually lipophilic THC more hydrophilic to allow for improved transport across the membranes of the eye.

In 2013 and 2014, UM conducted studies of the formulation in the rabbit ocular model which showed that THCVHS was able to penetrate all chambers of the eye which could potentially broaden the proposed therapeutic indications of interest for THCVHS to diseases of the eye that affect the retina and the optic nerve, such as glaucoma, macular degeneration or diabetic retinopathy.

These studies also revealed that THCVHS was able to achieve potentially therapeutic concentrations in the anterior compartment, vitreous humor, and posterior compartment of the normal rabbit eye, which is very similar to the human eye in anatomy and physiology.

Intraocular pressure (“IOP”) has been identified as an important risk factor in the pathogenesis of this disease.

Elevated IOP can lead to damage of RGC axons through vascular ischemia by compromising blood flow to the cells, and physical crush injury as the elevated ocular pressure compresses these delicate cells.

Cannabinoid receptors are highly concentrated in the eye, especially in organs of the anterior compartment that help regulate IOP, and the posterior compartment in the area of the retina and optic nerve.

Cannabinoid receptors are highly concentrated in the eye, especially in the anterior compartment that helps regulate IOP, and the posterior compartment in the area of the retina and optic nerve.

Stimulation of cannabinoid receptors by THC has been previously shown to lower IOP in both animal and human studies.

Our lead ocular compound is NB1111, a prodrug of THC.

The molecule has been formulated to make the usually lipophilic THC more hydrophilic to allow for improved transport across membranes.

In 2013 and 2014, UM conducted studies of the formulation in the rabbit ocular model which showed that the molecule was able to penetrate all chambers of the eye which could potentially broaden the proposed therapeutic indications of interest to diseases in the posterior compartment of the eye that affect the retina and optic nerve, such as macular degeneration or diabetic retinopathy.

These studies also revealed that the formulation was able to achieve potentially therapeutic concentrations in the anterior compartment, vitreous humor, and posterior compartment of the normal rabbit eye, which is very similar to the human eye in anatomy and physiology.

The rabbit ocular model is an accepted animal model for regulatory agencies when considering a candidate drug for human testing and this data will be submitted as part of the investigational new drug application (“IND”) to the Food and Drug Administration (the “FDA”).

Additional studies using an alpha-chymotrypsin induced glaucoma model in rabbits were performed by UM in 2013 and 2014 under a grant from the National Institutes of Health (the “NIH”).

Those studies showed that NB1111 was able to reduce IOP by 45% to 50%.

Those studies showed that THCVHS was able to reduce IOP by 45% to 50%.

Reduction in IOP was successful in an almost linear dose-responsive manner, with greater decline in IOP associated with higher dosage concentration.

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Army study were exposed to THC by smoking marijuana.

Patients tested by the NIH exhibited a decline in IOP ranging from 35% to as high as 65%, correlated to the amount of THC in the plasma and relative to their baseline IOP level.

Patients tested by the NIH exhibited a decline in IOP ranging from 35% to as high as 65%, correlated to the amount of THC in the plasma.

Normal volunteers in the U.S.

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While THC from smoking marijuana was able to reduce IOP in humans, the effect was short lived given the short half-life of the THC molecule.

The half-life of the pro-drug used in the rabbit glaucoma model was longer, but still pointed to the need to formulate the pro-drug in a way to lengthen the half-life that would be consistent with once-daily dosing of a marketed product

We examined the compound in further testing using a nanoparticle delivery system to prolong the drug’s biologic half-life in late 2015 and 2016.

The studies were conducted by UM and placed NB1111 into a solid lipid-nanoparticle system (“SLN”) to deliver the drug to the eye using topical drop administration.

The SLN delivery of NB1111 was administered to rabbits that underwent elevated IOP inducement using the alpha-chymotrypsin model.

Data from that experiment confirmed previous studies that showed administration of NB1111 resulted in a 45% reduction in IOP from baseline with a half- life consistent with five to six-times per day dosing.

When NB1111 was administered via SLN delivery in a normotensive model, the lower concentration of NB1111 (0.4% equivalent THC) exhibited a decrease in IOP of approximately 20% while the higher concentration of NB1111 (0.6% equivalent THC) lowered IOP by a maximum of 38%.

The use of SLN technology lengthened the physiologic half-life of NB1111 equivalent to dosing the drug two to three times a day.

Subsequently, the formulation being developed for human studies will involve encapsulating the drug in a nanoemulsion complemented with the use of the viscosity enhancer, Carbopol, to increase the residence time of the drug on the eye.

Testing of this formulation in a normotensive animal model revealed statistically significant lowering of the IOP when compared to both latanoprost and timolol, as well as extended pharmacologic activity time that could possibly support once daily dosing.

Further animal experimentation conducted in 2016-2017 examined both the penetration and concentration of NB1111 in key organs of the eye.

The half-life of the THCVHS used in the rabbit glaucoma model was considerably longer;

however, we intend to formulate THCVHS in order to lengthen the half-life to the degree that it would be effective when dosed once a day.

We examined the THCVHS in further testing using a nanoparticle delivery system to prolong the drug’s half-life in late 2015 and 2016.

The studies were conducted by UM and placed THCVHS into a solid lipid-nanoparticle system (“SLN”) to deliver the drug to the eye using topical drop administration.

The SLN delivery of THCVHS was administered to rabbits that underwent elevated IOP inducement using the alpha-chymotrypsin model.

Data from that experiment confirmed previous studies that showed administration of THCVHS resulted in a 45% reduction in IOP from baseline with a half-life consistent with five to six-times per day dosing.

When THCVHS was administered via SLN delivery in normotensive animals, a lower concentration of THCVHS (0.4% equivalent THC) exhibited a decrease in IOP of approximately 20% while a higher concentration of THCVHS (0.6% equivalent THC) lowered IOP up to 38%.

The use of SLN technology lengthened the half-life of THCVHS equivalent to dosing the drug two to three times a day.

The formulation we are developing for human studies will encapsulate THCVHS in a nanoemulsion including the emulsifier, Carbopol, to increase the residence time of the drug in the eye.

Testing of this formulation in a normotensive animal models revealed statistically significant lowering of the IOP when compared to both latanoprost and timolol, the current standard-of-care in the treatment of IOP, as well as extended pharmacologic activity time that could support once daily dosing.

Further animal experimentation conducted in 2016-2017 examined both the penetration and concentration of THCVHS in key organs of the eye.

The data revealed that IOP declined in a concentration-time dependent manner and could be correlated to the concentration of THC in organs regulating IOP, such as the trabecular meshwork in the anterior compartment and the retina-choroid in the posterior compartment.

The data was important for demonstrating a direct causal relationship between the penetration and concentration of THC with IOP-lowering capability and the presence of THC in multiple compartments of the eye.

Additionally, neither free-THC nor 11-hydroxy-THC (the main active metabolite of THC) was detected in the peripheral circulation of the test animals, indicating that the topical dosage of the test compound remained restricted to the eye.

In 2019, UM completed experiments showing that NB1111 was statistically superior in lowering IOP compared to the prostaglandin-based therapy, latanoprost, the current standard-of-care for treating glaucoma.

Significance was reached across multiple timepoints during a seven-day course of dosing using a validated rabbit normotensive ocular model and NB1111 exerted pharmacologic activity consistent with once-daily to twice-daily dosing.

Additionally, Glauconix Biosciences Inc.

(“Glauconix”) completed their pilot study to research the mechanism of action and IOP-lowering ability of THC when administered into an ex vivo model of a 3D-human trabecular meshwork using both healthy and glaucomatous-derived tissues.

The Glauconix study validated the mechanism of action of NB1111 in lowering IOP, a defining disease process of hypertensive glaucoma.

In 2019, UM completed experiments showing that THCVHS was statistically superior in lowering IOP compared to the prostaglandin-based therapy, latanoprost, the current standard-of-care for treating glaucoma.

Significance was reached across multiple timepoints during a seven-day course of dosing using a validated rabbit normotensive ocular model and THCVHS exerted pharmacologic activity consistent with once-daily to twice-daily dosing.

Additionally, we worked with Glauconix Biosciences Inc.

(“Glauconix”) to complete a pilot study to research the mechanism of action and IOP-lowering ability of THC when administered into an ex vivo model of a 3D-human trabecular meshwork using both healthy and glaucomatous-derived tissues.

The Glauconix study validated the mechanism of action of THCVHS in lowering IOP, a defining disease process of hypertensive glaucoma.

Moreover, biomarkers associated with inflammation and fibrosis in both normal and tissues affected by glaucoma were significantly decreased, pointing to anti-inflammatory and anti-fibrotic activities that are often associated with the cannabinoid class of molecules in other disease-states;

and data revealed that biomarkers associated with neovascularization, a disease process of new blood vessel formation that can damage the retina in a variety of ocular diseases, was also inhibited by THC, prompting further study for the utility of this drug in diseases of the retina.

The manufacturing of the active pharmaceutical ingredient of NB1111 is conducted in the United States.

Formulation of the eye drop for testing is also performed in the United States but can rely on regulatory-accepted excipients that can be sourced from countries outside the United States, such as China.

In lieu of the recent pandemic of COVID-19, there could possibly be an impact on sourcing materials that are part of the eye drop formulation, as well as impacting volunteer and/or patient recruitment in Australia for clinical studies.

Therefore, we anticipate shifting our first in-human studies of the lead drug candidate, NB1111, from the second half of 2020, to the 2021 timeframe.

The first-in-human studies are to be conducted in healthy volunteers and patients with glaucoma and ocular hypertension in Australia (the “Clinical Trial”).

Initially, we plan to conduct single-ascending dose (“SAD”) and multiple-ascending dose (“MAD”) studies to establish physiological activity in humans to define a dosing therapeutic window and to validate an ocular formulation for larger follow-on studies.

Subsequently, Phase 2 studies will be advanced provided initial human clinical data point to IOP lowering activity balanced by safety parameters.

Phase 2 studies in glaucoma/ocular hypertension are expected to be conducted over 7 to 28 days with supporting safety labs monitored concurrently with dosing, including validated assays to detect any evidence of THC in the peripheral circulation of those dosed.

Given that IOP data is objectively measured, we will decide whether to conduct a subsequent Phase 2b study or go directly to a larger Phase 3 clinical trial based on the quality of the data collected in the Phase 2a study and the advice provided by the FDA or other regulatory bodies.

NB2222 is a prototype ocular formulation of the proprietary Emerald Bioscience CBD analog, CBDVHS.

We have embarked on studies with UM exploring the utility of our drug candidate NB2222 as an eye drop emulsion for the potential treatment and management of several eye diseases, including uveitis, dry eye syndrome, macular degeneration and diabetic retinopathy.

Data presented at the American Association of Pharmaceutical Scientists (AAPS) meeting held in November 2017, revealed that this early formulation of the CBD analog was able to penetrate multiple compartments of the eye, including reaching the retina and the optic nerve.

Further testing will need to be conducted to assess biomarkers for the possible utility of this compound as a therapeutic agent.

In 2019, we announced that data generated by Glauconix showed significant anti-inflammatory and anti-fibrotic activity in ocular tissue with CBDVHS, when compared to CBD, indicating therapeutic potential as a neuroprotectant, especially in diseases of the retina.

CBDVHS displayed a statistically significant potency when compared to CBD.

Additionally, CBDVHS was not associated with elevating IOP at anti-fibrotic concentrations based on biomarker data.

In 2019, UM also completed pre-clinical experiments showing that NB2222 exhibited an ability to penetrate multiple chambers of the eye and reach the optic nerve.

These findings support the therapeutic potential to provide ocular neuroprotection of retinal ganglion cells, an important goal in treating diseases which lead to vision loss.

The data were published in the peer-reviewed Journal of Ocular Pharmacology and Therapeutics in a paper titled, “Analog Derivatization of Cannabidiol for Improved Ocular Permeation” (2019; volume 35 (5):

In 2020, we expect to continue to advance our pre-clinical studies related to NB2222 and our proprietary CBD analog.

MRSA was first described in 1961 after the introduction of the antibiotic, methicillin, and since that time, the prevalence of the organism has increased globally in both community and healthcare settings.

The prevalence of MRSA in intensive care units in the United States has been estimated to be 60% (Am J Infect Control 2004; 32:470) with more than 90,000 invasive MRSA infections occurring annually in the United States resulting in more than 18,000 deaths (JAMA 2007; 298:

Annual costs for treating MRSA in the United States are projected to exceed $4 billion, accounting for a collective eight million extra hospital days annually (ISPOR; 10th Annual Meeting, Wash D.C., May 2005; Pew Foundation Research Brief, April 2012).

MRSA is classically resistant to conventional antibiotics to treat staph infections such as fluoroquinolones, beta-lactams, and macrolides.

Most patients who develop MRSA infections are usually colonized with either a community acquired strain (CA-MRSA) or healthcare-associated strain (HA-MRSA).

Therefore, antibiotic development against MRSA can take three approaches:

(a) decolonization, (b) treatment of localized soft tissue infections, or (c) systemic antibiotic for generalized sepsis.

Cannabinoid molecules have been shown in in vitro studies conducted by third parties to possess anti-infective activity against a variety of MRSA strains.

We entered into a research agreement with UM to explore this area in 2015 and have tested a variety of cannabinoids in various strengths, combinations, and delivery systems against a variety of MRSA species found in community, healthcare, and institutional settings such as nursing homes, correctional facilities, and military quarters.

As discussed above in “Our Strategic Partnership - UM 5070 License Agreement,” in January 2017, we entered into a license agreement with UM pursuant to which UM granted us an exclusive, perpetual license, including the right to sublicense, to intellectual property related to UM 5070, a platform of cannabinoid-based molecules to research, develop and commercialize products for the treatment of infectious diseases.

The rabbit ocular model is an accepted animal model for regulatory agencies when considering a candidate drug for human testing and this data will be submitted as part of our investigational new drug application (“IND”) to the Food and Drug Administration (“FDA”).

The manufacturing of the active pharmaceutical ingredient THCVHS is conducted in the United States.

Formulation of the eye drop for testing is also performed in the United States but may utilize regulatory-accepted excipients sourced from countries outside the United States, such as China.

The recent COVID-19 pandemic may impact our ability to source specific materials that are part of the eye drop formulation and could possibly impact volunteer and/or patient recruitment in Australia for our Phase I clinical studies of THCVHS.

The pandemic has resulted in a shift of our first in-human studies, from the second half of 2020 to the third quarter of 2021.

Our first-in-human studies are to be conducted in healthy volunteers and patients with glaucoma and ocular hypertension in Australia (the “THCVHS Clinical Trial”).

Initially, we plan to conduct a Phase 1, first-in-human, randomized, double-blind, placebo-controlled, single-ascending dose (“SAD”) and multiple-ascending dose (“MAD”) study to establish a safe and tolerable dosing window of THCVHS in humans that can be used in the design of subsequent clinical trials.

Subsequently, we may advance THCVHS into a Phase 2 clinical trial provided that data from the Phase 1 clinical trial demonstrates that the topical delivery of THCVHS is safe and well-tolerated, and IOP is markedly different between THCVHS and the placebo.

Design of a subsequent Phase 2 clinical trial will be dependent upon the advice of our Advisory Board, the FDA and other regulatory bodies.

We have embarked on research exploring the utility of different formulations of CBDVHS, our proprietary CBD analog.

Early studies of CBDVHS demonstrated analgesic, anti-inflammation, anti-fibrotic, anti-seizure properties, including the potential treatment and management of several eye diseases, such as uveitis, dry eye syndrome, macular degeneration and diabetic retinopathy.

Data we presented at the American Association of Pharmaceutical Scientists (“AAPS”) meeting held in November 2017, revealed that an ocular formulation of CBDVHS was able to penetrate multiple compartments of the eye, including reaching the retina and the optic nerve.

Further testing will need to be conducted to further evaluate the possible utility of this compound as a therapeutic agent and we continue to advance our research studies related to CBDVHS to explore different therapeutic applications.

Cannabinoid Cocktail

Cannabinoid molecules have been shown in in vitro studies conducted by third parties to possess anti-infective activity against a variety of bacterial strains.

We entered into a research agreement with UM to explore this area in 2015 and have tested a variety of cannabinoids in various strengths, combinations, and delivery systems against a variety of bacterial species found in community, healthcare, and institutional settings such as nursing homes, correctional facilities, and military quarters.

As discussed above in “UM 5070 License Agreement,” in January 2017, we entered into a license agreement with UM pursuant to which UM granted us an exclusive, perpetual license, including the right to sublicense, intellectual property related to UM 5070, a platform of cannabinoid-based molecules to research, develop and commercialize products for the treatment of infectious diseases.

Other Potential Products

We continue to plan to work with UM to explore other potential indications and associated routes of administration based on the expanded UM 5050 and UM 8930 all fields of use licenses.

Our decision to advance a potential therapeutic candidate will be influenced by a number of criteria, including but not limited to pre-clinical data, synthesis and formulation capability, as well as prevailing market conditions.

For example, in December 2019, we announced data generated by StemoniX, that CBDVHS was both pharmacologically and therapeutically distinct from CBD when studied in an in vitro human neural tissue model mimicking chemically-induced seizure-like hyperactivity.

Additionally, CBDVHS was observed to gain potency in anti-seizure-like activity over the seven-day observation period, whereas the suppressive effect afforded by CBD dissipated by day three.

In assessing safety parameters of CBDVHS, the molecule was not found to be toxic to the neurologic cells tested in multiple assays, both in acute and longer-term exposure.

We continue to work with UM to explore other potential indications and associated routes of administration based on the expanded UM 5050 and UM 8930 all fields licenses.

Our decision to advance another potential therapeutic candidate will be influenced by a number of criteria, including but not limited to research, preclinical data, synthesis and formulation capability as well as prevailing market conditions.

Our Competitive Strengths

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UM’s current contract was awarded in 2015 and runs for a base year of one year with four one-year options.

Although in August 2016 the DEA announced that it would consider granting registrations for the cultivation of cannabis for research and development purposes outside of the NIDA contract process, we are not aware of any entity that has received such a registration under this process.

As the sole contract holder since 1968, UM has developed significant expertise in the extraction, separation, processing and manufacture of cannabinoids.

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These independent assessments correlate with highly variable response rates and safety profiles which, in some cases, have been deemed to have marginal clinical utility.

We have licensed from UM the rights to a pro-drug formulation of THC.

We have licensed from UM the rights to THCVHS, a pro-drug formulation of THC.

Data from UM supports the delivery of the pro-drug through absorptive routes other than the gastrointestinal tract, which we believe has the potential to mitigate the issue of first-pass metabolism by the liver, potentially enhancing drug bioavailability and predictive pharmacokinetics.

We are also working with UM and other parties on methods to formulate and deliver a variety of other pharmaceutical-grade cannabinoids to better manage symptoms and/or treat diseases.

We are also working with UM and other parties on methods to formulate and deliver CBDVHS and a variety of other pharmaceutical-grade cannabinoids to better manage symptoms and/or treat diseases.

Our Business Strategy

Our goal is to become a premier developer of prescriptive cannabinoid-based medicines for global markets with significant unmet medical needs.

Our goal is to become a premier developer of synthetic cannabinoid-derived medicines for global markets to treat significant unmet medical needs.

Our current operating strategy includes:

selection of potential clinical targets based on internal and external published data, access to appropriate cannabinoids, and the impact of both developmental and market conditions;

prioritization of product candidates based on the potential clinical utility of associated target indications;

utilization, where feasible, of naturally-derived drug prototypes leading to synthetically produced cannabinoid derivatives optimized for development and commercialization;

selection and licensing of potential clinical targets based on internal and external published data, access to appropriate cannabinoids, and the impact of both developmental and market conditions;

prioritization of product candidates based on the potential clinical utility and market of associated target indications;

development and execution of an intellectual property strategy;

development and advancement of our current product pipeline;

outsourcing services, such as use of Clinical Research Organizations (“CROs”) and contract manufacturers for the API, where possible and appropriate;

obtaining regulatory approval from the FDA, EMA, and other appropriate regulatory agencies for product candidates;

research and development of additional target indications for cannabinoid product candidates; and

partnering, out-licensing, or selling approved products, if any, to optimize Company efficiencies to bring state-of-the-art therapeutics to patients.

Clinical development and advancement of our current product pipeline;

outsourcing services, such as use of Clinical Research Organizations (“CROs”) and contract manufacturers for the active pharmaceutical ingredient, where possible and cost effective;

obtaining regulatory direction and approval from the FDA, European Medicines Agency (“EMA”), and other regulatory agencies for our product candidates;

research and development of additional indications for our product candidates; and

partnering, out-licensing, or selling our product candidates to pharmaceutical companies to maximize profits and to bring our state-of-the-art therapeutics to patients in need.

Sales and Marketing

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We do not own or operate, and currently have no plans to establish, any manufacturing facilities for final manufacture.

We currently rely, and expect to continue to rely, on third parties to manufacture our product candidates for preclinical and clinical testing, as well as for commercial manufacturing of any products that we may commercialize.

We entered into agreements with Albany Molecular Research Inc.

(“AMRI”) in February 2016, July 2018 and April 2019 for the development and manufacture of our proprietary cannabinoid- based APIs.

In late 2016, we finalized a commitment with Teewinot Life Sciences, working in conjunction with AMRI, to manufacture biosynthetically produced cannabinoids derivatives licensed from UM to be used in clinical trials or commercialized products.

It is anticipated that the biosynthetically generated API will eventually form the basis of our drug candidates NB1111 in development for glaucoma and NB2222 for ocular diseases.

In August 2019, we terminated our ongoing agreements with AMRI.

We entered into an agreement with Noramco Inc.

(“Noramco”) in February 2019 to develop scale-up synthesis methods and to manufacture the analog derivative, CBDVHS, and amended the agreement in August 2019 to include THCVHS.

For all of our future product candidates, we aim to identify and qualify manufacturers to provide the API and fill-and-finish services prior to submission of an NDA to the FDA.

We currently rely, and expect to continue to rely, on third parties for the manufacture of our product candidates for preclinical and clinical testing, as well as for commercial manufacture of any products that we may commercialize.

For all of our future product candidates, we aim to identify and qualify manufacturers to provide the API and fill-and-finish services prior to submission of a New Drug Application (“NDA”) to the FDA.

We expect to continue to develop drug candidates that can be produced cost-effectively at contract manufacturing facilities.

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operate without infringing the patents and proprietary rights of third parties.

We intend to continue to seek appropriate patent protection for certain of our product candidates, drug delivery systems, molecular modifications, as well as other proprietary technologies and their uses by filing patent applications in the United States and other selected global territories.

We intend for these patent applications to cover, where possible, claims for medical uses, processes for isolation and preparation, processes for delivery and formulations.

As of the date of this Annual Report, we have licensed from UM two U.S.

patents as well as foreign counterparts in the United Kingdom, European Union, Japan, Hong Kong, Canada and Australia.

The patents that we license cover composition of matter and preparation of delta-9 THC amino acid esters and their methods of use.

We intend to continue to seek patent protection for certain of our product candidates, drug delivery systems, molecular modifications, as well as other proprietary technologies and their uses by filing patent applications in the United States and other selected global territories.

We intend for these patent applications to cover, where possible, claims for composition of matter, medical uses, processes for isolation and preparation, processes for delivery and formulations.

As of the date of this Annual Report, we have licensed from UM three inventions, which include U.S.

patents as well as a number of foreign counterparts, including the European Union, Japan, Canada and Australia.

The patents that we license, cover composition of matter and preparation of prodrug of THC, analog of cannabidiol, and platform of cannabinoids for the treatment of infectious diseases, and their methods of use.

These patents are expected to expire in 2039.

Additionally, in March 2020, we were notified by the United States Patent and Trademark Office, that a notice of allowance has been issued for the proprietary analog of cannabidiol, CBDVHS.

The official issuance date for the CBDVHS US patent was July 2020.

The expiration date of the US patent for CBDVHS is January 2037.

Under our license agreements, UM retains ownership over the licensed patents and control over the maintenance and prosecution of the licensed patents and patent applications.

We also rely upon unpatented trade secrets and know- how and continuing technological innovation to develop and maintain our proprietary and intellectual property position.

We also rely upon trade secrets and know-how and continuing technological innovation to develop and maintain our proprietary and intellectual property position.

We seek to protect our proprietary information, in part, using confidentiality agreements with our collaborators, scientific advisors, employees and consultants, and invention assignment agreements with our employees and selected consultants, scientific advisors and collaborators.

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We face potential competition from many different sources, such as pharmaceutical companies, including generic drug companies, biotechnology companies, drug delivery companies and academic and research institutions.

Many of our potential competitors have substantially greater financial, scientific, technical, intellectual property, regulatory and human resources than we do, and greater experience than we do commercializing products and developing product candidates, including obtaining FDA and other regulatory approvals for product candidates.

Many of our potential competitors may have substantially greater financial, scientific, technical, intellectual property, regulatory and human resources than we do, and greater experience than we do commercializing products and developing product candidates, including obtaining FDA and other regulatory approvals for product candidates.

Consequently, our competitors may develop products for indications we pursue that are more effective, better tolerated, more widely prescribed or accepted, more useful and less costly, and they may also be more successful in manufacturing and marketing their products.

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Cannabis, cannabis extracts and some cannabinoids are regulated as “controlled substances” as defined in the Controlled Substances Act (the “CSA”), which establishes registration, security, recordkeeping, reporting, storage, distribution and other requirements administered by the DEA.

The DEA is concerned with the control of handlers of controlled substances, and with the equipment and raw materials used in their manufacture and packaging, in order to prevent loss and diversion into illicit channels of commerce.

The DEA is concerned with the control of handlers of controlled substances, and with the equipment and raw materials used in their manufacture and packaging, of controlled substances in order to prevent loss and diversion into illicit channels of commerce.

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

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The DEA has conducted a scientific review of the chemical structure of CBDVHS and determined that CBDVHS is not a regulated chemical nor controlled substance under the CSA.

This decision by the DEA may help us expand the network of clinical testing sites, permit a greater cross-section of patients to participate in studies of this drug, as well as speed the initiation of clinical trials.

THCVHS remains a Schedule I, controlled substance, pending a request to re-schedule after completion of pivotal clinical trials resulting in a drug approval by the FDA.

State Regulation

The states also maintain separate controlled substance laws and regulations, including licensing, recordkeeping, security, distribution, and dispensing requirements.

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

Failure to maintain compliance with applicable requirements, particularly as manifested in the loss or diversion of controlled substances, can result in enforcement action that could have a material adverse effect on our business, operations and financial condition.

The Single Convention on Narcotic Drugs 1961

Many countries, including the United States, are parties to the 1961 Single Convention on Narcotic Drugs (the “Single Convention”), which is an international treaty that governs international trade and domestic control of narcotic substances, including cannabis and cannabis extracts.

The Single Convention requires all parties to take measures to limit the production, manufacture, export, import, distribution of, trade-in, and use and possession of cannabis exclusively to medical and scientific purposes.

In particular, the Single Convention requires member countries to establish a government agency to oversee the cultivation of marijuana and establish a monopoly on the wholesale trade of marijuana, and it provides that this role must be filled by a single government agency if the member country’s constitution so permits.

Party members, including the United States, may interpret and implement their treaty obligations in a way that restricts our ability to develop and obtain marketing approval for our product candidates in accordance with our current plans and partnership with UM.

Pursuant to the Single Convention, NIDA oversees the cultivation of research-grade cannabis for medicinal research on behalf of the United States Government.

NIDA has historically fulfilled this obligation through a contract that it administers with UM.

UM has been the sole NIDA contractor to grow cannabis for research purposes since 1968.

The contract is open for competitive bidding at periodic intervals.

Since 1999, the term of the contract has been five years.

UM engaged in a competitive bidding process for the next contract interval and was awarded the contract in 2015.

Under the NIDA contract, UM grows, harvests, stores, ships and analyzes cannabis of different varieties, as NIDA requires.

In August 2016, the DEA announced that it would consider granting registrations for the cultivation of cannabis for research and development purposes outside of the NIDA contract process.

We are not aware of any entity that has received such a registration under this process to date.

UM has represented that it also grows cannabis for purposes of researching cannabis extracts, and has in the past grown cannabis, purified cannabis extracts, and distributed extracts for purposes of developing product candidates, separate and apart from its contract with NIDA.

UM has indicated that it conducted these activities pursuant to separate registrations from the DEA and that it plans to seek the necessary additional DEA registrations to conduct the contemplated activities in connection with our partnership, in compliance with applicable law and the United States’ obligations under the Single Convention.

However, there is a risk that regulatory authorities may disagree and decline to authorize UM to engage in these activities.

This decision by the DEA should help the Company expand the network of clinical testing sites, permit a greater cross-section of patients to participate in studies of this drug, as well as speed the initiation of clinical trials.

THCVHS remains a Schedule I, controlled substance, pending a request to re-schedule THCVHS after a drug approval by the FDA.

Food and Drug Administration

In the United States, pharmaceutical products are subject to extensive regulation by the FDA.

The FDA regulates drugs under the FDCA and its implementing regulations.

The FDA regulates drugs under the Food, Drug and Cosmetic Act (“FDCA”) and its implementing regulations.

The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources.

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performance of adequate and well-controlled human clinical trials in accordance with good clinical practice (“GCP”) requirements to establish the safety and efficacy of the proposed drug for each indication;

submission of a NDA to the FDA;

submission of an NDA to the FDA;

satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and

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In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin.

As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.

As a result, submission of an IND does not always result in the FDA allowing clinical trials to commence.

Clinical Trials

Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial.

Clinical trials involve the administration of the investigational new drug candidate to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial.

Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated.

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Marketing Approval

Assuming successful completion of the required clinical testing, the results of the preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of a NDA requesting approval to market the product for one or more indications.

In most cases, the submission of a NDA is subject to a substantial application user fee.

Under the Prescription Drug User Fee Act (“PDUFA”) guidelines that are currently in effect, the FDA has a goal of ten months from the date of “filing” of a standard NDA for a new molecular entity to review and act on the submission.

Assuming successful completion of the required clinical testing, the results of the preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.

In most cases, the submission of an NDA is subject to a substantial application user fee.

Under the Prescription Drug User Fee Act (“PDUFA”) guidelines that are currently in effect, the FDA has a goal of reviewing and responding to a submission within ten months from the date of “filing” of a standard NDA for a new molecular entity.

This review typically takes at least twelve months from the date the NDA is submitted to the FDA because the FDA has approximately two months to make a “filing” decision.

However, if issues arise during the review, the FDA may request additional information and the review period may be extended to permit the applicant to provide and the FDA to review that information, which may significantly extend this time period.

In addition, under the Pediatric Research Equity Act of 2003 (“PREA”), as amended and reauthorized, certain NDAs or supplements to a NDA must contain data that is adequate to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

In addition, under the Pediatric Research Equity Act of 2003 (“PREA”), as amended and reauthorized, certain NDAs or supplements to an NDA must contain data that is adequate to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.

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

The FDA reviews a NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

The FDA may refer an application for a novel drug to an advisory committee.

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The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving a NDA, the FDA typically will inspect the facility or facilities where the product is manufactured.

Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is manufactured.

The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

Additionally, before approving a NDA, the FDA may inspect one or more clinical trial sites to assure compliance with GCP requirements.

Additionally, before approving an NDA, the FDA may inspect one or more clinical trial sites to assure compliance with GCP requirements.

The testing and approval process for a NDA requires substantial time, effort and financial resources, and each may take several years to complete.

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After evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter.

A complete response letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical or preclinical testing in order for the FDA to reconsider the application.

A complete response letter generally contains a statement of specific conditions that must be met to secure final approval of the NDA and may require additional clinical or preclinical testing in order for the FDA to reconsider the application.

Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

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Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program.

imposition of post-market studies or clinical trials to assess new safety risks;

or imposition of distribution or other restrictions under a REMS program.

Other potential consequences include, among other things:

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This three-year exclusivity covers only the conditions of use associated with the new clinical investigations and, as a general matter, does not prohibit the FDA from approving ANDAs or 505(b)(2) NDAs for other versions of a drug.

Five-year and three- year exclusivity will not delay the submission or approval of a full NDA; however, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Five-year and three-year exclusivity will not delay the submission or approval of a full NDA;

however, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Orphan Drug Designation and Exclusivity

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We expect that additional state and federal 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, which could result in reduced demand for our products once approved or additional pricing pressures.

We expect that the Trump administration will continue to seek to modify, repeal, or otherwise invalidate all or certain provisions of the ACA.

In January 2017, the House and Senate passed a budget resolution that authorizes congressional committees to draft legislation to repeal all or portions of the ACA and permits such legislation to pass with a majority vote in the Senate.

President Trump has also recently issued an executive order in which he stated that it is his administration’s policy to seek the prompt repeal of the ACA and directed executive departments and federal agencies to waive, defer, grant exemptions from, or delay the implementation of the burdensome provisions of the ACA to the maximum extent permitted by law.

There is still uncertainty with respect to the impact President Trump’s administration and the U.S.

Congress may have if any.

Any changes will likely take time to unfold and could have an impact on coverage and reimbursement for healthcare items and services covered by plans that were authorized by the ACA.

As such, we cannot predict what effect the ACA or other healthcare reform initiatives that may be adopted in the future will have on our business.

Foreign Regulation

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Additional Regulation

We are a reporting company with the Securities and Exchange Commission (the “SEC”), and, therefore, subject to the information and reporting requirements of the Exchange Act of 1934, as amended (the “Exchange Act”) and other federal securities laws, and the compliance obligations of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).

In addition, our financial reporting is subject to United States generally accepted accounting principles (the “U.S.

In addition, our financial reporting is subject to United States generally accepted accounting principles (“U.S.

GAAP”), and U.S.

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We believe that we are in conformity with all applicable laws in all relevant jurisdictions.

As of the date of this Annual Report, we have a total of four full-time employees, two of whom have an M.D.

As of the date of this Annual Report, we have a total of six full-time employees.

None of our employees are represented by a labor union or covered by a collective bargaining agreement.

We have not experienced any work stoppages and we consider our relations with our employees to be good.

We anticipate that we will need to hire approximately four additional employees or independent contractors for our continued development efforts.

We anticipate that we will need to hire additional employees or independent contractors for our continued development efforts.

We also intend to utilize independent contractors and outsourced services, such as CROs, and third party manufacturers, where possible and appropriate.

Our Internet website, which is located at http://emeraldbio.life , describes our company and our management and provides information about cannabis-based therapeutics.

Our Internet website, which is located at http://www.skyebioscience.com , describes our company and our management and provides information about cannabis-based therapeutics.

Information contained on our website is not incorporated by reference into, and should not be considered a part of, this Annual Report.

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our ability to protect our intellectual property rights that are valuable to our business, including patent and other intellectual property rights;

our dependence on UM, third-party manufacturers, suppliers, research organizations, testing laboratories and other potential collaborators;

our dependence on University of Mississippi, third party manufacturers, suppliers, research organizations, testing laboratories and other potential collaborators;

our ability to develop successful sales and marketing capabilities in the future as needed;

the size and growth of the potential markets for any of our approved product candidates, and the rate and degree of market acceptance of any of our approved product candidates;

competition in our industry; and

competition in our industry;

the duration and impact of the novel coronavirus (“COVID-19”) pandemic;

regulatory developments in the United States and foreign countries.

We operate in a rapidly changing environment and new risks emerge from time to time.

As a result, it is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.

As a result, it is not possible for our management to predict all risks, such as the COVID-19 outbreak and associated business disruptions including delayed clinical trials and laboratory resources, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.

In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

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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 1. Business