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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2020~~2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number: 000-55657

NEUROPATHIX, INC.

(Exact name of registrant as specified in its charter)

Delaware	46-2645343
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3805 Old Easton Road Doylestown, PA	18902
(Address of principal executive offices)	(Zip Code)

(858) 883-2642

(Registrant’s telephone number, including area code)

KANNALIFE, INC.

(Former Name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

N/A

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.0001 per share

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

The aggregate market value of the registrant's common stock held by non-affiliates as of June 30, ~~2020~~2021, based upon the closing price of the registrant's common stock as reported by the OTCQB Marketplace on such date, was approximately $15,478,542. This calculation does not reflect a determination that persons are affiliates for any other purposes.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of ~~March~~April 3015, ~~2021~~2022, there were 8793,~~286~~374,~~137~~531 shares of common stock outstanding, par value $0.0001.

NEUROPATHIX, INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, ~~2020~~2021

TABLE OF CONTENTS

INDEX	PAGE
PART I
ITEM 1. Business.	4
ITEM 1A. Risk Factors.	3854
ITEM 1B. Unresolved Staff Comments.	6684
ITEM 2. Properties.	6684
ITEM 3. Legal Proceedings.	6685
ITEM 4. Mine Safety Disclosures.	6785
PART II
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	6886
ITEM 6. Selected Financial Data.	6886
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	6987
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk.	79103
ITEM 8. Financial Statements and Supplementary Data.	79103
ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	79103
ITEM 9A. Controls and Procedures.	80103
ITEM 9B. Other Information.	80104
ITEM 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections.	104
PART III
ITEM 10. Directors, Executive Officers and Corporate Governance.	81105
ITEM 11. Executive Compensation	84108
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	88112
ITEM 13. Certain Relationships and Related Transactions, and Director Independence.	90114
ITEM 14. Principal Accountant Fees and Services.	90114
PART IV
ITEM 15. Exhibit and Financial Statement Schedules	91115
ITEM 16. Form 10-K Summary	91115
Signatures	92139

FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K, the other reports, statements, and information that the Company has previously filed with or furnished to, or that we may subsequently file with or furnish to, the SEC and public announcements that we have previously made or may subsequently make include, may include, or may incorporate by reference certain statements that may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, and that are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that Act. To the extent that any statements made in this report contain information that is not historical, these statements are essentially forward-looking. Forward-looking statements can be identified by the use of words such as “anticipate”, “estimate”, “plan”, “project”, “continuing”, “ongoing”, “expect”, “believe”, “intend”, “may”, “will”, “should”, “could”, and other words of similar meaning. These statements are subject to risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, marketability of our products; legal and regulatory risks associated with trading publicly; our ability to raise additional capital to finance our activities; the future trading of our common stock; our ability to operate as a public company; our ability to protect our proprietary information; general economic and business conditions; the volatility of our operating results and financial condition; our ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed from time to time in our filings with the SEC, or otherwise.

Information regarding market and industry statistics contained in this report is included based on information available to us that we believe is accurate. It is generally based on industry and other publications that are not produced for purposes of securities offerings or economic analysis. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and the additional uncertainties accompanying any estimates of future market size, revenue and market acceptance of products and services. We do not undertake any obligation to publicly update any forward-looking statements. As a result, investors should not place undue reliance on these forward-looking statements.

PART I

ITEM 1. BUSINESS

Corporate History

The Company was originally incorporated in the State of Delaware on March 25, 2013 under the name TYG Solutions Corp. Our original business plan was to develop iPhone and Android smartphone apps for companies who need an app for their internal and external operations. We subsequently expanded our operations to offering corporate website design services.

On July 25, 2018, the Company entered into a Share Exchange Agreement with Kannalife Sciences, Inc., a Delaware corporation (“Kannalife Sciences”), and certain stockholders of Kannalife Sciences (the “Kannalife Sciences Stockholders”). Pursuant to the terms of the Share Exchange Agreement, the Company acquired substantially all of the issued and outstanding shares of Kannalife Sciences by means of a share exchange with the Kannalife Sciences Stockholders in exchange for newly issued shares of the common stock of the Company (the “Share Exchange”). As a result of the Share Exchange, Kannalife Sciences became a 99.7% owned subsidiary of the Company. The business operations of the Company regarding iPhone and Android smartphone apps was reduced significantly to focus efforts on target therapeutics and drug discovery, and accordingly, by virtue of the Share Exchange, the Company acquired the business of Kannalife Sciences including all of its assets. The Share Exchange was accounted for as a reverse acquisition and change in reporting entity, whereby Kannalife Sciences was the accounting acquirer.

Kannalife Sciences was incorporated in the State of Delaware on August 11, 2010. Kannalife Sciences is a developmental stage phyto-medical/pharmaceutical and drug discovery company that specializes in the research, development of cannabinoid and cannabinoid-based therapeutic products derived from synthetic and botanical sources, including the Cannabis “taxa” (the word “taxa” is the plural of “taxon,” which defines a group of one or more populations of an organism or organisms to form a unit). On November 9, 2018, the Company filed an amendment to its certificate of incorporation with the Delaware Secretary of State to change its name to Kannalife, Inc. The Company concurrently submitted a request to FINRA for approval of the name change as well as a ticker symbol change to “KLFE,” and such action went effective on January 17, 2019. Kannalife Sciences remains a wholly owned operational subsidiary of the Company.

On November 4, 2020, the Company filed an amendment to its certificate of incorporation with the Delaware Secretary of State to change its name to “Neuropathix, Inc.” The Company concurrently submitted a request to FINRA for approval of the name change as well as a ticker symbol change from “KLFE” to “NPTX.” The Company’s name change and ticker symbol change was reviewed and processed by FINRA, and went effective November 6, 2020.

~~Our~~On August 16, 2021, the Company established and ~~Business~~incorporated a new wholly owned subsidiary named Dermique Incorporated (“Dermique”). Dermique was established by the Company to hold, operate and commercialize all intellectual property associated with Kannalife Sciences’ previous research and development efforts to create and commercialize novel therapeutic topical over-the-counter cosmeceutical compounds to treat a variety of skin disorders, including but not limited to atopic dermatitis.

~~We are~~Our a biopharmaceutical company focused on discovering, developing and commercializing novel therapeutics from our proprietary synthetic cannabinoid derivatives platform potentially useful for a broad range of inflammatory and neuropathic pain related diseases. In our eleven (11) years of operations, dating back to August 2010 under the name Kannalife Sciences, Inc. we have been principally involved in the research and development of new chemical entities (“NCEs”) such as KLS-13019; KLS-13022 (“linoneyldihydroxybenzyl ethoxycarbonyl azetidine” or “LEA”); its related molecules; and synthetic cannabidiol (“CBD”) therapeutics through pre-clinical drug discovery and development processes. We have developed our own intellectual property portfolio and established relationships with third parties who are considered leaders in active pharmaceutical (“API”) contract manufacturing, formulation; and contract bulk drug manufacturing. All of the operations of the Company to date have been in the pre-clinical stage of drug discovery.Business

~~Our~~We are a biopharmaceutical company focused on ~~early~~discovering, ~~research~~developing and ~~development~~commercializing ~~efforts~~novel ~~began~~therapeutics ~~under~~from anour ~~exclusive~~proprietary ~~license~~synthetic ~~with~~cannabinoid ~~National~~derivatives ~~Institutes~~platform ofpotentially useful ~~Health~~for –a ~~Office~~broad range of ~~Technology Transfer~~inflammatory and neuropathic pain related diseases. In our eleven (~~“NIH-OTT”~~11) ~~for~~years ~~the~~of ~~use~~operations, ofdating back to August 2010 under the Uname Kannalife Sciences, Inc.S. ~~Government~~we ~~Patent~~have ~~6,630,507~~been –principally involved in the research and development of new chemical entities (“~~Cannabinoids~~NCEs”) such as ~~Antioxidants~~KLS-13019; KLS-13022 (“linoneyldihydroxybenzyl ethoxycarbonyl azetidine” or “LEAÔ”); its related molecules; and ~~Neuroprotectants”~~synthetic ~~(the~~cannabidiol (“~~‘507~~CBD”) ~~Patent~~therapeutics through pre-clinical drug discovery and development processes. We have developed our own intellectual property portfolio and established relationships with third parties who are considered leaders in active pharmaceutical (“APIC”) contract manufacturing, formulation; and contract bulk drug manufacturing. ~~Through~~Most all of the ~~use~~operations of the ~~‘507~~Company ~~Patent,~~to wedate ~~centered~~at ~~our~~Kannalife ~~initial research~~Sciences ~~into~~have been in the ~~use~~pre-clinical stage of ~~CBD~~drug ~~for~~discovery. ~~use~~In in2019 athe ~~variety~~Company began commercialization efforts for over-the-counter cosmeceutical uses of ~~neurodegenerative~~LEAÔ, ~~and~~the ~~oxidative~~Company’s lead ~~stress~~compound ~~related~~designed ~~diseases~~to address topical skin disorders.

~~Our core businesses are comprised of the following:~~4

•The ACompany ~~drug~~anticipates ~~development~~that all ~~company~~proposed ~~focused~~and onongoing ~~the~~preclinical ~~research~~studies ~~and~~for ~~development~~LEAÔ will be completed by April 2022. Preclinical studies for LEAÔ completed to date include, include in vitro efficacy, testing of irritants under human repeat insult patch testing (~~R&D~~“HRIPT”) and other predictive skin irritant and eye studies, completed formulation of ~~non-opioid~~a ~~based~~finished ~~synthetic~~white label skin cream product containing LEAÔ, and ~~chemical~~stability studies of LEAÔ with only the completion of a three month stability study due for completion in March 2022. Upon the completion of the remaining stability study, the Company intends to move forward in marketing LEAÔ as an over-~~medical~~the-counter ~~products~~active pharmaceutical ~~from:~~ingredient (“API”) for bulk sales, white label opportunities, and branded product opportunities in the cosmeceutical market. The results in preclinical testing for LEAÔ indicate better results than cannabidiol (“CBD”) and tacrolimus in addressing symptoms such as pain, itch and burning sensations in target therapeutic areas such as eczema, psoriasis, radiation dermatitis and excess UVB radiation.

oOur ~~naturally~~early ~~recurring~~research ~~sources,~~and ~~including~~development efforts ~~but~~began ~~not~~under ~~limited~~an toexclusive ~~cannabis,~~license ~~hemp~~with National Institutes of Health – Office of Technology Transfer (“NIH-OTT”) for the use of the U.S. Government Patent 6,630,507 – “Cannabinoids as Antioxidants and ~~other~~Neuroprotectants” ~~similar~~(the ~~species~~“‘507 Patent”). Through the use of ~~plantae;~~the ‘507 Patent, we centered our initial research into the use of CBD for use in a variety of neurodegenerative and oxidative stress related diseases.

oOur ~~semi-synthetic~~core ~~sources;~~businesses ~~and~~are comprised of the following:

o• ~~synthetic~~A drug development company focused on the research and ~~bio~~development (R&D) of non-opioid based synthetic ~~sources.~~and chemical-medical products from:

4o naturally recurring sources, including but not limited to cannabis, hemp, and other similar species of plantae;

•o Drug discovery platform to evaluate and potentially treat neurological and oxidative stress related disorders such as overt hepatic encephalopathy (“OHE”), Chronic Traumatic Encephalopathy (“CTE”) and Chemotherapy Induced Peripheral Neuropathy (“CIPN”) with high quality assured, quality controlled cGMP pharmaceutical grade semi-synthetic ~~and~~sources; ~~synthetic cannabinoids, CBD,~~ and ~~cannabidiol-like molecules.~~

•o ~~Topical~~synthetic ~~skincare pre-clinical program designed to some of our patented, proprietary cannabidiol-derived NCEs, for use as topical solutions, ointments,~~ and ~~creams for disorders such as diabetic neuropathies, diabetic ulcers, and for use as an anti~~bio-~~pruritic.~~synthetic ~~Anti-pruritics are known as anti-itch drugs and medications that inhibit the itching often associated with a variety of disorders and diseases~~sources.

~~Cannabinoids are~~• aDrug ~~class~~discovery ofplatform ~~molecules~~to ~~derived~~evaluate ~~from Cannabis plants. The two primary cannabinoids contained in Cannabis are CBD~~ and ~~D9-tetrahydrocannabinol, or~~potentially ~~THC.~~treat ~~Clinical~~neurological and ~~preclinical~~oxidative ~~data~~stress ~~suggest~~related ~~that~~disorders ~~CBD~~such ~~has~~as ~~positive~~overt ~~effects~~hepatic onencephalopathy ~~treating~~(“OHE”), ~~refractory~~Chronic ~~epilepsy,~~Traumatic ~~FXS~~Encephalopathy ~~and~~(“CTE”) ~~arthritis,~~ and ~~THC~~Chemotherapy ~~has~~Induced ~~positive~~Peripheral ~~effects~~Neuropathy on(“CIPN”) ~~treating~~with ~~pain.~~high ~~Interest~~quality inassured, ~~cannabinoid~~quality-controlled ~~therapeutics~~cGMP ~~has~~pharmaceutical ~~increased~~grade ~~significantly~~semi-synthetic ~~over the past several years as preclinical~~ and ~~clinical~~synthetic ~~data~~cannabinoids, ~~has~~CBD, ~~emerged highlighting the potential efficacy~~ and ~~safety~~cannabidiol-like ~~benefits of cannabinoid therapeutics~~molecules. ~~The cannabinoid therapeutics market is expected to grow significantly due to the potential benefits these products may provide over existing therapies.~~

~~CBD is~~• aTopical ~~naturally~~skincare ~~occurring~~pre-clinical ~~cannabinoid~~program ~~constituent~~designed ~~of cannabis. It was discovered in 1940 and is known~~ to ~~exhibit~~some ~~neuroprotective properties~~of inour ~~many~~patented, ~~experimental~~proprietary ~~systems.~~cannabidiol-derived ~~However~~NCEs, ~~our early research and development efforts revealed that there could be obstacles~~ for ~~CBD~~use as atopical ~~drug.~~solutions, ~~The FDA approval of EpidiolexÒ~~ointments, aand ~~CBD~~creams ~~based drug manufactured by GW Pharmaceuticals Ltd.~~ for ~~the~~disorders ~~treatment of~~such ~~Dravet’s~~as ~~Syndrome~~diabetic ~~and~~neuropathies, ~~Lennox-Gastaut~~diabetic ~~Syndrome~~ulcers, ~~has~~and ~~indicated~~for ~~that~~use ~~there~~as ~~are~~an ~~certain safety issues~~anti-pruritic. WeAnti-pruritics ~~also~~are ~~believe~~known ~~that the development of CBD~~ as aanti-itch ~~drug~~drugs ~~has~~and ~~been~~medications ~~confounded~~that byinhibit the ~~following:~~itching ~~(i)~~often ~~low~~associated ~~potency;~~with ~~(ii)~~ a ~~large~~variety ~~number~~ of ~~molecular~~disorders ~~targets; (iii) marginal pharmacokinetic properties;~~ and ~~(iv) designation as a Schedule 1 controlled substance under the Controlled Substances Act~~diseases.

~~In the~~Phyto ~~past~~Cannabinoids ~~three~~are ~~years,~~a ~~our~~class ~~most recent research and development efforts have been centered on the use~~ of ~~KLS-13019~~molecules ~~as a neuroprotectant~~derived ~~and~~from ~~therapeutic~~Cannabis ~~agent~~plants. toThe ~~treat~~two ~~chronic~~primary ~~and~~cannabinoids ~~neuropathic~~contained ~~pain.~~in ~~There~~Cannabis isare ~~currently~~CBD noand ~~FDA~~D9-tetrahydrocannabinol, ~~approved~~or ~~drug to treat CIPN~~THC. ~~Our~~Clinical and preclinical ~~efforts~~data insuggest ~~the~~that ~~research~~CBD ~~and~~has ~~development~~positive ofeffects on treating ~~CIPN~~refractory ~~with~~epilepsy, ~~our~~FXS ~~lead~~and ~~compound~~arthritis, ~~KLS-13019~~and ~~have~~THC ~~been~~has ~~fostered~~positive byeffects aon ~~successful study~~treating ~~grant~~pain. ~~from~~Interest ~~National~~in ~~Institutes~~cannabinoid oftherapeutics ~~Health~~has –increased ~~National~~significantly ~~Institute~~over onthe ~~Drug~~past ~~Abuse~~several ~~(“NIH-NIDA”)~~years ~~that~~as ~~compared~~preclinical ~~KLS-13019 to CBD in the prevention~~ and ~~reversal~~clinical ofdata ~~neuropathic~~has emerged ~~pain~~highlighting inthe ~~animal~~potential ~~models.~~efficacy Asand asafety ~~result~~benefits of ~~the~~cannabinoid ~~outcome~~therapeutics. ofThe ~~this~~cannabinoid ~~and~~therapeutics ~~other~~market ~~preclinical~~is expected ~~studies,~~to wegrow ~~believe~~significantly ~~there~~due ~~is strong evidence~~ to ~~support~~ the ~~use~~potential ofbenefits ~~KLS-13019~~these asproducts amay ~~non-opioid~~provide ~~solution~~over toexisting ~~chronic and neuropathic pain in human clinical trials~~therapies.

~~Our current~~CBD ~~focus~~was discovered in 1940 and is ~~centered~~known ~~around~~to ~~advancing~~exhibit neuroprotective ~~KLS-13019~~properties in many experimental systems. However, our early research and development efforts revealed that there could be obstacles for CBD as a ~~novel~~drug. The FDA approval of EpidiolexÒ, ~~non-opioid~~a ~~solution~~CBD based drug manufactured by GW Pharmaceuticals Ltd. for the treatment of ~~chronic~~Dravet Syndrome and ~~neuropathic~~Lennox-Gastaut Syndrome, has indicated that there are certain safety issues. We also believe that the ~~pain~~development of CBD as a drug has been confounded by the following: (i) low potency; (ii) a large number of molecular targets; (iii) marginal pharmacokinetic properties; and (iv) designation as a Schedule 1 controlled substance under the Controlled Substances Act.

Our present work involves comparing the properties of CBD with our patented novel cannabidiol derived molecule, KLS-13019, that has structural similarities to CBD. The design strategy for KLS-13019 was to increase hydrophilicity while optimizing neuroprotective potency against oxidative stress toxicity relevant to oxidative stress related diseases and neuro-inflammatory disorders. In early pre-clinical studies, the responses of CBD and KLS-13019 were compared in dissociated rat hippocampal cultures in a pre-clinical model for OHE and also CIPN.5

~~HE is a neuropsychiatric disorder that includes learning deficits and impairment of long~~KLS-~~term~~13019 ~~memory.~~versus OHE it is a sub-set of HE. HE is caused by accumulation of toxic substances in the bloodstream that are normally removed by the liver as a result of liver failure. If left unchecked, HE can progress to hepatic coma (also referred to as coma hepaticum) and ultimately death (Cordoba, 2011). The pathogenesis of HE includes damage to the prelimbic cortex, striatum and the hippocampus (Aria et al., 2013). The hippocampus, is a major component of the brains of humans and other vertebrates. The hippocampus belongs to the limbic system and plays important roles in the consolidation of information from short-term memory to long-term memory, and in spatial memory that enables navigation.CBD

~~It has~~Our ~~been~~preclinical ~~previously~~efforts demonstrated that impaired liver function and liver disease is associated with the production of free radical and oxidative stress (Bailey and Cunningham, 1998). The accumulation of these free radicals and oxidative stress contribute to ~~cognitive~~evaluate ~~impairment,~~CBD ~~learning~~indicate ~~deficits,~~that ~~memory~~there ~~impairment,~~are aspharmacological ~~well~~challenges ~~as damage~~ and ~~death~~limitation of ~~neuronal tissue~~CBD. ~~Cognitive~~Our ~~impairment is~~preclinical ~~when~~studies ahave ~~person~~shown ~~has trouble remembering, learning new things, concentrating, or making decisions~~ that ~~affect~~three ~~their everyday life.~~major ~~Cognitive~~concerns ~~impairment~~were ~~resulting~~the ~~from~~low Hpotency ~~ranges~~at ~~from~~10 ~~mild~~mM to ~~severe.~~achieve ~~There~~high isefficacy; acomplex ~~long~~pharmacology ~~felt~~as ~~need~~it ~~for~~hits too ~~neuroprotective~~many ~~agents~~molecular ~~that~~targets; ~~are both disease-modifying~~ and ~~effective~~low inoral ~~treating~~bioavailability ~~patients~~and ~~that~~poor ~~are~~brain ~~experiencing HE~~penetration. ~~Onset of HE symptoms may be gradual or sudden. Other symptoms may include movement problems, changes in mood, or changes in personality. In the advanced stages, HE can result in a coma.~~

5Comparisons between CBD and KLS-13019

~~CIPN,~~Comparisons between CBD and isKLS-13019 ahave ~~progressive~~been published in peer reviewed articles in ACS Medicinal Chemistry Letters (2016, ~~enduring~~7, 424-428) and ~~often~~two ~~irreversible~~publications ~~condition~~in the ~~featuring~~Journal ~~pain~~of Molecular Neuroscience (August 14, ~~numbness~~2018, ~~tingling~~ and ~~sensitivity~~May to10, ~~cold~~2019). The studies and science referenced in ~~the~~these articles were performed ~~hands~~by ~~and~~Advanced ~~free~~Neural Dynamics (~~sometimes~~“AND”), ~~progressing~~a tothird ~~the~~party ~~arms~~provider of preclinical pharmacology services and ~~legs~~Iteramed (“Iteramed”), a ~~that~~third ~~affects~~party ~~between~~provider ~~30%~~of medicinal chemistry consulting and ~~40%~~synthesis. ofBoth ~~patients~~AND ~~undergoing~~and ~~chemotherapy~~Iteramed are operated by Douglas Brenneman, Ph.D ~~CIPN~~and ~~often~~William ~~causes~~A. ~~termination~~Kinney ofPh.D, ~~chemotherapy~~respectively. inBoth ~~cancer~~Mr. ~~patients~~Brenneman and ~~presents~~Mr. aKinney ~~two-fold~~are ~~problem~~shareholders of the Company, ~~both~~co-inventors in ~~the~~our ~~ongoing chemotherapy~~intellectual ~~treatment~~property ~~regimen and~~underlying ~~the~~U.S. ~~abundant~~Patents ~~use~~9,611,213 ofand ~~opioids~~10,004,722, and ~~gabapentinoids~~with asrespect ~~the~~to ~~most~~Mr. ~~widely~~Kinney, is our Chief Scientific Officer. Mr. Brenneman ~~used~~is ~~products~~a tomember ~~treat~~of ~~CIPN~~our scientific advisory board.

~~Comparisons~~While results of the Company’s ~~between~~preclinical ~~CBD~~studies ~~and~~on KLS-13019 have ~~been~~shown ~~published~~preclinical inefficacy ~~peer reviewed articles~~ via in ~~ACS Medicinal Chemistry Letters (2016, 7, 424-428) and Journal of Molecular Neuroscience (14 August 2018). The~~ vitro studies ~~and science referenced~~ in ~~these~~CIPN ~~articles~~and ~~were performed by Advanced Neural Dynamics (“AND”)~~HE, aKLS-13019 ~~third party provider of preclinical pharmacology services and Iteramed (“Iteramed”),~~will arequire ~~third~~human ~~party~~clinical ~~provider~~trials ofto ~~medicinal~~determine ~~chemistry~~both ~~consulting~~safety and ~~synthesis.~~efficacy ~~Both AND~~ and ~~Iteramed~~such matters are ~~operated~~subject byto ~~Douglas~~clinical ~~Brenneman, Ph.D~~trial ~~and~~endpoints ~~William A. Kinney Ph.D, respectively. Both Mr. Brenneman~~ and ~~Mr.~~FDA ~~Kinney are shareholders of the Company~~review, ~~co-inventors~~ ~~in our intellectual property underlying U.S. Patents 9,611,213 and 10,004,722, and~~ with ~~respect~~ultimate toapproval ~~Mr.~~coming ~~Kinney,~~at isthe ~~our~~end ~~Chief~~of ~~Scientific Officer.~~a ~~Mr.~~successful ~~Brenneman~~human isclinical atrial ~~member~~study ofand ~~our~~new ~~scientific~~drug ~~advisory~~application ~~board~~(“NDA”).

~~In the~~Our ~~ACS~~peer ~~abstract and paper~~reviewed, ~~Notably,~~preclinical ~~KLS-13019~~studies ~~was~~published ~~found~~in toACS ~~be 50-fold more potent and >400-fold safer than CBD and exhibited~~Medicinal anChemistry ~~in vitro profile consistent with improved oral bioavailability. In the JOMN abstract and paper~~Letters, ~~the~~“Discovery ~~protective responses~~ of ~~CBD~~ ~~and~~ KLS-13019, ~~were~~a ~~compared~~Cannabidiol-Derived inNeuroprotective ~~dissociated~~Agent, ~~rat hippocampal cultures co-treated~~ with ~~toxic~~Improved ~~levels~~Potency, ofSafety, ~~ethanol~~ and ~~ammonium acetate.~~Permeability” This comparison revealed that KLS-13019 was 31-fold more potent than CBD in preventing neuronal toxicity from the combined toxin treatment, while both compounds exhibited protective efficacy back to control values. While results of the Company’s preclinical studies on KLS-13019 have shown ~~preclinical~~that ~~efficacy~~our ~~via in~~lead ~~vitro studies~~drug ~~in CIPN and HE~~candidate, KLS-13019 ~~will~~has ~~require human~~better ~~clinical~~pharmacokinetics ~~trials~~than toCBD ~~determine both safety~~ and ~~efficacy~~lasts ~~and such matters are subject to clinical trial endpoints and FDA review, with ultimate approval coming at the end of a successful human clinical trial study and new drug application (“NDA”)~~longer.

Our lead target drug candidate, KLS-13019, is part of an estate of new chemical entities (“NCEs”) underlying U.S. Patent 9,611,213 titled “Functionalized 1,3 Benzene-diols and their Method of Use for the Treatment of Hepatic Encephalopathy.” This patent is part of a divisional patent application by the Company to the United States Patent and Trademark Office (“USPTO”) whereby we sought claims for composition of matter, covered in Pat. 9,611,213, and separate claims for method for treatment, covered by U.S. Patent 10,004,722 titled “Method for Treating Hepatic Encephalopathy or a Disease Associated with Free Radical Mediate Stress and Oxidative Stress with Novel Functionalized 1,3 Benzene-diols.”6

~~KLS-13019 and~~In ~~its related molecules under~~ the ~~aforementioned~~ACS ~~patents~~abstract ~~describe~~and ~~novel functionalized 1~~paper,~~3-benzenediols (“Cannabidiol~~ ~~Derived~~notably, ~~Molecules”)~~KLS-13019 ~~and~~was ~~methods~~found ~~that~~to ~~may~~ be ~~useful~~50-fold ~~and~~more ~~have~~potent ~~potential~~and ~~for~~>400-fold ~~the~~safer ~~treatment~~than ofCBD HE and ~~related~~exhibited ~~conditions.~~an ~~The present~~in ~~invention~~vitro ~~further~~profile ~~describes~~consistent ~~(i)~~with improved aoral ~~novel~~bioavailability. ~~chemotype~~In ~~that~~2018 ~~may~~Journal ~~be useful and have potential for the treatment~~ of ~~diseases associated~~Molecular ~~with~~Neuroscience ~~HE,~~abstract and ~~(ii)~~paper, athe ~~novel~~protective ~~chemotype~~responses ~~that~~of ~~may~~CBD ~~be useful~~ and ~~have~~KLS-13019 were ~~potential~~compared asin ~~neuroprotective~~dissociated ~~agents.~~rat ~~The~~hippocampal ~~Cannabidiol Derived~~cultures ~~Molecules~~co-treated ~~under~~with ~~the~~toxic ~~present~~levels ~~invention~~of ~~may~~ethanol ~~be useful~~ and ~~have~~ammonium ~~potential~~acetate. ~~for~~This ~~treating~~comparison ~~and preventing diseases associated~~revealed ~~with~~that ~~free~~KLS-13019 ~~radical~~was ~~mediated~~31-fold ~~stress~~more ~~and~~potent ~~oxidative~~than ~~stress~~CBD ~~including,~~in ~~for~~preventing ~~example,~~neuronal ~~HE,~~toxicity ~~Parkinson’s~~from ~~disease,~~the ~~Alzheimer’s, Huntington’s~~combined ~~disease,~~toxin ~~traumatic head injury~~treatment, ~~stroke,~~while ~~epilepsy,~~both ~~neuropathic~~compounds exhibited ~~pain,~~protective ~~CTE,~~efficacy ~~Post~~back ~~Cardiac~~to ~~Arrest~~control ~~Hypoxic Ischemic Encephalopathy, and Epileptic Encephalopathy~~values.

We intend to study KLS-13019 in patients with chemotherapy induced neuropathic pain. We believe that the claims made in the Pat. 9,611,213 and Pat. 10,004,722 sufficiently cover the use of the novel molecule KLS-13019 in the treatment of neuropathic pain, which is broadly defined and includes chemotherapy induced neuropathic pain (a/k/a: chemotherapy induced peripheral neuropathy). 7

~~To date,~~In weaddition ~~have~~to ~~synthesized,~~the ~~pre-clinically~~ACS ~~tested and patented~~ publication, our ~~proprietary~~research ~~CBD~~and ~~like~~development ~~NCEs,~~efforts ~~including~~with KLS-13019, ~~and~~were also ~~formulated a~~the ~~new~~subject ~~CBD~~of ~~based~~peer ~~molecule~~reviewed, ~~KLS-13023.~~preclinical ~~KLS-13023~~studies ispublished ~~a target drug candidate that includes a synthetic CBD formulated~~ in aApril ~~gel capsule~~2021 ~~designed for potential use~~ in ~~humans, which is intended to enable more effective delivery of CBD. The formulation of this product is proprietary and currently held as a trade secret of~~ the ~~Company.~~British ~~CBD~~Journal ~~is the primary non-psychoactive component~~ of ~~cannabis. KLS-13023 has undergone a manufacturing feasibility study to improve some of the limitations associated with CBD~~Pharmacology, ~~including~~“Behavioural ~~but not limited to CBD’s low bioavailability~~ and ~~limited~~Pharmacological ~~drug~~Effects ~~like properties and improvement~~ of ~~the~~Cannabidiol ~~delivery of~~ (CBD) ~~through the first pass in the gut~~ and ~~into~~ the ~~circulatory~~Cannabidiol ~~system. We intend to study~~ Analogue KLS-~~13023~~13019 in ~~patients~~Mouse ~~with~~Models ~~mild~~of ~~traumatic~~Pain ~~brain injury.~~and InReinforcement” ~~addition,~~reported ~~we expect that KLS-13023 will be classified by~~ the ~~FDA~~following askey ~~an NCE. In our preclinical animal studies, KLS-13023 demonstrated effective intervention of neurodegeneration in the OHE disease state.~~results:

~~We believe~~• ~~these~~Like ~~product candidates will provide new treatment options for patients~~CBD, asKLS-13019 ~~well~~prevented asthe ~~additional~~development ~~treatment~~of ~~options~~mechanical ~~for patients~~sensitivity ~~not~~associated ~~currently~~with ~~receiving~~paclitaxel ~~adequate relief from current treatment regimens~~administration.

~~We are~~• ~~still~~In ~~conducting~~contrast ~~pre-clinical studies and have not yet commenced our clinical program or tested KLS-13019 or KLS-13023 in humans. For KLS-13019, we plan~~ to ~~conduct Phase 1~~CBD, ~~and possibly Phase 2, clinical trials in either the U.S. or Australia, subject to applicable regulatory approval. We plan to conduct our Phase 1 clinical trials for~~ KLS-~~13023 in either the U.S. or Australia, subject to applicable regulatory approval. We plan to submit New Drug Applications (“NDAs”) for KLS-~~13019 ~~and~~was ~~KLS-13023 to~~also ~~the~~effective ~~FDA~~at ~~upon~~reversing ~~completion~~established ofmechanical ~~Phase 3 clinical trials, regardless of where the Company conducts Phase 1 and Phase 2 clinical trials~~sensitivity. ~~We expect to initiate clinical trials for KLS-13019 and KLS-13023 in the first half of 2022.~~

6• KLS-13019 significantly attenuated acetic acid-induced stretching and produced modest effects in the hot plate assay.

~~We plan~~• ~~to conduct our Phase 1, and possibly Phase 2, clinical trials for~~ KLS-13019 inwas ~~the~~devoid ~~U.S.~~of oractivity ~~Australia, subject to applicable regulatory approval, and do not expect~~ at ~~this time to file an investigational new drug application~~μ-, δ- or ~~IND,~~κ-opioid ~~with the U~~receptors.S. ~~Food and~~Lastly, ~~Drug Administration~~KLS-13019, orbut ~~the~~not ~~FDA~~CBD, ~~prior~~attenuated to the ~~commencement~~reinforcing effects of ~~those~~palatable ~~clinical~~food ~~trials. We must file an IND with the FDA and receive approval from the U.S. Drug Enforcement Agency,~~ or ~~DEA, prior to commencement of any clinical trials in the United States~~morphine.

~~In preclinical~~The ~~studies~~following ~~performed~~chart ~~pursuant~~indicates toopioid ainhibition ~~small business technology transfers (“STTR”) agreement between us, and~~percentages ~~Temple~~for ~~University,~~both funded by the National Institutes of Health – National Institute on Drug Abuse (“NIH-NIDA”), our research, the subject of two peer reviewed scientific publications in the Journal of Molecular Neuroscience, described how KLS-13019, was superior to CBD and ~~morphine in the potential to prevent and reverse neuropathic pain caused by paclitaxel, a chemotherapeutic agent used to treat breast, ovarian and non~~KLS-~~small cell lung cancer. (See: Business – Preclinical Studies for more information).~~13019

~~Upon completion~~The ofstudy ~~all~~also ~~requisite~~reported ~~preclinical studies, we expect to open an Investigational New Drug Application, or IND, to pursue a clinical development program with either~~ the ~~U.S.~~following ~~Food and Drug Administration (“FDA”) in the U.S. or the Therapeutic~~conclusions ~~Goods Administration (“TGA”), the regulatory body for therapeutic goods (including medicines, medical devices, gene technology,~~ and ~~blood products) in Australia.~~Implications:

~~In mid~~• ~~2019~~KLS-13019 like CBD, weprevented ~~began~~the ~~screening~~development ~~and~~of ~~conducting~~CIPN, ~~preliminary~~while ~~research~~KLS-13019 ~~and~~uniquely ~~development~~attenuated ofestablished ~~some~~CIPN. ofBecause ~~our~~KLS-13019 ~~patented~~binds to fewer biological targets, ~~proprietary~~this ~~cannabidiol-derived NCEs~~will ~~for~~help ~~use~~to asidentifying ~~active~~molecular ~~pharmaceutical~~mechanisms ~~ingredients~~shared ~~(APIs)~~by inthese ~~topical~~two ~~solutions,~~compounds ~~ointments~~and those unique to KLS-13019. Lastly, ~~and~~KLS-13019 ~~creams~~may ~~for~~possess ~~various~~the ~~skin~~ability ~~disorders such~~to asattenuate ~~eczema,~~reinforced ~~psoriasis~~behaviour, ~~radiation~~an ~~dermatitis~~effect ~~and~~not ~~excessive~~observed ~~UVB~~in ~~radiation~~the present study with CBD.

~~These disorders generally lead to symptoms including neuropathies~~EpidiolexÒ, ~~inflammation and itch. The Company believes that successful development~~ ofa ~~its~~CBD ~~topical~~based ~~APIs~~FDA ~~can~~Approved beDrug ~~useful~~to asTreat ~~anti~~Lennox-~~pruritics,~~Gastaut ~~also~~Syndrome ~~known as anti-itch drugs~~ and ~~medications~~Dravet ~~that inhibit the itching often associated with a variety of disorders and diseases.~~Syndrome

~~We are~~To ~~considering~~date ~~commercialization~~there ~~routes~~has ~~that~~been ~~include~~only one cannabidiol based medicament, ~~but~~EpidiolexÒ, approved ~~are~~for ~~not~~use ~~limited~~in ~~to,~~humans ~~filing~~by anthe FDA. The ~~Monograph~~drug, ~~and/or~~EpidiolexÒ, ~~pursing~~is aused to ~~path~~treat seizures due to certain medical conditions ~~the~~(such ~~marketplace~~as Lennox-Gastaut ~~through~~syndrome ~~International~~and Dravet ~~Nomenclature~~syndrome). ofIt ~~Cosmetic~~is ~~Ingredients~~not ~~(“INCI”)~~known ~~certification~~how ~~and~~this ~~registration~~medication works for these seizures. CBD ~~with~~belongs ~~the~~to ~~Personal~~a ~~Care~~class ~~Products~~of ~~Council~~drugs ~~(“PCPC”)~~known as cannabinoids.

InAdditionally, the FDA’s ~~preclinical~~Office ~~testing,~~of ~~KLS-13022,~~Orphan aProducts ~~molecule~~Development ~~covered~~(“OOPD”) ~~under~~has ~~Pat.~~designated ~~9,611,213~~cannabidiol ~~was~~twenty ~~screened~~six ~~for~~times ~~neuroprotection~~since ~~and~~2013 ~~may~~for ~~have~~a ~~the~~multitude ~~potential~~of diseases ~~mechanism~~ranging from rare forms of ~~action~~epilepsy ~~for~~to ~~reducing~~prevention ~~inflammation,~~of ~~neuropathic~~reperfusion ~~pain~~injury ~~and~~due ~~itch~~to organ transplantation to glioblastoma multiforme to autoimmune hepatitis. ~~This~~While ~~molecule~~our ~~indicated~~primary ~~that~~indications itof isOHE ~~more~~and ~~soluble~~CIPN ~~than CBD~~have not, ~~also~~heretofore, ~~deemed~~been atargeted ~~neuroprotectant~~by ~~with~~CBD-based ~~potential~~or ~~anti~~CBD-~~inflammatory~~derived ~~properties.~~drugs Aand ~~molecule~~cleared by ~~that~~the isFDA ~~potentially~~or ~~more~~other ~~water~~foreign ~~soluble than~~regulatory ~~CBD~~agency, inneither ~~this~~have ~~regard~~the ~~may~~aforementioned betwenty ~~good~~six ~~candidate(s)~~orphan ~~for~~designated ~~use~~indications intargeted ~~topical~~by ~~applications~~CBD.

To date there has been only one cannabidiol based medicament, Epidiolex®, approved for use in humans by the FDA. The drug, Epidiolex®, is used to treat seizures due to certain medical conditions (such as Lennox-Gastaut syndrome and Dravet syndrome). It is not known how this medication works for these seizures. CBD belongs to a class of drugs known as cannabinoids. Additionally, the FDA’s Office of Orphan Products Development (“OOPD”) has designated cannabidiol twenty six times since 2013 for a multitude of diseases ranging from rare forms of epilepsy to prevention of reperfusion injury due to organ transplantation to glioblastoma multiforme to autoimmune hepatitis. While our primary indications of OHE and CIPN have not, heretofore, been targeted by CBD-based or CBD-derived drugs and cleared by the FDA or other foreign regulatory agency, neither have the aforementioned twenty six orphan designated indications targeted by CBD. 8

~~OTC~~CBD is the active ingredient ~~Cosmetic~~in ~~Skin~~EpidiolexÒ. ~~Care~~The –Warnings ~~KLS-13022~~and Precautions on the Highlights of Prescribing information for EpidiolexÒ states among other things:

~~Since mid~~· ~~2019,~~Hepatocellular ~~the~~Injury. ~~Company~~EpidiolexÒ ~~has~~causes ~~been~~dose-related ~~screening~~elevations ~~and conducting preliminary research and development~~ of ~~some~~liver oftransaminases ~~its patented, proprietary cannabidiol-derived new chemical entities~~ (~~“NCEs”),~~alanine ~~for~~aminotransferase ~~use~~[ALT] ~~as topical solutions, ointments,~~ and/or ~~creams~~aspartate ~~for~~aminotransferase ~~disorders such as diabetic neuropathies, diabetic ulcers, and for use as an anti-pruritic. (see: Business – Neuropathix Intellectual Properties~~[AST]) .

~~In preclinical~~· ~~testing,~~Transaminase ~~certain~~elevations ~~molecules~~are ~~under~~dose-related. ~~Patent~~Overall ~~9,611,213~~ALT ~~were~~elevations ~~screened~~greater ~~for~~than ~~neuroprotection~~3 ~~and~~times ~~may have~~ the ~~potential~~upper ~~mechanism~~ limit of ~~action~~normal ~~for~~(ULN) ~~reducing~~were ~~inflammation~~reported ~~and~~in ~~neuropathic~~17% ~~pain.~~of ~~These~~patients ~~molecules~~taking ~~indicate~~EpidiolexÒ ~~that~~20 ~~they~~mg/kg/day ~~are~~compared ~~more soluble than cannabidiol, also deemed a neuroprotectant~~ with ~~potential~~1% ~~anti-inflammatory properties. A molecule that is potentially more water soluble than cannabidiol~~ in ~~this~~patients ~~regard~~taking ~~may~~EpidiolexÒ be10 ~~good candidate(s) for use in topical applications~~mg/kg/day.

7· Somnolence and Sedation. EpidiolexÒ can cause somnolence and sedation. In controlled studies for Lennox-Gastaut Syndrome (LGS) and Dravet Syndrome (DS), the incidence of somnolence and sedation (including lethargy) was 32% in EpidiolexÒ treated patients, compared with 11% in patients on placebo and was dose-related (34% of patients taking EpidiolexÒ 20 mg/kg/day, compared with 27% in patients taking EpidiolexÒ 10 mg/kg/day.

~~The Company~~· ~~has~~EpidiolexÒ ~~completed~~can ~~the~~cause ~~following~~hypersensitivity ~~relating to KLS-13022:~~reactions.

•· ~~Preclinical~~EpidiolexÒ ~~screening~~has ~~for~~drug ~~consumer~~interaction ~~OTC~~effects. ~~cosmetic~~Coadministration ~~use~~of ~~under~~EpidiolexÒ ~~CFR~~with 21Clobazam produces a 3-fold increase in plasma concentrations of N-desmethylclobazam, the active metabolite of clobazam (a substrate of CYP2C19).

•· ~~Application~~Concomitant touse ~~International Nomenclature~~ of ~~Cosmetic~~EpidiolexÒ ~~Ingredients~~and ~~(INCI)~~valproate ~~completed~~increases tothe ~~receive~~incidence aof ~~compound~~liver ~~nomenclature~~enzume ~~for KLS-13022 - Limonenyldihydroxybenzyl Ethoxycarbonyl Azetidine (LEA)~~elevations.

•· ~~Received~~Concomitant ause ~~registered~~of ~~trademark~~EpidiolexÒ ~~from~~with ~~the~~other ~~U.S.~~central ~~Patent~~nervous ~~and~~system ~~Trademark Office~~ (~~“USPTO”~~CNS) ~~for~~depressants ~~Atopidine®,~~may toincrease bethe ~~used~~risk asof asedation ~~branded product as a relief cream, containing LEA, to treat inflammatory disorders like eczema, psoriasis, radiation dermatitis~~ and ~~excessive UVB radiation (post sun burn)~~somnolence.

~~Based~~In Juvenile Animal Studies, administration of cannabidiol (subcutaneous doses of 0 or 15 mg/kg on ~~preclinical~~Postnatal ~~testing~~Days (PNDs) 4 – 6, followed by oral administration of ~~LEA~~0, ~~versus~~100, ~~CBD~~150, or 250 mg/kg on PNDs 7 – 77) to juvenile rats for 10 weeks resulted in increased body weight, delayed male sexual maturation, neurobehavioral effects (~~cannabidiol~~decreased locomotor activity and auditory startle habituation), increased bone mineral density, and liver hepatocyte vacuolation. A no-effect dose was not established. The lowest dose causing developmental toxicity in ~~cultured~~juvenile ~~human~~rats ~~epidermal~~(15 sc/100 ~~keratinocytes:~~po mg/kg) was associated with cannabidiol exposures approximately 30 times that in humans at the recommended dose of 20 mg/kg/day.

•Neuropathix ~~LEA~~Research ~~provided better anti-inflammatory activity compared to CBD for TNFa, IL-6~~ and ~~significantly~~Development ~~more potent that CBD for IL-1b inhibition~~ in ~~UVB~~Chemotherapy Induced ~~irradiation~~Peripheral ~~induced~~Neuropathy ~~inflammation.~~(“CIPN”)

•In ~~LEA~~the ~~decreased~~past ~~CXCL5~~three ~~levels~~years, byour ~~100%~~most ~~after~~recent ~~UVB~~research and ~~irradiation~~development ~~with~~efforts ~~IC50~~have been centered on the use of ~~0.05~~KLS-13019 mMas a neuroprotectant and therapeutic agent to treat chronic and neuropathic pain. ~~(CXCL5~~There is acurrently ~~small~~no ~~cytokine~~FDA ~~belonging~~approved drug to treat CIPN. Our preclinical efforts in the ~~chemokine~~research ~~family~~and ~~known~~development asof ~~epithelial-derived~~treating ~~neutrophil~~CIPN with our lead compound KLS-~~activating~~13019 ~~peptide~~have 78been fostered by a successful study grant from National Institutes of Health – National Institute on Drug Abuse (~~ENA~~“NIH-78NIDA”). Itthat iscompared ~~produced~~KLS-13019 ~~following~~to CBD in the ~~stimulation~~prevention and reversal of ~~cells~~neuropathic ~~with~~pain in animal models. As a result of the ~~inflammatory~~outcome ~~cytokines~~of ~~TNFa~~this and ILother preclinical studies, we believe there is strong evidence to support the use of KLS-1b13019 as a non-opioid solution to chronic and neuropathic pain in human clinical trials.)

•Our ~~LEA~~current ~~decreases~~focus ~~levels~~is ofcentered ~~four~~around ~~(4)~~advancing KLS-13019 ~~inflammatory~~as ~~mediators~~a atnovel, ~~concentrations~~non-opioid >solution 65for ~~times~~the ~~less~~treatment ~~than~~of ~~toxic~~chronic ~~levels~~and neuropathic pain.

•Our ~~LEA~~present iswork aninvolves ~~antioxidant~~comparing the properties of CBD with our patented novel cannabidiol derived molecule, KLS-13019, that ~~does~~has ~~not~~structural ~~exhibit~~similarities ~~cellular~~to ~~irritation~~CBD. The design strategy for KLS-13019 was to increase hydrophilicity while optimizing neuroprotective potency against oxidative stress toxicity relevant to oxidative stress related diseases and isneuro-inflammatory ~~locally~~disorders. ~~restricted~~In inearly ~~its~~pre-clinical ~~action~~studies, ~~(antioxidant~~the ~~activity~~responses of ~~EC50~~CBD atand 25KLS-13019 ~~mM)~~were compared in dissociated rat hippocampal cultures in a pre-clinical model for OHE and also CIPN.

~~The~~CIPN, is a progressive, enduring and often irreversible ~~Company~~condition ~~has~~featuring ~~completed~~pain, ~~formulation~~numbness, tingling and sensitivity to cold in the hands and free (sometimes progressing to the arms and legs) that affects between 30% and 40% of patients undergoing chemotherapy. CIPN often causes termination of chemotherapy in cancer patients and presents a ~~topical~~two-fold ~~relief~~problem, ~~cream~~both ~~for~~in ~~use~~the asongoing anchemotherapy ~~OTC~~treatment ~~cosmetic~~regimen and ~~skin~~the ~~care~~abundant ~~product~~use toof beopioids ~~marketed~~and ~~under~~gabapentinoids as the ~~trade~~most ~~name~~widely ofused ~~Atopidine®~~products to treat CIPN.

~~Opioid Crisis in America~~9

~~In 2019,~~$2.97 ~~nearly~~Million ~~50,000~~Grant ~~people~~Award ~~in the United States died~~ from ~~opioid-involved overdoses (CDC/NCHS,~~ National ~~Vital Statistics~~Institutes ~~System,~~of ~~Mortality~~Health ~~2019~~(“NIH”)~~. The~~ ~~misuse of and addiction to opioids—including prescription pain relievers, heroin, and synthetic opioids such as fentanyl~~ – isNational aInstitute ~~serious~~of ~~national~~Neurological ~~crisis~~Disorders ~~that affects public health as well as social~~ and ~~economic~~Stroke ~~welfare.~~(“NINDS”) ~~The~~under ~~Centers for Disease Control and Prevention estimates that~~ the ~~total~~HEAL ~~economic burden of prescription~~Initiative ~~opioid misuse alone in the United States is $78.5 billion a year, including the costs of healthcare, lost productivity, addiction treatment, and criminal justice involvement.~~ (~~Med~~“Helping ~~Care~~to ~~2016;~~End ~~54(10~~Addiction Long-term”).

~~Since February~~On ~~2020~~September 28, ~~the~~2021, the Company’s ~~lead~~received ~~compound,~~a ~~KLS-13019~~notice ~~has~~of ~~been~~award infor ~~the~~a ~~preclinical~~$2.97 ~~screening~~million ~~program~~Phase ~~for~~2 ~~pain~~STTR ~~(PSPP)~~Study atGrant from the National Institutes of Health – National Institute of Neurological Disorders and Stroke under the HEAL Initiative (the “NIH-NINDS Study Grant Award”). ~~This~~The ~~program~~NIH-NINDS Study Grant Award is ~~part of~~funded through the NIH HEAL Initiative (“Helping to End Addiction Long-~~term~~Term”) ~~Initiative~~for Development of Therapies and Technologies Directed at Enhanced Pain Management. ~~With~~This NIH-~~HEAL~~NINDS ~~support,~~Study ~~NINDS~~Grant ~~has~~Award ~~developed~~provides ~~the~~funding ~~PSPP~~specifically ~~program~~in tothe further development ~~facilitate~~of KLS-13019 for the ~~identification~~treatment of ~~potential~~chemotherapy ~~non-addictive~~induced ~~treatments~~neuropathic pain (~~small~~“CIPN”). ~~molecules~~The grant award of $2.97 million sets forth the funding allocation of $977,054 ~~biologics~~in year 1; $991,944 ~~devices~~in year 2; and $1,001,774 orin ~~natural~~year ~~products~~3 and collectively budgets investigational new drug (“IND”) application enabling studies. IND enabling studies to be performed, include but are not limited to animal toxicity ~~for~~studies ~~acute~~and drug compound scale up studies under chemistry manufacturing and ~~chronic~~controls. ~~pain~~The ~~conditions~~NIH-NINDS Study Grant Award budget includes studies to be performed at Temple University; the University of Illinois; and Purisys (formerly, Noramco).

~~More than~~Of 25significant ~~million~~collateral importance ~~Americans~~is ~~live~~the ~~with~~current ~~daily~~epidemic ~~chronic~~of ~~pain~~opioid ~~and~~addiction ~~lack effective~~ and ~~safe~~abuse ~~non-opioid~~by ~~options~~patients ~~for~~in ~~pain~~the ~~management.~~United ~~Research offered~~States byand around the ~~PSPP~~globe. ~~will~~Adding beto athe equation ~~key~~is ~~step~~the inoff-label ~~transitioning~~use ~~HEAL~~of ~~preclinical~~opioids ~~programs~~and ~~into~~gabapentinoids ~~clinical~~for ~~programs,~~chronic ~~directly~~and ~~aligned~~neuropathic ~~with the~~pain ~~HEAL~~as ~~Initiative~~a ~~goal~~result of ~~accelerating~~ the ~~discovery~~unmet ~~and~~medical ~~pre-clinical~~need ~~development~~and no ofFDA approved non-~~addictive~~opioid ~~pain~~drug ~~treatments~~to ~~(NINDS~~treat ~~– Preclinical~~chronic ~~Screening~~and ~~Platform~~neuropathic ~~for~~pain, ~~Pain~~specifically ~~– ninds~~CIPN.~~nih.gov).~~

~~The Company’s~~In ~~lead~~December ~~compound~~2019, ~~KLS-13019, has already gone through Tier 1 evaluation under~~ the ~~PSPP~~Company’s wholly ~~which~~owned subsidiary, ~~among~~Kannalife ~~other things~~Sciences, ~~assesses~~ ~~targets~~Inc. ~~and~~completed ~~pharmacokinetics~~an ~~(PK) of KLS~~NIH-~~13019~~NINDS –phase ~~compared against morphine and diazepam. Certain results from the Tier~~ 1 ~~screening~~STTR ~~report~~study ~~under~~grant ~~the~~with ~~PSPP~~Temple indicate that KLS-13019 has a low abuse potential and acceptable PK to move to Tier 2 studies for animal model assessment in pain and guardian behavior; wound healing and ability to recover; and Irwin testing for CNS toxicityUniversity.

~~Additionally, the~~Key ~~Company~~preclinical isanimal ~~currently~~testing findings ~~awaiting~~of athis ~~response~~study ~~from~~were ~~NIH~~as follows. KLS-~~NINDS~~13019 ~~regarding~~has ~~its~~excellent ~~re-submission~~oral ofbioavailability ~~its~~(F%) ~~application~~67% ~~for~~was aobserved ~~Phase~~in 2mice. ~~SBIR~~In rat PK, F% was ~~study~~16% ~~grant~~in females and 8% in males. Further PK work in the rat will be done following formulation optimization. The reCmax and half-~~resubmission~~life of KLS-13019 ~~its~~is ~~original~~adequate ~~study~~in ~~grant~~both ~~application~~mice ~~included~~and ~~new~~rats ~~data~~for ontwice a ~~novel~~day ~~inflammatory~~treatment. ~~sentinel~~In a separate mouse study, brain and plasma concentrations were aequivalent ~~revised~~after ~~budget~~oral administration, ~~boosting~~boding ~~the~~well ~~grant~~for ~~request~~in tovivo ~~approximately~~efficacy ~~$2.9~~after ~~million~~oral administration. ~~The~~Under ~~Company~~the ~~anticipates~~Phase 1 award, the efficacy of KLS-13019 was tested in a ~~response~~mouse ~~from~~model ~~NIH~~of CIPN as well as a mouse model of opioid reinforcement. It was determined that KLS-~~NINDS~~13019 was ~~sometime~~as potent as CBD in ~~May~~preventing ~~2021~~the development of paclitaxel induced mechanical sensitivity and superior to CBD in its ability to reverse an established CIPN (Foss et al., 2020). Moreover, KLS13019 was also effective at preventing paclitaxelinduced mechanical sensitivity following oral administration.

To generate CIPN, male C57Bl/6 mice are injected with 8.0 mg/kg paclitaxel IP on alternating days for a total of 4 injections. For prevention studies, test compounds are administered 15 min prior to each paclitaxel injection. For reversal studies, test compounds are administered 2 weeks following paclitaxel administration, after mechanical sensitivity has developed. Mechanical sensitivity is determined by testing with von Frey filaments as described in Ward et al 2011. It was also determined that pretreatment with KLS-13019, but not CBD, attenuated motivated responding to receive infusions of morphine in mice trained to self-administer morphine under an operant procedure called progressive ratio responding. Taken together our results suggest that KLS-13019 may be effective in either preventing or reversing CIPN while having the added benefit of reducing the rewarding effects of prescription opioids.

~~Corporate~~In April 2021, a peer reviewed ~~Strengths~~scientific research paper was published in the British Journal of Pharmacology (6 April 2021) titled “Behavioural and ~~Weaknesses~~Pharmacological Effects of Cannabidiol (CBD) and the Cannabidiol Analogue KLS-13019 in Mouse Models of Pain and Reinforcement”. As indicated in the research paper, “The overarching goal of the experiments reported here was to determine the behavioural effects of KLS-13019, a structural analogue of CBD. Specifically, we aimed to determine whether KLS-13019 was as potent and effective as CBD at mitigating mechanical allodynia associated with paclitaxel treatment and whether it was efficacious following oral administration.”

~~We believe that we offer the following key distinguishing characteristics:~~10

•Key Wefindings ~~believe~~in ~~we are~~ the ~~first~~report included ~~commercial drug discovery company in~~ the cannabinoid therapeutics space to successfully synthesize CBD derived new chemical entities and pre-clinically test lead NCEs for potential treatment of oxidative stress related diseases, including OHE and CIPN.following:

• WeCBD ~~were~~analogue ~~the~~KLS-13019 ~~only~~shows ~~commercial~~efficacy ~~drug~~in ~~discovery~~an ~~company~~ in ~~the~~vitro ~~cannabinoid~~model ~~therapeutics~~of ~~space~~chemotherapy-induced toperipheral ~~license~~neuropathy ~~the ‘507 Patent, prior to its expiration, from NIH on two separate occasions~~(CIPN).

• ~~We have completed pharmacokinetic and pharmacodynamic pre-clinical studies with high purity scale, pharmaceutical grade CBD and~~ KLS-13019 ~~for~~has ~~potential~~the ~~treatment~~potentially ofto ~~oxidative~~be ~~stress~~a ~~related~~more ~~disease~~potent, –effective, ~~OHE~~orally ~~and~~bioavailable ~~CIPN~~option to CBD.

• WeIn ~~anticipate~~the ~~commencing~~present study, KLS-13019 reversed established CIPN at a ~~Phase~~minimal effective dose of 2.5 mg/kg-1 ~~trial~~i.p. inand ~~CIPN~~p.o. ~~sometime~~These results indicate that in addition to the ~~1st~~neuroprotective ormechanisms ~~2nd~~of ~~quarter~~CBD and KLS-13019, such as regulation of ~~2022~~mitochondrial Ca2+ handling (Brenneman et al., 2019), KLS-13019 may work through an additional, unique mechanism.

• WeBased ~~anticipate~~on ~~commencing~~the apresent ~~Phase~~opioid 1receptor ~~trial~~binding indata ~~OHE~~for ~~sometime~~KLS-13019 inshowing ~~the~~no ~~3rd~~appreciable ginding at m-, d- or ~~4th~~k- ~~quarter~~opioid ofreceptors ~~2022~~at 10 mM, it is unlikely that these reversal effects were opioid receptor mediated.

• WeIn ~~anticipate~~conclusion, ~~commencing~~these astudies ~~Phase~~demonstrate 1that ~~trial~~like inCBD, ~~Mild~~KLS-13019 ~~Traumatic~~can ~~Brain~~prevent ~~Injury~~the indevelopment ~~the~~of ~~1st~~mechanical orsensitivity ~~2nd~~following ~~quarter~~paclitaxel ofadministration ~~2023~~in mice, including following oral administration.

• WeWhile ~~have~~prevention of CIPN represents a ~~firm~~significant ~~understanding~~unmet ofmedical need, so does the ~~mechanism~~treatment of ~~action~~existing CIPN for thousands of ~~CBD~~cancer ~~and~~survivors. The present results highlight the additional potential benefit of KLS-13019 in ~~certain~~its ~~oxidative~~ability ~~stress~~to ~~related~~also ~~disorders~~reverse established paclitaxel-induced mechanical sensitivity, by extension underscoring the conclusion that KLS-13019 may work through unique mechanisms as compared with CBD in this model.

• WeLastly, ~~believe~~KLS-13019 wemay ~~have~~possess athe ~~strong~~ability ~~next~~to ~~generation~~attenuate ~~intellectual~~reinforced ~~property estate on cannabidiol derived NCEs. On this basis~~behavior, wean ~~believe~~effect wenot ~~can~~observed ~~expand~~in the ~~approved~~present ~~indications~~study ~~KLS-13019~~with ~~and develop additional cannabinoid therapeutic agents to add to our IP portfolio~~CBD.

•Results Wefrom ~~believe~~the ~~that~~Preclinical ~~our~~Screening ~~pre-clinical~~Platform for ~~drug~~Pain ~~development program points to a significant opportunity in cancer pain, a large market.~~(“PSPP”)

•In WeApril ~~believe~~2020, ~~that~~the ~~our~~company’s wholly ~~pre-clinical~~owned subsidiary, Kannalife Sciences, Inc. entered into an “Agreement for Submitting Your Asset to the Preclinical Screening Platform for Pain (PSPP) of the National Institute of Neurological Disorders and Stroke” (the “PSPP Agreement”). Critical resources on exploring the mechanism of action and assessment of drug-like ~~development~~actions ~~program~~of ~~points~~KLS-13019 have been provided to aKannalife ~~significant~~by ~~opportunity~~the Preclinical inScreening ~~opioid~~Platform ~~replacement~~for /Pain ~~reduction~~(PSPP) ~~market~~within NINDS.

~~We have~~With ~~not~~NIH ~~moved~~HEAL ~~beyond~~(Helping ~~pre-clinical~~to End ~~studies~~Addiction ofLong-Term) ~~our~~Initiative ~~drug candidates to date~~support, ~~and~~NINDS ~~there~~has ~~can~~developed bea noPreclinical ~~assurances~~Screening ~~that~~Platform wefor ~~will~~Pain do(PSPP) soprogram into facilitate the ~~near~~identification ~~future,~~of ifpotential ~~ever.~~non-addictive ~~While~~treatments we(small ~~believe~~molecules, ~~that~~biologics, wedevices, ~~are~~or ~~well~~natural ~~positioned~~products) tofor beacute ~~competitive~~and ~~in advancing non-opioid solutions for~~ chronic pain ~~and~~conditions. ~~neuropathic~~The ~~pain,~~overall asgoal ~~well~~of as the ~~cannabinoid~~PSPP ~~like~~is ~~therapeutics~~to ~~space,~~provide wepain ~~also~~researchers ~~believe~~from ~~that~~the weacademic ~~will~~and ~~face~~industry ~~significant challenges~~community inwith ~~successfully~~an ~~completing~~efficient, rigorous one-stop ~~or more clinical trials. In addition, there is a competitive landscape that exists~~ in ~~the~~ ~~market~~vivo ~~for~~screening ~~the~~resource ~~Company’s~~to ~~target~~accelerate ~~indications~~efficacy ofprofiling ~~OHE~~ and ~~CIPN.~~identification ~~The~~of ~~competitive~~alternatives ~~landscape~~to isopioid ~~challenging~~analgesics. ~~Competition in~~ ~~the~~PSPP ~~OHE~~conducts ~~and~~an ~~CIPN~~assessment ~~spaces~~of isin ~~well~~vitro ~~established,~~ and ~~many~~pharmacokinetic ~~companies~~profiles, ~~have~~side ~~significantly~~effect ~~greater~~profiles, ~~resources~~abuse ~~than we do~~liability, ~~some~~and ofefficacy ~~which are viewed as leaders~~ in ~~the~~models relevant ~~current~~to ~~standard~~human ofpain ~~care for these diseases~~conditions.

~~The current~~A ~~standard~~summary of ~~care~~the ~~for~~tier ~~patients~~1 ~~suffering~~PSPP ~~with~~study ~~OHE~~included isa screen ~~550mg~~of targets related to pain are as follows. Results from the early tier 1 studies of ~~XifaxanÒ,~~KLS-13019 ~~originally~~under anthe ~~antibiotic~~PSPP ~~useful~~has inprovided ~~treating~~valuable ~~traveler’s~~data ~~diarrhea~~from ~~and~~their ~~irritable~~screening ~~bowel~~of ~~syndrome~~78 pain-related targets. ~~Its~~This ~~exact~~screening ~~mechanism~~was ofnot ~~action~~only isvaluable ~~not~~in ~~known;~~identifying ~~however~~potential targets, itinsight isinto potential ~~theorized~~sides ~~that XifaxanÒ clinical~~effects ~~activity~~also ~~may~~were beobtained, ~~attributed~~including toall ~~effects~~of onthe ~~metabolic~~opiate ~~function~~receptors. The results of ~~gut~~this ~~microbiota,~~screen ~~rather~~indicated ~~than~~KLS-13019 was a ~~change~~ remarkably “clean” compound in that none of the ~~relative~~78 ~~bacterial~~targets ~~abundance~~exhibited high affinity functional activity (EC50 < 100 nM). ~~Currently,~~Low ~~there~~affinity isresponses no(EC50 ~~drug~~10-50 inµM) ~~the~~were ~~market~~observed for ~~OHE~~5HT-3A, ~~that~~COX1 isand ~~being~~COX2. ~~used~~KLS-13019 toshowed ~~treat~~a ~~the~~weak ~~toxic~~activity ~~effects on~~at the GABA-A ~~hippocampus~~α1/β2/γ2 subtype, producing a 14 and 62% increase in the ~~cognitive~~response to an EC20 of GABA at 1 and ~~behavioral~~10 ~~dysfunction~~µM, ~~associated~~respectively. KLS-13019 ~~with~~was ~~OHE~~tested in the positive allosteric mode for the delta, kappa and mu opioid receptors in the ~~action~~presence of ~~neuroprotection~~an ~~from~~EC20 ~~ammonia~~of agonist. KLS-13019 exhibited only low potency, with EC50 values between 24 and ~~ethanol~~38 ~~toxicity~~µM for the opiate receptors.

~~Given the~~Neuropathix ~~competitive~~Novel ~~landscape~~Drug in OHE, we believe we can participate in the OHE market with primary and adjunctive therapeutics currently under pre-clinical development, and potentially obtain orphan drug designation for one or more of our target therapeutic agents. Compounds

~~With respect~~Our tolead ~~competitive~~target ~~landscape~~drug ~~for CIPN~~candidate, ~~nearly~~ KLS-13019, ais ~~dozen~~part ~~agents~~of ~~have~~an ~~been~~estate ~~studied~~of innew ~~randomized~~chemical ~~controlled~~entities ~~trials~~(“NCEs”) ~~for~~underlying ~~the~~U.S. Patent 9,611,213 titled “Functionalized ~~treatment~~1,3 Benzene-diols and their Method of ~~CIPN,~~Use ~~but~~for ~~there~~the ~~has~~Treatment ~~been~~of ~~limited~~Hepatic ~~success~~Encephalopathy.” ~~The~~This ~~characteristics~~patent ~~and~~is ~~results~~part of ~~these~~a ~~studies~~divisional ~~are~~patent application ~~summarized~~by in the ~~study~~ ~~and~~Company ~~abstract~~to ~~“Management~~the ofUnited ~~Chemotherapy~~States ~~Induced~~Patent ~~Peripheral~~and ~~Neuropathy”~~Trademark Office (~~Physician’s~~“USPTO”) ~~Education~~whereby ~~Resource~~we sought claims for composition ~~LLC~~of matter, ~~Meghna~~covered Sin Pat. ~~Trivedi~~9,611,213, ~~MD;~~and ~~Dawn~~separate L.claims ~~Hershman,~~for MDmethod for treatment, ~~MS; Katherine~~covered Dby U.S. ~~Crew,~~Patent MD10,004,722 ~~MS).~~titled ~~Clinical~~“Method for ~~trials~~Treating ofHepatic ~~the~~Encephalopathy ~~antiepileptic~~or ~~agents gabapentin and~~a ~~lamotrigine and~~Disease ~~the~~Associated ~~antidepressants~~with ~~nortriptyline~~ Free Radical Mediate Stress and ~~amitriptyline have~~Oxidative ~~all~~Stress ~~been~~with ~~negative~~Novel Functionalized 1,3 Benzene-diols. ”

Additionally, there have been several small placebo-controlled trials which have shown that intravenous administration of glutathione with platinum-based chemotherapy regimens can decrease the incidence of neurotoxicity without diminishing the effect of chemotherapy. A North Central Cancer Treatment Group / Alliance trial conducted in 2014 studied the use of glutathione with carboplatin and paclitaxel for treatment of CIPN, and found no improvement in neurotoxicity symptoms, suggesting that glutathione may not help in taxane-induced CIPN. 11

9KLS-13019 and its related molecules under the aforementioned patents describe novel functionalized 1,3-benzenediols (“Cannabidiol Derived Molecules”) and methods that may be useful and have potential for the treatment of HE and related conditions. The present invention further describes (i) a novel chemotype that may be useful and have potential for the treatment of diseases associated with HE, and (ii) a novel chemotype that may be useful and have potential as neuroprotective agents. The Cannabidiol Derived Molecules under the present invention may be useful and have potential for treating and preventing diseases associated with free radical mediated stress and oxidative stress including, for example, HE, Parkinson’s disease, Alzheimer’s, Huntington’s disease, traumatic head injury, stroke, epilepsy, neuropathic pain, CTE, Post Cardiac Arrest Hypoxic Ischemic Encephalopathy, and Epileptic Encephalopathy.

~~Furthermore,~~We intend to study KLS-13019 ~~the~~in ~~continuous~~patients ~~use~~with ofchemotherapy ~~opiates~~induced neuropathic pain. We believe that the claims made in the ~~current~~Pat. ~~standard~~9,611,213 ofand ~~care~~Pat. to10,004,722 ~~treat~~sufficiently cover ~~CIPN~~the ~~have~~use ~~resulted~~of the novel molecule KLS-13019 in ~~mixed~~the ~~results~~treatment of neuropathic pain, ~~addiction~~which ~~problems~~ is broadly defined and ~~dose~~includes ~~tolerance~~chemotherapy induced ~~problems~~neuropathic pain (a/k/a: chemotherapy induced peripheral neuropathy).

WeTo date, we have synthesized, ~~believe~~pre-clinically ~~that~~tested and patented our proprietary CBD like NCEs, ~~while~~including ~~the~~KLS-13019, ~~current~~and ~~standard~~also offormulated ~~care~~a new CBD based molecule, KLS-13023. KLS-13023 is ~~well~~a ~~positioned~~target drug candidate that includes a synthetic CBD formulated in ~~the~~a ~~market~~gel capsule designed for potential use in humans, ~~there~~which is intended to enable more effective delivery of CBD. The formulation of this product is anproprietary ~~unmet~~and ~~need~~currently ~~for~~held as a trade secret of the ~~treatment~~Company. CBD is the primary non-psychoactive component of cannabis. KLS-13023 has undergone a manufacturing feasibility study to ~~CIPN~~improve insome of the ~~reduction~~limitations associated with CBD, including but not limited to CBD’s low bioavailability and limited drug like properties and improvement of ~~use~~the delivery of ~~opiates~~CBD through the first pass in the gut and into the circulatory system. We ~~believe~~intend ~~that~~to ~~this~~study KLS-13023 ~~presents~~in uspatients with anmild ~~opportunity~~traumatic tobrain ~~participate~~injury. inIn addition, we expect that KLS-13023 will be classified by the ~~market~~FDA ~~with~~as an NCE. aIn ~~novel~~our ~~therapeutic~~preclinical ~~agent~~animal tostudies, ~~treat~~KLS-13023 ~~CIPN~~demonstrated effective intervention of neurodegeneration in the OHE disease state.

~~Clinical~~Acquisition of AND ~~Timelines~~Compounds

AsOn aNovember ~~result~~17, of2020, the ~~unprecedented~~Company ~~effects~~signed ofa ~~COVID-19,~~binding weletter ~~have~~of ~~updated~~intent ~~our~~to ~~clinical~~acquire ~~timelines~~certain totechnology ~~give~~described ~~effect~~in toa ~~the~~patent ~~significant~~estate ~~interruption~~PCT WO2012/074784 toA2 ~~business~~– ~~and~~“Novel ~~financial~~Fluorinated ~~operations~~Sulfamides ~~worldwide~~Exhibiting asNeuroprotective aAction ~~result~~and Their Method of ~~the~~Use”; ~~COVID-19~~and ~~crisis.~~US WePatent ~~will~~8,609,849 – ~~continue~~“Novel toHydroxylated ~~monitor~~Sulfamides ~~the~~Exhibiting ~~progress~~Neuroprotective Action and Their Method of Use (the ~~shutdowns~~“AND ~~currently~~Compounds”). On inDecember ~~effect~~18, ~~and~~2020, ~~revise~~the ~~our~~Company ~~clinical~~completed ~~timelines~~the ~~accordingly~~acquisition of the AND Compounds.

Product Candidate	Target Indication	Delivery Method	Current Development Status	Expected Next Steps
KLS-13019	Chemotherapy Induced	Oral Gel Capsule	Preclinical	2Q22: Initiate Phase 1
	Peripheral Neuropathy
	Mild Traumatic Brain Injury	Oral Gel Capsule	Preclinical	1Q23: Initiate Phase 1
KLS-13023	Overt Hepatic Encephalopathy	Oral Gel Capsule	Preclinical	4Q22: Initiate Phase 1
	Mild Traumatic Brain Injury	Oral Gel Capsule	Preclinical	1Q23: Initiate Phase 1

The AND Compounds, specifically AND-302, are novel potent neuroprotective sulfamide based drug candidates that have been shown in advanced preclinical discovery efforts to protect against glutamate toxicity, prevent the accumulation of reactive oxygen species (ROS), have a high therapeutic index in a refractory epilepsy test at 6 Hz and show neuroprotective efficacy in the sub-nanomolar range, approximately 1,000 times more potent than current standard of care anti-epileptic drugs (carbamazepine, lamotrigine and topiramate).

With respect to certain other proprietary compounds underlying Pat. 9,611,213, we plan on pursuing topical solutions as potential relief creams and/or ointments for neuropathic pain, anti-inflammation, anti-pruritic and skin ulcers. We are considering commercialization routes that include, but are not limited to, filing and FDA Monograph and/or pursing a path to the marketplace through INCI certification and registration with the PCPC. In preclinical testing, certain molecules under Pat. 9,611,213 were screened for neuroprotection and may have the potential mechanism of action for reducing inflammation and neuropathic pain. These molecules indicate that they are more soluble than CBD, also deemed a neuroprotectant with potential anti-inflammatory properties. A molecule that is potentially more water soluble than CBD in this regard may be good candidate(s) for use in topical applications.

Comparative and Distinguishing Characteristics	AND-302	Standard of Care AEDs*
Potent Neuroprotection against Glutamate Toxicity	0.1-1 nM	100 mM-1 mM
Prevention of Reactive Oxygen Species Accumulation	0.1 nM	None reported
High Therapeutic Index in a Refractory Epilepsy test (6-Hz)	12	0-.5
Disease-modifying Potential	Yes	None reported

We believe that we will be able to raise sufficient capital to proceed forth with a Phase 1 human safety trial for the treatment of Chemotherapy Induced Peripheral Neuropathy. All preclinical work in this indication, including animal toxicity studies, are expected to be completed before the end of the first quarter 2022. We plan on entering into clinical trials sometime in the second quarter 2022.12

~~Additionally,~~Key wehighlights ~~believe~~underlying ~~that we will be able to raise sufficient capital to proceed forth with a Phase 1 human safety trial for~~ the ~~treatment of~~AND ~~Overt~~Compounds Hepatic Encephalopathy. All preclinical work in this indication, including animal toxicity studies, are expected to be completed before the end of the third quarter 2022. We plan on entering into clinical trials sometime in the fourth quarter 2022.include:

~~We intend~~• toValidated ~~seek~~in ~~additional~~Phase ~~capital~~1 toNIH ~~proceed~~SBIR ~~with~~Study ~~our business plan regarding additional drug pipeline opportunities.~~Grant

~~We believe~~• ~~that~~Over ~~our~~$1.5 ~~current~~million ~~relationships~~invested with Purisys, LLC (formerly known as Noramco) (“Purisys”), a supplier of bulk active pharmaceutical ingredients (APIs), specifically pharmaceutical grade CBD, and Catalent Pharma Solutions (“Catalent”), a manufacturer of formulated and packaged pharmaceuticals, will enable us to meet our objectives in the production of target drug candidates that can be used in clinical trials and, beyond successful clinical trials, meet patient demand in commercial sales for each of our target disease indications.date

~~We have~~• ~~estimated~~Patented that the cost of a Phase 1 trial, limited to 80 patients in CINP and 80 patients in the OHE, indication will cost approximately $1,300,000 and $1,600,000, respectively. As part of our plans to initiate Phase 1 clinical trials in the U.S. or Australia. The benefit of commencing Phase 1 clinical trials in Australia is that the Australian government has provided incentives that provide for research and development rebates.technology

~~Research &~~• ~~Development~~Wide ~~tax~~therapeutic incentives offered by the government actively encourage overseas sponsors to conduct research in Australia. These incentives have also made it attractive for global companies to access Australian research facilities, as holding the intellectual property within Australia is not mandatory. Sponsors wishing to be eligible for this benefit can either establish an affiliate company in Australia (which may take from 1 week to 1 month) or choose a Contract Research Organization (“CRO”) to act on their behalf. index

10• Better dose response curve than AEDs*

~~Controlled Substances~~• ~~Laws~~Non ~~and~~ion ~~Regulations~~channel blocking –

~~Our~~• ~~drug~~unlike ~~candidates~~gabapentinoids ~~contain~~– ~~controlled~~Gabitril® ~~substances as defined in the Controlled Substances Act~~ (~~“CSA”~~tiagabine). Controlled substances that are pharmaceutical products are subject to a high degree of regulation under the CSA, which establishes, among other things, certain registration, manufacturing quotas, security, recordkeeping, reporting, import, export and other requirements administered by the DEA.

~~Despite recent~~• ~~approvals~~High bypotential the FDA and DEA for a newly approved medication that contains CBD, the scheduling of these substances, many of which are beyond our control, could jeopardize our ability to obtain regulatory approval for and successfully market KLS-13019 or KLS-13023. Moreover, because our business is almost entirely dependent upon these two product candidates, any such setback in ~~our~~refractory ~~pursuit~~epilepsy ofmodel regulatory approval would have a material adverse effect on our business and prospects. See our full description of the impact-controlled substances laws and regulations have on our business in the “Risk Factors” section of this annual report. –

~~KLS-13019~~• ~~does~~hippocampal ~~not~~kindling contain CBD and is a new chemical entity that would not fall under the CSA or be deemed a Schedule 1 controlled substance. A new chemical entity (“NCE”) is a molecule developed by the innovator company in the early drug discovery stage, which, after undergoing clinical trials, could translate into a drug that could be a treatment for some disease. Under the Food and Drug Administration Amendments Act of 2007, all NCE’s must first be reviewed by an advisory committee before the FDA can approve these products.validated

~~KLS-13023 is~~• aNon ~~formulation~~dopamine ~~that does contain CBD. At present, CBD is deemed a Schedule 1 controlled substance by the U.S. Drug Enforcement Agency~~ (~~“DEA”)~~no ~~under~~dopaminergic ~~the~~effects CSA. Like the drug molecule EpidiolexÒ, which was recently approved by the FDA for marketing and sale for use in treating Dravet’s Syndrome and Lennox-Gasteau Syndrome (forms of child epilepsy), KLS-13023 would need to follow the guidance set forth by the CSA, complete a successful human clinical trial, and apply for rescheduling, as was the case with EpidiolexÒ, now a Schedule 5 drug, before it can be sold and marketed to the public.–

On• ~~January~~no ~~14,~~dopey ~~2019,~~feel we– ~~received~~Topamax® written notice from the DEA and Chemical Evaluation Section, as follows: “Please be advised that your material meets the definition of ‘Hemp’ and is not regulated under the CSA, as long as it consists of high purity Cannabidiol (~~CBD~~topiramate) that contains approximately 0.1% delta-9- THC. (However, if it contains more than 0.3% delta-9 THC, it is considered ‘Marihuana’ and would be in Schedule 1 of the CSA).” While this notice is an official notice from the DEA regarding the scheduling of high purity CBD, we will continue to abide by the CSA in all respects with regards to its treatment and handling of CBD.

~~The~~We ~~active~~believe ~~pharmaceutical~~these ~~ingredient~~product ~~(“API”)~~candidates ~~found~~will inprovide ~~KLS-13023~~new istreatment ~~highly~~options ~~purified~~for ~~synthetic CBD produced by Purisys. Purisys has been manufacturing cannabidiol since 2016 (DMF33223). Today~~patients, ~~through~~as ~~our~~well ~~partnership~~as ~~with~~additional ~~Purisys,~~treatment weoptions ~~have the ability to produce on the largest commercial scale. Purisys’ ultra-high purity CBD (“Purisys CBD”) is attractive~~ for ~~drug~~ ~~development projects and falls significantly below the 0.3% THC limits set in the 2018 Farm Bill for use in consumer products. Purisys’~~patients ~~patent-protected~~not ~~manufacturing~~currently ~~process~~receiving ~~produces~~adequate arelief ~~consistently~~from ~~odorless,~~current ~~tasteless~~treatment ~~white powder highest-purity form of CBD that exhibits:~~regimens.

•We Noare ~~heavy~~still ~~metals~~conducting (epre-clinical studies and have not yet commenced our clinical program or tested KLS-13019 or KLS-13023 in humans.g For KLS-13019, we plan to conduct Phase 1, and possibly Phase 2, clinical trials in either the U.S. ~~lead~~or Australia, subject to applicable regulatory approval. We plan to conduct our Phase 1 clinical trials for KLS-13023 in either the U.S. or Australia, subject to applicable regulatory approval. We plan to submit New Drug Applications (“NDAs”) ~~from~~for ~~soil;~~KLS-13019 and KLS-13023 to the FDA upon completion of Phase 3 clinical trials, regardless of where the Company conducts Phase 1 and Phase 2 clinical trials.. We expect to initiate clinical trials for KLS-13019 and KLS-13023 in the first half of 2022.

•We Noplan ~~pesticide~~to ~~residues;~~conduct our Phase 1, and possibly Phase 2, clinical trials for KLS-13019 in the U.S. or Australia, subject to applicable regulatory approval, and do not expect at this time to file an investigational new drug application, or IND, with the U.S. Food and Drug Administration, or the FDA, prior to the commencement of those clinical trials. We must file an IND with the FDA and receive approval from the U.S. Drug Enforcement Agency, or DEA, prior to commencement of any clinical trials in the United States.

•In Nopreclinical ~~environmental~~studies ~~influences~~performed pursuant to a small business technology transfers (“STTR”) agreement between us, and Temple University, funded by the National Institutes of Health – National Institute on ~~quality~~Drug ~~such~~Abuse as(“NIH-NIDA”), ~~rain~~our research and results are the subject of two peer reviewed scientific publications in the Journal of Molecular Neuroscience, ~~sunlight~~and &one ~~soil~~peer ~~nutrients;~~reviewed scientific publication in the British Journal of Pharmacology. These peer reviewed publications have described how KLS-13019, is superior to CBD and morphine in the potential to prevent and reverse neuropathic pain caused by paclitaxel, a chemotherapeutic agent used to treat breast, ovarian and non-small cell lung cancer. (See: Business – Preclinical Studies for more information).

~~• No plant impurities to remove;~~13

•The NoCompany ~~microbial~~is orcurrently ~~mold~~in the ~~proliferation;~~midst ~~and~~of performing certain IND enabling studies, that include but are not limited to:

• NoProcess ~~structural~~Development, ~~(or~~Analytical ~~stereo~~Method ~~chemical)~~Development ~~differences exist between an active cannabinoid ingredient manufactured by Purisys~~ and ~~those~~Scale ~~that~~Up ~~are~~Production ~~chemically~~of ~~extracted~~Non-GMP ~~and~~KLS-13019 ~~isolated~~ from ~~plants.~~25 ~~They~~grams ~~are,~~to in400 ~~effect, nature-identical~~grams.

~~Purisys currently~~• ~~has~~Animal amodels ~~drug master file (“DMF”) for its ultra-high purity CBD with the FDA. In November 2019, Purisys received advise notice from the DEA that the Purisys CBD has been removed from Schedule 1~~ of ~~the~~drug ~~CSA~~discrimination.

~~U.S. Food~~• HPLC method development and ~~Drug~~validation ~~Administration~~for ~~(FDA)~~formulations.

~~The FDA~~• ~~is responsible for advancing the public health by helping to speed innovations that make medicines safer and more effective and by helping the public get the accurate, science~~LC-~~based~~MS/MS ~~information~~Method itdevelopment ~~needs to use medicines to maintain~~ and ~~improve~~validation ~~public health. In 2004, the FDA provided a guidance document~~ for ~~innovations,~~rat ~~challenges,~~ and ~~solutions~~dog for new drug products that examine the critical path needed to bring therapeutic products to completion, and how the FDA can collaborate in the process, from laboratory to production to end use, to make medical breakthroughs available to those in need as quickly as possibletoxicology.

11• Non-GLP rat acute and 7-day repeated oral dose toxicity and toxicokinetics.

~~FDA Approval~~• ~~– What~~GLP Itrat ~~Means~~28-day repeat oral dosing in with TK, NCS safety, and histopathology.

~~FDA approval~~• ofNon-GLP aacute ~~drug~~7-day ~~means~~toxicokinetic ~~that~~dog data on the drug’s effects have been reviewed by the Center for Drug Evaluation and Research, and the drug is determined to provide benefits that outweigh its known and potential risks for the intended populationstudy. ~~The drug approval process takes place within a structured framework that includes:~~

• ~~Analysis~~Formulatin ofdevelopment, ~~the target condition and available treatments—FDA reviewers analyze the condition or illness for which the drug is intended and evaluate the current treatment landscape~~analytical, ~~which provide the context for weighing the drug’s risks~~ and ~~benefits.~~stability For example, a drug intended to treat patients with a life-threatening disease for which no other therapy exists may be considered to have benefits that outweigh the risks even if those risks would be considered unacceptable for a condition that is not life threateningstudies.

• ~~Assessment~~In ofhouse ~~benefits~~biomarker ~~and risks from clinical data—FDA reviewers evaluate clinical benefit and risk information submitted by the drug maker~~evaluation, ~~taking~~chemical ~~into~~development account any uncertainties that may result from imperfect or incomplete data. Generally, the agency expects that the drug maker will submit results from two well-designed clinical trials, to be sure that the findings from the first trial are not the result of chance or bias. In certain cases, especially if the disease is rare and ~~multiple~~reference ~~trials~~standard ~~may not be feasible, convincing evidence from one clinical trial may be enough~~synthesis. ~~Evidence that the drug will benefit the target population should outweigh any risks and uncertainties.~~

• ~~Strategies~~GLP ~~for~~cardiac ~~managing risks—All drugs have risks. Risk management strategies include an FDA-approved drug label, which clearly describes the drug’s benefits~~ and ~~risks,~~respiratory ~~and~~safety ~~how~~pharmacology ~~the~~in ~~risks can be detected and managed~~dogs. ~~Sometimes, more effort is needed to manage risks. In these cases, a drug maker may need to implement a Risk Management and Mitigation Strategy (“REMS”).~~

~~Although many~~• ofGLP ~~the~~Dog ~~FDA’s risk~~28-~~benefit~~day ~~assessments~~repead ~~and~~dose ~~decisions~~oral ~~are~~toxicity ~~straightforward, sometimes the benefits~~ and ~~risks are uncertain and may be difficult to interpret or predict~~toxicokinetics. The agency and the drug maker may reach different conclusions after analyzing the same data, or there may be differences of opinion among members of the FDA’s review team. As a science-led organization, the FDA uses the best scientific and technological information available to make decisions through a deliberative process.

~~Accelerated Approval~~• Non-GMP preparation of three formulations, stability, and PK evaluation in rats.

~~In some~~Upon ~~cases,~~completion ~~the approval~~ of aall ~~new~~requisite preclinical ~~drug~~studies, iswe ~~expedited.~~expect ~~Accelerated Approval can be applied~~ to ~~promising~~open ~~therapies that treat a serious or life-threatening condition and provide therapeutic benefit over available therapies. This approach allows for the approval of a drug that demonstrates~~ an ~~effect~~Investigational onNew aDrug ~~“surrogate~~Application, ~~endpoint”~~or ~~that~~IND, ~~is reasonably likely~~ to ~~predict~~pursue ~~clinical benefit, or on~~ a clinical ~~endpoint~~development ~~that~~program ~~occurs~~with either ~~earlier but may not be as robust as~~ the ~~standard endpoint used for approval~~U.S. ~~This~~Food ~~approval pathway~~and isDrug ~~especially~~Administration ~~useful~~(“FDA”) ~~when~~in the ~~drug is meant to treat a disease whose course is long, and an extended period of time is needed to measure its effect~~U.S. ~~After~~or the Therapeutic ~~drug~~Goods ~~enters~~Administration ~~the market~~(“TGA”), ~~the drug maker is required to conduct post-marketing clinical~~ ~~trials to verify and describe~~ the regulatory ~~drug’s~~body for ~~benefit.~~therapeutic Ifgoods ~~further~~(including ~~trials~~medicines, ~~fail~~medical todevices, ~~verify~~gene ~~the predicted clinical benefit~~technology, ~~FDA~~and ~~may withdraw~~blood ~~approval.~~products) in Australia.

~~Since the~~OTC ~~Accelerated~~Solutions ~~Approval~~for ~~pathway~~Topical was established in 1992, many drugs that treat life-threatening diseases have successfully been brought to market this way and have made a significant impact on disease course. For example, many antiretroviral drugs used to treat HIV/AIDS entered the market via accelerated approval, and subsequently altered the treatment paradigm. A number of targeted cancer-fighting drugs also have come onto the market through this pathway. Use

~~Drug~~In mid 2019, we began screening ~~Development~~and ~~Designations~~conducting preliminary research and development of some of our patented, proprietary cannabidiol-derived NCEs for use as active pharmaceutical ingredients (APIs) in topical solutions, ointments, and creams for various skin disorders such as eczema, psoriasis, radiation dermatitis and excessive UVB radiation.

The FDA also employs several approaches to encourage the development of certain drugs, especially drugs that may represent the first available treatment for an illness, or ones that have a significant benefit over existing drugs. These ~~approaches,~~disorders or designations, are meant to address specific needs, and a new drug application may receive more than one designation, if applicable. Each designation helps ensure that therapies for serious conditions are made available to patients as soon as reviewers can conclude that their benefits justify their risks. general

•ly ~~Fast~~lead ~~Track is a process designed~~ to ~~facilitate~~symptoms ~~the~~including neuropathies, ~~development~~inflammation and ~~advance~~itch. ~~the~~The ~~review~~Company ofbelieves ~~drugs~~ that ~~treat~~successful ~~serious~~development ~~conditions,~~of ~~and~~its ~~fill~~topical anAPIs ~~unmet~~can ~~medical~~be ~~need,~~useful ~~based~~as onanti-pruritics, also ~~promising~~known ~~animal~~as oranti-itch ~~human~~drugs ~~data.~~and ~~Fast~~medications ~~tracking~~that ~~can~~inhibit ~~get important new drugs to~~ the ~~patient~~itching ~~earlier.~~often ~~The~~associated ~~drug~~with ~~company~~a ~~must~~variety ~~request~~of ~~the~~disorders ~~Fast~~and ~~Track process~~diseases.

•We ~~Breakthrough~~are ~~Therapy~~considering ~~designation~~commercialization routes ~~expedites~~that ~~the~~include, ~~development~~but ~~and review of drugs that~~ are ~~intended~~not limited to, ~~treat~~filing aan ~~serious~~FDA ~~condition,~~Monograph and/or ~~preliminary~~pursing ~~clinical~~a ~~evidence~~path ~~indicates~~to ~~that~~ the ~~drug~~marketplace ~~may~~through ~~demonstrate~~International ~~substantial~~Nomenclature of ~~improvement~~Cosmetic ~~over~~Ingredients ~~available~~(“INCI”) ~~therapy.~~certification Aand ~~drug~~registration with ~~Breakthrough Therapy designation is also eligible for~~ the ~~Fast~~Personal ~~Track~~Care ~~process.~~Products ~~The~~Council ~~drug company must request a Breakthrough Therapy designation~~(“PCPC”).

•In ~~Priority~~preclinical ~~Review~~testing, ~~means~~KLS-13022, a ~~that~~molecules ~~FDA~~covered ~~aims~~under toPat. ~~take~~9,611,213 ~~action~~was onscreened anfor ~~application~~neuroprotection ~~within~~and ~~six~~may ~~months,~~have ~~compared~~the topotential 10mechanism ~~months~~of ~~under~~action ~~standard~~for ~~review~~reducing inflammation, neuropathic pain and itch. AThis ~~Priority~~molecule ~~Review~~indicated ~~designation~~that ~~directs~~it ~~attention~~is ~~and~~more ~~resources~~soluble tothan ~~evaluate~~CBD, ~~drugs~~also deemed a neuroprotectant with potential anti-inflammatory properties. A molecule that ~~would~~is ~~significantly~~potentially ~~improve~~more ~~the~~water ~~treatment,~~soluble ~~diagnosis,~~than orCBD ~~prevention~~in ofthis ~~serious~~regard ~~conditions.~~may ~~More~~be ~~information~~good ~~about~~candidate(s) for ~~Priority~~use ~~Review~~in istopical ~~here~~applications.

1214

~~FDA Human~~OTC ~~Clinical~~Cosmetic ~~Trials~~Skin Care – KLS-13022

~~Phase I studies~~Since ~~assess~~mid 2019, the ~~safety~~Company has ofbeen ascreening ~~drug~~and orconducting ~~device.~~preliminary ~~This~~research ~~initial~~and ~~phase~~development of ~~testing,~~some ~~which~~of ~~can~~its ~~take~~patented, ~~several~~proprietary ~~months~~cannabidiol-derived tonew ~~complete,~~chemical ~~usually~~entities ~~includes a small number of healthy volunteers~~ (~~20 to 100~~“NCEs”), ~~who are generally paid~~ for ~~participating~~use inas ~~the~~topical ~~study.~~solutions, ~~The study~~ointments, isand ~~designed~~creams tofor ~~determine~~disorders ~~the~~such ~~effects~~as ofdiabetic ~~the drug or device on humans including how it is absorbed~~neuropathies, ~~metabolized~~diabetic ulcers, and ~~excreted. This~~for ~~phase~~use ~~also investigates the side effects that occur~~ as ~~dosage~~an ~~levels are increased~~anti-pruritic. ~~About~~(see: ~~70%~~Business of– Neuropathix ~~experimental~~Intellectual ~~drugs pass this phase of testing.~~Properties)

~~Phase~~In ~~II studies~~preclinical ~~test the efficacy of a drug or device. This second phase of~~ testing, ~~can~~certain ~~last~~molecules ~~from~~under ~~several~~Patent ~~months to two years~~9, ~~and~~611,213 ~~involves~~were upscreened tofor ~~several~~neuroprotection ~~hundred~~and ~~patients.~~may ~~Most~~have ~~Phase~~the IIpotential ~~studies~~mechanism ~~are randomized trials where one group~~ of ~~patients receives~~ ~~the~~action ~~experimental~~for ~~drug,~~reducing ~~while~~inflammation aand ~~second~~neuropathic ~~“control” group receives a standard treatment or placebo~~pain. ~~Often~~These ~~these~~molecules ~~studies are~~indicate ~~“blinded,” which means~~ that ~~neither~~they ~~the~~are ~~patients~~more ~~nor~~soluble ~~the~~than ~~researchers~~cannabidiol, ~~know~~also ~~who~~deemed a ~~has~~neuroprotectant ~~received~~with ~~the~~potential ~~experimental~~anti-inflammatory ~~drug~~properties. ~~This~~ ~~allows~~A ~~investigators~~molecule tothat ~~provide~~is ~~the~~potentially ~~pharmaceutical~~more ~~company~~water ~~and~~soluble ~~the~~than ~~FDA~~cannabidiol ~~with~~in ~~comparative information about the relative safety~~this ~~and~~regard ~~effectiveness~~may ofbe ~~the~~good ~~new~~candidate(s) ~~drug.~~for ~~Approximately~~use ~~one-third~~in oftopical ~~experimental drugs successfully complete both Phase I and Phase II studies~~applications.

~~Phase III studies~~The ~~involve~~Company ~~randomized~~has ~~and blind testing in several hundred to several thousand patients. This large-scale testing,~~completed ~~which can last several years, provides~~ the ~~pharmaceutical~~following ~~company~~relating ~~and the FDA with a more thorough understanding of the effectiveness of the drug or device, the benefits and the range of possible adverse reactions. Approximately 70%~~ to ~~90% of drugs that enter Phase III studies successfully complete this phase of testing. Once Phase III is complete, a pharmaceutical company can request FDA approval for marketing the drug.~~ KLS-13022:

~~Phase IV studies,~~• ~~often~~Preclinical ~~called~~screening ~~Post Marketing Surveillance Trials, are conducted after a drug or device has been approved~~ for consumer ~~sale.~~ ~~Pharmaceutical~~OTC ~~companies~~cosmetic have several objectives at this stage: (1) to compare a drug with other drugs already in the market; (2) to monitor a drug’s long-term effectiveness and impact on a patient’s quality of life; and (3) to determine the cost-effectiveness of a drug therapy relative to other traditional and new therapies. Phase IV studies can result in a drug or device being taken off the market or restrictions of use ~~could~~under beCFR ~~placed on the product depending on the findings in the study~~21.

~~Therapeutic Goods~~• ~~Administration~~Application to International Nomenclature of Cosmetic Ingredients (~~TGA~~INCI) ~~– Australia~~completed to receive a compound nomenclature for KLS-13022 - Limonenyldihydroxybenzyl Ethoxycarbonyl Azetidine (LEAÔ).

~~Clinical trials~~• ~~conducted~~Received ina ~~Australia~~registered ~~are~~trademark ~~subject~~from tothe ~~various~~U.S. ~~regulatory~~Patent ~~controls~~and Trademark Office (“USPTO”) for AtopidineÔ, to ~~ensure~~be ~~the~~used ~~safety~~as ofa ~~participants.~~branded ~~The~~product ~~TGA~~as ~~regulates the~~a ~~use~~relief ofcream, ~~therapeutic~~containing ~~goods~~LEA, ~~supplied~~to intreat ~~clinical~~inflammatory ~~trials~~disorders inlike ~~Australia~~eczema, ~~under~~psoriasis, ~~the~~radiation ~~therapeutic~~dermatitis ~~goods~~and ~~legislation~~excessive UVB radiation (post sun burn).

~~Clinical trial~~Based ~~sponsors~~on ~~must~~preclinical betesting ~~aware~~ of ~~the requirements to import, export, manufacture and supply therapeutic goods in Australia. The~~LEAÔ ~~following~~versus ~~avenues~~CBD ~~provide~~(cannabidiol) ~~for the importation into and/or supply~~ in ~~Australia~~cultured ofhuman ~~‘unapproved’~~epidermal ~~therapeutic goods for use in a clinical trial~~keratinocytes:

• ~~Clinical~~LEAÔ ~~Trial~~provided ~~Notification~~better ~~(CTN)~~anti-inflammatory ~~scheme;~~activity compared to CBD for TNFa, IL-6 and significantly more potent that CBD for IL-1b inhibition in UVB irradiation induced inflammation.

• ~~Clinical~~LEAÔ ~~Trial~~decreased ~~Exemption~~CXCL5 levels by 100% after UVB irradiation with IC50 of 0.05 mM. (~~CTX~~CXCL5 is a small cytokine belonging to the chemokine family known as epithelial-derived neutrophil-activating peptide 78 (ENA-78). ~~scheme~~It is produced following the stimulation of cells with the inflammatory cytokines TNFa and IL-1b.)

~~The CTN~~• ~~Scheme~~LEAÔ isdecreases alevels ~~notification~~of ~~process~~four ~~involving~~(4) ~~the~~inflammatory ~~following:~~mediators at concentrations > 65 times less than toxic levels.

• ~~The~~LEAÔ ~~Australian~~is ~~clinical trial sponsor must notify the TGA of the intent to sponsor a clinical trial involving~~ an ~~‘unapproved’~~antioxidant ~~therapeutic~~that ~~good.~~does ~~This~~not ~~must~~exhibit ~~take~~cellular ~~place~~irritation ~~before~~and ~~starting~~is tolocally ~~use~~restricted ~~the~~in ~~goods.~~its ~~The~~action ~~notification~~(antioxidant ~~form~~activity ~~must~~of beEC50 ~~submitted~~at ~~online~~25 ~~and accompanied by the relevant fee~~mM).

• The ~~TGA~~Company ~~may~~has ~~give~~completed formulation ~~the~~of ~~sponsor~~a oftopical ~~the~~relief ~~trial~~cream ~~written~~for ~~notice~~use toas ~~provide~~an ~~specified~~OTC ~~information~~cosmetic ~~relating~~skin care product to ~~goods~~be ~~notified~~marketed inunder the ~~CTN~~trade ~~form~~name of AtopidineÔ and LEAÔ.

•On ~~The~~August ~~TGA~~16, ~~does~~2021, ~~not evaluate any data relating to~~ the ~~clinical~~Company established ~~trial~~and atincorporated ~~the~~a ~~time~~new ofwholly ~~submission.~~owned ~~The~~subsidiary ~~Human~~named ~~Research~~Dermique ~~Ethics~~Incorporated ~~Committee~~ (“~~HREC~~Dermique”). ~~reviews~~Dermique ~~the~~was ~~scientific~~established by ~~validity of~~ the ~~trial~~Company ~~design~~to hold, ~~the~~operate ~~balance~~and ofcommercialize ~~risk~~all ~~versus~~intellectual ~~harm~~property ofassociated ~~the~~with ~~therapeutic~~Kannalife ~~good,~~Sciences’ ~~the~~previous ~~ethical~~research and ~~acceptability~~development ofefforts ~~the~~to ~~trial~~create ~~process,~~ and ~~approves~~commercialize novel therapeutic topical over-the-counter ~~trial~~cosmeceutical ~~protocol.~~compounds ~~The~~to ~~HREC~~treat isa ~~also~~variety of ~~responsible~~skin ~~for~~disorders, ~~monitoring~~including ~~the~~but ~~conduct~~not oflimited ~~the~~to ~~trial~~atopic dermatitis.

•Hepatic ~~The~~Encephalopathy institution or organization at which the trial will be conducted, referred to as the ‘Approving Authority,’ gives the final approval for the conduct of the trial at the site, having due regard to advice from the HREC.(“HE”)

•HE Itis a neuropsychiatric disorder that includes learning deficits and impairment of long-term memory. OHE it is ~~the~~a ~~responsibility~~sub-set of HE. HE is caused by accumulation of toxic substances in the ~~sponsor~~bloodstream that are normally removed by the liver as a result of liver failure. If left unchecked, HE can progress to ~~ensure~~hepatic coma ~~that~~(also ~~all~~referred ~~relevant~~to ~~approvals~~as ~~are~~coma inhepaticum) ~~place~~and ~~before~~ultimately ~~supplying~~death (Cordoba, 2011). The pathogenesis of HE includes damage to the ~~‘unapproved’~~prelimbic cortex, ~~therapeutic~~striatum ~~goods~~and the hippocampus (Aria et al., 2013). The hippocampus, is a major component of the brains of humans and other vertebrates. The hippocampus belongs to the limbic system and plays important roles in the ~~clinical~~consolidation ~~trial~~of information from short-term memory to long-term memory, and in spatial memory that enables navigation.

1315

It has been previously demonstrated that impaired liver function and liver disease is associated with the production of free radical and oxidative stress (Bailey and Cunningham, 1998). The accumulation of these free radicals and oxidative stress contribute to cognitive impairment, learning deficits, memory impairment, ~~CTX~~as ~~Scheme~~well as damage and death of neuronal tissue. Cognitive impairment is anwhen a person has trouble remembering, learning new things, concentrating, or making decisions that affect their everyday life. Cognitive impairment resulting from H ranges from mild to severe. There is a long felt need for neuroprotective agents that are both disease-modifying and effective in treating patients that are experiencing HE. Onset of HE symptoms may be gradual or sudden. ~~approval process~~Other ~~involving~~symptoms may include movement problems, changes in mood, or changes in personality. In the ~~following:~~advanced stages, HE can result in a coma.

•Opioid ACrisis ~~sponsor submits an application to the TGA seeking approval to supply ‘unapproved’ therapeutic goods~~ in ~~a clinical trial. The application must be accompanied by the relevant fee.~~America

• The Centers ~~TGA~~for ~~evaluates~~Disease ~~summary~~Control ~~information~~released ~~about~~a report on November 17, 2021 that indicate there were and estimated 100,306 drug overdose deaths in the ~~product~~United ~~including~~States ~~relevant~~during 12-month perioed ending in April 2021, ~~but~~an ~~limited~~increase of 28.5% from 78,056 ~~scientific~~deaths ~~data~~during ~~(which~~the ~~may~~same beperiod ~~preclinical~~the year ~~and~~before ~~early~~(CDC/NCHS, ~~clinical~~National ~~data~~Vital Statistics System, Mortality 2021). The ~~prior~~misuse of and addiction to opioids—including prescription pain relievers, heroin, and synthetic opioids such as fentanyl – is a serious national crisis that affects public health as well as social and economic welfare. The Centers for Disease Control and Prevention estimates that the ~~start~~total economic burden of prescription opioid misuse alone in the United States is $78.5 billion a ~~trial~~year, including the costs of healthcare, lost productivity, addiction treatment, and criminal justice involvement. (Med Care 2016; 54(10).

• Opioids and ~~The~~Pain ~~HREC~~– isPain ~~responsible for considering the scientific~~ and ~~ethical issues of the proposed trial protocol.~~Addiction

•According to ~~The~~a ~~sponsor~~February ~~must~~2018 ~~notify~~research usreport from BIO, “The State of ~~each~~Innocation ~~trial~~in ~~conducted~~Highly ~~using~~Prevalent ~~the~~Chronic ~~unapproved~~Diseases ~~therapeutic~~– ~~good(s)~~Volume ~~approved~~II: inPain and Addiction Therapeutics”, the ~~CTX~~report ~~application.~~states that:

~~Clinical trials~~• ~~that~~Chronic dopain ~~not~~affects ~~involve~~as ~~‘unapproved’~~many ~~therapeutic~~as ~~goods~~100 ~~are~~million ~~not~~people ~~subject~~in ~~to requirements of~~ the ~~CTN or CTX schemes~~U. ItS. isalone ~~the~~(Medical ~~responsibility~~Expenditure ofPanel ~~the~~Survey ~~Australian~~– ~~clinical~~MEPS ~~trial sponsor to determine whether a product is considered an ‘unapproved’ therapeutic good~~2008).

~~Clinical trials~~• ~~that~~Total doeconomic ~~not~~and ~~involve~~direct ~~‘unapproved’~~healthcare ~~therapeutic~~costs ~~goods~~for ~~are~~treating ~~not~~pain ~~subject~~in the U.S. have been estimated to ~~requirements~~be ofas ~~the~~high ~~CTN~~as or$635 ~~CTX~~billion ~~schemes. It~~annually, ishigher than the ~~responsibility~~costs offor ~~the~~cancer, ~~Australian~~Alzheimer’s, ~~clinical~~or ~~trial~~cardiovascular ~~sponsor~~disease to(Relieving ~~determine~~Pain ~~whether~~in aAmerica: ~~product~~A isBlueprint ~~considered~~for anTransforming ~~‘unapproved’ therapeutic~~Prevention ~~good~~Care, education and Research, 2011).

~~In Australia,~~• inAddiction ~~2014,~~to ~~the~~drugs ~~Advisory~~and ~~Council~~alcohol onaffects ~~Medicines~~more ~~Scheduling~~than ~~recommended~~23 ~~rescheduling~~million ~~CBD~~Americans ~~from~~and acontinues ~~prohibited substance~~ to ~~being a~~rise, ~~prescription~~in ~~medicine~~part ~~because,~~due ~~according~~ to ~~the~~abuses ~~Advisory Council on Medicines Scheduling, “there is a low risk~~ of ~~misuse or~~pain ~~abuse~~medications as(Defining ~~cannabidiol does not possess psychoactive properties.”~~ The ~~TGA~~Addiction ~~accepted~~Treatment ~~this~~Gap ~~recommendation, and the decision took effect in July 2015~~2020).

~~CBD is~~• ~~one~~Total ofeconomic ~~the~~and ~~cannabinoids~~direct ~~which~~healthcare ~~may~~costs befor ~~extracted~~substance asabuse ais ~~therapeutic~~an ~~good~~alarming ~~from~~$700 ~~cannabis.~~billion ~~From~~per ~~June~~year ~~1, 2015, CBD has been included under Schedule 4~~ (S4Drugabuse.gov) ~~Prescription Only Medicine of the Poisons Standard when preparations for therapeutic use contain 2% or less of other cannabinoids found in cannabis~~.

InKey ~~February~~Takeaways ~~2016,~~from the ~~Australian~~BIO ~~Federal~~research ~~Government~~report passed legislation that amended the Narcotic Drugs Act, allowing the supply of suitable medicinal cannabis products for the management of painful and chronic conditions. This legislation does not relate to the decriminalization of cannabis for general cultivation or recreational use and it does not include ~~the provision of medicinal grade herbal cannabis, but rather only covers processed, non-smokable medicinal grade products.~~ :

~~Much of~~• ~~the~~There ~~detail~~have ~~remains~~been ~~unclear.~~only ~~For~~two ~~example,~~novel ~~the~~chemical ~~legislation~~entities ~~does~~FDA ~~not~~approved ~~specify~~to ~~which~~treat ~~products~~pain ~~will~~over ~~be covered under~~ the ~~amendment, and~~past ~~it does not specify which particular conditions or symptoms will be eligible for treatment with cannabis-based products~~decade. Before products can be prescribed, they must be registered with the TGA or, in rare circumstances, receive special approval from the TGA. The registration process requires evidence of testing and efficacy and it is therefore unlikely Australia will see a TGA registered medicinal cannabis product that GPs can prescribe any time soon.

~~Whilst there~~• ~~are~~Private ~~currently~~company noinvestment, ~~cannabis-based~~as ~~products~~measured ~~that~~by ~~are~~venture ~~lawfully~~capital ~~produced~~into inU.S. ~~Australia,~~companies ~~the~~with ~~medicinal~~lead ~~use~~stage ofprograms ~~pharmaceutical~~in ~~products containing~~pain, ~~cannabinoids~~ is ~~not~~3.6% ~~prohibited,~~of astotal ~~long~~drug asdevelopment ~~authorization~~venture ~~for~~funding. ~~prescribing~~For isventure ~~granted~~funding ~~from~~of ~~the~~novel ~~Commonwealth~~R&D. ~~Therapeutic Goods~~pain ~~Administration~~has ~~and~~received at17 ~~this~~times ~~point~~less inventure ~~time,~~capital ~~NSW~~than ~~Health~~oncology over the last decade.

~~Neuropathix Intellectual~~• ~~Properties~~Venture investment for addiction drug R&D is nearly non-existent.

~~Neuropathix~~Research ~~PCT~~and ~~Patent~~Development ~~– PCT/US2015/010827~~Efforts Funded Through NIH-NINDS Under The HEAL Initiative

OnSince ~~January~~February 132020, ~~2014,~~the weCompany’s ~~filed~~lead ~~for~~compound, aKLS-13019 ~~provisional~~has ~~patent~~been ~~with~~in the ~~USPTO~~preclinical screening program for ~~our~~pain ~~“Novel~~(PSPP) ~~Functionalized~~at 1,the ~~3-Benzene-diols~~National Institutes of Health – National Institute of Neurological Disorders and ~~Their~~ ~~Treatment~~Stroke (NIH-NINDS). This program is part of ~~Hepatic~~the ~~Encephalopathy”~~NIH HEAL (Helping to End Addiction Long-term) Initiative. With NIH-HEAL support, ~~under~~NINDS ~~application~~has ~~number~~developed ~~61/926~~the PSPP program to facilitate the identification of potential non-addictive treatments (small molecules,~~869~~ biologics, devices, or natural products) for acute and chronic pain conditions.

OnResearch ~~January~~offered 9,by ~~2015,~~the wePSPP ~~filed~~will be a ~~non-provisional~~key ~~patent~~step ~~application~~in ~~Patent~~transitioning ~~Cooperation~~HEAL ~~Treaty~~preclinical ~~(“PCT”)~~programs ~~Application~~into ~~under application~~clinical ~~number PCT/US2015/010827 titled~~programs, ~~“Novel~~directly ~~Functionalized~~aligned ~~1,3-Benzene~~with ~~Diols and Their Method of Use for~~ the ~~Treatment~~HEAL ofInitiative ~~Hepatic~~goal ~~Encephalopathy”~~of ~~(the~~accelerating ~~“PCT Patent”). Under~~ the ~~PCT~~discovery ~~Patent,~~and ~~the~~pre-clinical ~~present~~development ~~invention~~of ~~describes~~non-addictive ~~novel~~pain ~~functionalized 1,3-benzenediols~~treatments (~~“Cannabidiol~~NINDS ~~Derived~~– ~~Molecules”) and methods that may be useful and have potential for the treatment~~Preclinical ofScreening HEPlatform ~~and related conditions. The present invention further describes a novel chemotype that may be useful and have potential~~ for ~~the~~Pain ~~treatment~~– ~~of diseases associated with HE~~ninds. ~~The present invention further describes a novel chemotype that may be useful and have potential as neuroprotective agents~~nih.gov).

1416

WeThe ~~believe~~Company’s ~~that~~lead ~~the~~compound, ~~Cannabidiol~~KLS-13019, ~~Derived~~has ~~Molecules~~already gone through Tier 1 evaluation under the ~~present~~PSPP ~~invention~~which, ~~have~~among ~~potential~~other ~~for~~things, ~~treating~~assesses targets and ~~preventing~~pharmacokinetics ~~diseases associated~~(PK) ~~with~~of ~~free~~KLS-13019 ~~radical~~– ~~mediated~~compared ~~stress~~against morphine and ~~oxidative~~diazepam. ~~stress~~Certain ~~including,~~results ~~for~~from ~~example,~~the ~~HE,~~Tier ~~Parkinson’s~~1 ~~disease, Alzheimer’s,~~screening ~~Huntington’s~~report ~~disease,~~under ~~traumatic~~the ~~head~~PSPP ~~injury,~~indicate ~~stroke,~~that ~~epilepsy,~~KLS-13019 ~~neuropathic~~has ~~pain,~~a ~~traumatic~~low ~~head~~abuse ~~injury,~~potential ~~stroke,~~and ~~CTE,~~acceptable ~~Post~~PK to move to Tier 2 studies for animal model assessment ~~Cardiac~~in ~~Arrest~~pain ~~Hypoxic~~and ~~Ischemic~~guardian ~~Encephalopathy,~~behavior; wound healing and ~~Epileptic~~ability ~~Encephalopathy~~to recover; and Irwin testing for CNS toxicity. Tier 2 studies remain ongoing for KLS-13019 under the PSPP.

On September 28, 2021, the Company received a notice of award for a $2.97 million Phase 2 STTR Study Grant from the National Institutes of Health – National Institute of Neurological Disorders and Stroke under the HEAL Initiative (the “NIH-NINDS Study Grant Award”). The NIH-NINDS ~~present~~Study ~~invention~~Grant ~~addresses~~Award is funded through the ~~need~~NIH toHEAL ~~prevent~~Initiative ~~free~~(“Helping ~~radical~~End ~~mediated~~Addiction ~~stress~~Long-Term”) for Development of Therapies and ~~oxidative~~Technologies ~~stress,~~Directed asat ~~well~~Enhanced asPain toManagement. ~~prevent~~This NIH-NINDS Study Grant Award provides funding specifically in the ~~neural~~further development ~~damage~~of ~~associated~~KLS-13019 ~~with~~for HEthe treatment of chemotherapy induced neuropathic pain (“CIPN”). The ~~present~~grant ~~invention~~award ~~further~~of ~~addresses~~$2.97 million sets forth the ~~need~~funding toallocation ~~prevent~~of ~~cognitive~~$977,054 ~~impairment~~in year 1; $991,944 ~~learning~~in ~~deficits~~year 2; and $1,001,774 in year 3 and collectively budgets investigational new ~~memory~~drug ~~impairment~~(“IND”) application enabling studies. IND enabling studies to be performed, asinclude ~~well~~but asare ~~damage~~not limited to animal toxicity studies and ~~death~~drug compound scale up studies under chemistry manufacturing and controls. The NIH-NINDS Study Grant Award budget includes studies to be performed at Temple University; the University of ~~neuronal~~Illinois; ~~tissue~~and ~~associated~~Purisys ~~with~~(formerly, HENoramco).

~~On November~~Corporate ~~29,~~Strengths ~~2016,~~and as part of our patent cooperation treaty global patent application, the USPTO granted allowance on the composition of matter portion, covering claims 1 through 14 of the Company’s PCT Patent covering claims of our novel cannabidiol derived molecule.Weaknesses

~~In January 2017, we filed a divisional application with the USPTO to cover the method claims, which were originally covered in claims 15 through 22 of the original PCT Patent.~~ We ~~currently~~believe ~~hold~~that awe ~~valid~~offer ~~allowance in~~ the ~~United States on the composition of matter~~ ~~for~~following akey ~~new~~distinguishing ~~cannabidiol derived molecules.~~characteristics:

~~On April~~• 4,We ~~2017,~~believe we ~~were~~are ~~awarded~~the ~~U.S.~~first ~~Patent~~commercial ~~9,611,213~~drug ~~titled~~discovery ~~“Functionalized~~company ~~1,3~~in ~~Benzene-diols and their Method of Use for~~ the ~~Treatment~~cannabinoid oftherapeutics ~~Hepatic~~space ~~Encephalopathy”.~~to ~~This~~successfully ~~patent~~synthesize isCBD ~~part~~derived ofnew achemical ~~divisional~~entities ~~patent~~and ~~application~~pre-clinically bytest ~~the~~lead ~~Company~~NCEs tofor ~~the~~potential ~~USPTO whereby~~treatment weof ~~sought~~oxidative ~~separate~~stress ~~claims~~related ~~for composition of matter~~diseases, ~~covered~~including inOHE ~~Pat. 9,611,213,~~ and ~~separate claims for method for treatment~~CIPN.

~~On June~~• ~~26,~~We ~~2018, we~~ were ~~awarded~~the ~~U.S.~~only ~~Patent~~commercial ~~10,004,722~~drug ~~titled~~discovery ~~“Method~~company ~~for~~in ~~Treating~~the ~~Hepatic~~cannabinoid ~~Encephalopathy~~therapeutics orspace ato ~~Disease~~license ~~Associated with~~the ~~Free~~‘507 ~~Radical~~Patent, ~~Mediate~~prior ~~Stress~~to ~~and~~its ~~Oxidative~~expiration, ~~Stress~~from ~~with~~NIH ~~Novel~~on ~~Functionalized~~two ~~1,3~~separate ~~Benzene-diols~~occasions.”

• We have ~~patent~~completed ~~pending~~pharmacokinetic ~~status~~and ofpharmacodynamic ~~the~~pre-clinical ~~same~~studies ~~PCT~~with ~~Patent~~high inpurity ~~Canada~~scale, ~~the~~pharmaceutical ~~European~~grade ~~Union,~~CBD ~~Brazil,~~and ~~Russia,~~KLS-13019 ~~India,~~for ~~China,~~potential ~~Japan~~treatment of oxidative stress related disease – OHE and ~~Australia~~CIPN.

~~National Institutes~~• ofWe ~~Health~~anticipate ~~– Office~~commencing ofa ~~Technology~~Phase ~~Transfer~~1a ~~(NIH-OTT)~~trial ~~– Patent~~in ~~6,630,507~~CIPN sometime in the 2nd quarter of 2024.

~~On June~~• ~~12,~~We ~~2010,~~anticipate wecommencing ~~filed an application for an exclusive license with the NIH-OTT for the development and commercialization of~~ a ~~target~~Phase ~~drug~~1a ~~candidate~~trial toin beOHE ~~used~~sometime in the ~~treatment~~3rd ofquarter ~~patients suffering with HE. The application for exclusive license was made for the license and use~~ of U2024.~~S. patent 6,630,507 “Cannabinoids as Antioxidants and Neuroprotectants, ‘507 Patent.~~

~~On November~~• ~~17,~~We ~~2011,~~anticipate wecommencing ~~received~~a ~~notice~~Phase of1a ~~publication~~trial in ~~the~~Mild ~~Federal~~Traumatic ~~Register~~Brain ofInjury ~~NIH-OTT’s~~in ~~Prospective~~the ~~Grant~~1st ofquarter ~~Exclusive License – Development~~ of ~~Cannabinoid(s)~~ ~~and Cannabidiol(s) Based Therapeutics to treat hepatic encephalopathy in humans~~2025.

~~On June~~• ~~12,~~We ~~2012,~~have wea ~~entered~~firm ~~into~~understanding anof ~~exclusive license with NIH-OTT for~~ the ~~use~~mechanism of ~~the~~action ~~‘507 Patent in the commercialization~~ of ~~one~~CBD orand ~~more~~KLS-13019 ~~cannabinoid~~in ~~therapeutics~~certain tooxidative ~~treat~~stress HErelated disorders.

~~In addition~~• toWe ~~the~~believe ~~exclusive~~we ~~use~~have ofa ~~the~~strong ~~‘507~~next ~~Patent~~generation ~~for~~intellectual ~~the~~property ~~treatment~~estate ofon ~~hepatic~~cannabidiol ~~encephalopathy,~~derived onNCEs. ~~July~~On ~~16,~~this ~~2014~~basis, we ~~formally entered~~believe ~~into~~we acan ~~second~~expand ~~license~~the ~~agreement~~approved ~~with~~indications ~~NIH~~KLS-~~OTT~~13019 ~~for~~and ~~the~~develop ~~non-exclusive~~additional ~~license~~cannabinoid oftherapeutic ~~the~~agents ~~‘507~~to ~~Patent~~add ~~for~~to ~~the~~our ~~treatment of~~IP ~~CTE~~portfolio.

~~Prior to~~• ~~the~~We ~~expiration~~believe ~~of the ‘507 Patent, we were the only company~~ that ~~had~~our ~~use~~pre-clinical ofdrug ~~the~~development ~~‘507~~program ~~Patent~~points ~~and~~to ~~corresponding~~a ~~licenses from~~significant ~~NIH-OTT.~~opportunity ~~The jurisdictions~~ in ~~which~~cancer ~~the ‘507 Patent is valid are: the U.S.~~pain, ~~the~~a ~~U.K.,~~large ~~Ireland, the E~~market.~~U., and Australia. The patent life in these jurisdictions expired on April 21, 2019.~~

~~Although we~~• ~~properly~~We ~~maintained~~believe ~~and~~that ~~paid all of the minimum annual royalties and past prosecution fees underlying~~ our ~~two licenses of the ‘507 Patent during its lifetime and met the additional financial benchmarks set forth in the NIH licenses L~~pre-~~113-2012/0~~clinical ~~and L-302-2014/0, we were not able to secure the necessary funds to advance our~~ drug ~~discovery~~development ~~efforts~~program ~~into~~points ~~human clinical trials. Our financial obligations~~ to ~~NIH-OTT~~a ~~terminated~~significant opportunity in ~~2019,~~opioid ~~effective~~replacement ~~upon~~/ ~~expiration~~reduction ~~of the ‘507 Patent~~market.

15We have not moved beyond pre-clinical studies of our drug candidates to date, and there can be no assurances that we will do so in the near future, if ever. While we believe that we are well positioned to be competitive in advancing non-opioid solutions for chronic and neuropathic pain, as well as the cannabinoid like therapeutics space, we also believe that we will face significant challenges in successfully completing one or more clinical trials. In addition, there is a competitive landscape that exists in the market for the Company’s target indications of OHE and CIPN. The competitive landscape is challenging. Competition in the OHE and CIPN spaces is well established, and many companies have significantly greater resources than we do, some of which are viewed as leaders in the current standard of care for these diseases.

~~A summary of the Company’s patents and status to each such patent is as set forth below:~~17

TITLE	APPLICATION NUMBER	DATE FILED	COUNTRY	STATUS
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	2015204609	Jan 9, 2015	AU	Issued
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	BR1120160161386	Jan 9, 2015	BR	Pending
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	2936506	Jan 9, 2015	CA	Allowed
FUNCTIONALIZED 1, 3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	2015800136466	Jan 9, 2015	CN	Issued
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	157348707	Jan 9, 2015	Europe	Issued
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	2016133213	Jan 9, 2015	RU	Issued
FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	J4044	Jan 9, 2015	MO	Pending
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	2936506	Jan 9, 2015	CA	Allowed
PROCESS FOR SYNTHESIZING CANNABINOIDS AND DERIVATIVES THEREOF			US	Unfiled
USE OF CERTAIN PHOSPHATIDYLCHOLINES CONTAINING LONG CHAIN POLYUNSATURATED FATTY ACIDS AS NEUROPROTECTIVE AGENTS	PCTUS2020039860	Jun 26, 2020	WO	Pending
METHOD FOR TREATING PERIPHERAL NEUROPATHIC PAIN			US	Unfiled
GPR55 ANTAGONISTS AND ANTI-INFLAMMATORY THERAPY USING SAME			US	Unfiled

With respect to competitive landscape for CIPN, nearly a dozen agents have been studied in randomized controlled trials for the treatment of CIPN, but there has been limited success. The characteristics and results of these studies are summarized in the study and abstract “Management of Chemotherapy Induced Peripheral Neuropathy” (Physician’s Education Resource LLC, Meghna S. Trivedi, MD; Dawn L. Hershman, MD, MS; Katherine D. Crew, MD, MS). Clinical trials of the antiepileptic agents gabapentin and lamotrigine and the antidepressants nortriptyline and amitriptyline have all been negative.

16Additionally, there have been several small placebo-controlled trials which have shown that intravenous administration of glutathione with platinum-based chemotherapy regimens can decrease the incidence of neurotoxicity without diminishing the effect of chemotherapy. A North Central Cancer Treatment Group / Alliance trial conducted in 2014 studied the use of glutathione with carboplatin and paclitaxel for treatment of CIPN, and found no improvement in neurotoxicity symptoms, suggesting that glutathione may not help in taxane-induced CIPN.

~~PRE-CLINICAL~~Furthermore, ~~DRUG~~the ~~DISCOVERY~~continuous use of opiates in the current standard of care to treat CIPN have resulted in mixed results, addiction problems and dose tolerance problems.

~~Since~~We ~~inception~~believe ~~in 2010~~that, ~~our~~while ~~primary~~the ~~drug~~current ~~discovery~~standard ~~plans~~of ~~have~~care ~~revolved~~is ~~around~~well ~~neuroprotection~~positioned ~~and~~in the ~~use~~market, ofthere ~~CBD~~is asan ~~well~~unmet asneed for the ~~development~~treatment of CIPN in the reduction of ~~proprietary~~use ~~CBD-derived~~of ~~molecules~~opiates. asWe ~~target~~believe ~~drug~~that ~~candidates~~this presents us with an opportunity to ~~treat~~participate ~~neurodegenerative~~in ~~and~~the ~~oxidative~~market ~~stress~~with ~~related~~a ~~diseases~~novel therapeutic agent to treat CIPN.

~~Conceptual~~The current standard of care ~~Drug~~for ~~Discovery~~patients suffering with OHE is 550mg of ~~Cannabidiol~~Xifaxan®, ~~Derived~~originally ~~Molecules~~an antibiotic useful in treating traveler’s diarrhea and irritable bowel syndrome. Its exact mechanism of action is not known; however, it is theorized that Xifaxan® clinical activity may be attributed to effects on metabolic function of gut microbiota, rather than a change in the relative bacterial abundance. Currently, there is no drug in the market for OHE that is being used to treat the toxic effects on the hippocampus, the cognitive and behavioral dysfunction associated with OHE, and the action of neuroprotection from ammonia and ethanol toxicity.

~~An emerging~~Given ~~concept is that blockade of free radical mediated stress and oxidative stress will prevent~~ the ~~neural~~competitive ~~damage associated~~landscape ~~with~~in ~~HE and prevent cognitive impairment~~OHE, ~~learning~~we ~~deficits,~~believe ~~memory~~we ~~impairment,~~can asparticipate ~~well~~in asthe ~~damage~~OHE ~~and~~market ~~death of neuronal tissue associated~~ with ~~HE.~~primary ~~Cannabidiol Derived Molecules may have the potential of acting as neuroprotective agents by blocking the damage caused by free radicals~~ and ~~oxidative~~adjunctive ~~stress,~~therapeutics ~~may~~currently ~~prevent~~under ~~the~~pre-clinical ~~neural damage associated with HE~~development, and ~~may~~potentially ~~also~~obtain ~~prevent~~orphan ~~cognitive impairment,~~drug ~~learning~~designation ~~deficits,~~for ~~memory~~one ~~impairment,~~or asmore ~~well as damage and death~~ of ~~neuronal~~our ~~tissue~~target ~~associated~~therapeutic ~~with HE~~agents.

~~Around 1900,~~Clinical Moses Gomberg, a chemistry professor, discovered that prevention of free radical mediated stress and oxidative stress can prevent damage and death of neuronal tissue, as well as prevent cognitive impairment, learning deficits, and memory impairment associated with damage and death of neuronal tissue. Without wishing to be limited by theory, it is believed that the neuroprotective agents of the disclosure can ameliorate, abate, and otherwise cause to be controlled, diseases associated free radical mediated stress and oxidative stress.Timelines

~~Free radical~~As ~~mediated~~a ~~stress~~result ~~and~~of ~~oxidative~~the ~~stress is also known to contribute to additional pathological conditions including, but~~unprecedented ~~not~~effects ~~limited~~of toCOVID-19, ~~epilepsy,~~we ~~neuropathic~~have ~~pain,~~updated ~~traumatic~~our ~~head~~clinical ~~injury,~~timelines ~~stroke,~~to ~~CTE,~~give ~~Post~~effect ~~Cardiac~~to ~~Arrest~~the ~~Hypoxic~~significant ~~Ischemic~~interruption ~~Encephalopathy, Epileptic~~to ~~Encephalopathy,~~business and ~~neurodegenerative~~financial ~~diseases~~operations worldwide ~~such~~ as ~~Parkinson’s~~a ~~disease,~~result ~~Alzheimer’s,~~of ~~Huntington’s disease,~~the ~~and~~COVID-19 ~~amyotrophic lateral sclerosis (“ALS”)~~crisis. ~~Under~~We ~~the~~will ~~present~~continue ~~invention,~~to ~~these~~monitor ~~Cannabidiol~~the ~~Derived~~progress ~~Molecules may be capable~~ of ~~acting as neuroprotective agents, and may be useful for~~ the ~~treatment~~shutdowns ofcurrently ~~epilepsy,~~in ~~neuropathic pain~~effect, ~~traumatic head injury, stroke, CTE, Post Cardiac Arrest Hypoxic Ischemic Encephalopathy, Epileptic Encephalopathy,~~ and ~~neurodegenerative~~revise ~~diseases~~our ~~such~~clinical astimelines ~~Parkinson’s disease, Alzheimer’s, Huntington’s disease, and ALS~~accordingly.

Current Pre-clinical Discovery Efforts

Product Candidate	Target Indication	Delivery Method	Current Development Status	Expected Next Steps
KLS-13019	Chemotherapy Induced	Oral Gel Capsule	Preclinical	2Q24: Initiate Phase 1
	Peripheral Neuropathy
	Mild Traumatic Brain Injury	Oral Gel Capsule	Preclinical	1Q25: Initiate Phase 1
KLS-13023	Overt Hepatic Encephalopathy	Oral Gel Capsule	Preclinical	3Q24: Initiate Phase 1
	Mild Traumatic Brain Injury	Oral Gel Capsule	Preclinical	1Q25: Initiate Phase 1

~~Our research~~With ~~and~~respect ~~development~~to ~~efforts~~certain ~~at the Pennsylvania Biotechnology Center are centered on the creation of novel synthetic cannabinoid~~other ~~and~~proprietary ~~cannabinoid-like~~compounds ~~molecules,~~underlying ~~the~~Pat. ~~pre-clinical and in vitro efficacy of CBD~~9, ~~a non-psychotropic molecule~~611,213, ~~and the~~we ~~testing~~plan ~~and~~on ~~control~~pursuing oftopical ~~our~~solutions ~~lead~~as ~~target~~potential ~~drug~~relief ~~candidates~~creams ~~alongside CBD for the treatment of OHE~~ and/or ~~CTE.~~ointments ~~As part of our research~~for ~~and~~neuropathic ~~development efforts~~pain, ~~we have sought to establish the pre~~anti-~~clinical efficacy of CBD~~inflammation, ~~which,~~anti-pruritic ~~along with our novel~~ and ~~proprietary lead~~skin ~~target molecules, have shown to have neuroprotective properties~~ulcers. We are ~~currently~~considering ~~conducting~~commercialization ~~preclinical~~routes ~~evaluation~~that ~~and~~include, ~~formulation~~but are ofnot ~~our~~limited ~~CBD based target drug candidate~~to, ~~KLS-13023,~~filing and ~~the~~FDA ~~subject~~Monograph ofand ~~our ongoing feasibility study with Catalent Pharma Solutions (“Catalent”). While we~~ have ~~evaluated~~already ~~CBD~~pursued onand ~~its~~completed ~~own, in~~ a ~~highly~~commercialization ~~purified~~path ~~form,~~to wethe ~~plan~~marketplace onhaving ~~bringing a CBD based target~~received ~~drug~~INCI ~~therapeutic~~certification ~~revolve~~and ~~around~~registration awith ~~formulated product in oral dose administration capsule (KLS-13023), which is currently~~ the ~~subject of~~PCPC ~~our~~for ~~ongoing feasibility study with Catalent Pharma Solutions (“Catalent”)~~LEAÔ.

As of October 2013, we had performed six distinct pre-clinical studies on murine specimens, including functional assay screens on twenty-four viable analogues and pre-clinical studies against CBD as a therapeutic control. Analogues are compounds or molecules having a structure similar to that of another compound or molecule, but differing from it in respect to a certain component.18

~~As a~~In ~~result~~preclinical ~~of the screening process~~testing, wecertain molecules ~~found~~under ~~that~~Pat. ~~there~~9,611,213 were ~~four target candidates along with CBD that were~~ screened for ~~final pre-clinical~~neuroprotection inand ~~vitro~~may ~~testing~~have ~~for~~the ~~pharmacokinetics~~potential ~~(“PK”),~~mechanism ~~CACO~~of ~~permeability,~~action ~~lethal~~for ~~dose~~reducing ~~(“LD”), EC50~~inflammation and ~~IC90~~neuropathic ~~testing~~pain. PKThese ~~relate~~molecules toindicate ~~the~~that ~~branch~~they ofare ~~pharmacology~~more ~~concerned~~soluble ~~with~~than ~~the movement of drugs within the body. Factors in PK studies include CACO permeability~~CBD, ~~which~~also ~~relates~~deemed ~~to assays that measure the ability of~~ a ~~drug~~neuroprotectant towith bepotential ~~absorbed from the gastrointestinal~~anti-inflammatory ~~tract and thereby to evaluate whether the drug can be suitably dosed via an oral route~~properties. ~~EC50~~A ~~and~~molecule ~~IC90~~that ~~relate~~is ~~to the~~potentially ~~concentration of~~more awater ~~drug,~~soluble ~~antibody~~than orCBD ~~toxicant~~in ~~which~~this ~~induces~~regard amay ~~response~~be ~~halfway~~good ~~between the baseline and maximum after a specified exposure time. It is commonly used as a measure of a drug’s potency~~ candidate(~~EC50~~s), ~~and the~~for ~~concentration~~use ~~of a medication~~ in ~~the~~topical ~~blood that will inhibit the replication of a specified percentage of microorganisms (IC90)~~applications.

~~Our lead~~We ~~target~~believe ~~drug~~that ~~candidate~~we ~~was~~will ~~then~~be able ~~analyzed~~to ~~using~~raise asufficient ~~mouse~~capital ~~model~~ to ~~determine,~~proceed ~~among~~forth ~~other~~with things, blood brain barrier concentrations, tissue and organ distribution, bioavailability, administration (IV vs. Oral), spinal fluid concentration, and blood plasma concentration. A route of “administration” in pharmacology and toxicology is the path by which a ~~drug,~~Phase ~~fluid,~~1a ~~poison,~~human orsafety ~~other~~trial ~~substance is~~for ~~taken into~~ the ~~body.~~treatment ~~“Bioavailability” is a subcategory~~ of ~~absorption~~Chemotherapy ~~and~~Induced ~~relates to a fraction of an administered~~Peripheral ~~dose~~Neuropathy. ofAll apreclinical ~~drug~~work ~~that reaches systemic circulation~~ in ~~the~~this ~~body. “Blood plasma concentration~~indication,” ~~otherwise~~including ~~known~~animal astoxicity ~~volume of distribution~~studies, is aare ~~theoretic~~expected ~~concept~~to ~~that~~be ~~relates~~completed before the ~~amount~~end of ~~drug in~~ the ~~body~~third ~~(dose)~~quarter to2023. ~~the~~We ~~concentration~~plan ~~(C)~~on ofentering ~~drug that~~into isclinical ~~measured~~trials (sometime in ~~blood,~~the ~~plasma,~~second ~~and~~quarter ~~unbound in tissue water)~~2024.

17Additionally, we believe that we will be able to raise sufficient capital to proceed forth with a Phase 1a human safety trial for the treatment of Overt Hepatic Encephalopathy. All preclinical work in this indication, including animal toxicity studies, are expected to be completed before the end of the first quarter 2024. We plan on entering into clinical trials sometime in the third quarter 2024.

~~In May~~We ~~2014,~~intend weto ~~commissioned~~seek ~~the first of two animal behavioral studies via research pact with Temple University. The aim of the~~additional ~~study~~capital ~~was~~ to ~~test~~proceed ~~the effects of CBD and KLS-13019 on cognitive function in a mouse model of OHE in support of the identification of molecules~~ with inour ~~vivo~~business ~~efficacy.~~plan Anregarding ~~established~~additional ~~model~~drug ofpipeline ~~OHE, the thioacetamide model (TAA, 200 mg/kg i~~opportunities.p.), was used to assess the effect of CBD (5.0 mg/kg i.p.) and KLS-13019 (0.5 – 5.0 mg/kg i.p.) on learning and memory in male C57Bl6 mice. The autoshaping procedure, an operant learning and memory assay that rapidly assesses acquisition and retention of a simple task, was the primary cognitive assay used. The task is an operant conditioning task wherein food restricted mice are placed in experimental chambers and must learn how to make a behavioral response to gain access to food rewards.

~~In summary,~~We ~~thioacetamide~~believe ~~induced~~that aour ~~robust,~~current ~~but~~relationships ~~variable~~with Purisys, ~~toxicity~~LLC ~~associated~~(formerly ~~with~~known ~~cognitive~~as ~~impairment,~~Noramco) ~~morbidity~~(“Purisys”), ~~and~~a ~~mortality. KLS13019,~~supplier ~~administered~~of inbulk ~~the~~active ~~absence~~pharmaceutical ofingredients ~~thioacetamide~~(APIs), ~~produced~~specifically pharmaceutical nograde ~~negative~~CBD, ~~behavioral~~and orCatalent ~~general~~Pharma ~~health~~Solutions ~~effects~~(“Catalent”), a manufacturer of formulated and ~~actually~~packaged pharmaceuticals, ~~appeared~~will enable us to ~~improve~~meet ~~cognitive~~our ~~functioning~~objectives in the ~~behavioral~~production ~~task.~~of ~~The~~target ~~5.0~~drug ~~mg/kg~~candidates ~~dose~~that ofcan ~~KLS~~be ~~13019~~used ~~also~~in ~~significantly~~clinical ~~prevented thioacetamide-induced~~trials ~~cognitive~~and, ~~performance~~beyond ~~deficit~~successful clinical trials, ~~and~~meet ~~the~~patient ~~lower~~demand ~~dose~~in commercial sales for each of 1our target disease indications.0Estimated ~~mg/kg~~Costs ~~showed~~for aCIPN ~~trend~~Clinical Trials in– ~~this~~Phase ~~direction.~~1a through Phase 2b

~~Pharmacokinetic~~We have estimated that the cost of a Phase 1a and ~~Pharmacodynamic~~1b ~~Comparison~~trials, ~~Between~~limited ~~KLS-13019~~to 40 patients in each trial will will cost approximately $1,050,000 and ~~CBD~~ $1,2500,000, respectively. The Company anticipates that a Phase 2a trial limited to 180 patients will cost approximately $3,000,000, with a Phase 2b trial estimated at $4,500,000 for 180 patients. As part of our plans to initiate Phase 1 clinical trials in the U.S. or Australia. The benefit of commencing Phase 1 clinical trials in Australia is that the Australian government has provided incentives that provide for research and development rebates.

~~Results from~~Research PK& ~~and~~Development tax PDincentives ~~studies~~offered ~~performed~~by inthe ~~evaluating~~government ~~CBD~~actively ~~versus~~encourage ~~KLS-13019~~overseas ~~(molecule~~sponsors ~~name~~to ~~16),~~conduct ~~has~~research ~~shown~~in ~~KLS-13019~~Australia. toThese beincentives ~~superior in~~have ~~aqueous~~also ~~solubility~~made ~~(potential~~it attractive for ~~drug~~global ~~absorption~~companies ~~after~~to ~~oral~~access ~~administration);~~Australian ~~Log~~research Pfacilities, ~~(ratio~~as ~~which~~holding ~~measures~~the ~~difference~~intellectual inproperty ~~solubility~~within Australia inis ~~two~~not ~~phases);~~mandatory. ~~bioavailability~~Sponsors ~~(proportion~~wishing ofto ~~the~~be ~~drug~~eligible ~~that~~for ~~enters~~this ~~the~~benefit ~~circulation);~~can ~~and~~either Cestablish ~~max~~an ataffiliate 10company ~~mg/kg,~~in ~~p.o.~~Australia (~~peak~~which ~~serum~~may take ~~concentration~~from 1 week to 1 month) or choose a Contract Research Organization (“CRO”) to act on their behalf.

~~Results from~~Controlled ~~our~~Substances ~~pre-clinical~~Laws ~~efforts in the potential treatment of OHE~~ and the potential treatment of CIPN have shown a marked improvement over 99.7% pure pharmaceutical grade synthetic CBD in side by side pre-clinical comparison. In a pre-clinical comparison for neuroprotection between CBD and KLS-13019, results indicated increased potency for the new molecule (KLS-13019) as determined by six assays, while both molecules exhibited efficacy in preventing oxidative stress-related toxicities back to control values. Treatment with KLS-13019 alone, however, was 5-fold less toxic than CBD. Previous studies suggested that CBD targeted the Na+ Ca2+ (sodium-calcium) exchanger in mitochondria to regulate intracellular calcium levels, an important determinant of neuronal survival. After treatment with an inhibitor, the mNCX inhibitor (“CGP-37157”), no detectable neuroprotection from ethanol toxicity was observed for either CBD or KLS-13019. Furthermore, AM630 (a CB2 antagonist) significantly attenuated CBD-mediated neuroprotection, while having no detectable effect on KLS-13019 neuroprotection. Our studies indicated KLS-13019 was more potent and less toxic than CBD. Both molecules can act through mNCX. Based on these results, amongst other things, we believe that KLS-13019 may provide an alternative to CBD as a therapeutic candidate to treat disease associated with oxidative stress.Regulations

18Our drug candidates contain controlled substances as defined in the Controlled Substances Act (“CSA”). Controlled substances that are pharmaceutical products are subject to a high degree of regulation under the CSA, which establishes, among other things, certain registration, manufacturing quotas, security, recordkeeping, reporting, import, export and other requirements administered by the DEA.

AsDespite ~~previously~~recent ~~noted,~~approvals ~~comparisons~~by ~~between~~the FDA and DEA for a newly approved medication that contains CBD, the scheduling of these substances, many of which are beyond our control, could jeopardize our ability to obtain regulatory approval for and successfully market KLS-13019 ~~have~~or ~~been~~KLS-13023. Moreover, ~~published~~because inour ~~peer~~business ~~reviewed~~is ~~articles~~almost entirely dependent upon these two product candidates, any such setback in ~~ACS~~our ~~Medicinal~~pursuit ~~Chemistry~~of regulatory ~~Letters~~approval ~~(2016,~~would 7,have ~~424-428)~~a material adverse effect on our business and ~~Journal~~prospects. See our full description of ~~Molecular~~the ~~Neuroscience~~impact-controlled ~~(14~~substances laws ~~August~~and ~~2018)~~regulations have on our business in the “Risk Factors” section of this annual report.

19KLS-13019 does not contain CBD and is a new chemical entity that would not fall under the CSA or be deemed a Schedule 1 controlled substance. A new chemical entity (“NCE”) is a molecule developed by the innovator company in the early drug discovery stage, which, after undergoing clinical trials, could translate into a drug that could be a treatment for some disease. Under the Food and Drug Administration Amendments Act of 2007, all NCE’s must first be reviewed by an advisory committee before the FDA can approve these products.

Additional follow on studies recently published on May 10, 2019 in the Journal of Molecular Neuroscience have further advanced our studies on the mechanism of action for CBD and KLS-13019 in pre-clinical testing for the treatment of CIPN. The mechanism of action for CBD-and KLS-13019-mediated protection now has been explored with dissociated dorsal root ganglion (“DRG”) cultures using small interfering RNA (siRNA) to the mitochondrial Na+ Ca2+ exchanger-1 (“mNCX-1”). Treatment with this siRNA produced a 50–55% decrease in the immunoreactive (“IR”) area for mNCX-1 in neuronal cell bodies and a 72–80% decrease in neuritic IR area as determined with high-content image analysis. After treatment with 100 nM KLS-13019 and siRNA, DRG cultures exhibited a 75 ±5% decrease in protection from paclitaxel-induced toxicity, whereas siRNA studies with 10 μM CBD produced a 74± 3% decrease in protection. Treatment with mNCX-1 siRNA alone did not produce toxicity. The protective action of cannabidiol and KLS-13019 against paclitaxel-induced toxicity during a 5-h test period was significantly attenuated after a 4-day knockdown of mNCX-1 that was not attributable to toxicity. This data indicates that decreases in neuritic mNCX-1 corresponded closely with decreased protection after siRNA treatment. Pharmacological blockade of mNCX-1 with CGP-37157 produced complete inhibition of cannabinoid-mediated protection from paclitaxel in DRG cultures, supporting the observed siRNA effects on mechanism. 19

~~Sodium~~KLS-~~Calcium~~13023 is a formulation ~~Exchanger~~that ~~(“NCX”) (often~~does ~~denoted~~contain ~~Na+/Ca2+ exchanger,~~CBD. ~~NCX~~At present, orCBD ~~exchange~~is ~~protein)~~deemed ~~is an~~a ~~antiporter~~Schedule ~~membrane~~1 ~~protein~~controlled ~~that~~substance ~~removes~~by ~~calcium~~the ~~from~~U.S. ~~cells~~Drug Enforcement Agency (“DEA”) under the CSA. ~~The~~Like ~~exchanger~~the ~~exists~~drug inmolecule ~~many~~EpidiolexÒ, ~~different~~which ~~cell~~was ~~types~~recently ~~and~~approved ~~animal~~by ~~species.~~the FDA ~~The~~for ~~NCX~~marketing isand ~~considered~~sale tofor beuse ~~one~~in oftreating ~~the~~Dravet ~~most~~Syndrome ~~important~~and ~~cellular~~Lennox-Gasteau ~~mechanisms~~Syndrome ~~for~~(forms ~~removing~~of ~~Ca2+ (calcium~~child ~~ions~~epilepsy), ~~from~~KLS-13023 would need ~~cells.~~to ~~The~~follow ~~exchanger~~the isguidance ~~usually~~set ~~found~~forth inby the ~~plasma~~CSA, ~~membranes~~complete a successful human clinical trial, and apply for rescheduling, as was the ~~mitochondria~~case ~~and~~with EpidiolexÒ, ~~endoplasmic~~now ~~reticulum~~a ofSchedule ~~excitable~~5 ~~cells~~drug, before it can be sold and marketed to the public.

~~Mitochondria is~~On January 14, 2019, we received awritten ~~double-membrane-bound organelle found~~notice infrom ~~most eukaryotic organisms.~~the ~~Mitochondria~~DEA ~~generate~~and ~~most~~Chemical ofEvaluation Section, as follows: “Please be advised that your material meets the ~~cell’s~~definition ~~supply~~of ‘Hemp’ and is not regulated under the CSA, as long as it consists of ~~adenosine~~ ~~triphosphate~~ high purity Cannabidiol (~~“ATP”~~CBD) that contains approximately 0.1% delta-9- THC. (However, ~~used~~if asit acontains ~~source~~more ~~of chemical~~than ~~energy~~0.3% ~~ATP~~delta-9 THC, it is aconsidered ~~complex~~‘Marihuana’ ~~organic~~and would be in Schedule ~~chemical~~1 ~~that~~of ~~provides~~the ~~energy~~CSA).” toWhile ~~drive~~this ~~many~~notice ~~processes~~is inan ~~living~~official ~~cells,~~notice ~~including~~from ~~muscle~~the ~~contractions~~DEA regarding the scheduling of high purity CBD, ~~nerve~~we ~~impulse~~will ~~propagation~~continue to abide by the CSA in all respects with regards to its treatment and ~~chemical~~handling ~~synthesis~~of CBD.

~~According~~The toactive ~~Fallon,~~pharmaceutical etingredient ~~al.~~(“API”) found in ~~the~~KLS-13023 ~~March/April~~is ~~2006~~highly ~~edition~~purified ofpharmaceutical ~~Clinical~~grade ~~Medicine,~~synthetic ~~pain~~CBD isproduced by ~~uncontrolled~~Purisys ~~with~~and ~~opioid~~currently ~~treatments~~under indrug ~~approximately 20%~~master offile ~~patients~~ with ~~advanced~~the ~~cancer,~~FDA. orPurisys ~~420~~(formerly,~~000~~ ~~people~~Noramco) inhas ~~the~~been ~~United~~manufacturing ~~States.~~cannabidiol ~~There~~since ~~are~~2016 (DMF33223). ~~currently~~Today, nothrough ~~FDA~~our ~~approved~~partnership ~~non-opioid~~with ~~treatments for~~Purisys, ~~patients~~we ~~who~~have dothe ~~not~~ability ~~respond~~ to, orproduce ~~experience~~on ~~negative~~the ~~side~~largest ~~effects~~commercial ~~with, opioid medications~~scale. WePurisys’ ultra-high ~~believe~~purity ~~that~~CBD ~~KLS-13019~~(“Purisys ~~has the~~CBD”) ~~potential~~is toattractive ~~address~~for adrug ~~significant~~development ~~unmet~~projects ~~need~~and infalls ~~this~~significantly ~~large~~below ~~market~~the by0.3% ~~treating~~THC limits ~~patients~~set ~~with~~in athe ~~product~~2018 ~~that~~Farm ~~employs~~Bill afor ~~differentiated non-opioid~~use ~~mechanism~~in ofconsumer ~~action,~~products. Purisys’ ~~and~~patent-protected ~~offers~~manufacturing ~~the~~process ~~prospect~~produces ofa ~~pain~~consistently odorless, ~~relief~~tasteless ~~without~~white ~~increasing~~powder ~~opioid~~highest-~~related~~purity ~~adverse~~form ~~side~~of ~~effects.~~CBD that exhibits:

~~Neuropathix Studies~~• onNo ~~CBD~~heavy metals (e.g. lead) from soil;

~~In March~~• ~~2013,~~No wepesticide began our pre-clinical research and discovery efforts at the Pennsylvania Biotechnology Center/Baruch Blumberg Institute in Doylestown, PA. We began the research and development, and pre-clinical work focused on the identification, synthesis and/or extraction of novel Cannabis-derived molecules for the treatment of impairments associated with oxidative stress in OHE. Prior research (published on April 16, 2011, in the British Journal of Pharmacology under the title “Cannabidiol Improves Brain and Liver Function in a Fulminant Hepatic Failure Induced Model of Hepatic Encephalopathy in Mice”) produced substantial behavioral and histochemical evidence demonstrating the effectiveness of certain Cannabis-derived molecules, such as CBD, in the improvement of brain and liver function in fulminant hepatic failure. Findings from the above referenced study include reversal of locomotors and cognitive pathologies, reversal of structural changes, such as Alzheimer’s Type II astrogliosis, and reversal of increases in ammonia levels.residues;

~~In 2014,~~• weNo ~~published~~environmental aninfluences ~~abstract~~ on ~~our~~quality ~~completed~~such ~~studies~~as ~~regarding CBD at the 24th Annual International Cannabinoid Research Society symposium~~rain, ~~titled~~sunlight ~~“Cannabidiol~~& ~~Provides~~soil Protection from Ethanol and Ammonium Toxicity in a Hippocampal Model of Hepatic Encephalopathy.” In the present study, an in vitro model of HE has been utilized to evaluate the protective properties of CBD, a substance with demonstrated protective properties against oxidative stress in pre-clinical studies targeting the OHE range of neuronal toxicity.nutrients;

~~HE is~~• aNo ~~known~~plant ~~oxidative~~impurities stress related disorder. Although ammonia is considered the main factor involved in the pathogenesis of HE, it correlates well with the severity of HE in acute liver failure, but not in chronic liver disease. Oxidative stress is another factor believed to ~~play a role in the pathogenesis of this syndrome~~remove; it represents an imbalance between the production and neutralization of reactive oxygen species, which leads to cellular dysfunction (“Oxidative Stress: A Systemic Factor Implicated in the Pathogenisis of Hepatic Encephalopathy”, Metabolic Brain Disease, 28 June 2013, 175-178).

~~On January~~• ~~22,~~No ~~2015,~~microbial weor ~~signed~~mold anproliferation; agreement with Catalent Pharma Solutions LLC (“Catalent”), a $3.9 billion pharmaceutical manufacturer, for the performance of a feasibility study named “Solution for Cannabidiol Softgel Feasibility” (the “CBD OTC Feasibility Study”). Catalent has over eight years of experience in capsule and ~~softgel manufacturing capabilities and experience.~~

~~The purpose~~• ofNo ~~the~~structural ~~CBD~~(or ~~OTC~~stereo ~~Feasibility~~chemical) ~~Study~~differences ~~with~~exist ~~Catalent~~between isan toactive ~~advance~~cannabinoid ~~our~~ingredient ~~plans~~manufactured toby ~~submit~~Purisys ~~one~~and orthose ~~more~~that ~~products~~are ~~for~~chemically ~~FDA~~extracted ~~clinical trials to treat certain oxidative stress related~~ and ~~neurodegenerative~~isolated ~~related~~from ~~diseases~~plants. ~~such~~They asare, ~~Traumatic~~in ~~Brain~~effect, ~~Injury (“TBI”)~~nature-identical.

~~TBI, also~~Purisys ~~known~~currently ashas ~~intracranial~~a ~~injury,~~drug ~~occurs~~master ~~when~~file ~~an external force injures the brain. TBI can be classified based on severity, mechanism~~ (~~closed~~“DMF”) orfor ~~penetrating~~its ~~head~~ultra-high ~~injury),~~purity orCBD ~~other~~with ~~features~~the (eFDA.~~g.,~~ ~~occurring~~In inNovember a2019, ~~specific~~Purisys ~~location~~received ~~or over a widespread area). Head~~advise ~~injury~~notice isfrom athe ~~broader~~DEA ~~category~~ that ~~may involve damage to other structures, such as~~ the ~~scalp~~Purisys ~~and~~CBD ~~skull.~~has ~~TBI~~been ~~can~~removed ~~result in physical, cognitive, social, emotional, and behavioral symptoms, and outcomes can range~~ from ~~complete~~Schedule ~~recovery~~1 toof ~~permanent~~the ~~disability or death~~CSA.

20U.S. Food and Drug Administration (FDA)

The ~~Centers~~ FDA is responsible for advancing ~~Disease~~the ~~Control~~public ~~and~~health ~~Prevention~~by ~~(the~~helping ~~“CDC”)~~to ~~has~~speed ~~compiled~~innovations ~~statistics~~that onmake ~~TBI,~~medicines ~~which~~safer ~~occurs~~and more ~~with~~effective ~~children~~ and ~~older~~by ~~adults.~~helping ~~According~~the topublic get the ~~CDC~~accurate, ~~total~~science-based ~~combined~~information ~~rates~~it ~~for~~needs ~~TBI-related~~to ~~emergency~~use ~~department~~medicines ~~(“ED”)~~to ~~visits,~~maintain ~~hospitalizations~~ and ~~deaths~~improve ~~have~~public ~~increased over the past decade~~health. In ~~2014~~2004, ~~there~~the ~~were~~FDA ~~approximately~~provided ~~2.5~~a ~~million TBI-related ED visits in the U.S.,~~guidance ~~including~~document ~~over~~for ~~812~~innovations,~~000~~ ~~among children. Unintentional falls~~challenges, ~~being~~and ~~unintentionally~~solutions ~~struck~~for bynew ordrug ~~against~~products anthat ~~object,~~examine ~~and motor vehicle crashes were~~ the ~~most~~critical ~~common~~path ~~mechanisms~~needed ~~of injury contributing~~ to abring ~~TBI~~therapeutic ~~diagnosis in the ED. These three principal mechanisms~~products ofto ~~injury accounted for 47.9%~~completion, ~~17.1%,~~ and ~~13.2%,~~how ~~respectively,~~the ofFDA ~~all~~can ~~TBI-related~~collaborate EDin ~~visits.~~the ~~Rates of TBI-related ED visits per 100~~process,~~000~~ ~~population~~from ~~were~~laboratory ~~highest~~to ~~among~~production ~~older~~to ~~adults~~end ~~aged~~use, ≥to 75make ~~years~~medical ~~(1,682.0),~~breakthroughs available ~~young~~to ~~children~~those ~~aged~~in ~~0-4~~need ~~years~~as ~~(1,618.6),~~quickly ~~and individuals~~as ~~15-24 years (1,010~~possible.~~1).~~

~~On March 4, 2015, the Company and Catalent commenced the feasibility study named “Solution for Cannabidiol Softgel Feasibility.”~~20

~~On March~~FDA ~~16,~~Approval ~~2015,~~– What weIt received notice from Catalent that the DEA advised them that the CBD drug code 7360 had been added to Catalent’s Schedule 1 registration and that a quota for a certain quantum of CBD was successfully submitted for the importation of 150 grams of 99.7% pure synthetic cannabidiol from Purisys.Means

~~Additionally, on~~FDA ~~July~~approval ~~13,~~of ~~2018,~~a wedrug ~~received~~means that ~~notice~~data ~~from~~on the ~~DEA~~drug’s ~~that~~effects ~~were~~have ~~approved~~been ~~for~~reviewed ~~our~~by ~~own~~the ~~Schedule~~Center ~~1 Controlled Substance license~~ for ~~the purpose~~Drug ofEvaluation ~~research~~and ~~activity.~~Research, ~~The~~and ~~addition~~the ofdrug ~~this~~is ~~license~~determined ~~will~~to provide ~~further~~benefits ~~assist~~that ~~the~~outweigh ~~Company~~its inknown ~~the bailment~~ and ~~delivery~~potential ofrisks ~~CBD to~~for ~~and~~the ~~from~~intended ~~research~~population. ~~collaborators~~The ~~like~~drug ~~Catalent~~approval ~~and~~process ~~Temple~~takes ~~University,~~place aswithin a ~~well~~structured asframework ~~others.~~that includes:

~~Our relationship~~• ~~with~~Analysis ~~Catalent~~of ~~was~~the ~~founded~~target oncondition ~~our~~and ~~efforts~~available totreatments—FDA ~~produce~~reviewers aanalyze ~~formulated~~the ~~version~~condition ofor aillness ~~CBD~~for ~~based~~which ~~gel~~the ~~capsule,~~drug ~~herein~~is ~~referred to~~intended asand ~~KLS-13023,~~evaluate ~~for further advancements in~~ the current treatment ~~of oxidative stress related disorders~~landscape, ~~such~~which ~~as OHE. Catalent does not share in any royalties or ownership of intellectual property that we~~ provide tothe ~~Catalent~~context orfor ~~that~~weighing ~~is developed under~~ the ~~feasibility study~~drug’s ~~with~~risks ~~Catalent~~and ~~described herein~~benefits. ~~The~~For ~~current~~example, ~~feasibility study being performed is for our efforts to create~~ a ~~high~~drug ~~quality controlled~~intended ~~and assured pharmaceutical grade product for use in an FDA clinical trial~~ to treat patients ~~suffering~~ with ~~OHE.~~a ~~Catalent’s efforts~~life-threatening indisease ~~this~~for ~~instance~~which isno asother atherapy ~~contract~~exists ~~manufacturer~~may ~~involved~~be inconsidered ~~the~~to ~~advancement~~have ofbenefits ~~our~~that ~~intellectual~~outweigh ~~property~~the ~~and~~risks ~~for~~even ~~Catalent to~~if bethose arisks ~~third~~would ~~party~~be ~~contract~~considered ~~manufacturer~~unacceptable for ~~the~~a ~~commercial~~condition ~~production~~that ofis ~~KLS-13023~~not life threatening.

~~A satisfactory~~• ~~and~~Assessment ~~successful completion~~ of ~~the~~benefits ~~feasibility~~and ~~study~~risks ~~with~~from ~~Catalent,~~clinical ~~followed~~data—FDA byreviewers ~~the~~evaluate ~~completion~~clinical ofbenefit ~~our~~and ~~pre-clinical evaluation~~risk ofinformation ~~KLS-13023~~submitted inby anthe ~~animal~~drug ~~toxicity model~~maker, ~~and~~taking ~~thereafter~~into ~~the~~account ~~application~~any ofuncertainties ~~KLS-13023~~that ~~under~~may anresult ~~NDA~~from ~~with~~imperfect ~~the~~or ~~FDA,~~incomplete ~~would likely~~data. ~~lead~~Generally, tothe aagency ~~bulk~~expects ~~commercial~~that the drug ~~manufacturing~~maker ~~agreement~~will ~~between~~submit ~~the~~results ~~Company~~from ~~and~~two ~~Catalent.~~well-designed Weclinical ~~have~~trials, ~~only~~to ~~committed~~be tosure ~~completing~~ that the ~~feasibility~~findings ~~study~~from ~~with~~the ~~Catalent,~~first ~~and~~trial are ~~under~~not nothe ~~obligation~~result toof ~~enter~~chance ~~into~~or abias. ~~commercial~~In ~~drug~~certain ~~manufacturing~~cases, ~~agreement~~especially ~~with Catalent.~~if ~~After~~ the ~~completion~~disease ofis ~~our~~rare ~~feasibility~~and ~~study~~multiple ~~with~~trials ~~Catalent,~~may wenot ~~currently~~be ~~believe~~feasible, ~~that~~convincing ~~the~~evidence ~~logical~~from ~~next~~one ~~step~~clinical intrial ~~our commercial~~may ~~development~~be ~~plans~~enough. ~~for~~Evidence ~~KLS-13023~~that isthe todrug ~~engage~~will ~~with~~benefit ~~Catalent~~the astarget ~~our~~population ~~contract~~should ~~drug~~outweigh ~~manufacturer~~any ~~for~~risks ~~KLS-13023~~and uncertainties.

~~CBD Reclassified~~• byStrategies ~~DEA~~ for ~~Epidiolex~~managing risks—All drugs have risks. Risk management strategies include an FDA-approved drug label, which clearly describes the drug’s benefits and risks, and how the risks can be detected and managed. Sometimes, more effort is needed to manage risks. In these cases, a drug maker may need to implement a Risk Management and Mitigation Strategy (“REMS”).

~~On September~~Although ~~27,~~many ~~2018, in~~of ~~a significant decision relating to~~ the ~~classification of CBD, currently classified as a Schedule I~~FDA’s ~~narcotic~~risk-benefit byassessments ~~the DEA under the Controlled Substances Act, the Department of Justice~~ and ~~the~~decisions ~~DEA~~are ~~announced that Epidiolex~~straightforward, ~~the~~sometimes ~~recently approved medication by~~ the ~~FDA,~~benefits ~~was~~and ~~being~~risks ~~placed~~are inuncertain ~~Schedule~~and Vmay ofbe ~~the~~difficult ~~Controlled~~to ~~Substances Act, the least restrictive schedule~~interpret ofor ~~the CSA~~predict. On ~~June~~The ~~26, 2018,~~agency ~~the~~and ~~FDA announced it approved Epidiolex for~~ the ~~treatment~~drug ofmaker ~~seizures~~may ~~associated~~reach ~~with two~~different ~~rare~~conclusions ~~and~~after ~~severe~~analyzing ~~forms~~the ofsame ~~epilepsy~~data, ~~Lennox-Gastaut~~or ~~syndrome~~there ~~and~~may ~~Dravet~~be ~~syndrome,~~differences ~~in patients two years~~ of ~~age and older. Epidiolex~~ ~~contains~~opinion ~~CBD.~~among ~~The~~members ~~CBD~~of ~~in Epidiolex is extracted from~~ the ~~cannabis plant and is the first~~ FDA~~-approved~~’s ~~drug~~review toteam. ~~contain~~As a ~~purified extract~~science-led ~~from~~organization, the ~~plant.~~FDA ~~Schedule~~uses ~~V drugs represent~~ the ~~least~~best ~~potential~~scientific ~~for~~and ~~abuse. Schedule V drugs, substances, or chemicals~~technological ~~are~~information ~~defined~~available asto ~~drugs~~make ~~with~~decisions ~~lower~~through ~~potential~~a ~~for~~deliberative ~~abuse than Schedule IV and consist of preparations containing limited quantities of certain narcotics~~process.

~~We believe~~Accelerated this was a significant reclassification that validates our efforts in the research and development of ethical pharmaceuticals containing CBD as an active pharmaceutical ingredient and reduces the regulatory and market risks associated with the use of CBD, still a Schedule I narcotic. Approval

WeIn some cases, the approval ~~have~~of ~~maintained~~a ~~since~~new ~~inception~~drug ~~that~~is ~~the~~expedited. ~~only~~Accelerated ~~clear~~Approval ~~path~~can be applied to ~~reclassification~~promising istherapies tothat ~~follow~~treat ~~the~~a ~~regulatory~~serious ~~path~~or life-threatening condition and provide therapeutic benefit over available therapies. This approach allows for the approval of ~~proving~~a ~~medical~~drug that demonstrates an effect ~~purpose~~on ~~through~~a ~~traditional~~“surrogate ~~Phase~~endpoint” 1that ~~through~~is ~~Phase~~reasonably 3likely to predict clinical ~~trials.~~benefit, Weor ~~believe~~on a clinical endpoint that occurs earlier but may not be as robust as the standard endpoint used for approval. ofThis ~~Epidiolex~~approval bypathway is especially useful when the ~~FDA~~drug onis ~~June~~meant ~~26,~~to ~~2018~~treat a disease whose course is long, and ~~reclassification~~an ofextended ~~CBD~~period asof ittime ~~relates~~is needed to ~~Epidiolex~~measure byits effect. After the ~~DEA~~drug onenters ~~September~~the 27market, the ~~2018,~~drug maker is ~~clear~~required ~~evidence~~to ofconduct ~~the~~post-marketing ~~need~~ clinical trials to ~~follow~~verify and describe the ~~regulatory~~drug’s ~~path~~benefit. inIf ~~order~~further trials fail to ~~meet~~verify the ~~requirements~~predicted ofclinical ~~reclassification~~benefit, ofFDA amay ~~Schedule~~withdraw ~~I controlled substance~~approval.

21Since the Accelerated Approval pathway was established in 1992, many drugs that treat life-threatening diseases have successfully been brought to market this way and have made a significant impact on disease course. For example, many antiretroviral drugs used to treat HIV/AIDS entered the market via accelerated approval, and subsequently altered the treatment paradigm. A number of targeted cancer-fighting drugs also have come onto the market through this pathway.

~~Neuropathix Strategic~~Drug ~~Third~~Development ~~Party Business Relationships, Licenses and Joint Ventures~~Designations

~~Natural~~The FDA also employs several ~~Products~~approaches ~~Discovery~~to ~~Institute~~encourage ~~– Pennsylvania~~the ~~Biotechnology~~development ~~Center~~of certain drugs, especially drugs that may represent the first available treatment for an illness, or ones that have a significant benefit over existing drugs. These approaches, or designations, are meant to address specific needs, and a new drug application may receive more than one designation, if applicable. Each designation helps ensure that therapies for serious conditions are made available to patients as soon as reviewers can conclude that their benefits justify their risks.

~~In December~~• ~~2013,~~Fast weTrack ~~entered~~is ~~into~~ a ~~Materials~~process ~~Transfer~~designed ~~and~~to ~~Testing~~facilitate ~~Agreement (“MTTA”) with~~ the ~~Institute~~development ~~for Hepatitis~~ and ~~Virus~~advance ~~Research and their division,~~ the ~~Natural~~review ~~Products Discovery Institute (“NPDI”), located at Pennsylvania Biotechnology Center in Doylestown, PA. The purpose~~ of ~~the~~drugs ~~MTTA,~~that ~~is,~~treat ~~among~~serious ~~other things~~conditions, ~~the~~and ~~research~~fill ofan ~~original~~unmet ~~material~~medical ~~made up of plants~~need, ~~plant~~based ~~matter,~~on ~~and~~promising ~~plant~~animal ~~extracts~~or ~~(the~~human ~~“Plant Materials”) to identify bioactive molecules contained in these Plant Materials which may lead to the commercial production of bioactive molecules~~data. ToFast ~~date,~~tracking wecan ~~have~~get ~~screened~~important ~~one~~new ~~plant source~~drugs ~~and have fractionated extracts~~ to ~~determine its neuroprotective activity. This plant source and extracted material has shown a high degree of neuroprotectant factor in~~ the ~~face~~patient ~~of ethanol and ammonium toxicity in neuronal cell cultures~~earlier. WeThe ~~plan on~~drug ~~furthering~~company ~~the~~must ~~commercial~~request ~~development of this material and also filing for patent protection on~~ the ~~process,~~Fast ~~method~~Track ~~and use of this material in the treatment of neurodegenerative diseases~~process.

~~On April~~• 2,Breakthrough ~~2020,~~Therapy wedesignation ~~entered~~expedites ~~into~~the andevelopment ~~Intellectual Property Rights Purchase~~ and ~~Transfer~~review ~~Agreement~~of ~~with~~drugs ~~the~~that ~~BSBI~~are intended to ~~purchase~~treat ~~all~~a ~~of the~~serious ~~rights~~condition, ~~titles,~~ and ~~interests~~preliminary ~~that~~clinical ~~would~~evidence ~~otherwise~~indicates ~~belong~~that to the ~~BASBI~~drug ~~solely~~may ~~under~~demonstrate ~~the~~substantial ~~MTTA~~improvement ~~Agreement~~over available therapy. ~~The~~A ~~purchase~~drug ~~price for~~with ~~the~~Breakthrough ~~acquisition~~Therapy ofdesignation ~~these~~is ~~rights~~also ~~was~~eligible ~~twenty~~for ~~five~~the ~~thousand~~Fast ~~shares~~Track ofprocess. ~~the~~The ~~Company’s~~drug ~~restricted~~company ~~common~~must ~~stock~~request a Breakthrough Therapy designation.

~~Subsequent to~~• ~~this~~Priority ~~transaction~~Review ~~with~~means ~~the~~that ~~BSBI,~~FDA weaims ~~filed~~to ~~for~~take ~~patent~~action ~~protection~~ on ~~this~~an ~~discovery~~application within six months, ~~which~~compared ~~patent~~to ~~describes~~10 ~~claims~~months onunder ~~the~~standard ~~process, method~~review. A Priority Review designation directs attention and ~~use~~resources ofto ~~this~~evaluate ~~material~~drugs inthat would significantly improve the treatment, diagnosis, or prevention of ~~neurodegenerative~~serious ~~diseases~~conditions. ~~(see:~~More ~~Neuropathix~~information ~~Intellectual~~about ~~Properties)~~ Priority Review is here.

~~Temple University – Animal Behavioral/Pre-Clinical Model~~21

~~On May~~FDA 1,Human ~~2014,~~Clinical we signed a Research Services Agreement with Temple University to test the effects of CBD and CBD-like molecules in an HE model of cognitive impairment in support of the identification of molecules with in vivo efficacy. The tests were performed by Temple University in the pre-clinical model for HE, and involved a mouse model of OHE and administration of CBD and KLS-13019 conducted by Dr. Sara Jane Ward and Dr. Ronald Tuma, with the study titled – “Cognitive, neurological, and motor function in a mouse model of hepatic encephalopathy: effects of CBD and CBD analogues (KLS-13019).” The results of this study showed that KLS-13019 is superior to CBD in the intervention of cognitive impairment from associated neurotoxicity in the OHE model.Trials

OnPhase I studies assess ~~January~~the 4,safety ~~2017,~~of wea ~~applied~~drug ~~for~~or adevice. ~~Phase~~This 1initial ~~Small~~phase ~~Business~~of ~~Technology~~testing, ~~Transfer~~which ~~(“STTR”)~~can ~~grant~~take ~~from~~several ~~the~~months ~~National~~to ~~Institutes of~~complete, ~~Health~~usually –includes ~~National~~a ~~Institute~~small onnumber of ~~Drug~~healthy ~~Abuse~~volunteers (~~“NIH-NIDA”~~20 to 100)., ~~This~~who ~~grant~~are ~~application~~generally ~~was~~paid ~~made~~for participating in ~~collaboration with~~the ~~Temple~~study. ~~University~~The ~~and~~study ~~titled~~is ~~“Development~~designed to determine the effects of ~~KLS-13019~~the ~~for~~drug ~~Chemotherapy~~or ~~Induced~~device ~~Peripheral~~on ~~Neuropathy~~humans ~~and~~including ~~Drug~~how ~~Dependence”. In~~it ~~December~~is ~~2017~~absorbed, wemetabolized, ~~were~~and ~~informed~~excreted. ~~that~~This phase also investigates the ~~Phase~~side 1effects that ~~grant~~occur ~~was~~as ~~awarded~~dosage levels are increased. About 70% of experimental drugs pass this phase of testing.

~~The~~Phase II studies test ~~following~~the isefficacy of a ~~summary~~drug ~~outline~~or device. This second phase of testing can last from several months to two years, and involves up to several hundred patients. Most Phase II studies are randomized trials where one group of patients receives the ~~aims~~experimental ~~proposed~~drug, inwhile a second “control” group receives a standard treatment or placebo. Often these studies are “blinded,” which means that neither the ~~aforementioned~~patients ~~grant~~nor the researchers know who has received the experimental drug. This allows investigators to provide the pharmaceutical company and the FDA with comparative information about the relative safety and effectiveness of the new drug. Approximately one-third of experimental drugs successfully complete both Phase I and Phase II studies.

~~Chemotherapy-induced~~Phase III studies involve ~~peripheral~~randomized ~~neuropathy~~and ~~(CIPN)~~blind ~~can~~testing bein aseveral ~~chronic,~~hundred ~~severely~~to ~~debilitating~~several ~~consequence~~thousand ofpatients. ~~cancer~~This ~~therapy~~large-scale ~~for~~testing, which ~~there~~can ~~are~~last noseveral ~~effective~~years, ~~management~~provides ~~strategies.~~the ~~Moreover,~~pharmaceutical ~~upwards~~company ofand ~~80%~~the ofFDA ~~CIPN~~with ~~patients~~a ~~reported~~more ~~using~~thorough ~~prescription~~understanding ~~opioids~~of ~~for~~the ~~pain~~effectiveness ~~management~~of the drug or device, ~~despite~~the benefits and the ~~fact~~range ~~that~~of ~~there~~possible isadverse ~~only~~reactions. ~~weak~~Approximately ~~evidence~~70% to 90% of drugs that ~~the~~enter ~~long-term~~Phase ~~continuation~~III studies successfully complete this phase of ~~opioids~~testing. ~~provides~~Once ~~clinically~~Phase ~~significant~~III ~~pain~~is ~~relief in~~complete, ~~these~~a ~~patients~~pharmaceutical company can request FDA approval for marketing the drug.

~~Mitochondrial dysfunction~~Phase IV studies, ~~oxidative~~often called ~~stress~~Post Marketing Surveillance Trials, ~~and~~are ~~inflammation~~conducted ~~have~~after ~~all~~a drug or device has been ~~implicated~~approved infor ~~its~~consumer ~~etiology~~sale. WePharmaceutical companies have ~~shown~~several ~~that~~objectives ~~the~~at ~~non-psychoactive cannabinoid~~this ~~CBD~~stage: ~~prevents~~(1) ~~the~~to ~~development~~compare ofa ~~CIPN~~drug inwith aother ~~mouse~~drugs ~~model~~already ofin ~~paclitaxel-induced~~the ~~cold~~market; ~~and~~(2) ~~mechanical~~to ~~allodynia.~~monitor ~~This~~a ~~target,~~drug’s long-term ~~allodynia,~~effectiveness ~~refers~~and toimpact ~~central~~on ~~pain~~a ~~sensitization~~patient’s ~~(increased~~quality ~~response~~ of ~~neurons~~life; and (3) ~~following~~to ~~normally~~determine ~~non~~the cost-~~painful,~~effectiveness ~~often~~of ~~repetitive~~a drug therapy relative ~~stimulation~~to other traditional and new therapies. ItPhase IV studies can ~~lead~~result toin a drug or device being taken off the ~~triggering~~market or restrictions of use ~~pain~~could ~~response~~be ~~from~~placed ~~stimuli~~on ~~that~~the ~~normally~~product dodepending ~~not~~on ~~provoke~~the ~~pain~~findings in the study.

~~In vitro,~~Therapeutic weGoods ~~observe~~Administration ~~that paclitaxel increases microglial expression of several putative mediators of neuropathic pain, and that this effect can be blocked by CBD in a mitochondrial Na+/Ca2+ exchanger~~ (~~mNCX~~TGA)~~- dependent manner. We have also shown that a more~~ potent, hydrophilic analogue of CBD, KLS-13019, protects against paclitaxel-induced oxidative stress in cultured dorsal root ganglia neurons, and that the mechanism underlying this neuroprotection is also regulation of intracellular calcium via the mNCX. Preliminary results demonstrate that KLS-13019 can attenuate mechanical sensitivity associated with CIPN while also reducing microglial activation and T cell infiltration into the spinal cord.– Australia

~~Dorsal root~~Clinical ~~ganglia~~trials ~~(“DRG”) is a cluster of neurons (a ganglion) in the dorsal root of a spinal nerve. The cell bodies of~~conducted ~~sensory neurons known as the first-order neurons are located~~ in ~~the~~Australia ~~dorsal root ganglia. Even though dorsal root ganglia~~ are asubject ~~part of the system of peripheral nerves, they lie very close~~ to ~~the~~various ~~spine,~~regulatory ~~and~~controls ~~therefore~~ to ensure the ~~central~~safety ~~nervous~~of ~~system~~participants. ~~That~~ ~~makes~~The ~~them~~TGA anregulates ~~important connection between~~ the ~~two~~use ~~systems.~~of ~~These nerve clusters help transmit messages toward the brain~~therapeutic ~~and~~goods ~~play~~supplied ~~a key role~~ in ~~neuropathic pain development and maintenance. Peripheral nerve injury-induced neuropathic pain is one of major~~ clinical ~~disorders~~trials ~~characterized by spontaneous ongoing or intermittent burning pain, sensory abnormalities (dysesthesia), an increased response to painful stimuli (hyperalgesia), and pain~~ in ~~response~~Australia tounder ~~normally~~the ~~innocuous~~therapeutic ~~stimuli~~goods ~~(allodynia)~~legislation.

22Clinical trial sponsors must be aware of the requirements to import, export, manufacture and supply therapeutic goods in Australia. The following avenues provide for the importation into and/or supply in Australia of ‘unapproved’ therapeutic goods for use in a clinical trial:

~~Our central~~• ~~hypothesis~~Clinical isTrial ~~that~~Notification administration of CBD or KLS-13019 helps preserve Ca2+ homeostasis by promoting activity of the mNCX, which in turn protects from both mitochondrial dysfunction and microglial activation to prevent the neuronal and glial changes associated with the development and maintenance of paclitaxel-induced neuropathic pain. We believe that results from experiments in AIM 1 will demonstrate that the neuroprotective properties of CBD and KLS-13019 can be reduced by pharmacological or gene knockdown of the mNCX in a statistically significant manner. We believe that results from experiments in AIM 2 will further confirm the i.p. and p.o. efficacy of KLS-13019 vs CBD to prevent or reverse mechanical sensitivity and neuroinflammation in a mouse model of paclitaxel-induced neuropathic pain and that repeated administration of these molecules does not lead to analgesic tolerance. Remarkably, the non-psychoactive CBD has also been shown to inhibit cue-induced heroin-seeking and neurochemical correlates thereof in a rat model of relapse and decrease heroin craving in a small human study. Experiments in AIM 3 are designed to test the hypothesis that KLS-13019 and CBD will attenuate reinstatement of morphine seeking behavior in a rat model of opioid relapse. The overall impact of the results from the proposed research will be significant advancements into (iCTN) ~~identification~~scheme; ~~of specific mechanisms that induce CIPN, (ii) application of this knowledge to facilitate design of novel treatment strategies for neuropathic pain,~~ and ~~(iii) novel treatment strategies to reduce or replace prescription opioid use and decrease prescription opioid abuse.~~

~~Chemotherapy-induced peripheral~~• ~~neuropathy~~Clinical ~~(CIPN)~~Trial ~~can~~Exemption be a chronic, severely debilitating consequence of cancer therapy for which there are no effective management strategies. Moreover, upwards of 80% of CIPN patients reported using prescription opioids for pain management, despite the weak evidence of their efficacy and the risks of long term dependence (~~Hirayama, ESMO Open 2016~~CTX). ~~Mitochondrial dysfunction, calcium dysregulation, oxidative stress, and inflammation have all been implicated in its etiology~~scheme. In pre-clinical studies, CBD, a non-psychoactive component of cannabis sativa, has shown evidence in a murine model to be a potentially effective treatment for CIPN and relieving opiate dependence currently experienced by certain patients undergoing current therapeutic chemotherapy and pain management regimens in cancer treatment. However, CBD has severe limitations in terms of potency, safety, oral bioavailability, and regulatory restrictions. KLS-13019 is a novel new chemical entity that, as per pre-clinical testing, may be able to target these problems. In the NIH-NIDA Phase 1 STTR Study Grant completed in December 2019, our research efforts with Temple University demonstrated the efficacy of KLS- 13019 in models of CIPN and opiate dependence, and also further elucidated its mechanism of action in regulation of calcium levels and inflammatory sequelae.

We have completed all of our work related to the aforementioned grant and are currently in a peer review submission of our research results to the Journal of Molecular Neuroscience. Temple University has completed two of the three aims outlined in the grant proposal, and is currently in the process of completing the third and final aim, morphine reinstatement. We believe that the grant study will be completed on or about June 2019 and the results will be published by Temple University. 22

OnThe ~~December~~CTN ~~31,~~Scheme ~~2019,~~is ~~we, together with Temple University, filed~~ a ~~completion~~notification ~~report~~process ~~with~~involving ~~NIH-NIDA regarding~~ the ~~Phase 1 STTR grant. The results of this study were promising and have set forth our plans to file for a Phase 2 grant due for filing on or before April 7, 2020.~~following:

~~In April~~• ~~2020,~~The ~~the~~Australian ~~Company~~clinical ~~and~~trial ~~Temple~~sponsor ~~University~~must ~~filed~~notify ~~for~~the aTGA ~~Phase~~of 2the ~~SBIR~~intent ~~Grant~~to ~~with~~sponsor ~~National~~a ~~Institutes~~clinical oftrial ~~Health~~involving –an ~~National Institute~~‘unapproved’ oftherapeutic ~~Neurological Disorders and Stroke (“NIH-NINDS”)~~good. ~~Our~~This ~~application~~must ~~provided~~take ~~strong~~place ~~support~~before starting to ~~further~~use the ~~research~~ ~~and development of our treatment for CIPN~~goods. ~~Phase~~ ~~2 is~~The ~~focused~~notification onform ~~the~~must ~~development,~~be ~~demonstration~~submitted online and ~~delivery of~~accompanied by the ~~innovation.~~relevant fee.

~~In June~~• ~~2020,~~The ~~the~~TGA ~~Company~~may ~~was~~give ~~informed~~the ~~that~~sponsor ~~its Phase 2 SBIR grant application received an impact/priority score~~ of ~~47.~~the ~~Generally speaking,~~trial ~~impact/priority~~written ~~scores~~notice ~~of 10~~ to 30provide ~~are~~specified ~~most~~information ~~likely~~relating to begoods ~~funded.~~notified Scores between 31 and 45 might be funded; scores greater than 46 are rarely funded. The Company believed that there were elements of its initial Phase 2 SBIR grant application that were misunderstood and believed it still had a very strong application. After making several critical changes to the original application, in ~~January 2021,~~ the ~~Company~~CTN ~~resubmitted its Phase 2 SBIR grant application with NIH-NINDS and currently awaits response from NIH-NINDS~~form.

~~Proposed Study~~• The TGA does not evaluate any data relating to the clinical trial at the time of submission. The Human Research Ethics Committee (“HREC”) reviews the scientific validity of the trial design, the balance of risk versus harm of the therapeutic good, the ethical acceptability of the trial process, and approves the trial protocol. The HREC is also responsible for ~~Traumatic~~monitoring ~~Brain~~the ~~Injury~~conduct of the trial.

~~To investigate~~• ~~the~~The ~~mechanisms~~institution ofor ~~action~~organization ~~through~~at which ~~CBD~~the ~~and~~trial awill ~~cannabinoid~~be ~~analogue~~conducted, ~~(KLS-13019)~~referred ~~provide neuroprotection form neurotoxicity factors (glutamate and CCL11) relevant~~ to ~~TBI.~~as ~~Neural~~the ~~damage~~‘Approving ~~associated with TBI has been associated with multiple processes including excitotoxicity~~Authority,’ ~~oxidative~~gives ~~stress~~the ~~and~~final ~~neuroinflammation.~~approval ~~Because~~for of the ~~recognized~~conduct ~~protective effects~~ of ~~cannabinoids~~the ontrial ~~all~~at ~~of these toxic processes, we have chosen to explore~~ the ~~effects and mechanism of action of two molecules: (i) CBD~~site, ahaving ~~substance~~due ~~found in~~regard ~~cannabis; and (ii) KLS-13019, a novel CBD-like analogue that has been shown~~ to ~~protect~~advice ~~against~~from ~~various toxicity associated with oxidative stress (Kinney et al., 2016). In this proposal, we intend to investigate~~ the protective mechanisms related to the attenuation of CCL11 for both molecules in disease-relevant in vitro test systems that utilized glutatmate as a relevant toxin and then explore their effectiveness in animal models of TBIHREC.

23• It is the responsibility of the sponsor to ensure that all relevant approvals are in place before supplying the ‘unapproved’ therapeutic goods in the clinical trial.

~~Catalent Pharma Solutions~~23

In December 2014, we signed a feasibility study contract with Catalent Pharma Solutions (“Catalent”), to, among other things, commence a feasibility study on a dose controlled soft-gel containing CBD as the main active pharmaceutical ingredient (the “CBD Feasibility Study”). The ~~purpose~~CTX ofScheme ~~the CBD Feasibility Study with Catalent~~ is ~~to enable us to develop a~~an approval process ~~proprietary~~involving drug product formulation using CBD that has suitable solubility and stability characteristics for IND, enabling pre-clinical studies in animals and clinical studies in humans, as part of our ongoing research and development of a cannabinoid therapeutic for the treatment of neurodegenerative diseases, including CTE and OHE. Catalent is the leading global provider of advanced delivery technologies and development solutions for drugs, biologics, consumer health and animal health products. With over 80 years serving the industry, Catalent has proven expertise in bringing more customer products to market faster, enhancing product performance and ensuring reliable clinical and commercial product supply. Catalent employs approximately 13,900 people, including over 1,000 scientists, at 53 facilities across 4 continents, and in fiscal 2020 generated approximately $3.09 billion in annual revenue. Catalent is headquartered in Somerset, N.J. following:

~~Purisys, LLC~~• ~~(formerly~~A ~~Noramco,~~sponsor ~~Inc~~submits an application to the TGA seeking approval to supply ‘unapproved’ therapeutic goods in a clinical trial.) The application must be accompanied by the relevant fee.

~~Noramco, Inc.~~• ~~(“Noramco”)~~The ~~was~~TGA ~~formed~~evaluates insummary ~~1979~~information toabout ~~provide~~the aproduct ~~secure~~including ~~source of Codeine Phosphate. On October 1~~relevant, ~~2019,~~but ~~Noramco spun off its cannabinoid related business into a separate affiliated company~~limited, ~~Purisys,~~scientific ~~LLC~~data (~~“Purisys”).~~which ~~With~~may ~~Noramco’s acquisition~~be ofpreclinical ~~Tasmanian Alkaloids~~ and ~~addition~~early ofclinical ~~their~~data) ~~Athens,~~prior ~~Georgia~~to ~~site in 1982, and continuous expansions over~~ the ~~past three~~start ~~decades at both~~ of ~~its~~a Utrial.~~S. facilities, Noramco and Purisys, together, now contribute to billion dollar affiliate franchises, as well as to significant third-party generic and branded pharmaceutical products worldwide.~~

~~Noramco is~~• aThe ~~world~~HREC ~~leader~~is inresponsible ~~specialty~~for ~~active~~considering ~~pharmaceutical ingredients, with a particular focus in controlled substances. Purisys is~~ the ~~leader~~scientific ~~in manufacturing ultra-high purity cannabinoid ingredients. Purisys’ headquarters~~ and ~~primary~~ethical ~~production~~issues ~~facility is~~of ~~located~~the inproposed ~~Athens,~~trial ~~GA, with additional sites in Wilmington, DE and Schaffhausen Switzerland~~protocol.

~~In April~~• ~~2015,~~The wesponsor ~~entered~~must ~~into~~notify ~~discussions~~us ~~with Purisys (then, Noramco), for, among other things, the long term supply~~ of ~~high~~each ~~purity, pharmaceutical grade,~~trial ~~synthetic~~conducted ~~cannabidiol~~using ~~for~~ the ~~purpose~~unapproved oftherapeutic ~~delivering~~good(s) ~~CBD~~approved ~~as an active pharmaceutical ingredient to Catalent~~ in ~~connection with~~the ~~our~~CTX ~~CBD Feasibility Study~~application.

InClinical trials that do not ~~addition~~involve ‘unapproved’ therapeutic goods are not subject to requirements of the ~~procurement~~CTN ofor ~~CBD~~CTX ~~through~~schemes. ~~Purisys,~~It is the ~~Company~~responsibility of ~~and~~the ~~Purisys~~Australian ~~have~~clinical ~~discussed~~trial ansponsor ~~additional~~to ~~feasibility~~determine ~~study~~whether ~~for the~~a ~~scale-up~~product ~~and~~is ~~commercial~~considered ~~production~~an of‘unapproved’ ~~KLS-13019~~therapeutic good.

SKClinical trials that do not ~~Capital~~involve ~~Partners~~‘unapproved’ ~~(“SK~~therapeutic ~~Capital”)~~goods ~~acquired~~are ~~Noramco~~not ~~from~~subject ~~Johnson~~to &requirements ~~Johnson~~of inthe ~~July~~CTN ~~2016~~or CTX schemes. SK ~~Capital~~It is athe ~~private~~responsibility ~~investment~~of ~~firm~~the ~~with~~Australian aclinical ~~disciplined~~trial ~~focus~~sponsor onto ~~the~~determine ~~specialty~~whether ~~materials,~~a ~~chemicals~~product ~~and~~is ~~healthcare~~considered ~~sectors~~an ‘unapproved’ therapeutic good.

~~PRIMARY~~In Australia, in 2014, the ~~TARGETS~~Advisory ~~FOR~~Council ~~DRUG~~on ~~DISCOVER~~Medicines ~~AND~~Scheduling ~~MARKET~~recommended ~~SIZE~~rescheduling CBD from a prohibited substance to being a prescription medicine because, according to the Advisory Council on Medicines Scheduling, “there is a low risk of misuse or abuse as cannabidiol does not possess psychoactive properties.” The TGA accepted this recommendation, and the decision took effect in July 2015.

~~Target~~CBD is one of the cannabinoids which may be extracted as a therapeutic good from cannabis. From June 1~~:Hepatic~~, ~~Encephalopathy~~2015, ~~– $2+~~CBD ~~Billion~~has ~~Market~~been inincluded under Schedule 4 (S4) Prescription Only Medicine of the UPoisons Standard when preparations for therapeutic use contain 2% or less of other cannabinoids found in cannabis.S.

~~HE is~~In ~~one~~February of2016, the ~~most~~Australian Federal ~~important~~Government ~~clinical~~passed ~~manifestations~~legislation inthat ~~decompensated~~amended ~~liver cirrhosis. Accepted concepts regarding~~ the ~~pathophysiology of~~Narcotic HEDrugs ~~are~~Act, ~~that~~allowing the ~~endogenous~~supply ~~neurotoxic~~of ~~substances,~~suitable ~~including~~medicinal ~~ammonia:~~cannabis ~~(i)~~products for ~~escape from catabolism by~~ the ~~liver~~management ~~due~~of ~~both~~painful toand ~~the impaired~~chronic ~~function~~conditions. ofThis ~~the~~legislation ~~cirrhotic~~does ~~liver~~not ~~and~~relate ~~also~~ to the ~~presence~~decriminalization of ~~portal~~cannabis ~~systemic~~for ~~shunting; (ii) circulate at elevated concentrations~~general incultivation ~~the~~or ~~systemic~~recreational ~~blood~~use ~~flow;~~and ~~(iii)~~it ~~reach~~does ~~the~~not ~~brain~~include ~~through~~ the ~~blood-brain~~provision ~~barrier; and (iv) impair cerebral function leading to disturbances~~ of ~~consciousness.~~medicinal ~~See Discovery~~grade ofherbal ~~KLS-13019~~cannabis, abut ~~Cannabidiol-Derived~~rather ~~Neuroprotective~~only ~~Agent,~~covers ~~with Improved Potency~~processed, ~~Safety, and Permeability. William A. Kinney, Mark E. McDonnell, Hua Marlon Zhong, Chaomin Liu, Lanyi Yang, Wei~~ ~~Ling,~~non-smokable ~~Tao~~medicinal ~~Qian,~~grade ~~Yu Chen, Zhijie Cai, Dean Petkanas, and Douglas E~~products. ~~Brenneman –~~ ~~ACS Med. Chem. Lett., 2016, 7 (4), pp 424–428.~~

~~The majority~~Much of ~~these~~the ~~toxins~~detail ~~are~~remains unclear. ~~produced~~For inexample, the ~~intestine~~legislation bydoes ~~the~~not ~~bacterial~~specify ~~flora,~~which ~~and~~products ~~are~~will ~~absorbed~~be ~~into~~covered under the ~~portal~~amendment, ~~venous~~and ~~flow.~~it Indoes not specify which ~~spite~~particular ofconditions ~~improved~~or ~~therapeutic~~symptoms ~~options~~will be eligible for ~~encephalopathy,~~treatment ~~the~~with ~~long~~cannabis-~~term~~based ~~survival~~products. isBefore ~~still~~products ~~low.~~can ~~Thus~~be prescribed, HEthey must ~~remains~~be aregistered ~~serious~~with ~~complication of~~the ~~liver~~TGA ~~cirrhosis.~~or, Wein ~~believe~~rare ~~that~~circumstances, receive special approval from the ~~establishment~~TGA. ofThe ~~truly~~registration ~~effective~~process ~~prevention~~requires ~~modalities~~evidence of testing and ~~broader~~efficacy ~~application~~and ofit ~~liver transplantation~~is ~~will~~therefore ~~help~~unlikely ~~rescue~~Australia ~~patients~~will ~~suffering~~see ~~from~~a ~~this~~TGA ~~complication~~registered ofmedicinal ~~liver~~cannabis ~~cirrhosis~~product inthat ~~the~~GPs ~~near~~can ~~future~~prescribe any time soon.

~~According to~~Whilst anthere ~~article~~are ~~published~~currently inno ~~the~~cannabis-based ~~British~~products ~~Journal~~that ofare ~~Pharmacology Research, studies conducted over the past decade has~~ lawfully produced ~~substantial behavioral~~in ~~and~~Australia, ~~histochemical evidence demonstrating~~ the ~~effectiveness~~medicinal ofuse ~~certain Cannabis-derived molecules such as CBD in the improvement~~ of ~~brain~~pharmaceutical ~~and~~products ~~liver~~containing ~~function~~cannabinoids inis ~~fulminant~~not ~~hepatic~~prohibited, ~~failure.~~as ~~Findings~~long ~~include~~as ~~reversal of locomotors and cognitive pathologies,~~authorization ~~reversal~~for ofprescribing ~~structural~~is ~~changes~~granted ~~such~~from asthe ~~Alzheimer’s~~Commonwealth ~~Type~~Therapeutic IIGoods ~~astrogliosis,~~Administration and ~~reversal~~at ofthis ~~increases~~point in ~~ammonia levels. Beyond the supportive preclinical evidence~~time, ~~multiple~~NSW ~~factors provide reasons for enthusiasm in the pursuit of the HE indication:~~Health.

•Neuropathix ~~New~~Intellectual mechanism of action: Cannabinoids, if shown effective in clinical trials, would provide a new mechanism of action, and thus be an incremental clinical tool to combine with existing treatments. This combination of mechanisms of action could lead to additive or synergistic effects. Existing treatment methods, such as lactulose, Rifaximin and others under study (e.g., AST-120), manage symptoms by reducing ammonia uptake in the digestive system. However, once blood ammonia levels have increased, they putatively provide limited benefits. Cannabinoids, instead, act in the central nervous system ameliorating the downstream pathological effects of ammonia.Properties

•Neuropathix ~~Multiple~~PCT ~~preventive~~Patent benefits: According to National Institute of Health, pre-clinical studies have shown that CBD, the major constituent in our intended lead target drug molecule and candidate, may provide benefits in the secondary prevention of HE.– PCT/US2015/010827

oOn ~~Steatosis:~~January ~~In vitro studies have shown CBD to reverse the histopathology associated with steatosis or fatty liver syndrome. This is particularly relevant because fatty liver is a major cause of liver cirrhosis~~13, ~~and has no current drug-based treatment. In addition~~2014, ~~multiple~~we ~~currently~~filed ~~marketed~~for ~~drugs~~a ~~are~~provisional patent ~~known~~with tothe ~~induce~~USPTO ~~steatosis.~~for ~~These~~our ~~include~~“Novel ~~steroids~~Functionalized ~~(e.g.~~1, ~~triamcinolone, cortisone, prednisone), the anti~~3-~~cancer~~Benzene-diols ~~drug~~and ~~Tamoxifen~~Their (aTreatment ~~breast~~of ~~cancer~~Hepatic ~~drug)~~Encephalopathy”, ~~HIV~~under application ~~anti-retrovirals~~number ~~and anti-arrythmic drug Amiodarone~~61/926,869.

oOn ~~Fibrogenesis:~~January ~~Animal~~9, ~~studies~~2015, ~~have~~we ~~shown~~filed ~~that~~a ~~endocannabinoids~~non-provisional patent ~~are~~application ~~involved~~Patent inCooperation Treaty (“PCT”) Application under application number PCT/US2015/010827 titled, “Novel Functionalized 1,3-Benzene Diols and Their Method of Use for the ~~regulation~~Treatment of ~~fibrogenesis~~Hepatic inEncephalopathy” (the ~~liver~~“PCT Patent”). Under ~~CB2~~the ~~-/-~~PCT ~~mice~~Patent, ~~show~~the ~~increased~~present ~~fibrogenesis~~invention indescribes ~~response~~novel tofunctionalized ~~CCl4 injection~~1,3-benzenediols ~~whereas~~(“Cannabidiol ~~CB1~~Derived ~~-/-~~Molecules”) and ~~mice~~methods that may be useful and have ~~decreased~~potential ~~hepatic~~for ~~fibrogenesis.~~the ~~This~~treatment ~~suggests~~of anHE ~~opportunity~~and torelated ~~modulate~~conditions. ~~fibrogenesis,~~The present invention further describes a ~~critical~~novel ~~intermediate~~chemotype ~~step~~that inmay ~~liver~~be ~~cirrhosis,~~useful ~~through~~and ahave ~~proper~~potential ~~selection~~for the treatment of ~~cannabinoid~~diseases ~~antagonists~~associated with HE. The present invention further describes a novel chemotype that may be useful and have potential as neuroprotective agents.

~~HE is~~We abelieve ~~neuropsychiatric disorder~~ that ~~includes learning deficits and impairment of long-term memory. HE can be caused by chronic and excessive ethanol ingestion along with~~ the ~~accumulation~~Cannabidiol ofDerived ~~toxic substances that are normally removed by the liver. The pathogenesis~~Molecules ofunder ~~HE in~~ the ~~central~~present ~~nervous~~invention ~~system~~have ~~includes~~potential ~~damage~~for totreating ~~the pre-limbic cortex, striatum~~ and ~~the~~preventing ~~hippocampus,~~diseases ~~and~~associated ~~this~~with ~~pathology is~~free ~~believed~~radical ~~to be~~ mediated bystress ~~the accumulation of free radicals~~ and oxidative stress. HEincluding, ~~has~~for ~~primary epidemiological precursors in cirrhosis~~example, ~~hepatitis B~~HE, ~~hepatitis~~Parkinson’s Cdisease, ~~and portal hypertension. The incidence rate of HE among alcohol induced cirrhosis patients is as high as 45%~~Alzheimer’s, ~~making~~Huntington’s ~~HE a leading opportunistic~~ disease, ~~stemming~~traumatic ~~from~~head ~~alcoholism. If left unchecked~~injury, ~~HE can progress~~stroke, toepilepsy, ~~hepatic coma~~neuropathic ~~and~~pain, ~~ultimately~~traumatic ~~death.~~head ~~The~~injury, ~~pathogenesis~~stroke, ofCTE, HEPost ~~includes~~Cardiac ~~damage~~Arrest toHypoxic ~~the~~Ischemic ~~prelimbic cortex~~Encephalopathy, ~~striatum,~~ and ~~the~~Epileptic ~~hippocampus~~Encephalopathy. ~~HE is caused by accumulation of toxic substances in the bloodstream that are normally removed by the liver.~~

~~It has~~The ~~been~~present ~~previously~~invention ~~demonstrated~~addresses ~~that impairment of hepatocytes by ethanol is associated with~~ the ~~production~~need ofto prevent free radical ~~and oxidative~~mediated stress. ~~The accumulation of these free radicals~~ and oxidative stress ~~contribute to cognitive impairment~~, ~~learning deficits, memory impairment,~~ as well as ~~damage~~to ~~and~~prevent ~~death~~the ofneural ~~neuronal~~damage ~~tissue.~~associated Anwith ~~emerging~~HE. ~~concept~~The ispresent ~~that~~invention ~~blockade of free radical mediated~~further ~~stress~~addresses ~~and oxidative stress will prevent~~ the ~~neural~~need ~~damage~~to ~~associated with hepatic encephalopathy and~~ prevent cognitive impairment, learning deficits, memory impairment, as well as damage and death of neuronal tissue associated with HE.

~~Currently in~~On ~~the~~November ~~United~~29, ~~States~~2016, ~~there~~as ~~are~~part ~~over~~of ~~1.5~~our ~~million~~patent ~~sufferers~~cooperation treaty ofglobal HEpatent ~~across~~application, ~~four~~the ~~stages,~~USPTO ~~including~~granted ~~approximately~~allowance ~~121~~on the composition of matter portion,~~000~~ ~~patients hospitalized~~covering ~~each~~claims ~~year~~1 ~~from~~through 14 of the Company’s ~~OHE~~PCT ~~stage~~Patent covering claims of ~~the~~our ~~disease~~novel cannabidiol derived molecule.

~~Cannabidiol~~In January 2017, we filed a divisional application ~~(CBD)~~with vsthe USPTO to cover the method claims, which were originally covered in claims 15 through 22 of the original PCT Patent. ~~KLS-13019~~We currently hold a valid allowance in ~~Overt~~the ~~Hepatic~~United ~~Encephalopathy~~States on the composition of matter for a new cannabidiol derived molecules.

InOn April 4, 2017, we were awarded U.S. Patent 9,611,213 titled “Functionalized 1,3 Benzene-diols and their Method of Use for the Treatment of Hepatic Encephalopathy”. This patent is part of a ~~publication~~divisional inpatent ~~American~~application ~~Chemical~~by ~~Society Medicinal~~the ~~Chemistry~~Company ~~Letters~~to onthe ~~February~~USPTO 10whereby we sought separate claims for composition of matter, covered ~~2016~~in Pat. 9,611,213, ~~our~~and ~~abstract~~separate ~~read~~claims asfor ~~follows:~~method for treatment.

~~“Cannabidiol is~~On ~~the~~June ~~nonpsychoactive~~26, ~~natural~~2018, ~~component~~we ofwere C.awarded ~~sativa (cannabis sativa) that has been shown to be neuroprotective in multiple animal models~~U. ~~Our interest is to advance a therapeutic candidate for the orphan indication overt hepatic encephalopathy (OHE)~~S. ~~OHE~~ ~~is a serious neurological disorder that occurs in patients with cirrhosis or liver failure. Although cannabidiol has~~Patent ~~shown evidence in a murine model to be a potentially effective treatment for OHE~~10, ~~it has limitations in terms of safety and oral bioavailability. Herein~~004,722 wetitled ~~describe~~“Method ~~a series of side chain modified resorcinols that were designed~~ for ~~greater~~Treating ~~hydrophilicity and~~Hepatic ~~“drug~~Encephalopathy ~~likeness”,~~or ~~while~~a ~~varying~~Disease ~~hydrogen~~Associated ~~bond~~with ~~donors,~~Free ~~acceptors,~~Radical ~~architecture,~~Mediate ~~basicity,~~Stress ~~neutrality, acidity,~~ and ~~polar~~ ~~surface area within the pendent group. Our primary screen evaluated the ability of the test agents to prevent damage to~~Oxidative ~~hippocampal~~Stress ~~neurons~~with ~~induced~~Novel byFunctionalized ~~ammonium acetate and ethanol at clinically relevant concentrations. Notably~~1,3 ~~KLS~~Benzene-~~13019 was 50-fold more potent and >400-fold safer than cannabidiol and exhibited an in vitro profile consistent with improved oral bioavailability~~diols.”

25We have patent pending status of the same PCT Patent in Canada, the European Union, Brazil, Russia, India, China, Japan and Australia.

~~CBD has~~National ~~been~~Institutes ~~shown to be neuroprotective by blocking the damage caused by free radicals and oxidative stress. This effect was independent~~ of ~~cannabinoid~~Health ~~receptors because it could not be blocked by a cannabinoid antagonist. CBD~~– ~~has~~Office ~~shown~~of ~~evidence in two murine~~Technology ~~models~~Transfer to(NIH-OTT) ~~be a potentially effective treatment for HE,~~– ~~thioacetamide~~Patent ~~induced and bile duct ligation induced liver damage~~6, ~~at a dose of 5 mg/kg IP (intraperitoneal injection). Importantly~~630, ~~CBD treated animals in the first study exhibited improvements in both liver and brain function as compared to untreated control animals.~~507

~~Free~~On June 12, 2010, we filed an application for ~~radical~~an ~~mediated~~exclusive ~~stress~~license ~~and~~with ~~oxidative~~the ~~stress~~NIH-OTT ~~are~~for ~~also~~the ~~known~~development toand ~~contribute~~commercialization of a target drug candidate to ~~additional~~be ~~pathological~~used ~~conditions~~in ~~including~~the ~~epilepsy,~~treatment ~~neuropathic~~of ~~pain,~~patients ~~traumatic~~suffering ~~head~~with ~~injury,~~HE. ~~stroke,~~The ~~CTE,~~application ~~and~~for ~~neurodegenerative~~exclusive ~~diseases~~license ~~such~~was asmade ~~Parkinson’s~~for ~~disease~~the license and use of U.S. patent 6,630,507 ~~Alzheimer’s~~“Cannabinoids ~~disease,~~as ~~Huntington’s~~Antioxidants ~~disease~~and Neuroprotectants, ~~and~~‘507 ~~ALS~~Patent.

Other examples of neuroprotection by CBD include use in hypoxia-ischemia and stroke models. A wide range of possible mechanisms have been attributed to CBD’s neuroprotective effects including antioxidant, anti-inflammatory, adenosine signaling, cannabinoid receptor GPR55 (G Protein-coupled receptor 55), and serotonin mediated pathways; however, mitochondrial calcium modulation is fundamental. The GPR55 receptor is a G protein receptor in humans that is encoded by the GPR55 gene. The GPR55 receptor has been identified as a novel cannabinoid receptor. Receptors are sensing molecules which communicate signals between cells to illicit physiological changes in the body. To hedge our bets, we chose to interrogate the hippocampal neuron, as a phenotypic screen that will measure neuroprotection independent of a mechanism.25

~~Target~~On November 17, 2011, we received notice of publication ~~2:Chronic~~in ~~Traumatic~~the ~~Encephalopathy~~Federal ~~(CTE)~~Register of NIH-OTT’s Prospective Grant of Exclusive License – ~~$2+~~Development ~~Billion~~of Cannabinoid(s) and ~~Market~~Cannabidiol(s) inBased ~~the~~Therapeutics Uto treat hepatic encephalopathy in humans.S.

~~Not~~On June ~~unlike~~12, ~~OHE~~2012, ~~CTE~~we isentered ainto ~~neuro~~an exclusive license with NIH-~~degenerative~~OTT ~~disease~~for the use of the ~~brain~~‘507 ~~and~~Patent isin ~~associated~~the ~~with~~commercialization ~~repeated~~of ~~head~~one or ~~traumas~~more ~~like~~cannabinoid ~~concussions~~therapeutics to treat HE.

~~CTE is~~In aaddition ~~form~~to ofthe ~~encephalopathy~~exclusive ~~that~~use isof athe ~~progressive neuro-degenerative disease, which can only be definitively diagnosed postmortem,~~‘507 inPatent ~~individuals~~for ~~with~~the atreatment ~~history~~ of ~~multiple~~hepatic ~~concussions~~encephalopathy, ~~and~~on ~~other~~July ~~forms~~16, ~~of head injury. The disease was previously called dementia pugilistica (“DP”)~~2014, aswe itformally ~~was~~entered ~~initially~~into ~~found in those with~~ a ~~history~~second oflicense ~~boxing.~~agreement ~~CTE~~with ~~has been most commonly found~~NIH-OTT infor ~~professional~~the ~~athletes~~non-exclusive ~~participating~~license inof ~~American~~the ~~football,~~‘507 ~~ice~~Patent ~~hockey,~~for ~~professional~~the ~~wrestling~~treatment ~~and~~of ~~other contact sports who have experienced repetitive brain trauma~~CTE.

~~It has~~Prior ~~also been found in soldiers exposed~~ to athe ~~blast~~expiration orof athe ~~concussive~~‘507 ~~injury~~Patent, ~~in both cases resulting in characteristic degeneration~~ ofwe ~~brain~~were ~~tissue and~~ the ~~accumulation~~only ofcompany ~~tau~~that ~~protein.~~had ~~Individuals~~use ~~with CTE may show symptoms~~ of ~~dementia,~~the ~~such~~‘507 asPatent ~~memory loss, aggression, confusion~~ and ~~depression,~~corresponding ~~which~~licenses ~~generally~~from ~~appear~~NIH-OTT. ~~years~~The orjurisdictions ~~many~~in ~~decades~~which ~~after~~ the ~~trauma. Repeated concussions and~~ ~~injuries~~‘507 ~~less~~Patent is ~~serious~~valid ~~than~~are: ~~concussions~~the ~~(“sub-concussions”)~~U.S., ~~incurred during~~ the ~~play of contact sports over a long period can result in CTE~~U.K., InIreland, the ~~case of blast injury~~E.U., ~~a single exposure to a blast~~ and ~~the~~Australia. ~~subsequent~~The ~~violent movement of the~~patent ~~head~~life in ~~the~~these ~~blast~~jurisdictions ~~wind~~expired ~~can~~on ~~cause~~April ~~the~~21, ~~condition~~2019.

~~The primary~~Although ~~physical~~we ~~manifestations~~properly maintained and paid all of the ~~CTE~~minimum ~~include~~annual aroyalties ~~reduction~~and inpast ~~brain~~prosecution ~~weight,~~fees ~~associated~~underlying ~~with~~our ~~atrophy~~two licenses of the ~~frontal~~‘507 Patent during its lifetime and ~~temporal~~met ~~cortices~~the ~~and~~additional ~~medial~~financial ~~temporal~~benchmarks ~~lobe.~~set ~~The~~forth ~~lateral~~in ~~ventricles~~the NIH licenses L-113-2012/0 and L-302-2014/0, we were not able to secure the ~~third~~necessary funds ~~ventricle~~to ~~are~~advance ~~often~~our ~~enlarged,~~drug ~~with~~discovery ~~rare~~efforts ~~instances~~into ofhuman ~~dilation~~clinical trials. Our financial obligations to NIH-OTT terminated in 2019, effective upon expiration of the ~~fourth~~‘507 ~~ventricle~~Patent.

Other physical manifestations of CTE include pallor of the substantia nigra and locus ceruleus, and atrophy of the olfactory bulbs, thalamus, mammillary bodies, brainstem and cerebellum. As CTE progresses, there may be marked atrophy of the hippocampus, entorhinal cortex, and amygdala.26

~~On a~~A ~~microscopic~~summary ~~scale,~~of the ~~pathology~~Company’s ~~includes~~patents ~~neuronal loss, tau deposition, TAR DNA- binding Protein 43 (TDP 43) beta-amyloid deposition, white matter changes,~~ and ~~other abnormalities. The tau deposition occurs as dense neurofibrillary tangles (“NFT”),~~status ~~neurites,~~to ~~and~~each ~~glial~~such ~~tangles,~~patent ~~which are made up of astrocytes and other glial cells Beta-amyloid deposition~~ is ~~relatively~~as ~~uncommon feature~~set offorth ~~CTE.~~below:

A small group of individuals with CTE have chronic traumatic encephalo-myopathy (“CTEM”), characterized by motor neuron disease symptoms, which mimics ALS, also known as Lou Gehrig’s disease. Progressive muscle weakness and balance and gait problems seem to be early signs of CTEM.

TITLE	COUNTRY	STATUS	APPLICATION NUMBER	DATE FILED	PATENT NUMBER	GRANT DATE
FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF INFLAMMATION AND PAIN	PCT	Pending	PCT/US2022/014557	31-Jan-2022
USE OF CERTAIN PHOSPHATIDYLCHOLINES CONTAINING LONG CHAIN POLYUNSATURATED FATTY ACIDS AS NEUROPROTECTIVE AGENTS	US	Pending	17/622,861	26-Dec-2021
FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF INFLAMMATION AND PAIN	US	Completed	63/144,471	1-Feb-2021
FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF RADIATION DERMATITIS AND OTHER SKIN DISORDERS	PCT	Published	PCT/US2020/060587	13-Nov-2020
USE OF CERTAIN PHOSPHATIDYLCHOLINES CONTAINING LONG CHAIN POLYUNSATURATED FATTY ACIDS AS NEUROPROTECTIVE AGENTS	Brazil	Abandoned	BR 11 2021 026514 7	26-Jun-2020
USE OF CERTAIN PHOSPHATIDYLCHOLINES CONTAINING LONG CHAIN POLYUNSATURATED FATTY ACIDS AS NEUROPROTECTIVE AGENTS	Canada	Pending		26-Jun-2020
USE OF CERTAIN PHOSPHATIDYLCHOLINES CONTAINING LONG CHAIN POLYUNSATURATED FATTY ACIDS AS NEUROPROTECTIVE AGENTS	China	Abandoned		26-Jun-2020
USE OF CERTAIN PHOSPHATIDYLCHOLINES CONTAINING LONG CHAIN POLYUNSATURATED FATTY ACIDS AS NEUROPROTECTIVE AGENTS	Japan	Abandoned	2021-578018	26-Jun-2020
USE OF CERTAIN PHOSPHATIDYLCHOLINES CONTAINING LONG CHAIN POLYUNSATURATED FATTY ACIDS AS NEUROPROTECTIVE AGENTS	PCT	Published	PCT/US2020/039860	26-Jun-2020
FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF RADIATION DERMATITIS AND OTHER SKIN DISORDERS	US	Completed	62/934,861	13-Nov-2019
USE OF CERTAIN PHOSPHATIDYLCHOLINES CONTAINING LONG CHAIN POLYUNSATURATED FATTY ACIDS AS NEUROPROTECTIVE AGENTS	US	Completed	62/866,938	26-Jun-2019
METHOD FOR TREATING HEPATIC ENCEPHALOPATHY OR A DISEASE ASSOCIATED WITH FREE RADICAL MEDIATE STRESS AND OXIDATIVE STRESS WITH NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS	US	Issued	15/436,956	20-Feb-2017	10004722	Jun 26, 2018
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	US	Issued	14/781,081	29-Sep-2015	9611213	Apr 04, 2017
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Australia	Issued	2015204609	9-Jan-2015	2015204609	Feb 20,2020
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Belgium	Issued	15734870.7	9-Jan-2015	3094318	Feb 19, 2020
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Brazil	Pending	BR112016016138-6	9-Jan-2015
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Canada	Issued	2,936,506	9-Jan-2015	2936506	Feb 23, 2021
FUNCTIONALIZED 1, 3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	China	Issued	201580013646.6	9-Jan-2015	ZL201580013646.6	Dec 03, 2019
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Denmark	Issued	15734870.7	9-Jan-2015	3094318	Feb 19, 2020
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	European Patent Office	Issued	15734870.7	9-Jan-2015	3094318	Feb 19, 2020
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	France	Issued	15734870.7	9-Jan-2015	3094318	Feb 19, 2020
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Germany	Issued	15734870.7	9-Jan-2015	3094318	Feb 19, 2020
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	India	Issued	201617027528	9-Jan-2015	382465	Nov 24, 2021
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Ireland	Issued	15734870.7	9-Jan-2015	3094318	Feb 19, 2020
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Italy	Issued	15734870.7	9-Jan-2015	3094318	Feb 19, 2020
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Japan	Issued	2016-547058	9-Jan-2015	6486950	Mar 01, 2019
FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Macao	Pending	J/4044	9-Jan-2015
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Netherlands	Issued	15734870.7	9-Jan-2015	3094318	Feb 19, 2020
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	PCT	Closed	PCT/US15/10827	9-Jan-2015
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Russian Federation	Issued	2016133213	9-Jan-2015	2676475	Dec 29, 2018
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Spain	Issued	15734870.7	9-Jan-2015	3094318	Feb 19, 2020
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NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Switzerland	Issued	15734870.7	9-Jan-2015	3094318	Feb 19, 2020
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Turkey	Issued	15734870.7	9-Jan-2015	3094318	Feb 19, 2020
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	United Kingdom	Issued	15734870.7	9-Jan-2015	3094318	Feb 19, 2020
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	US	Expired	61/926,869	13-Jan-2014
NOVEL FUNCTIONALIZED 1,3-BENZENE DIOLS AND THEIR METHOD OF USE FOR THE TREATMENT OF HEPATIC ENCEPHALOPATHY	Colombia	Unfiled
PROCESS FOR SYNTHESIZING CANNABINOIDS AND DERIVATIVES THEREOF	US	Unfiled
METHOD FOR TREATING PERIPHERAL NEUROPATHIC PAIN	US	Unfiled

~~Target 3:Chemotherapy Induced Peripheral Neuropathy (CIPN) – $3+ Billion Market in U.S.~~ 27

In December 2016, as part of a Small Business Technology Transfer (“STTR”) program, we, together with Temple University, filed an STTR grant proposal with the National Cancer Institute (“NCI”) to demonstrate improved in vivo efficacy of an orally administered KLSPRE-~~13019,~~CLINICAL ~~our~~DRUG ~~lead target drug candidate, in a head-to-head comparison to intraperitoneal injection (“IP Injection”) of CBD in a model of chemotherapy-induced peripheral neuropathy.~~DISCOVERY

~~At the~~Since ~~conclusion~~inception ofin ~~Phase I STTR application~~2010, weour ~~hope~~primary todrug ~~demonstrate~~discovery plans ~~that~~have ~~KLS-13019~~revolved ~~(Per~~around osneuroprotection ~~– taken~~and ~~through~~ the ~~mouth) can~~use ~~control~~of ~~mechanical~~CBD ~~sensitivity~~as ~~and~~well ~~inflammation~~as ~~associated with CIPN in~~ the ~~absence~~development of ~~tolerance~~proprietary ~~development,~~CBD-derived ~~and~~molecules ~~also~~as ~~reduce~~target ~~opioid~~drug ~~craving~~candidates ~~behavior with comparable efficacy~~ to ~~CBD~~treat ~~(intraperitoneal~~neurodegenerative ~~injection). In Phase II STTR, we will investigate a back-up series~~ and ~~will~~oxidative ~~execute~~stress ~~the~~related ~~CMC, pharmacokinetic, safety pharmacology, and toxicology assessments required for IND filing on KLS-13019~~diseases.

26Historical Pre-clinical Discovery Efforts

~~A visual~~Our ~~image~~research ofand development efforts at the ~~chemical~~Pennsylvania ~~structure~~Biotechnology Center were originally centered on the creation of ~~cannabidiol~~novel synthetic cannabinoid and ~~KLS~~cannabinoid-~~13019~~like molecules, ~~can~~the bepre-clinical ~~seen~~and in asvitro efficacy ~~follows~~of CBD, ~~along~~a ~~with~~non-psychotropic ~~selected~~molecule, ~~data~~and ~~describing EC50 (~~the ~~concentration~~testing and control of our alead target drug ~~that~~candidates ~~give~~alongside ~~half-maximum~~CBD ~~response),~~for ~~Safety~~the ~~Margin~~treatment ~~(pre-clinical~~of ~~toxicity),~~OHE and ~~Bioavailability~~ ~~(seen as “F”):~~CTE.

~~KLS-13019 does~~Conceptual ~~not~~Drug ~~contain~~Discovery ~~CBD~~of ~~and~~Cannabidiol ~~is a new chemical entity that would not fall under the CSA be deemed a Schedule 1 controlled substance.~~Derived Molecules

~~KLS-13023 is~~An aemerging ~~formulation~~concept is that ~~does~~blockade ~~contain~~of ~~CBD.~~free Atradical mediated ~~present,~~stress ~~CBD~~and isoxidative ~~deemed~~stress awill ~~Schedule~~prevent 1the ~~controlled~~neural ~~substance~~damage byassociated ~~the~~with ~~DEA~~HE ~~under~~and ~~the~~prevent ~~Controlled~~cognitive impairment, learning deficits, ~~Substances~~memory ~~Act.~~impairment, ~~Like~~as ~~the~~well ~~drug~~as ~~molecule~~damage ~~EpidiolexÒ,~~and ~~which~~death ~~was~~of ~~recently~~neuronal ~~approved~~tissue byassociated ~~the~~with ~~FDA~~HE. ~~for~~Cannabidiol ~~marketing~~Derived ~~and~~Molecules ~~sale~~may ~~for~~have ~~use~~the potential inof ~~treating~~acting ~~Dravet’s~~as ~~Syndrome~~neuroprotective ~~and~~agents ~~Lennox-Gasteau~~by ~~Syndrome~~blocking ~~(forms~~the ofdamage ~~child~~caused ~~epilepsy),~~by ~~KLS-13023~~free ~~would~~radicals ~~need~~and tooxidative ~~follow~~stress, ~~the guidance~~may ~~set~~prevent ~~forth~~the byneural ~~the~~damage associated ~~CSA~~with HE, ~~complete~~and amay ~~successful~~also ~~human~~prevent ~~clinical~~cognitive ~~trial~~impairment, ~~and~~learning ~~apply~~deficits, ~~for~~memory ~~rescheduling~~impairment, as ~~was~~well ~~the~~as ~~case~~damage ~~with~~and ~~EpidiolexÒ, now~~death aof ~~Schedule~~neuronal tissue 5associated ~~drug~~with HE.

WeAround 1900, Moses Gomberg, a chemistry professor, ~~currently~~discovered ~~plan~~that onprevention ~~using~~of ~~KLS-13019~~free radical mediated stress and oxidative stress can prevent damage and death of neuronal tissue, as ~~our~~well as ~~lead~~prevent ~~target~~cognitive ~~drug~~impairment, ~~candidate~~learning ~~for~~deficits, and memory impairment associated with damage and death of neuronal tissue. Without wishing to be limited by theory, it is believed that the ~~treatment~~neuroprotective agents of ~~CIPN~~the disclosure can ameliorate, abate, and otherwise cause to be controlled, diseases associated free radical mediated stress and oxidative stress.

~~The treatment~~Free ofradical ~~CIPN~~mediated stress and oxidative stress is aalso ~~priority~~known ~~therapeutic~~to ~~opportunity~~contribute ~~because~~to additional pathological conditions including, but not limited to, ~~date~~epilepsy, noneuropathic ~~one~~pain, ~~drug~~traumatic head orinjury, ~~drug~~stroke, ~~class~~CTE, isPost ~~considered~~Cardiac toArrest beHypoxic ~~safe~~Ischemic Encephalopathy, Epileptic Encephalopathy, and neurodegenerative diseases ~~effective~~such inas ~~this~~Parkinson’s ~~disabling~~disease, Alzheimer’s, Huntington’s disease., ~~Tricyclic~~and ~~antidepressants~~amyotrophic ~~are~~lateral ~~often~~sclerosis (“ALS”). Under the ~~first~~present ~~choice~~invention, inthese ~~most~~Cannabidiol ~~patients,~~Derived ~~but~~Molecules ~~are~~may ~~associated with~~be ~~significant~~capable ~~side~~of ~~effects~~acting ~~including~~as ~~sedation~~neuroprotective agents, and ~~cardiovascular~~may ~~complications~~be asuseful for ~~well~~the astreatment ~~marginal~~of ~~efficacy~~epilepsy, ~~(Wolf~~neuropathic etpain, altraumatic ~~2008). Anticonvulsants~~head injury, ~~despite~~stroke, ~~their~~CTE, ~~efficacy~~Post inCardiac ~~animal~~Arrest ~~models~~Hypoxic ofIschemic ~~CIPN~~Encephalopathy, Epileptic ~~are~~Encephalopathy, ~~only~~and ~~partially~~neurodegenerative ~~effective~~diseases insuch ~~the~~as ~~majority~~Parkinson’s ofdisease, ~~patients~~Alzheimer’s, ~~(Bosnjak~~Huntington’s disease, etand ~~al 2002)~~ALS.

~~Even more~~As ~~problematic, upwards~~ of ~~80%~~October of2013, ~~CIPN~~we ~~patients~~had ~~report~~performed ~~using~~six ~~prescription opioids for pain management despite lacking strong~~distinct ~~evidence~~pre-clinical ~~for~~studies ~~efficacy~~on ~~and~~murine ~~increasing~~specimens, ~~safety~~including ~~concerns~~functional inassay ~~the~~screens ~~face~~on oftwenty-four ~~the~~viable ~~current~~analogues ~~devastating~~and ~~opioid~~pre-clinical ~~epidemic. The exact mechanism~~studies ofagainst ~~CIPN~~CBD ~~has~~as ~~not~~a ~~been~~therapeutic ~~fully~~control. ~~elucidated~~Analogues ~~and~~are ~~can~~compounds ~~differ~~or ~~across~~molecules ~~classes~~having ofa ~~chemotherapeutic~~structure ~~agents.~~similar ~~It is therefore necessary~~ to ~~identify novel therapies to prevent or treat CIPN~~ that ~~target one or more~~ of ~~these~~another ~~putative~~compound ~~mechanisms.~~or ~~Recently~~molecule, but ~~there~~differing ~~has~~from ~~been~~it ~~a resurgence~~ in ~~interest~~respect ~~in the potential medical utility of the cannabis plant and its constituents, and mechanism-based basic research is warranted~~ to ~~develop safe and effective cannabinoid-based pain treatments. CBD is~~ a ~~non-psychoactive~~certain component ~~of Cannabis sativa that is neuroprotective, independent of cannabinoid receptors (Hampson 1998)~~.

~~Prior studies~~As ata ~~Temple~~result ~~University~~of ~~revealed~~the screening process, we found that ~~CBD~~there ~~prevents~~were ~~the~~four ~~development~~target ofcandidates ~~paclitaxel-induced~~along ~~mechanical~~with ~~sensitivity~~CBD inthat ~~mice~~were screened for final pre-clinical in ~~vivo~~ ~~(Ward~~vitro ettesting alfor ~~2011~~pharmacokinetics (“PK”), ~~2014).~~CACO ~~Additionally~~permeability, ~~CBD~~lethal ~~attenuates~~dose ~~morphine~~(“LD”), ~~reward~~EC50 and ~~heroin~~IC90 ~~seeking~~testing. ~~behavior~~PK inrelate ~~animal~~to ~~models~~the ~~(Ren,~~branch of pharmacology ~~Whittard~~concerned etwith althe movement of drugs within the body. ~~2009;~~Factors ~~Katsidoni~~in PK studies include CACO permeability, ~~Anagnostou~~which etrelates ~~al.~~to ~~2013)~~assays ~~and~~that measure the ability of a ~~small~~drug ~~trial~~to inbe ~~humans~~absorbed ~~suggests~~from ~~attenuation~~the ofgastrointestinal ~~heroin~~tract ~~craving~~and ~~in humans~~thereby ~~(Hurd,~~to ~~Yoon~~evaluate etwhether ~~al.~~the ~~2015)~~drug can be suitably dosed via an oral route. ~~However,~~EC50 ~~CBD~~and ~~has~~IC90 ~~limitations~~relate into the ~~terms~~concentration of ~~potency,~~a ~~safety~~drug, ~~and~~antibody ~~oral~~or ~~bioavailability.~~toxicant ~~We believe~~which ~~that~~induces wea ~~may~~response behalfway ~~able~~between tothe ~~address~~baseline ~~these~~and ~~problems~~maximum inafter ~~our~~a ~~fully~~specified ~~owned~~exposure ~~series~~time. ofIt ~~side~~is ~~chain~~commonly ~~modified~~used ~~derivatives,~~as ~~which~~a ~~have~~measure ~~been~~of ~~protected~~a drug’s potency (EC50), and the concentration of a medication in the blood that will inhibit the replication of a ~~non-provisional~~specified ~~patent~~percentage of ~~application~~microorganisms ~~WO2015/106108A2~~(IC90).

One of the molecules covered by the patent is KLS-13019, which in pre-clinical studies, including PK studies, has shown evidence of improved in vitro efficacy, improved safety, and improved oral bioavailability over CBD in side by side preclinical evaluation, and is not a controlled substance. (Pharmacological Comparisons Between Cannabidiol and KLS-13019, Journal of Molecular Neuroscience, 14 August 2018)28

~~Preliminary Effects~~Our oflead ~~KLS-13019~~target indrug ~~CIPN~~candidate ~~model: In~~was then analyzed using a ~~preliminary~~mouse ~~study,~~model weto ~~treated~~determine, ~~eight~~among ~~mice~~other ~~with~~things, ~~saline~~blood ~~and~~brain ~~sixteen~~barrier ~~mice~~xs, ~~with~~tissue ~~paclitaxel (Days~~and 1,organ 3distribution, 5bioavailability, ~~and~~administration (IV ~~7, 8~~vs.0 ~~mg/kg IP~~Oral)., ~~Half~~spinal offluid ~~the~~concentration, ~~paclitaxel-treated~~and ~~mice~~blood ~~were~~plasma ~~pretreated~~concentration. A ~~with~~route ~~KLS-13019~~of ~~(2.5~~“administration” in ~~mg/kg~~pharmacology ~~IP)~~ and ~~half were~~toxicology ~~pretreated~~is ~~with~~the ~~its~~path ~~vehicle~~by ~~alone.~~which Ona ~~days 9~~drug, 14fluid, ~~and 21 post initiation of injections~~poison, ~~mechanical~~or ~~sensitivity~~other ~~was~~substance ~~tested using~~is ~~von~~taken ~~Frey~~into ~~filaments~~the ~~and compared with baseline sensitivities prior to treatment (Fig~~body. ~~3).~~“Bioavailability” is ~~One-way ANOVA revealed~~ a ~~significant effect~~subcategory of ~~KLS-13019~~absorption onand ~~Day~~relates 14 to ~~prevent~~a ~~the~~fraction ~~development~~ of ~~paclitaxel-induced~~an ~~mechanical~~administered ~~sensitivity~~dose ~~[F(2,~~of ~~21) = 4.67,~~a ~~p<0.05].~~drug ~~Dunnett’s~~that ~~multiple~~reaches ~~comparison’s~~systemic ~~test~~circulation ~~revealed~~in ~~a significant difference between~~ the ~~saline and paclitaxel~~body. ~~treated~~“Blood ~~groups~~plasma concentration,” ~~but~~otherwise ~~not~~known ~~between~~as ~~the~~volume ~~saline~~of ~~and~~distribution, is ~~KLS-13019+paclitaxel~~a ~~treated~~theoretic ~~groups.~~concept ~~Preliminary~~that ~~flow~~relates ~~cytometry results with pooled~~the ~~cords~~amount ~~from~~of ~~three~~drug ~~mice~~ in ~~each~~the ~~group~~body ~~revealed~~(dose) ~~that~~to ~~paclitaxel-treated~~the ~~mice~~concentration ~~had~~(C) ~~increased numbers~~ of ~~CD4+~~drug Tthat ~~cells~~is ~~and~~measured ~~microglia~~ (in ~~the~~blood, ~~whole spinal cord~~plasma, and ~~that~~unbound ~~this~~in ~~increase~~tissue ~~is prevented by KLS-13019 treatment~~water).

27In May 2014, we commissioned the first of two animal behavioral studies via research pact with Temple University. The aim of the study was to test the effects of CBD and KLS-13019 on cognitive function in a mouse model of OHE in support of the identification of molecules with in vivo efficacy. An established model of OHE, the thioacetamide model (TAA, 200 mg/kg i.p.), was used to assess the effect of CBD (5.0 mg/kg i.p.) and KLS-13019 (0.5 – 5.0 mg/kg i.p.) on learning and memory in male C57Bl6 mice. The autoshaping procedure, an operant learning and memory assay that rapidly assesses acquisition and retention of a simple task, was the primary cognitive assay used. The task is an operant conditioning task wherein food restricted mice are placed in experimental chambers and must learn how to make a behavioral response to gain access to food rewards.

~~E1. Aim~~In 1.summary, ~~Research~~thioacetamide induced ~~Plan.~~a ~~Determine~~robust, ~~target~~but ~~for~~variable, ~~the~~toxicity ~~neuroprotective~~associated ~~actions~~with ofcognitive ~~CBD~~impairment, morbidity, and mortality. KLS-13019~~. As~~, ~~mentioned~~administered ~~above,~~in ~~DRG~~the ~~neurons~~absence ~~are a primary cytotoxic target~~ of ~~chemotherapeutic agents. In addition~~thioacetamide, ~~spinal~~produced ~~microglia~~no ~~have~~negative ~~been~~behavioral ~~heavily~~or ~~implicated in~~general ~~the~~health ~~development~~effects, and ~~maintenance~~actually ofappeared ~~neuropathic pain and have shown~~ to ~~become~~improve ~~activated~~cognitive functioning in ~~animal~~the ~~models~~behavioral ~~of CIPN~~task. ~~At the~~ ~~conclusion~~The of5.0 ~~Aim~~mg/kg 1,dose weof ~~intend~~KLS-13019 toalso ~~demonstrate~~significantly ~~that~~prevented ~~the~~thioacetamide-induced ~~neuroprotective~~cognitive ~~properties~~performance ~~can~~deficit, and bethe ~~reduced~~lower bydose ~~pharmacological~~of or1.0 ~~gene knock-down~~mg/kg ofshowed a ~~relevant~~trend ~~target~~ in athis ~~statically significant manner~~direction.

~~E2. Aim~~Pharmacokinetic ~~2. Assess KLS-13019, CBD,~~ and ~~morphine~~Pharmacodynamic ~~against paclitaxel-induced peripheral neuropathy. At the conclusion of~~Comparison ~~Aim~~Between ~~2, we intend to have demonstrated that~~ KLS-13019 ~~performs as well as CBD (ip~~ and ~~po) against CIPN and CNS inflammation and shows no antinociceptive tolerance as compared to morphine.~~ CBD

~~CIPN procedure: Experiments~~Results ~~are~~from ~~designed~~PK toand ~~test~~PD ~~the~~studies ~~efficacy~~performed ofin ~~novel~~evaluating CBD ~~analogues in attenuating established mechanical~~versus ~~sensitivity~~KLS-13019 ~~and inflammation associated with CIPN. Dr. Ward’s laboratory has been using the CIPN procedure for ten years and has demonstrated that CBD treatment can both prevent the development of~~ (~~Ward~~molecule etname ~~al 2011, 2014~~16) ~~and reverse established (King et al in revision~~, ~~British~~ ~~Journal~~has ofshown ~~Pharmacology) CIPN in mouse models. CBD and~~ KLS-13019 ~~and~~to ~~their vehicle controls will~~ be ~~tested~~superior in ~~groups~~aqueous ofsolubility ~~mice treated with paclitaxel~~ (~~8.0~~potential ~~mg/kg~~for ~~IP,~~drug ~~days~~absorption 1,after 3,oral ~~5 and 7~~administration).; Log ~~Testing~~P of(ratio ~~each~~which ~~dose~~measures ~~for~~difference ~~each~~in ~~molecule will~~solubility ~~require~~in atwo ~~final~~phases); ~~sample~~bioavailability ~~size~~(proportion of ~~eight.~~the ~~Molecules~~drug ~~will~~that beenters ~~administered daily for three weeks, starting on Day 11 when peak mechanical allodynia has already been achieved. In~~ the ~~initial study, CBD (0.05 - 5 mg/kg ip~~circulation) ~~will be compared with three doses~~; ~~of KLS-13019 (e.g., 0.05, 0.5~~ and 5C ~~mg/kg~~max ~~ip)~~at ~~and three doses of morphine (1.0 –~~ 10 mg/kg, ~~ip; Neelakantan et al 2016)~~p. ~~This will be followed by a study in which KLS-13019 will be assessed at three oral doses~~o. ~~In preliminary studies, we have dosed the mice with KLS-13019~~ (~~2.5~~peak -serum ~~5 mg/kg ip~~concentration) ~~with no adverse effects~~. ~~In addition, KLS-13019 was shown to produce no impairment in the mouse rotorod test at 100 mg/kg po in studies conducted at the Anticonvulsant Screening Program (NIH).~~

Neuroinflammation assessment: Immunohistochemistry and flow cytometry will run in the PIs laboratory to evaluate markers of pain and inflammation associated with neuropathic pain, including astrocytic and microglial activation, CGRP, and T cell infiltration. Given the fact that we are observing CNS infiltration of T cells that is reversed by treatment with KLS-13019, cranial windows will be surgically implanted (as described in Ni, Tuma et al 2004) in additional groups of vehicle or KLS-13019 + paclitaxel treated mice prior to treatment to longitudinally assess the effect of paclitaxel with or without cannabinoid treatment on leukocyte rolling and adhesion across the development of CIPN.29

E2Results from our pre-clinical efforts in the potential treatment of OHE and the potential treatment of CIPN have shown a marked improvement over 99.7% pure pharmaceutical grade synthetic CBD in side ~~Aim~~by 3side pre-clinical comparison.~~Assess~~ In a pre-clinical comparison for neuroprotection between CBD and KLS-13019, ~~and~~results indicated increased potency for the new molecule (KLS-13019) as determined by six assays, while both molecules exhibited efficacy in preventing oxidative stress-related toxicities back to control values. Treatment with KLS-13019 alone, however, was 5-fold less toxic than CBD. ~~against~~Previous ~~reinstatement~~studies suggested that CBD targeted the Na+ Ca2+ (sodium-calcium) exchanger in mitochondria to regulate intracellular calcium levels, an important determinant of ~~morphine~~neuronal ~~seeking~~survival. At After treatment with an inhibitor, the ~~conclusion~~mNCX ofinhibitor ~~Aim~~(“CGP-37157”), no 3detectable neuroprotection from ethanol toxicity was observed for either CBD or KLS-13019. Furthermore, weAM630 ~~intend~~(a toCB2 antagonist) significantly ~~have~~attenuated ~~demonstrated~~CBD-mediated ~~that~~neuroprotection, while having no detectable effect on KLS-13019 ~~attenuates~~neuroprotection. ~~opioid~~Our studies indicated KLS-~~seeking~~13019 was ~~behavior~~more aspotent ~~well~~and asless toxic than CBD. Both molecules can act through mNCX. Based on these results, amongst other things, we believe that KLS-13019 may provide an alternative to CBD as a therapeutic candidate to treat disease associated with oxidative stress.

~~Morphine Reinstatement: The~~As ~~Principal~~previously ~~Investigator has 20 years of experience with behavioral assays with specific expertise in rodent models of substance abuse~~noted, ~~including~~comparisons ~~opioid~~between ~~self-administration.~~CBD A standard rat model of morphine seeking will be used (Vassoler et al 2017) wherein rats make lever presses to receive infusions of morphine. Rats will be surgically implanted with chronically indwelling jugular catheters and ~~trained to self~~KLS-~~administer~~13019 ~~morphine~~have ~~(0.75~~been published ~~mg/kg/inf)~~ in ~~the~~peer ~~presence~~reviewed ofarticles ~~auditory and~~in ~~visual~~ACS ~~cues~~Medicinal ~~daily~~Chemistry ~~for~~Letters ~~20 days~~(2016, ~~followed by 10 days of extinction wherein the morphine is replaced with saline and the conditioned cues are eliminated. During the last three days of extinction~~7, ~~rats will be treated with vehicle, CBD (5.0 mg/kg IP), or KLS~~424-~~13019 (0.5 – 5.0 mg/kg IP~~428). ~~The following day rats will be exposed to a single reinstatement session wherein lever presses are again paired with auditory~~ and ~~visual~~Journal ~~cues but saline is delivered instead~~ of ~~morphine.~~Molecular ~~This~~Neuroscience ~~experimental~~(14 ~~design is based~~August ~~on Ren et al 2009 results with CBD on cue-induced reinstatement of heroin seeking in rats~~2018).

~~Status of Phase 1 STTR Grant Research~~30

OnAdditional follow on studies recently published ~~January~~on 4,May ~~2017~~10, we2019 ~~applied~~in the Journal of Molecular Neuroscience have further advanced our studies on the mechanism of action for aCBD ~~Phase~~and 1KLS-13019 ~~Small~~in ~~Business~~pre-clinical ~~Technology~~testing ~~Transfer~~for the treatment of CIPN. The mechanism of action for CBD-and KLS-13019-mediated protection now has been explored with dissociated dorsal root ganglion (“~~STTR~~DRG”) ~~grant~~cultures ~~from~~using small interfering RNA (siRNA) to the ~~NIH~~mitochondrial Na+ Ca2+ exchanger-~~NIDA~~1 (“mNCX-1”). ~~This~~Treatment with this siRNA produced a 50–55% decrease in the immunoreactive (“IR”) ~~grant~~area ~~application~~for ~~was~~mNCX-1 ~~made~~in neuronal cell bodies and a 72–80% decrease in ~~collaboration~~neuritic IR area as determined with ~~Temple~~high-content ~~University~~image analysis. After treatment with 100 nM KLS-13019 and ~~titled~~siRNA, ~~“Development~~DRG cultures exhibited a 75 ±5% decrease in protection from paclitaxel-induced toxicity, whereas siRNA studies with 10 μM CBD produced a 74± 3% decrease in protection. Treatment with mNCX-1 siRNA alone did not produce toxicity. The protective action of cannabidiol and KLS-13019 ~~for~~against ~~Chemotherapy~~paclitaxel-induced toxicity during a 5-h test period ~~Induced~~was ~~Peripheral~~significantly ~~Neuropathy~~attenuated ~~and~~after ~~Drug~~a ~~Dependence”.~~4-day Inknockdown ~~December~~of ~~2017,~~mNCX-1 wethat ~~were~~was ~~informed~~not attributable to toxicity. This data indicates that ~~the~~decreases in ~~Phase~~neuritic mNCX-1 ~~grant~~corresponded ~~was~~closely ~~awarded~~with decreased protection after siRNA treatment. Pharmacological blockade of mNCX-1 with CGP-37157 produced complete inhibition of cannabinoid-mediated protection from paclitaxel in DRG cultures, supporting the observed siRNA effects on mechanism.

WeSodium-Calcium ~~have~~Exchanger ~~completed~~(“NCX”) (often ~~all~~denoted ofNa+/Ca2+ exchanger, ~~our~~NCX, ~~work~~or ~~related~~exchange toprotein) ~~the~~is ~~aforementioned~~an antiporter ~~grant~~membrane ~~and~~protein ~~are~~that ~~currently~~removes calcium from cells. The exchanger exists in amany ~~peer~~different ~~review~~cell ~~submission~~types ofand ~~our~~animal ~~research~~species. The ~~results~~NCX is considered to ~~the~~be ~~Journal~~one of ~~Molecular~~the ~~Neuroscience.~~most ~~Temple~~important ~~University~~cellular ~~has~~mechanisms ~~completed~~for ~~all~~removing ~~three~~Ca2+ (calcium ~~aims~~ions) ~~outlined~~from cells. The exchanger is usually found in the ~~grant~~plasma ~~proposal~~membranes and the mitochondria and endoplasmic reticulum of excitable cells.

28Mitochondria is a double-membrane-bound organelle found in most eukaryotic organisms. Mitochondria generate most of the cell’s supply of adenosine triphosphate (“ATP”), used as a source of chemical energy. ATP is a complex organic chemical that provides energy to drive many processes in living cells, including muscle contractions, nerve impulse propagation and chemical synthesis.

~~On December~~According ~~31,~~to ~~2019~~Fallon, weet al. in the March/April 2006 edition of Clinical Medicine, ~~together~~pain is uncontrolled with ~~Temple~~opioid ~~University,~~treatments ~~filed~~in aapproximately ~~completion~~20% ~~report~~of patients with ~~NIH-NIDA~~advanced ~~regarding~~cancer, or ~~the~~420,000 ~~Phase~~people 1in ~~STTR~~the ~~grant~~United States. There are currently no FDA approved non-opioid treatments for patients who do not respond to, ~~The~~or ~~results~~experience ofnegative ~~this~~side ~~study~~effects ~~were~~with, ~~promising~~opioid ~~and~~medications. ~~have~~We ~~set~~believe ~~forth~~that ~~our~~KLS-13019 ~~plans~~has the potential to ~~file~~address ~~for~~a significant unmet need in this large market by treating patients with a ~~Phase~~product 2that ~~grant~~employs ~~due~~a ~~for~~differentiated ~~filing~~non-opioid onmechanism orof ~~before~~action, and offers ~~April~~the 7,prospect ~~2020~~of pain relief without increasing opioid-related adverse side effects.

~~In April~~Neuropathix ~~2020,~~Early ~~the~~Studies Company and Temple University filed for a Phase 2 SBIR Grant with National Institutes of Health – National Institute of Neurological Disorders and Stroke (“NIH-NINDS”). Our application provided strong support to further the research and development of our treatment for CIPN. Phase 2 is focused on ~~the development, demonstration and delivery of the innovation.~~ CBD

In ~~June~~ ~~2020~~March 2013, ~~the~~we ~~Company~~began ~~was~~our ~~informed~~pre-clinical ~~that~~research and ~~its~~discovery ~~Phase~~efforts 2at ~~SBIR~~the ~~grant~~Pennsylvania ~~application~~Biotechnology ~~received~~Center/Baruch anBlumberg ~~impact/priority~~Institute ~~score~~in ofDoylestown, 47PA. ~~Generally~~We began the research and ~~speaking~~development, ~~impact~~and pre-clinical work focused on the identification, synthesis and/~~priority~~or ~~scores~~extraction of 10novel toCannabis-derived 30molecules ~~are~~for the ~~most~~treatment ~~likely~~of toimpairments beassociated ~~funded~~with oxidative stress in OHE. ~~Scores~~Prior ~~between~~research 31(published ~~and~~on 45April ~~might~~16, be2011, ~~funded;~~in ~~scores~~the ~~greater~~British Journal ~~than~~of 46Pharmacology ~~are~~under ~~rarely~~the ~~funded.~~title ~~The~~“Cannabidiol ~~Company~~Improves ~~believed~~Brain ~~that~~and ~~there~~Liver ~~were~~Function ~~elements~~in a Fulminant Hepatic Failure Induced Model of ~~its~~Hepatic Encephalopathy ~~initial~~in ~~Phase~~Mice”) 2produced ~~SBIR~~substantial ~~grant~~behavioral ~~application~~and ~~that~~histochemical ~~were~~evidence demonstrating the effectiveness of certain Cannabis-derived ~~misunderstood~~molecules, ~~and~~such ~~believed~~as itCBD, ~~still~~in ~~had~~the aimprovement ~~very~~of ~~strong~~brain ~~application.~~and ~~After~~liver ~~making~~function ~~several~~in ~~critical~~fulminant ~~changes~~hepatic tofailure. Findings from the ~~original~~above ~~application,~~referenced instudy ~~January~~include ~~2021,~~reversal ~~the~~of ~~Company~~locomotors ~~resubmitted~~and ~~its~~cognitive ~~Phase~~pathologies, 2reversal ~~SBIR~~of ~~grant~~structural ~~application~~changes, ~~with~~such ~~NIH-NINDS~~as Alzheimer’s Type II astrogliosis, and ~~currently~~reversal ~~awaits~~of ~~response~~increases ~~from NIH-NINDS~~in ammonia levels.

~~Reduction~~In 2014, we published an abstract on our completed studies regarding CBD at the 24th Annual International Cannabinoid Research Society symposium, titled “Cannabidiol Provides Protection from Ethanol and Ammonium Toxicity in ~~Addiction~~a ~~Based~~Hippocampal ~~Opiate~~Model ~~Dependency~~of –Hepatic ~~HEAL~~Encephalopathy.” In the present study, an in vitro model of HE has been utilized to evaluate the protective properties of CBD, a substance with demonstrated protective properties against oxidative stress in pre-clinical studies targeting the OHE range of neuronal toxicity.

According to statistics compiled by the National Institutes of Health for the HEAL Initiative (Helping End Addiction Long-term), the public health crisis of opioid misuse and addiction in America is rapidly evolving. More than 47,000 Americans died of opioid overdose in 2017, and more than 2 million Americans live with addiction to opioids. Moreover, more than 50 million Americans suffer from chronic pain, and of those, 25 million live with daily chronic pain and lack effective and safe non-opioid options for pain management.  The widespread use of opioids to treat acute and chronic pain contributed to the approximately 10.3 million people aged 12 years and older in the United States in 2018 who misused opioids, including heroin. These staggering numbers are likely underestimates. They fail to capture the full extent of the damage of the opioid crisis, which reaches across every domain of family and community life – from lost productivity and economic opportunity, to intergenerational and childhood trauma, to extreme strain on community resources, including first responders, emergency rooms, hospitals, and treatment centers. With the full support of the administration, NIH launched the Helping to End Addiction Long-term Initiative, or NIH HEAL Initiative, to provide scientific solutions to the opioid crisis and offer new hope for individuals, families, and communities affected by this devastating crisis. 31

~~NIH-NINDS~~OHE is a known oxidative stress ~~HEAL~~related ~~Initiative~~disorder. Although ammonia is considered the main factor involved in the pathogenesis of OHE, it correlates well with the severity of OHE in acute liver failure, but not in chronic liver disease. Oxidative stress is another factor believed to play a role in the pathogenesis of this syndrome; it represents an imbalance between the production and neutralization of reactive oxygen species, which leads to cellular dysfunction (“Oxidative Stress: A Systemic Factor Implicated in the Pathogenisis of Hepatic Encephalopathy”, Metabolic Brain Disease, 28 June 2013, 175-178).

~~Launched in~~As ~~April~~part ~~2018,~~of ~~the NIH Helping~~our toresearch ~~End~~and development ~~Addiction Long-term (HEAL) Initiative is an aggressive~~efforts, ~~trans-agency~~we ~~effort~~have ~~to speed~~sought ~~scientific solutions~~ to ~~stem~~establish the ~~national~~pre-clinical ~~opioid~~efficacy ~~public~~of ~~health~~CBD, ~~crisis. The~~which, ~~Initiative~~along ~~will~~with ~~advance~~our ~~research~~novel toand ~~reduce the~~proprietary ~~risks~~lead oftarget molecules, ~~opioid~~have ~~use~~shown ~~and~~to ~~misuse~~have ~~and~~neuroprotective ~~improve~~properties. ~~pain~~From ~~management,~~2013 ~~thereby~~through ~~reducing~~2019 ~~reliance~~we onconducted ~~opioids.~~preclinical ~~NINDS~~evaluations isand ~~the~~formulation of ~~lead~~our ~~Institute for~~CBD ~~pain~~based ~~research~~target atdrug ~~NIH~~candidate, ~~and~~KLS-13023. ~~leads~~These ~~the~~efforts ~~Executive~~involved ~~Committee~~a offeasibility ~~the NIH~~study ~~Pain~~with ~~Consortium, which~~Catalent ~~includes~~Pharma 23Solutions ~~Institutes~~(“Catalent”) ~~and~~utilizing ~~Centers.~~a ~~The~~highly ~~NIH~~purified ~~Pain~~pharmaceutical ~~Consortium’s~~grade ~~mission~~synthetic ~~includes~~CBD ~~improving~~produced ~~the~~by ~~treatment~~Purisys of(formerly, aNoramco) ~~variety~~and ofcurrently ~~pain~~under ~~conditions.~~drug ~~NINDS will~~master ~~focus~~file ~~efforts~~with in the ~~NIH~~ ~~HEAL~~FDA. ~~Initiative in~~While ~~developing~~we ~~non-addictive~~have ~~pain~~evaluated ~~treatments~~CBD ~~that~~on ~~may~~its ~~displace~~own, ~~the~~in ~~need~~a ~~for opioids,~~highly ~~and~~purified ~~importantly~~form, ~~serve~~we asplan ~~effective~~on ~~treatments~~bringing ~~for~~a ~~acute~~CBD ~~and~~based ~~chronic~~target ~~pain~~drug ~~conditions~~therapeutic revolve ~~for~~around ~~which~~a ~~opioids~~formulated ~~are~~product ~~not~~in ~~effective. This~~oral ~~work~~dose ~~will~~administration becapsule ~~informed~~(KLS-13023) byand ~~partners~~supported ~~from~~with ~~the~~additional ~~government,~~intellectual ~~industry,~~property created ~~academia,~~by ~~and~~the ~~patients suffering from pain~~Company.

~~Research~~On January 22, 2015, we signed an agreement with onCatalent ~~Pain~~Pharma Solutions LLC (“Catalent”), a $3.9 billion pharmaceutical manufacturer, for the performance of a feasibility study named “Solution for Cannabidiol Softgel Feasibility” (the “CBD OTC Feasibility Study”). Catalent has over eight years of experience in capsule and ~~Next~~softgel ~~Generation~~manufacturing ~~Analgesics~~capabilities and experience.

~~Although opioid~~The ~~medications~~purpose ~~effectively~~of treat acute pain and help relieve chronic pain for some patients, their addiction risk presents a dilemma for healthcare providers who seek to relieve suffering while preventing drug abuse and addiction. Little is yet known about the ~~risk~~CBD ~~for~~OTC ~~addiction~~Feasibility ~~among~~Study ~~those being treated for chronic pain or about how basic pain mechanisms interact~~ with ~~prescription~~ ~~opioids~~Catalent is to ~~influence~~advance ~~addiction~~our ~~potential.~~plans To better understand this, NIDA launched a research initiative on “Prescription Opioid Use and Abuse in the Treatment of Pain.” This initiative encourages a multidisciplinary approach using both human and animal studies to ~~examine~~submit ~~factors~~one ~~(including pain itself) that predispose~~ or ~~protect~~more ~~against~~products ~~opioid~~for ~~abuse~~FDA ~~and addiction. Funded grants cover~~ clinical ~~neurobiology,~~trials ~~genetics, molecular biology, prevention, treatment, and services research. This type of information will help develop screening and diagnostic tools that physicians can use~~ to ~~assess~~treat ~~the~~certain ~~potential~~oxidative ~~for~~stress ~~prescription~~related ~~drug abuse in their patients. Because opioid medications are prescribed for all ages~~ and ~~populations, NIDA is also encouraging research that~~ ~~assesses~~neurodegenerative ~~the~~related ~~effects~~diseases ~~of prescription opioid abuse by pregnant women, children, and adolescents, and how~~ such ~~abuse~~as inTraumatic ~~these~~Brain ~~vulnerable populations~~Injury ~~might increase the lifetime risk of substance abuse and addiction~~(“TBI”).

29TBI, also known as intracranial injury, occurs when an external force injures the brain. TBI can be classified based on severity, mechanism (closed or penetrating head injury), or other features (e.g., occurring in a specific location or over a widespread area). Head injury is a broader category that may involve damage to other structures, such as the scalp and skull. TBI can result in physical, cognitive, social, emotional, and behavioral symptoms, and outcomes can range from complete recovery to permanent disability or death.

~~PRIMARY~~The Centers for Disease Control and Prevention (the “CDC”) ~~TARGETS~~has ~~FOR~~compiled ~~TOPICAL~~statistics ~~MEDICAMENTS~~on ~~AND~~TBI, ~~MARKET~~which ~~SIZE~~occurs more with children and older adults. According to the CDC, total combined rates for TBI-related emergency department (“ED”) visits, hospitalizations and deaths have increased over the past decade. In 2014, there were approximately 2.5 million TBI-related ED visits in the U.S., including over 812,000 among children. Unintentional falls, being unintentionally struck by or against an object, and motor vehicle crashes were the most common mechanisms of injury contributing to a TBI diagnosis in the ED. These three principal mechanisms of injury accounted for 47.9%, 17.1%, and 13.2%, respectively, of all TBI-related ED visits. Rates of TBI-related ED visits per 100,000 population were highest among older adults aged ≥ 75 years (1,682.0), young children aged 0-4 years (1,618.6), and individuals 15-24 years (1,010.1).

~~The Company~~On ~~has~~March ~~completed~~4, ~~formulation~~2015, ofthe aCompany ~~topical~~and ~~relief~~Catalent ~~cream~~commenced the ~~for~~feasibility ~~use~~study asnamed an“Solution ~~OTC~~for ~~cosmetic~~Cannabidiol ~~skin~~Softgel ~~care product to be marketed under the trade name of Atopidine®~~Feasibility.”

~~Since mid~~On ~~2019~~March 16, ~~the~~2015, ~~Company~~we ~~has~~received ~~been~~notice ~~screening~~from ~~and~~Catalent that ~~conducting~~the ~~preliminary~~DEA ~~research~~advised ~~and~~them ~~development~~that ofthe ~~some~~CBD ofdrug ~~its~~code ~~patented,~~7360 ~~proprietary cannabidiol-derived~~had ~~new~~been ~~chemical~~added ~~entities~~to ~~(“NCEs”),~~Catalent’s ~~for~~Schedule ~~use~~1 asregistration ~~topical~~and ~~solutions,~~that ~~ointments,~~a ~~and~~quota ~~creams~~ for ~~disorders~~ ~~such~~a ascertain ~~diabetic~~quantum ~~neuropathies,~~of ~~diabetic~~CBD ~~ulcers,~~was ~~and~~successfully submitted for ~~use~~the asimportation anof ~~anti-pruritic~~150 grams of 99.7% ~~(see:~~pure ~~Business~~synthetic ~~– Neuropathix~~cannabidiol ~~Intellectual~~from Purisys ~~Properties~~(formerly, Noramco) .

~~In preclinical testing~~Additionally, ~~certain~~on ~~molecules~~July ~~under~~13, ~~Patent 9~~2018,~~611,213~~ ~~were~~we ~~screened~~received ~~for~~notice from ~~neuroprotection and may have~~ the ~~potential~~DEA ~~mechanism of~~that ~~action~~were approved for ~~reducing~~our ~~inflammation~~own ~~and~~Schedule ~~neuropathic~~1 ~~pain.~~Controlled ~~These~~Substance ~~molecules~~license ~~indicate~~for ~~that~~the ~~they~~purpose ~~are~~of ~~more~~research ~~soluble~~activity. ~~than~~The ~~cannabidiol,~~addition ~~also~~of ~~deemed~~this alicense ~~neuroprotectant~~will ~~with~~further ~~potential~~assist ~~anti-inflammatory~~the ~~properties.~~Company Ain ~~molecule~~the ~~that~~bailment isand ~~potentially~~delivery ~~more~~of ~~water~~CBD ~~soluble~~to ~~than cannabidiol~~and infrom ~~this~~research ~~regard~~collaborators ~~may~~like beCatalent ~~good~~and Temple ~~candidate(s)~~University, ~~for~~as ~~use~~well inas ~~topical applications~~others.

~~The Company has completed the following relating to KLS-13022:~~32

•Our ~~Preclinical~~relationship ~~screening~~with Catalent was founded on our efforts to produce a formulated version of a CBD based gel capsule, herein referred to as KLS-13023, for ~~consumer~~further ~~OTC~~advancements ~~cosmetic~~in ~~use~~the treatment of oxidative stress related disorders, such as OHE. Catalent does not share in any royalties or ownership of intellectual property that we provide to Catalent or that is developed under ~~CFR~~the 21feasibility study with Catalent described herein. The current feasibility study being performed is for our efforts to create a high quality controlled and assured pharmaceutical grade product for use in an FDA clinical trial to treat patients suffering with OHE. Catalent’s efforts in this instance is as a contract manufacturer involved in the advancement of our intellectual property and for Catalent to be a third party contract manufacturer for the commercial production of KLS-13023.

•In ~~Application~~late to2019, ~~International~~this ~~Nomenclature~~novel offormulation and ~~Cosmetic~~feasibility ~~Ingredients~~study ~~(INCI)~~was completed toat ~~receive~~Catalent aand ~~compound~~also ~~nomenclature~~validated ~~for~~through ~~KLS-13022~~repeated -in ~~Limonenyldihydroxybenzyl~~vitro ~~Ethoxycarbonyl~~viability ~~Azetidine~~assays ~~(LEA)~~and pharmacology tests.

•We ~~Received~~are asatisfied ~~registered~~by ~~trademark~~the ~~from~~successful completion of the ~~U.S.~~feasibility ~~Patent~~study with Catalent, and ~~Trademark~~plan ~~Office~~to perform additional research and development and further pre-clinical evaluation of KLS-13023 in mild traumatic brain injury (~~“USPTO”~~mTBI) animal models and move towards animal toxicity studies. Thereafter we plan on filing an IND application for ~~Atopidine®,~~KLS-13023 towith bethe ~~used~~FDA. asWe ahave ~~branded~~only ~~product~~committed asto acompleting ~~relief~~the ~~cream,~~feasibility ~~containing~~study ~~LEA~~with Catalent, and are under no obligation to ~~treat~~enter ~~inflammatory~~into ~~disorders~~a ~~like~~commercial ~~eczema~~drug manufacturing agreement with Catalent. After the completion of our feasibility study with Catalent, ~~psoriasis~~we currently believe that the logical next step in our commercial development plans for KLS-13023 is to engage with Purisys (formerly, ~~radiation~~Noramco) ~~dermatitis~~for the API supply of their highly purified pharmaceutical grade CBD and ~~excessive~~with ~~UVB~~Catalent ~~radiation~~as ~~(post~~our ~~sun~~contract ~~burn)~~drug manufacturer for KLS-13023.

~~Based on preclinical testing of LEA versus~~ CBD ~~(cannabidiol)~~Reclassified inby ~~cultured~~DEA ~~human~~for ~~epidermal keratinocytes:~~Epidiolex

• On ~~LEA~~September ~~provided~~27, ~~better~~2018, in a ~~anti-inflammatory~~significant ~~activity~~decision ~~compared~~relating to the classification of CBD, ~~for~~currently ~~TNFa~~classified as a Schedule I narcotic by the DEA under the Controlled Substances Act, ~~IL-6~~the Department of Justice and ~~significantly~~the ~~more~~DEA ~~potent~~announced that ~~CBD~~EpidiolexÒ, the recently approved medication by the FDA, was being placed in Schedule V of the Controlled Substances Act, the least restrictive schedule of the CSA. On June 26, 2018, the FDA announced it approved EpidiolexÒ for ILthe treatment of seizures associated with two rare and severe forms of epilepsy, Lennox-1bGastaut ~~inhibition~~syndrome and Dravet syndrome, in ~~UVB~~patients two ~~irradiation~~years ~~induced~~of ~~inflammation~~age and older. EpidiolexÒ contains CBD. The CBD in EpidiolexÒ is extracted from the cannabis plant and is the first FDA-approved drug to contain a purified extract from the plant. Schedule V drugs represent the least potential for abuse. Schedule V drugs, substances, or chemicals are defined as drugs with lower potential for abuse than Schedule IV and consist of preparations containing limited quantities of certain narcotics.

•We ~~LEA~~believe ~~decreased~~this ~~CXCL5~~was ~~levels~~a bysignificant reclassification ~~100%~~that ~~after~~validates ~~UVB~~our ~~irradiation~~efforts ~~with~~in ~~IC50~~the ofresearch ~~0.05~~and ~~mM.~~development ~~(CXCL5~~of isethical apharmaceuticals ~~small~~containing ~~cytokine~~CBD ~~belonging~~as toan ~~the~~active ~~chemokine~~pharmaceutical ingredient ~~family~~and ~~known~~reduces asthe ~~epithelial-derived~~regulatory ~~neutrophil-activating~~and ~~peptide~~market 78risks ~~(ENA-78).~~associated Itwith ~~is produced following~~ the ~~stimulation~~use of ~~cells~~CBD, ~~with~~still ~~the~~a ~~inflammatory~~Schedule ~~cytokines~~I ~~TNFa and IL-1b~~narcotic.)

•We ~~LEA~~have ~~decreases~~maintained ~~levels~~since inception that the only clear path to reclassification is to follow the regulatory path of ~~four~~proving ~~(4)~~medical ~~inflammatory~~purpose ~~mediators~~through attraditional ~~concentrations~~Phase >1 65through ~~times~~Phase ~~less~~3 ~~than~~clinical ~~toxic~~trials. ~~levels~~We believe that the approval of EpidiolexÒ by the FDA on June 26, 2018 and reclassification of CBD as it relates to EpidiolexÒ by the DEA on September 27, 2018, is clear evidence of the need to follow the regulatory path in order to meet the requirements of reclassification of a Schedule I controlled substance.

~~• LEA is an antioxidant that does not exhibit cellular irritation and is locally restricted in its action (antioxidant activity of EC50 at 25 mM).~~33

~~Neuropathic Pain,~~Neuropathix ~~Anti-Inflammation,~~Strategic ~~Anti-Pruritic~~Third &Party ~~Skin~~Business ~~Ulcers~~Relationships, Licenses and Joint Ventures

~~Target~~Natural ~~1: Anti-Puritics~~Products ~~(Anti-Itch)~~Discovery Institute – ~~$3.85~~Pennsylvania ~~Billion~~Biotechnology ~~Global Market in 2019~~ Center

In December 2013, we entered into a Materials ~~2019~~Transfer itand isTesting ~~estimated~~Agreement ~~that~~(“MTTA”) with the ~~top~~Institute ~~ten~~for ~~product~~Hepatitis ~~segments~~and ~~for~~Virus ~~use~~Research inand ~~U.S.~~their ~~pruritus~~division, ~~therapeutics~~the ~~market~~Natural Products ~~accounted~~Discovery ~~for~~Institute ~~USD$448.7~~(“NPDI”), ~~million~~ located at Pennsylvania Biotechnology Center in ~~sales~~Doylestown, PA. The purpose of ~~products~~the MTTA, ~~such~~is, asamong ~~corticosteroids~~other ~~and~~things, ~~antihistamines.~~the ~~The~~research ~~global~~of ~~compounded~~original ~~annual~~material ~~growth~~made ~~rate~~up of plants, plant matter, and plant extracts (the “~~CAGR~~Plant Materials”) is ~~expected~~ to beidentify ~~12.5%~~bioactive ~~annually,~~molecules contained in these Plant Materials which ~~predicts~~may alead ~~global~~to ~~market~~the ~~size~~commercial production of ~~USD$10~~bioactive molecules.97 ~~billion~~To ~~by 2030~~date, ~~with~~we Uhave screened one plant source and have fractionated extracts to determine its neuroprotective activity.S. ~~sales~~This ~~estimated~~plant atsource ~~USD$1~~and extracted material has shown a high degree of neuroprotectant factor in the face of ethanol and ammonium toxicity in neuronal cell cultures.~~295~~ ~~billion~~We plan on furthering the commercial development of this material..

~~Growing worldwide~~On ~~prevalence~~April of2, ~~atopic dermatitis~~2020, ~~allergic~~we ~~contact~~entered ~~dermatitis,~~into ~~and~~an ~~urticaria~~Intellectual Property isRights ~~expected~~Purchase toand ~~drive~~Transfer ~~market~~Agreement ~~growth~~with ~~during~~ the ~~forecast~~BSBI ~~period.~~to ~~The~~purchase ~~introduction~~all of ~~new~~the ~~products~~rights, ~~based~~titles, onand ~~scientific~~interests ~~mechanistic~~that ~~understanding~~would ~~such~~otherwise belong asto the ~~identification of~~BASBI ~~new~~solely ~~T-cell~~under ~~subsets,~~the ~~particularly~~MTTA ~~Th17,~~Agreement. ~~and~~The ~~Th22~~purchase ~~and~~price for the ~~patent~~acquisition ~~expiration~~ of ~~PROTOPIC~~these ~~(tacrolimus)~~rights iswas ~~expected~~twenty tofive ~~open~~thousand ~~up new~~shares ~~avenues~~of ~~for~~the ~~manufacturers~~Company’s torestricted ~~capitalize~~common ~~on over the forecast period~~stock.

~~Corticosteroids remain~~Subsequent ~~the leading product segment. Topical applications of corticosteroids have been found~~ to bethis ~~extremely~~transaction ~~effective~~with in the ~~treatment~~BSBI, ~~and~~we ~~maintenance~~filed ~~therapies~~for ~~pertaining~~patent toprotection ~~pruritus.~~on ~~However,~~this ~~according to a 2007 article in American Family Physician~~discovery, ~~long-term topical~~which ~~corticosteroid~~patent ~~use~~describes isclaims ~~associated~~on ~~with local and systemic adverse effects that may lead to~~ the ~~underutilization of these effective agents. Common local adverse effects include striae~~process, ~~petechiae,~~method ~~telangiectasia, skin thinning, atrophy,~~ and ~~worsening acne.~~use ~~These~~of ~~effects~~this ~~are~~material ~~reported infrequently~~ in ~~clinical trials, although trials are primarily designed to assess effectiveness~~the ~~rather~~treatment ~~than~~of ~~safety~~neurodegenerative ~~and tolerability~~diseases. ~~Most~~(see: ~~clinical~~Neuropathix ~~trials~~Intellectual ~~of topical steroids are of short duration and, therefore, are unable to evaluate long-term toxicity.~~Properties)

~~Itching is~~Temple aUniversity ~~sensation~~– Animal that, if sufficiently strong, will provoke scratching or the desire to scratch. It is a frequent and distressing symptom of various dermatological and systemic diseases. It can also occur in some patients without any skin symptoms. Knowledge has been accumulated about the initiation of itch by external stimuli, but the neuronal substrate in the skin has not been completely identified. This has, fortunately, changed to some degree since a group of histamineBehavioral/Pre-~~sensitive C-fibers were recently identified,~~Clinical which likely represent the afferent units that mediate itch sensations. Histamine, derived from mast cells, is the best known pruritogen. It induces different degrees of itching when applied in different concentrations into the skin. In most dermatological and systemic diseases, except urticaria, histamine is not the main mediator. There are other proinflammatory mediators to consider, such as substance P, proteases, interleukin-2, acetylcholine, vasoactive intestinal peptide (VIP) and opioid peptides.Model

30On May 1, 2014, we signed a Research Services Agreement with Temple University to test the effects of CBD and CBD-like molecules in an HE model of cognitive impairment in support of the identification of molecules with in vivo efficacy. The tests were performed by Temple University in the pre-clinical model for HE, and involved a mouse model of OHE and administration of CBD and KLS-13019 conducted by Dr. Sara Jane Ward and Dr. Ronald Tuma, with the study titled – “Cognitive, neurological, and motor function in a mouse model of hepatic encephalopathy: effects of CBD and CBD analogues (KLS-13019).” The results of this study showed that KLS-13019 is superior to CBD in the intervention of cognitive impairment from associated neurotoxicity in the OHE model.

~~Several~~On January 4, 2017, we applied for a Phase 1 Small ~~key~~Business ~~characteristics~~Technology ofTransfer (“STTR”) grant from the ~~anti~~National Institutes of Health – National Institute on Drug Abuse (“NIH-~~puritics~~NIDA”). ~~market~~This ~~are~~grant ~~set~~application ~~forth~~was ~~below:~~made in collaboration with Temple University and titled “Development of KLS-13019 for Chemotherapy Induced Peripheral Neuropathy and Drug Dependence”. In December 2017, we were informed that the Phase 1 grant was awarded.

•The ~~Calcineurin~~following ~~inhibitor~~ is ~~identified~~a assummary ~~the~~outline ~~most lucrative segment~~ of the ~~market~~aims proposed ~~on account of high usage rate of these drugs~~ in ~~combination therapy for~~ the ~~treatment~~aforementioned ~~of pruritus in patients suffering from chronic pruritus and growing market penetration rates~~grant. ~~Moreover, the introduction of new products such as Pimecrolimus cream and Tacrolimus ointment is expected to further drive this market.~~

~~• Anti~~Chemotherapy-~~histamines~~induced ~~owing~~peripheral toneuropathy ~~its~~(CIPN) can ~~growing~~be ~~use~~a aschronic, aseverely ~~first~~debilitating ~~line~~consequence ~~treatment~~of ~~and~~cancer ~~presence~~therapy for which there are no effective management strategies. Moreover, upwards of ~~drugs~~80% inof ~~pipeline~~CIPN ~~with~~patients ~~expected~~reported ~~commercialization~~using isprescription ~~also~~opioids ~~expected~~for topain ~~grow~~management, atdespite athe ~~healthy~~fact ~~rate~~that ~~during~~there is only weak evidence that the ~~forecast~~long-term ~~period~~continuation of opioids provides clinically significant pain relief in these patients.

~~Target~~Mitochondrial ~~2: Anti~~dysfunction, ~~Inflammatory –~~oxidative ~~$74~~stress, and ~~Billion~~inflammation ~~Global~~have ~~Market~~all been implicated in ~~2019~~its etiology. We have shown that the non-psychoactive cannabinoid CBD prevents the development of CIPN in a mouse model of paclitaxel-induced cold and mechanical allodynia. This target, allodynia, refers to central pain sensitization (increased response of neurons) following normally non-painful, often repetitive stimulation. It can lead to the triggering of pain response from stimuli that normally do not provoke pain.

In a ~~research~~vitro, ~~study~~we ~~published~~observe inthat ~~April~~paclitaxel ~~2018~~increases microglial –expression ~~Global~~of ~~Anti-Inflammatory~~several ~~Therapeutics~~putative ~~Market~~mediators ~~Size,~~of ~~Market~~neuropathic ~~Share~~pain, ~~Application Analysis,~~and ~~Regional~~that ~~Outlook,~~this ~~Growth~~effect ~~Trends,~~can ~~Key~~be ~~Players,~~blocked ~~Competitive~~by ~~Strategies~~CBD ~~and~~in ~~Forecasts,~~a ~~2018~~mitochondrial Na+/Ca2+ toexchanger ~~2026 –the Anti~~(mNCX)-~~inflammatory therapeutics~~ ~~market~~dependent ~~projected to US$ 130~~manner.6 BnWe byhave ~~2026~~also ~~with~~shown ~~CAGR~~that ofa ~~8.5%~~more ~~throughout~~potent, ~~the~~hydrophilic ~~forecast~~analogue ~~period~~of ~~from~~CBD, ~~2018~~KLS-13019, toprotects ~~2026. Biologics~~against ~~and~~paclitaxel-induced ~~immune~~oxidative ~~selective~~stress ~~anti-inflammatory~~in ~~derivatives~~cultured ~~(ImSAIDs)~~dorsal ~~are~~root ~~the~~ganglia ~~promising~~neurons, ~~drugs~~and ~~classes~~ that ~~will play~~ the ~~main~~mechanism ~~role~~underlying inthis ~~the~~neuroprotection is ~~market.~~also ~~Global~~regulation ~~anti-inflammatory~~of ~~therapeutics~~intracellular ~~market~~calcium ~~from~~via ~~2018-2026~~the ~~study~~mNCX. isPreliminary ~~based~~results ondemonstrate ~~exhaustive~~that ~~analysis~~KLS-13019 ~~with~~can ~~insights~~attenuate ~~from~~mechanical ~~industry~~sensitivity ~~stakeholders.~~associated ~~The~~with ~~detailed~~CIPN ~~study~~while ~~incorporates~~also ~~the~~reducing ~~market~~microglial ~~landscape~~activation and ~~its~~T ~~growth~~cell ~~scenarios~~infiltration ~~for~~into the ~~forecasting~~spinal ~~period from 2018-2026~~cord.

According to World Health Organization (WHO), around 235 million individuals experience the ill effects of asthma around the globe. Symptomatic help amid the inflammation gives alleviation to the patients suffering from inflammatory diseases. In spite of the fact that there are numerous anti-inflammatory drugs present in the market, still, there is an essential requirement for better and novel anti-inflammatory therapeutics drugs with slighter side effects and improved efficacy.34

~~Based~~Dorsal root ganglia (“DRG”) is a cluster onof ~~the~~neurons ~~drug~~(a ~~types,~~ganglion) in the ~~global~~dorsal ~~anti-inflammatory~~root ~~therapeutics~~of ~~market~~a isspinal ~~segmented~~nerve. ~~into~~The ~~biologics,~~cell ~~corticosteroids,~~bodies ~~immune~~of ~~selective anti-inflammatory~~sensory ~~derivatives~~neurons ~~(ImSAIDs),~~known ~~and~~as ~~non-steroidal~~the ~~anti~~first-~~inflammatory~~order ~~drugs~~neurons ~~(NSAIDs);~~are located ~~additionally,~~in the ~~indication~~dorsal ~~studied in~~root ~~this~~ganglia. Even ~~report~~though dorsal root ganglia are ~~categorized~~a ~~into~~part ~~COPD,~~of ~~multiple~~the ~~sclerosis,~~system of ~~IBD~~peripheral nerves, ~~psoriatic~~they ~~arthritis,~~lie ~~gout~~very close to the spine, and ~~Others~~therefore ~~(Osteoarthritis,~~to ~~Systemic Lupus,~~the ~~Psoriasis)~~central nervous system. ~~Rising~~That ~~prevalence~~makes ofthem ~~inflammatory~~an ~~diseases~~important ~~and~~connection between the ~~strong~~two ~~drug~~systems. ~~pipeline~~These ~~would~~nerve ~~additionally~~clusters ~~boost~~help transmit messages toward the ~~anti~~brain and play a key role in neuropathic pain development and maintenance. Peripheral nerve injury-~~inflammatory~~induced neuropathic pain is one of major clinical disorders characterized by spontaneous ongoing ~~therapeutics~~or ~~market~~intermittent burning pain, sensory abnormalities (dysesthesia), an increased response to painful stimuli (hyperalgesia), and pain in response to normally innocuous stimuli (allodynia).

InOur central hypothesis is that administration ~~addition~~of CBD or KLS-13019 helps preserve Ca2+ homeostasis by promoting activity of the mNCX, ~~they~~which ~~are~~in ~~also~~turn ~~difficult~~protects tofrom ~~imitate~~both ~~due~~mitochondrial dysfunction and microglial activation to ~~their~~prevent ~~complex~~the ~~molecular~~neuronal ~~structure~~and glial changes associated with the development and ~~origin~~maintenance of paclitaxel-induced neuropathic pain. ~~The~~We ~~global~~believe ~~anti~~that results from experiments in AIM 1 will demonstrate that the neuroprotective properties of CBD and KLS-~~inflammatory~~13019 ~~market~~can be reduced by pharmacological or gene knockdown of the mNCX in a statistically significant manner. We believe that results from experiments in AIM 2 will further confirm the i.p. and p.o. efficacy of KLS-13019 vs CBD to prevent or reverse mechanical sensitivity and neuroinflammation in a mouse model of paclitaxel-induced neuropathic pain and that repeated administration of these molecules does not lead to analgesic tolerance. Remarkably, the non-psychoactive CBD has also been ~~driven~~shown byto ~~factors~~inhibit ~~such~~cue-induced asheroin-seeking ~~increasing~~and ~~autoimmune~~neurochemical correlates thereof in a rat model of relapse and ~~respiratory~~decrease ~~conditions,~~heroin ~~new~~craving ~~drugs~~in a small human study. Experiments in ~~pipeline~~AIM 3 are designed to test the hypothesis that KLS-13019 and ~~increasing~~CBD will attenuate reinstatement of morphine seeking behavior in a rat model of opioid relapse. The overall impact ~~adoption~~of the results from the proposed research will be significant advancements into (i) identification of ~~anti-inflammatory~~specific ~~drugs~~mechanisms that induce CIPN, (ii) application of this knowledge to facilitate design of novel treatment strategies for neuropathic pain, and (iii) novel treatment strategies to reduce or replace prescription opioid use and decrease prescription opioid abuse.

~~In 2014,~~Chemotherapy-induced ~~AstraZeneca~~peripheral ~~had~~neuropathy ~~five~~(CIPN) can ~~anti-inflammatory~~be ~~drugs~~a inchronic, ~~the~~severely ~~final~~debilitating ~~stages~~consequence of ~~drug~~cancer ~~development.~~therapy ~~These~~for ~~drugs~~which there are ~~lesinurad,~~no ~~sifalimumab~~effective management strategies. Moreover, ~~anifrolumab,~~upwards ~~mavrilimumab~~of ~~and~~80% ~~brodalumab.~~of ~~The~~CIPN ~~companies~~patients ~~have~~reported ~~filed~~using ~~new~~prescription ~~patents~~opioids tofor ~~overcome~~pain ~~the~~management, ~~issues~~despite ofthe ~~patent~~weak ~~expiries~~evidence of their ~~existing~~ ~~drugs,~~efficacy and the torisks ~~gain~~of along ~~prominent~~term ~~market~~dependence ~~share~~(Hirayama, ESMO Open 2016). ~~The~~Mitochondrial ~~key~~dysfunction, ~~companies~~calcium ~~profiled~~dysregulation, oxidative stress, and inflammation have all been implicated in ~~this~~its ~~report~~etiology. ~~include~~In ~~Pfizer~~pre-clinical studies, ~~Inc.~~CBD, ~~Abbvie~~a non-psychoactive component of cannabis sativa, ~~Inc~~has shown evidence in a murine model to be a potentially effective treatment for CIPN and relieving opiate dependence currently experienced by certain patients undergoing current therapeutic chemotherapy and pain management regimens in cancer treatment. However, ~~Johnson~~CBD &has ~~Johnson~~severe limitations in terms of potency, ~~GlaxoSmithKline~~safety, ~~Merck~~oral ~~& CO.~~bioavailability, ~~Inc~~and regulatory restrictions. KLS-13019 is a novel new chemical entity that, as ~~Novartis~~per pre-clinical testing, Fmay be able to target these problems. ~~Hoffman,~~In Lathe ~~Roche~~NIH-NIDA AGPhase 1 STTR Study Grant completed in December 2019, our ~~Eli~~research ~~Lily~~efforts with Temple University demonstrated the efficacy of KLS- 13019 in models of CIPN and ~~Company~~opiate dependence, and also ~~AstraZeneca~~further ~~PLC,~~elucidated its mechanism of action in regulation of calcium levels and ~~Amgen~~inflammatory sequelae.

~~Target~~We have completed all of our work related to the 3:aforementioned ~~Atopic~~grant ~~Dermatitis~~and /are ~~Eczema~~currently ~~– $3+~~in ~~Billion~~a ~~Market~~peer review submission of our research results to the Journal of Molecular Neuroscience. Temple University has completed two of the three aims outlined in ~~North~~the ~~America~~grant proposal, and is currently in ~~2020~~the process of completing the third and final aim, morphine reinstatement. We believe that the grant study will be completed on or about June 2019 and the results will be published by Temple University.

~~In a~~On ~~research~~December ~~study~~31, ~~published~~2019, inwe, ~~February~~together ~~2020~~with ~~– North America Atopic Dermatitis Treat Market Research Study – the size~~Temple ofUniversity, ~~the~~filed ~~atopic dermatitis treatment market in North America is valued at USD$2.95 billion in 2020 and is expected to grow at~~ a ~~CAGR~~ ofcompletion ~~13.4%~~report towith ~~reach~~NIH-NIDA ~~USD$5.52~~regarding ~~billion~~the byPhase ~~2025.~~1 ~~Atopic~~STTR ~~dermatitis is an inflammatory skin disease~~grant. The ~~degree~~results of ~~its~~this ~~severity varies~~study ~~from~~were ~~patient~~promising ~~to patient. It usually begins in childhood~~ and ~~is mostly confined to flexural surfaces of the body. It is~~have ~~highly~~set ~~prevalent.~~forth Itour isplans ~~more~~to ~~commonly~~file ~~known~~for asa ~~eczema.~~Phase ~~Itching,~~2 ~~redness~~grant ofdue ~~skin,~~for ~~cracking,~~filing ~~and~~on ~~weeping~~or ~~are~~before ~~symptoms~~April ~~of it. It is a long term disease. Low humidity~~7, ~~cold weather, seasonal allergies are the common causes of it~~2020. ~~Pattern of the disease and its severity determine the kind of treatment a patient with eczema is to receive.~~

31In April 2020, the Company and Temple University filed for a Phase 2 SBIR Grant with National Institutes of Health – National Institute of Neurological Disorders and Stroke (“NIH-NINDS”). Our application provided strong support to further the research and development of our treatment for CIPN. Phase 2 is focused on the development, demonstration and delivery of the innovation.

~~The Eczema Therapeutics Market is Dominated by Topical Corticosteroids (TCSs)~~35

~~Current competition~~In inJune 2020, the ~~eczema~~Company ~~therapeutics~~was ~~market~~informed ~~contains~~that ~~conventional~~its Phase ~~forms~~2 ofSBIR ~~therapy~~grant ~~such~~application asreceived ~~topical~~an ~~corticosteroids,~~impact/priority ~~topical immunomodulators~~score ~~and~~of ~~emollients as the most prominent therapies~~47. ~~Among~~Generally ~~all the available treatment options~~speaking, ~~topical~~impact/priority ~~corticosteroids hold~~scores aof ~~large~~10 ~~share~~to ~~and~~30 ~~dominate the market. Topical corticosteroids~~ are ~~available~~most likely into ~~various~~be ~~strengths~~funded. ~~(mild,~~Scores ~~moderate,~~between ~~potent and~~31 ~~very potent)~~ and ~~formulations~~45 ~~(ointment,~~might ~~cream,~~be ~~lotion~~funded; ~~and~~scores ~~many~~greater ~~more),~~than so46 ~~that~~are ~~they~~rarely ~~can~~funded. beThe ~~used~~Company ~~according~~believed tothat ~~the severity~~there ofwere ~~eczema.~~elements ~~Calceurin~~of ~~inhibitors~~its ~~(Protopic~~initial ~~(tacrolimus)~~Phase ~~and~~2 ~~Elidel~~SBIR ~~(pimecrolimus))~~grant ~~showed~~application ~~higher~~that ~~efficacy~~were inmisunderstood ~~comparison to corticosteroids~~ and ~~these~~believed ~~products~~it ~~were~~still ~~widely~~had ~~used~~a ~~after~~very ~~their~~strong ~~respective launches~~application. After ~~However,~~making inseveral ~~2005~~critical ~~the~~changes ~~FDA~~to ~~issued black box warnings for~~ the ~~calceurin~~ ~~inhibitors~~original ~~(Protopic and Elidel)~~application, ~~which has resulted~~ in ~~declining~~January ~~sales of these products. Emollients have good efficacy as well as good safety. They hydrate~~2021, ~~moisturize and repair~~ the ~~skin.~~Company ~~These~~resubmitted ~~products~~its doPhase ~~not~~2 ~~offer~~SBIR ~~first~~grant ~~line treatment, but they~~application ~~are~~with ~~useful~~NIH-NINDS asand ~~maintenance~~currently ~~therapy~~awaits inresponse ~~eczema~~from ~~patients~~NIH-NINDS.

~~Significant~~On March 10, 2021, we were notified that our resubmitted ~~Unmet~~application ~~Need~~received ina ~~Eczema~~summary ~~Therapeutics~~review ~~Market~~and ~~Could~~impact/priority ~~Drive~~score ~~Market~~of 20, which is considered by many to be exceptional and rare. This impact/priority score and summary attests to the novelty and advancement of our scientific discovery with KLS-13019.

~~Eczema~~On September 28, 2021, the Company received a isnotice of award for a ~~chronic~~$2.97 ~~condition~~million ~~characterized~~Phase by2 ~~frequent~~STTR ~~relapses~~Study ~~known~~Grant asfrom ~~flare~~the National Institutes of Health – National Institute of Neurological Disorders and Stroke under the HEAL Initiative (the “NIH-~~ups~~NINDS Study Grant Award”). The ~~market~~NIH-NINDS ~~has~~Study ~~various~~Grant ~~products~~Award ~~that~~is ~~are effective,~~funded ~~but~~through ~~their~~the ~~safety~~NIH ~~profile~~HEAL isInitiative ~~not~~(“Helping ~~always~~End ~~satisfactory,~~Addiction ~~leaving~~Long-Term”) afor ~~significant~~Development ~~unmet~~of ~~need~~Therapies and Technologies Directed at Enhanced Pain Management. This NIH-NINDS Study Grant Award provides funding specifically in the ~~market~~further development of KLS-13019 for the treatment of chemotherapy induced neuropathic pain (“CIPN”). The ~~unmet~~grant ~~need~~award isof ~~also~~$2.97 ~~a result~~million ofsets forth the ~~lack~~funding allocation of ~~effective~~$977,054 ~~treatment~~in ~~options~~year ~~for~~1; ~~severe~~$991,944 ~~conditions~~in year 2; ~~the~~and ~~need~~$1,001,774 ~~for~~in ayear ~~controlled~~3 and ~~targeted~~collectively budgets investigational new drug ~~delivery~~(“IND”) ~~system;~~application ~~low~~enabling ~~patience~~studies. ~~compliance~~IND ~~and~~enabling ~~the~~studies ~~black~~to ~~box~~be ~~warnings~~performed, ~~issued~~include tobut ~~Elidel~~are ~~and~~not ~~Protopic.~~limited ~~The~~to ~~unmet~~animal ~~need~~toxicity instudies ~~eczema~~and ~~therapeutics~~drug compound ~~could~~scale beup ~~filled~~studies byunder achemistry ~~new~~manufacturing ~~entrant~~and ~~with~~controls. aThe ~~better~~NIH-NINDS ~~safety~~Study ~~profile,~~Grant ~~enhanced~~Award ~~patient~~budget ~~compliance,~~includes ~~and~~studies ~~competitive~~to ~~pricing~~be ~~with~~performed ~~respect~~at toTemple University; the ~~available~~University ~~products~~of Illinois; and Purisys (formerly, Noramco).

~~Target 4: Psoriasis~~Proposed ~~– $5+~~Study ~~Billion~~for ~~Market~~Traumatic inBrain ~~North America in 2019~~Injury

~~Psoriasis is~~To ainvestigate ~~common~~the ~~chronic~~mechanisms ~~skin~~of ~~disorder.~~action Itthrough iswhich ~~also~~CBD ~~associated~~and a ~~with~~cannabinoid ~~several~~analogue ~~comorbidities,~~(KLS-13019) ~~such~~provide asneuroprotection ~~obesity,~~form ~~hypertension,~~neurotoxicity ~~psoriatic arthritis,~~factors ~~depression,~~(glutamate and ~~diabetes~~CCL11) relevant to TBI. ~~Psoriasis~~Neural isdamage associated ~~characterized~~with byTBI ~~skin~~has ~~flares~~been ~~and~~associated ~~inflammation~~with ~~that~~multiple ~~vary~~processes inincluding ~~severity~~excitotoxicity, ~~from~~oxidative ~~minor localized~~stress ~~patches~~and toneuroinflammation. ~~substantial~~Because of ~~body~~the ~~surface~~recognized ~~involvement.~~protective ~~Around~~effects ~~20%~~ of ~~diagnosed~~cannabinoids ~~patients~~on ~~have~~all ~~moderate~~of tothese ~~severe~~toxic ~~psoriasis. Currently~~processes, inwe ~~the~~have ~~United~~chosen ~~States,~~to ~~psoriasis~~explore isthe aeffects ~~$8.48~~and ~~billion~~mechanism of ~~market~~action ~~in 2019,~~ of ~~which~~two ~~90%~~molecules: ~~are~~(i) ~~from~~CBD, ~~drugs~~a ~~targeting~~substance ~~moderate~~found ~~to severe~~in ~~psoriasis~~cannabis; ~~patients~~and ~~where~~(ii) ~~the~~KLS-13019, ~~skin~~a ~~manifestation~~novel ~~affects~~CBD-like ~~more~~analogue ~~than~~that 3%has ofbeen ~~the~~shown to ~~body.~~protect ~~See Treatment~~against ofvarious ~~Psoriasis~~toxicity ~~in Adults – Steven~~associated R.with ~~Feldman,~~oxidative ~~MD,~~stress ~~PhD,~~(Kinney ~~August~~et 24al., ~~2018~~2016). ~~For~~In ~~such~~this ~~patients~~proposal, ~~psoriasis~~we isintend ~~often~~to ~~a debilitating~~investigate ~~condition~~the ~~impacting~~protective ~~their~~mechanisms ~~quality~~related ofto ~~life and psychological well-being. Over~~ the ~~past~~attenuation ~~decade,~~of ~~biologics~~CCL11 ~~have~~for ~~altered~~both ~~the~~molecules ~~landscape~~ in ~~the~~disease-relevant ~~management~~in ofvitro ~~moderate~~test tosystems ~~severe~~that ~~psoriasis~~utilized glutatmate byas ~~achieving~~a ~~improved~~relevant ~~skin~~toxin ~~clearance,~~and ~~control~~then ofexplore ~~symptoms~~their ~~and~~effectiveness ~~quality~~in ofanimal ~~life for~~models ~~hundreds~~ of ~~thousands of individuals affected~~TBI.

~~Psoriasis is~~Catalent ~~linked~~Pharma to pathogenesis caused by dysregulation of T-cell-dependent immune response, as well as hyperproliferation of keratinocytes, the predominant cell type on the outer layer of skin. Biologics target the cytokines usually upregulated as a result of the abnormal immune response. Solutions

32In December 2014, we signed a feasibility study contract with Catalent Pharma Solutions (“Catalent”), to, among other things, commence a feasibility study on a dose controlled soft-gel containing CBD as the main active pharmaceutical ingredient (the “CBD Feasibility Study”). The purpose of the CBD Feasibility Study with Catalent is to enable us to develop a proprietary drug product formulation using CBD that has suitable solubility and stability characteristics for IND, enabling pre-clinical studies in animals and clinical studies in humans, as part of our ongoing research and development of a cannabinoid therapeutic for the treatment of neurodegenerative diseases, including CTE and OHE. Catalent is the leading global provider of advanced delivery technologies and development solutions for drugs, biologics, consumer health and animal health products. With over 80 years serving the industry, Catalent has proven expertise in bringing more customer products to market faster, enhancing product performance and ensuring reliable clinical and commercial product supply. Catalent employs approximately 13,900 people, including over 1,000 scientists, at 53 facilities across 4 continents, and in fiscal 2020 generated approximately $3.09 billion in annual revenue. Catalent is headquartered in Somerset, N.J.

~~Target 5: Diabetic Foot Ulcers – $3+ Billion Market in U.S.~~ 36

The market for Diabetic Foot Ulcers in the U.S. is $3+ billion and growing. There are 29 million people living with diabetes and 86 million pre-diabetics in the U.S. Approximately 25% of diabetics will acquire a non-healing ulcer in their lifetimePurisys, ~~which~~LLC ~~equates to approximately 3 million diabetic ulcers annually. Diabetic foot ulcers lead to over 73~~(formerly,~~000~~ ~~amputations annually at a cost that is estimated to exceed $5 billion annually. Hospitalization costs are approximately $20~~Noramco,~~000~~ ~~per patient with diabetic foot ulcers and $70,000 for an amputation~~Inc. ~~The global numbers are more startling. 400 million people are currently living with diabetes worldwide and that number is expected to increase to approximately 600 million by 2035.~~)

~~The current~~Noramco, ~~approach~~Inc. to(“Noramco”) ~~treating~~was ~~diabetic foot ulcers requires offloading the wound by using appropriate therapeutic footwear, daily~~formed ~~saline~~in or1979 ~~similar dressings~~ to provide a ~~moist~~secure ~~wound~~source ~~environment, debridement~~of ~~when~~Codeine ~~necessary,~~Phosphate. ~~antibiotic~~On ~~therapy if~~October ~~osteomyelitis~~1, or2019, ~~cellulitis~~Noramco isspun ~~present, optimal~~off ~~control~~its ofcannabinoid ~~blood~~related ~~glucose,~~business ~~and~~into ~~evaluation~~a separate ~~and~~affiliated ~~correction~~company, ~~of peripheral~~Purisys, ~~arterial~~LLC ~~insufficiency~~(“Purisys”). ~~Wound~~With ~~coverage~~Noramco’s byacquisition ~~cultured~~of ~~human~~Tasmanian ~~cells or~~Alkaloids ~~heterogeneic~~and ~~dressings/grafts, application~~addition of ~~recombinant~~their ~~growth factors~~Athens, ~~and~~ ~~hyperbaric~~Georgia ~~oxygen~~site ~~treatments~~in ~~also~~1982, ~~may~~and becontinuous ~~beneficial~~expansions atover ~~times,~~the ~~but~~past ~~only~~three ifdecades ~~arterial insufficiency~~at isboth ~~not~~of ~~present~~its U.S. ~~Among people with diabetes~~facilities, ~~most~~Noramco ~~severe foot infections that ultimately require some part of the~~and ~~toe~~Purisys, ~~foot~~together, ornow ~~lower~~contribute ~~leg~~ to bebillion ~~amputated~~dollar ~~start~~affiliate franchises, as awell ~~foot~~as ~~ulcer.~~to ~~See Diabetic~~significant ~~Ulcers~~third-party ~~Treatment~~generic &and ~~Management,~~branded ~~V.L.~~pharmaceutical ~~Rowe,~~products ~~MD, R~~worldwide. ~~Khardori MD, PhD, FACP, Medscape, March 12, 2018.~~

~~Foot ulcers~~Noramco ~~are~~is ~~especially~~a ~~common~~world leader in ~~people~~specialty ~~who~~active pharmaceutical ~~have~~ingredients, ~~one~~with ora ~~more~~particular offocus in controlled substances. Purisys is the ~~following~~leader ~~health~~in ~~problems:~~manufacturing ultra-high purity cannabinoid ingredients. Purisys’ headquarters and primary production facility is located in Athens, GA, with additional sites in Wilmington, DE and Schaffhausen Switzerland.

•In ~~Peripheral~~April 2015, ~~neuropathy.~~we ~~This~~entered isinto ~~nerve~~discussions ~~damage~~with inPurisys ~~the~~(then, ~~feet~~Noramco), orfor, ~~lower~~among ~~legs.~~other ~~Diabetes is~~ things, the ~~most~~long ~~common~~term ~~cause~~supply of ~~peripheral~~high ~~neuropathy. When nerves in the feet are damaged~~purity, pharmaceutical ~~they can no longer warn about pain or discomfort. When this happens~~grade, ~~tight-fitting~~synthetic ~~shoes~~cannabidiol ~~can~~for ~~trigger~~the apurpose ~~foot ulcer by rubbing on a part~~ of ~~the~~delivering ~~foot~~CBD ~~that~~as ~~has~~an ~~become~~active pharmaceutical ~~numb.~~ingredient ~~People with peripheral neuropathy may not be able~~ to ~~feel~~Catalent ~~when they've stepped on something sharp or when they have an irritating pebble~~ in ~~their~~connection ~~shoes.~~with ~~They~~our ~~can~~CBD ~~injure~~Feasibility ~~their feet significantly and never know it, unless they examine their feet routinely for injury~~Study.

~~Many elderly~~In ~~people~~addition ~~and~~to ~~diabetics~~the ~~with~~procurement ~~vision~~of ~~problems~~CBD ~~also~~through Purisys, ~~can't~~the ~~see~~Company ~~their~~and ~~feet~~Purisys ~~well~~have ~~enough~~discussed toan ~~examine~~additional ~~them~~feasibility study for ~~problems~~the scale-up and commercial production of KLS-13019.

•SK ~~Circulatory~~Capital ~~problems.~~Partners ~~Any~~(“SK ~~illness~~Capital”) acquired ~~that~~Noramco ~~decreases~~from ~~circulation~~Johnson to& ~~the~~Johnson ~~feet~~in ~~can~~July ~~cause foot ulcers~~2016. SK ~~Less~~Capital ~~blood~~is ~~reaches~~a ~~the~~private ~~feet,~~investment firm ~~which~~with ~~deprives~~a ~~cells~~disciplined offocus ~~oxygen.~~on ~~This makes~~ the ~~skin~~specialty ~~more vulnerable to injury~~materials, chemicals and ithealthcare ~~slows the foot’s ability to heal~~sectors.

~~Poor circulation~~PRIMARY inTARGETS ~~the~~FOR ~~leg~~DRUG ~~arteries~~DISCOVER isAND ~~called~~MARKET ~~peripheral artery disease. It also causes pain in the leg or buttock during walking. It is caused by atherosclerosis. This is a disease in which fatty deposits of cholesterol build up inside arteries.~~SIZE

•Target ~~Abnormalities~~1: inHepatic ~~the~~Encephalopathy ~~bones~~– $2+ orBillion ~~muscles~~Market in of the ~~feet~~U. ~~Any condition that distorts the normal anatomy of the foot can lead to foot ulcers~~S. ~~This is particularly true if the foot is forced into shoes that don’t fit the foot’s altered shape. Examples are claw feet, feet with fractures, and cases of severe arthritis.~~

~~More~~HE is one ~~than~~of ~~any~~the ~~other~~most ~~group,~~important ~~people~~clinical ~~with~~manifestations ~~diabetes~~in ~~have~~decompensated aliver ~~particularly~~cirrhosis. ~~high~~Accepted ~~risk~~concepts regarding the pathophysiology of ~~developing~~HE are ~~foot~~that ~~ulcers.~~the ~~This~~endogenous isneurotoxic ~~because~~substances, including ammonia: (i) escape from catabolism by the ~~long-term~~liver due both to the impaired function ~~complications~~of the cirrhotic liver and also to the presence of ~~diabetes~~portal ~~often~~systemic ~~include~~shunting; ~~neuropathy~~(ii) ~~and~~circulate ~~circulatory~~at ~~problems.~~elevated ~~Without~~concentrations ~~prompt~~in the systemic blood flow; (iii) reach the brain through the blood-brain barrier; and ~~proper~~(iv) ~~treatment~~impair cerebral function leading to disturbances of consciousness. See Discovery of KLS-13019, a ~~foot~~Cannabidiol-Derived ~~ulcer~~Neuroprotective Agent, with Improved Potency, Safety, and Permeability. William ~~may~~A. ~~require~~Kinney, ~~hospital~~Mark ~~treatment~~E. OrMcDonnell, itHua ~~may~~Marlon ~~lead~~Zhong, toChaomin ~~deep~~Liu, ~~infection~~Lanyi orYang, ~~gangrene~~Wei Ling, Tao Qian, Yu Chen, Zhijie Cai, Dean Petkanas, and ~~amputation~~Douglas E. Brenneman – ACS Med. Chem. Lett., 2016, 7 (4), pp 424–428.

~~Governmental~~The majority ~~Regulations~~of these toxins are produced in the intestine by the bacterial flora, and are absorbed into the portal venous flow. In spite of improved therapeutic options for encephalopathy, the long-term survival is still low. Thus, HE remains a serious complication of liver cirrhosis. We believe that the establishment of truly effective prevention modalities and broader application of liver transplantation will help rescue patients suffering from this complication of liver cirrhosis in the near future.

~~Manufacturing~~According to an article published in the British Journal of Pharmacology Research, studies conducted over the past decade has produced substantial behavioral and histochemical evidence demonstrating the effectiveness of certain Cannabis-derived molecules such as CBD in the improvement of brain and liver function in fulminant hepatic failure. Findings include reversal of locomotors and cognitive pathologies, reversal of structural changes such as Alzheimer’s Type II astrogliosis, and reversal of increases in ammonia levels. Beyond the supportive preclinical evidence, multiple factors provide reasons for enthusiasm in the pursuit of the HE indication:

~~Although we~~• New mechanism of action: Cannabinoids, if shown effective in clinical trials, would provide a new mechanism of action, and thus be ~~reliant~~an ~~upon~~incremental ~~the~~clinical ~~manufacturing~~tool to combine with existing treatments. This combination of ~~our~~mechanisms ~~target~~of ~~drug~~action ~~candidates~~could ~~and~~lead ~~API~~to ~~from~~additive ~~well-established~~or ~~manufacturers~~synergistic effects. Existing treatment methods, ~~manufacturers of~~such ~~therapeutic~~as ~~products~~lactulose, Rifaximin and ~~their~~others ~~facilities~~under ~~are~~study ~~subject~~(e.g., toAST-120), ~~continual~~manage ~~review~~symptoms ~~and~~by ~~periodic~~reducing ~~inspections~~ammonia byuptake in the ~~FDA~~digestive system. However, ~~the~~once ~~EMA~~blood ~~and other~~ammonia ~~comparable~~levels ~~foreign~~have ~~regulatory~~increased, ~~authorities~~they ~~for~~putatively ~~compliance~~provide ~~with~~limited ~~current~~benefits. ~~good~~Cannabinoids, ~~manufacturing~~instead, ~~practices~~act ~~(“cGMP”) regulations~~in the central nervous system ameliorating the downstream pathological effects of ammonia.

Further, manufacturers of controlled substances must obtain and maintain necessary DEA and state registrations and registrations with applicable foreign regulatory authorities and must establish and maintain processes to ensure compliance with DEA and state requirements and requirements of applicable foreign regulatory authorities governing, among other things, the storage, handling, security, recordkeeping and reporting for controlled substances.37

33• Multiple preventive benefits: According to National Institute of Health, pre-clinical studies have shown that CBD, the major constituent in our intended lead target drug molecule and candidate, may provide benefits in the secondary prevention of HE.

~~If we~~o orSteatosis: aIn ~~regulatory~~vitro ~~agency~~studies ~~discover~~have ~~previously~~shown ~~unknown~~CBD ~~problems~~to ~~with~~reverse athe ~~product,~~histopathology ~~such~~associated aswith ~~adverse~~steatosis ~~events of unanticipated severity~~ or ~~frequency,~~fatty orliver ~~problems~~syndrome. ~~with~~This ~~the~~is ~~facility~~particularly ~~where~~relevant ~~the~~because ~~product~~fatty liver is ~~manufactured,~~ a ~~regulatory~~major ~~agency~~cause ~~may~~of ~~impose~~liver ~~restrictions~~cirrhosis, ~~on that~~and ~~product,~~has ~~the~~no ~~manufacturing~~current ~~facility~~drug-based ortreatment. usIn addition, ~~including~~multiple ~~requiring~~currently ~~recall~~marketed ordrugs ~~withdrawal~~are ofknown ~~the~~to ~~product~~induce ~~from~~steatosis. ~~the~~These ~~market~~include orsteroids ~~suspension of manufacturing~~(e.g., Iftriamcinolone, wecortisone, ~~our~~prednisone), ~~product candidates or~~ the ~~manufacturing~~anti-cancer ~~facilities~~drug ~~for~~Tamoxifen ~~our~~(a ~~product~~breast ~~candidates~~cancer ~~fail to comply with applicable regulatory requirements~~drug), aHIV ~~regulatory~~anti-retrovirals ~~agency~~and ~~may,~~anti-arrythmic ~~among~~drug ~~other things:~~Amiodarone.

•o ~~issue~~Fibrogenesis: ~~untitled~~Animal ~~letters~~studies orhave ~~warning~~shown ~~letters;~~that endocannabinoids are involved in the regulation of fibrogenesis in the liver. CB2 -/- mice show increased fibrogenesis in response to CCl4 injection, whereas CB1 -/- mice have decreased hepatic fibrogenesis. This suggests an opportunity to modulate fibrogenesis, a critical intermediate step in liver cirrhosis, through a proper selection of cannabinoid antagonists.

•HE ~~mandate~~is ~~modifications~~a neuropsychiatric disorder that includes learning deficits and impairment of long-term memory. HE can be caused by chronic and excessive ethanol ingestion along with the accumulation of toxic substances that are normally removed by the liver. The pathogenesis of HE in the central nervous system includes damage to ~~promotional~~the ~~materials~~pre-limbic orcortex, ~~require~~striatum usand the hippocampus, and this pathology is believed to ~~provide~~be ~~corrective~~mediated by ~~information~~the accumulation of free radicals and oxidative stress. HE has primary epidemiological precursors in cirrhosis, hepatitis B, hepatitis C, and portal hypertension. The incidence rate of HE among alcohol induced cirrhosis patients is as high as 45%, making HE a leading opportunistic disease stemming from alcoholism. If left unchecked, HE can progress to ~~healthcare~~hepatic coma ~~practitioners;~~and ultimately death. The pathogenesis of HE includes damage to the prelimbic cortex, striatum, and the hippocampus. HE is caused by accumulation of toxic substances in the bloodstream that are normally removed by the liver.

•It ~~require~~has usbeen previously demonstrated that impairment of hepatocytes by ethanol is associated with the production of free radical and oxidative stress. The accumulation of these free radicals and oxidative stress contribute to ~~enter~~cognitive ~~into~~impairment, alearning ~~consent~~deficits, ~~decree~~memory impairment, as ~~which~~well ~~can~~as ~~include~~damage ~~imposition~~and death of ~~various~~neuronal ~~fines,~~tissue. ~~reimbursements~~An ~~for~~emerging ~~inspection~~concept ~~costs~~is that blockade of free radical mediated stress and oxidative stress will prevent the neural damage associated with hepatic encephalopathy and prevent cognitive impairment, ~~required~~learning ~~due~~deficits, ~~dates~~memory ~~for~~impairment, as ~~specific~~well ~~actions~~as damage and ~~penalties~~death ~~for~~of ~~noncompliance;~~neuronal tissue associated with OHE.

•Currently in ~~seek~~the anUnited ~~injunction~~States, orthere ~~impose~~are ~~civil~~over or1.5 ~~criminal~~million ~~penalties~~sufferers orof ~~monetary~~HE ~~fines;~~across four stages, including approximately 121,000 patients hospitalized each year from the OHE stage of the disease.

•Cannabidiol ~~suspend~~(CBD) orvs. ~~withdraw~~KLS-13019 ~~regulatory~~in ~~approval;~~Overt Hepatic Encephalopathy

•In ~~suspend~~a ~~any~~publication ~~ongoing~~in ~~clinical~~American ~~trials;~~Chemical Society Medicinal Chemistry Letters on February 10, 2016, our abstract read as follows:

•“Cannabidiol is ~~refuse~~the nonpsychoactive natural component of C. sativa (cannabis sativa) that has been shown to ~~approve~~be ~~pending~~neuroprotective ~~applications~~in multiple animal models. Our interest is to advance a therapeutic candidate for the orphan indication overt hepatic encephalopathy (OHE). OHE is a serious neurological disorder that occurs in patients with cirrhosis or ~~supplements~~liver failure. Although cannabidiol has shown evidence in a murine model to ~~applications~~be ~~filed~~a potentially effective treatment for OHE, it has limitations in terms of safety and oral bioavailability. Herein, we describe a series of side chain modified resorcinols that were designed for greater hydrophilicity and “drug likeness”, while varying hydrogen bond donors, acceptors, architecture, basicity, neutrality, acidity, and polar surface area within the pendent group. Our primary screen evaluated the ability of the test agents to prevent damage to hippocampal neurons induced by ~~us;~~ammonium acetate orand ethanol at clinically relevant concentrations. Notably, KLS-13019 was 50-fold more potent and >400-fold safer than cannabidiol and exhibited an in vitro profile consistent with improved oral bioavailability.”

~~• require us to initiate a product recall.~~38

~~The~~CBD has ~~occurrence~~been shown to be neuroprotective by blocking the damage caused by free radicals and oxidative stress. This effect was independent of ~~any~~cannabinoid receptors ~~event~~because orit ~~penalty~~could ~~described~~not ~~above~~be ~~may~~blocked ~~inhibit~~by ~~our~~a ~~ability~~cannabinoid antagonist. CBD has shown evidence in two murine models to ~~commercialize~~be ~~our~~a potentially ~~product~~effective ~~candidates~~treatment for HE, thioacetamide induced and ~~may~~bile ~~otherwise~~duct ligation induced ~~have~~liver damage, at a ~~material~~dose ~~adverse~~of ~~effect~~5 onmg/kg ~~our~~IP ~~business~~(intraperitoneal injection). Importantly, ~~financial~~CBD ~~condition~~treated animals in the first study exhibited improvements in both liver and ~~results~~brain offunction ~~operations~~as compared to untreated control animals.

~~Regulation~~Free radical ofmediated ~~CBD~~stress and oxidative stress are also known to contribute to additional pathological conditions including epilepsy, neuropathic pain, traumatic head injury, stroke, CTE, and neurodegenerative diseases such as Parkinson’s disease, Alzheimer’s disease, Huntington’s disease, and ALS.

~~KLS-13023~~Other examples ~~contains~~of ~~controlled~~neuroprotection ~~substances~~by asCBD ~~defined~~include use in ~~the~~hypoxia-ischemia ~~CSA~~and stroke models. ~~Controlled~~A ~~substances~~wide ~~that~~range ~~are~~of ~~pharmaceutical~~possible ~~products~~mechanisms ~~are~~have ~~subject~~been attributed to ~~a high~~CBD’s ~~degree~~neuroprotective ofeffects ~~regulation~~including ~~under the CSA~~antioxidant, ~~which establishes~~anti-inflammatory, ~~among~~adenosine ~~other things~~signaling, ~~certain~~cannabinoid ~~registration,~~receptor ~~manufacturing~~GPR55 ~~quotas,~~(G ~~security,~~Protein-coupled ~~recordkeeping,~~receptor ~~reporting~~55), ~~import, export~~ and ~~other~~serotonin ~~requirements~~mediated ~~administered~~pathways; ~~by the DEA. The DEA classifies controlled substances into five schedules: Schedule I~~however, ~~II,~~mitochondrial ~~III,~~calcium IVmodulation oris ~~V substances~~fundamental. ~~Schedule~~The IGPR55 ~~substances,~~receptor byis ~~definition, have~~ a ~~high~~G ~~potential for~~protein ~~abuse,~~receptor ~~have no currently “accepted medical use”~~ in ~~the~~humans ~~United~~that ~~States,~~is ~~lack~~encoded ~~accepted~~by ~~safety for use under medical supervision, and may not be prescribed, marketed or sold in~~ the ~~United~~GPR55 ~~States~~gene. ~~Pharmaceutical~~The ~~products~~GPR55 ~~approved~~receptor ~~for~~has ~~use~~been inidentified ~~the United States may be listed~~ as ~~Schedule~~a ~~II,~~novel ~~III,~~cannabinoid IVreceptor. orReceptors are V,sensing ~~with~~molecules ~~Schedule~~which IIcommunicate ~~substances~~signals ~~considered~~between cells to ~~present~~illicit ~~the~~physiological ~~highest~~changes ~~potential~~in ~~for abuse or dependence and Schedule V substances~~ the ~~lowest relative risk of abuse among such substances~~body. ~~Schedule~~To Ihedge ~~and~~our IIbets, ~~drugs~~we ~~are subject~~chose to ~~the~~interrogate ~~strictest controls under~~ the ~~CSA,~~hippocampal ~~including manufacturing and procurement quotas~~neuron, ~~security~~as ~~requirements~~a ~~and~~phenotypic ~~criteria~~screen ~~for importation.~~that Inwill ~~addition,~~measure ~~dispensing~~neuroprotection independent of ~~Schedule II drugs is further restricted. For example, they may not be refilled without~~ a ~~new prescription~~mechanism.

~~While cannabis~~Target is2: aChronic ~~Schedule~~Traumatic ~~I controlled substance, products approved for medical use in the United States that contain cannabis or~~Encephalopathy ~~cannabis~~(CTE) ~~extracts~~– $2+ ~~must~~Billion beMarket ~~placed~~ in ~~Schedules II - V, since approval by~~ the ~~FDA satisfies the “accepted medical use” requirement~~U. If and when KLS-13023 receives FDA approval, the DEA will make a scheduling determination and place it in a schedule other than Schedule I in order for it to be prescribed to patients in the United StatesS. If approved by the FDA, we expect the finished dosage forms of KLS-13023 to be listed by the DEA as a Schedule II or III controlled substance. Consequently, their manufacture, importation, exportation, domestic distribution, storage, sale and legitimate use will be subject to a significant degree of regulation by the DEA. The scheduling process may take one or more years beyond FDA approval, thereby significantly delaying the launch of KLS-13023. Furthermore, if the FDA, DEA or any foreign regulatory authority determines that KLS-13023 may have potential for abuse, it may require us to generate more clinical data than that which is currently anticipated, which could increase the cost and/or delay the launch of KLS-13023.

~~Because KLS-13023~~Not ~~contains~~unlike ~~active ingredients of cannabis~~OHE, ~~which~~CTE ~~are~~is ~~Schedule~~a ~~I substances, to conduct pre~~neuro-~~clinical~~degenerative ~~studies and clinical~~disease ~~trials with KLS-13023 in the United States prior to approval, each~~ of ~~our research sites must submit a research protocol to~~ the ~~DEA~~ ~~and~~brain ~~obtain~~ and ~~maintain~~is aassociated ~~DEA researcher registration that will allow those sites to handle and dispense~~ with ~~KLS-13023~~repeated ~~and to~~head ~~obtain~~traumas ~~the~~like ~~product from our manufacturer~~concussions. If the DEA delays or denies the grant of a research registration to one or more research sites, the pre-clinical studies or clinical trials could be significantly delayed, and we could lose and be required to replace clinical trial sites, resulting in additional costs.

~~We expect~~CTE ~~that~~is ~~KLS-13023 will be scheduled as Schedule II or III, as~~ a ~~result~~form of ~~which~~encephalopathy wethat ~~will~~is ~~also~~a ~~need to identify wholesale distributors~~progressive ~~with~~neuro-degenerative ~~the~~disease, ~~appropriate~~which ~~DEA~~can ~~registrations~~only ~~and~~be ~~authority~~definitively todiagnosed ~~distribute~~postmortem, ~~the~~in ~~products~~individuals towith ~~pharmacies~~a ~~and~~history ~~other~~of ~~healthcare~~multiple ~~providers,~~concussions and ~~these~~other ~~distributors~~forms ~~would~~of ~~need~~head ~~to obtain Schedule II or III distribution registrations~~injury. The ~~failure~~disease towas ~~obtain,~~previously orcalled ~~delay~~dementia ~~in obtaining~~pugilistica (“DP”), oras ~~the~~it ~~loss~~was ofinitially ~~any~~found ~~of those registrations could result~~ in ~~increased costs to us. If KLS-13023 is a Schedule II drug,~~ ~~pharmacies~~those ~~would have to maintain enhanced security~~ with ~~alarms~~a ~~and~~history ~~monitoring~~of ~~systems and they must adhere to recordkeeping and inventory requirements~~boxing. ~~This~~CTE ~~may~~has ~~discourage~~been ~~some~~most ~~pharmacies~~commonly ~~from~~found ~~carrying~~in ~~the~~professional ~~product.~~athletes ~~Furthermore,~~participating ~~state~~in ~~and~~American ~~federal enforcement actions~~football, ~~regulatory~~ice ~~requirements~~hockey, ~~and legislation intended to reduce prescription drug abuse, such as the requirement that physicians~~ ~~consult~~professional awrestling ~~state~~and ~~prescription~~other ~~drug~~contact ~~monitoring~~sports ~~program,~~who ~~may~~have ~~make~~experienced ~~physicians~~repetitive ~~less~~brain ~~willing to prescribe, and pharmacies to dispense, Schedule II products~~trauma.

34It has also been found in soldiers exposed to a blast or a concussive injury, in both cases resulting in characteristic degeneration of brain tissue and the accumulation of tau protein. Individuals with CTE may show symptoms of dementia, such as memory loss, aggression, confusion and depression, which generally appear years or many decades after the trauma. Repeated concussions and injuries less serious than concussions (“sub-concussions”) incurred during the play of contact sports over a long period can result in CTE. In the case of blast injury, a single exposure to a blast and the subsequent violent movement of the head in the blast wind can cause the condition.

~~We may~~The ~~manufacture~~primary ~~the~~physical ~~commercial~~manifestations ~~supply~~ of ~~KLS-13023~~CTE ~~outside of the United States. If KLS-13023 is approved by the FDA and classified~~include as a ~~Schedule~~reduction IIin orbrain ~~III substance~~weight, anassociated ~~importer~~with ~~can~~atrophy ~~import~~of ~~for commercial purposes if it obtains from~~ the ~~DEA~~frontal ~~an importer registration~~ and ~~files~~temporal ancortices ~~application~~and ~~with~~medial ~~the~~temporal ~~DEA for an import permit for each import~~lobe. The ~~DEA~~lateral ~~provides annual assessments/estimates to the~~ventricles ~~International~~and ~~Narcotics Control Board, which guides~~ the ~~DEA~~third inventricle ~~the~~are ~~amounts~~often ~~of controlled substances that the DEA authorizes to be imported. The failure to identify an importer or obtain the necessary import authority~~enlarged, ~~including~~with ~~specific~~rare ~~quantities,~~instances ~~could affect the availability~~ of ~~KLS-13023~~dilation ~~and have a material adverse effect on our business, results~~ of ~~operations and financial condition. In addition, an application for a Schedule II importer registration must be published in~~ the ~~Federal~~fourth ~~Register, and there is a waiting period for third party comments to be submitted~~ventricle.

~~Individual states~~Other ~~have~~physical ~~also~~manifestations ~~established~~of ~~controlled~~CTE ~~substance~~include ~~laws~~pallor of ~~and~~the ~~regulations.~~substantia ~~Though~~nigra ~~state-controlled~~and ~~substance~~locus ~~laws~~ceruleus, ~~often~~and ~~mirror~~atrophy ~~federal law,~~of ~~because~~ the ~~states~~olfactory ~~are~~bulbs, ~~separate jurisdictions~~thalamus, ~~they~~mammillary ~~may~~bodies, ~~separately~~brainstem ~~schedule~~and ~~our product candidates as well~~cerebellum. ~~While some states~~ ~~automatically~~As ~~schedule~~CTE ~~a drug based on federal action~~progresses, ~~other~~there ~~states schedule drugs through rulemaking or a legislative action. State scheduling~~ may ~~delay~~be ~~commercial~~marked ~~sale~~atrophy of ~~any product for which we obtain federal regulatory approval and adverse scheduling could have a material adverse effect on~~ the ~~commercial attractiveness of such product. We or our partners must also obtain separate state registrations~~hippocampus, ~~permits~~entorhinal ~~or licenses in order to be able to obtain~~cortex, ~~handle,~~ and distribute controlled substances for clinical trials or commercial sale, and failure to meet applicable regulatory requirements could lead to enforcement and sanctions by the states in addition to those from the DEA or otherwise arising under federal lawamygdala.

~~We currently~~On ~~obtain the API for KLS-13023 from~~ a ~~bulk~~microscopic ~~manufacturer~~scale, ofthe ~~pharmaceutical~~pathology ~~grade~~includes neuronal ~~API in Switzerland. For KLS-13023~~loss, ~~we plan~~tau ~~to conduct Phase 1 clinical trials in Australia~~deposition, ~~subject~~TAR toDNA- ~~applicable~~binding ~~regulatory~~Protein ~~approval.~~43 In(TDP ~~addition,~~43) webeta-amyloid ~~may decide to develop~~deposition, ~~manufacture~~white ormatter ~~commercialize our product candidates in additional countries. As a result~~changes, ~~KLS-13023~~and ~~will~~other ~~also be subject~~abnormalities. toThe ~~controlled~~tau ~~substance~~deposition ~~laws~~occurs ~~and~~as ~~regulations~~dense ~~from~~neurofibrillary ~~the~~tangles ~~Therapeutic Goods Administration in Australia~~(“NFT”), ~~Health Canada’s Office of Controlled Substances in Canada~~neurites, and ~~from~~glial ~~other regulatory agencies in other countries where we may develop~~tangles, ~~manufacture~~which ~~or commercialize~~are ~~KLS-13023~~made inup ~~the future. We plan to submit NDA for KLS-13023 to the FDA upon completion~~ of ~~all requisite clinical~~astrocytes ~~trials~~ and ~~will~~other ~~require~~glial ~~additional~~cells ~~DEA~~Beta-amyloid ~~approvals~~deposition atis ~~such~~relatively ~~time~~uncommon asfeature ~~well~~of CTE.

~~On September~~A ~~27,~~small ~~2018, the~~group ~~DOJ~~of ~~and~~individuals ~~DEA~~with ~~announced~~CTE ~~that~~have ~~Epidiolex,~~chronic traumatic ~~the~~encephalo-myopathy ~~newly~~(“CTEM”), ~~approved~~characterized ~~medication~~ by ~~the~~motor ~~Food~~neuron &disease ~~Drug Administration~~symptoms, ~~was~~ ~~being~~which ~~placed~~mimics ~~in Schedule V of the Controlled Substances Act~~ALS, ~~the~~also ~~least~~known ~~restrictive~~as ~~schedule~~Lou Gehrig’s ~~of the CSA~~disease. On ~~June~~Progressive ~~26, 2018, the~~muscle ~~FDA~~weakness ~~announced it approved Epidiolex for the treatment of seizures associated with two rare~~ and ~~severe~~balance ~~forms of epilepsy, Lennox-Gastaut syndrome~~ and ~~Dravet~~gait ~~syndrome,~~problems inseem ~~patients~~to ~~two~~be ~~years~~early signs of ~~age and older~~CTEM. ~~Epidiolex contains CBD.~~

The CBD in Epidiolex is extracted from the cannabis plant and is the first FDA-approved drug to contain a purified extract from the plant. Schedule V drugs represents the least potential for abuse. Schedule V drugs, substances, or chemicals are defined as drugs with lower potential for abuse than Schedule IV and consist of preparations containing limited quantities of certain narcotics. Schedule V drugs are generally used for antidiarrheal, antitussive, and analgesic purposes. Some examples of Schedule V drugs are: cough preparations with less than 200 milligrams of codeine or per 100 milliliters (Robitussin AC), Lomotil, Motofen, Lyrica, Parepectolin.39

~~Despite the~~Target ~~approvals~~3: byChemotherapy ~~the~~Induced ~~FDA~~Peripheral ~~and DEA for Epidiolex, any of these foregoing factors, many of which are beyond our control, could jeopardize~~Neuropathy ~~our~~(CIPN) ~~ability~~– $3+ toBillion ~~obtain~~Market ~~regulatory approval for and successfully market KLS-13019 or KLS-13023. Moreover, because our business is almost entirely dependent upon these two product candidates, any such setback~~ in ~~our pursuit of regulatory approval would have a material adverse effect on our business and prospects~~U.S.

~~KLS-13019 does~~In ~~not~~December ~~contain~~2016, ~~CBD~~as ~~and~~part isof a ~~new~~Small ~~chemical~~Business Technology ~~entity~~Transfer ~~that~~(“STTR”) ~~would~~program, ~~not~~we, ~~fall~~together ~~under~~with Temple University, filed an STTR grant proposal with the ~~CSA~~National Cancer orInstitute be(“NCI”) ~~deemed~~to demonstrate improved in vivo efficacy of an orally administered KLS-13019, our lead target drug candidate, in a ~~Schedule~~head-to-head 1comparison ~~controlled~~to ~~substance~~intraperitoneal injection (“IP Injection”) of CBD in a model of chemotherapy-induced peripheral neuropathy.

~~KLS-13023 is~~At athe ~~formulation~~conclusion ~~that~~of ~~does~~Phase ~~contain~~I ~~CBD.~~STTR ~~At present~~application, we ~~CBD~~hope isto ~~deemed~~demonstrate athat ~~Schedule~~KLS-13019 1(Per ~~controlled~~os ~~substance~~– taken bythrough the ~~DEA~~mouth) ~~under~~can ~~the~~control ~~CSA. Like~~mechanical ~~the~~sensitivity ~~drug~~and ~~molecule~~inflammation associated ~~EpidiolexÒ,~~with ~~which~~CIPN ~~was~~in ~~recently approved by~~ the ~~FDA~~absence ~~for~~of ~~marketing~~tolerance development, and ~~sale~~also ~~for~~reduce ~~use~~opioid incraving ~~treating~~behavior ~~Dravet’s Syndrome~~with ~~and~~comparable ~~Lennox-Gasteau~~efficacy ~~Syndrome~~to CBD (~~forms~~intraperitoneal ~~of child epilepsy~~injection),. ~~KLS-13023~~In ~~would~~Phase ~~need~~II toSTTR, ~~follow~~we ~~the~~will ~~guidance~~investigate ~~set forth by the CSA, complete~~ a ~~successful~~back-up ~~human~~series ~~clinical~~and ~~trial~~will ~~and~~execute ~~apply~~the ~~for~~CMC, ~~rescheduling~~pharmacokinetic, assafety pharmacology, ~~was~~and ~~the~~toxicology ~~case~~assessments ~~with~~required ~~EpidiolexÒ,~~for ~~now~~IND afiling ~~Schedule 5~~on ~~drug~~KLS-13019.

~~On January~~A ~~14,~~visual ~~2019,~~image weof ~~received written notice from~~ the ~~DEA~~chemical ~~Drug~~structure of cannabidiol and ~~Chemical~~KLS-13019 ~~Evaluation~~can ~~Section,~~be seen as follows:, ~~“Please~~along bewith ~~advised that~~selected ~~your~~data ~~material~~describing ~~meets~~ EC50 (the ~~definition~~concentration of ~~‘Hemp’~~a ~~and~~drug ~~is not regulated under the CSA, as long as it consists of high purity Cannabidiol (CBD)~~ that ~~contains approximately 0.1% delta~~give half-9-maximum ~~THC. (However~~response), ifSafety itMargin ~~contains more than 0.3% delta~~(pre-9clinical ~~THC~~toxicity), ~~it is considered ‘Marihuana’~~ and ~~would~~Bioavailability be(seen inas ~~Schedule 1 of the CSA).~~“F” While this notice is an official notice from the DEA regarding the scheduling of high purity CBD, we will continue to abide by the CSA in all respects with regards to our treatment and handling of CBD.):

35KLS-13019 does not contain CBD and is a new chemical entity that would not fall under the CSA be deemed a Schedule 1 controlled substance.

~~The~~KLS-13023 is a formulation ~~active~~that ~~pharmaceutical~~does ~~ingredient~~contain ~~(“API”)~~CBD. ~~found~~At inpresent, ~~KLS-13023~~CBD is ~~highly~~deemed ~~purified~~a ~~synthetic~~Schedule ~~CBD~~1 ~~produced~~controlled substance by ~~Purisys. Purisys~~the ~~has~~DEA ~~been~~under ~~manufacturing~~the ~~cannabidiol~~Controlled ~~since~~Substances ~~2016 (DMF33223)~~Act. ~~Today,~~Like the ~~through~~drug ~~our~~molecule ~~partnership~~EpidiolexÒ, ~~with~~which ~~Purisys,~~was werecently ~~have~~approved by the ~~ability to~~FDA ~~produce~~for onmarketing ~~the~~and ~~largest~~sale ~~commercial~~for ~~scale.~~use ~~Purisys~~in treating Dravet’s Syndrome ~~ultra~~and Lennox-~~high~~Gasteau ~~purity~~Syndrome ~~CBD~~ (~~“Purisys~~forms ~~CBD”)~~of ischild ~~attractive~~epilepsy), ~~for drug~~KLS-13023 ~~development~~would ~~projects~~need ~~and~~to ~~falls~~follow ~~significantly below~~ the ~~0.3%~~guidance ~~THC limits~~ set inforth by the ~~2018~~CSA, ~~Farm~~complete a ~~Bill~~successful ~~for~~human ~~use~~clinical intrial ~~consumer~~and ~~products. Purisys’ patent-protected~~apply ~~manufacturing~~for ~~process~~rescheduling, ~~produces~~as awas ~~consistently~~the ~~odorless,~~case ~~tasteless~~with ~~white~~EpidiolexÒ, ~~powder~~now ~~highest-purity~~a ~~form~~Schedule of5 ~~CBD that exhibits:~~drug.

•We Nocurrently ~~heavy~~plan ~~metals~~on ~~(e.g.~~using KLS-13019 as our lead) target ~~from~~drug ~~soil;~~candidate for the treatment of CIPN.

•The Notreatment ~~pesticide~~of ~~residues;~~CIPN is a priority therapeutic opportunity because, to date, no one drug or drug class is considered to be safe and effective in this disabling disease. Tricyclic antidepressants are often the first choice in most patients, but are associated with significant side effects including sedation and cardiovascular complications as well as marginal efficacy (Wolf et al 2008). Anticonvulsants, despite their efficacy in animal models of CIPN, are only partially effective in the majority of patients (Bosnjak et al 2002).

•Even Nomore ~~environmental~~problematic, ~~influences~~upwards onof ~~quality~~80% ~~such~~of asCIPN patients ~~rain~~report using prescription opioids for pain management despite lacking strong evidence for efficacy and increasing safety concerns in the face of the current devastating opioid epidemic. The exact mechanism of CIPN has not been fully elucidated and can differ across classes of chemotherapeutic agents. It is therefore necessary to identify novel therapies to prevent or treat CIPN that target one or more of these putative mechanisms. Recently, ~~sunlight~~there &has ~~soil~~been ~~nutrients;~~a resurgence in interest in the potential medical utility of the cannabis plant and its constituents, and mechanism-based basic research is warranted to develop safe and effective cannabinoid-based pain treatments. CBD is a non-psychoactive component of Cannabis sativa that is neuroprotective, independent of cannabinoid receptors (Hampson 1998).

~~• No plant impurities to remove;~~40

•Prior Nostudies ~~microbial~~at orTemple ~~mold~~University ~~proliferation~~revealed that CBD prevents the development of paclitaxel-induced mechanical sensitivity in mice in vivo (Ward et al 2011, 2014). Additionally, CBD attenuates morphine reward and heroin seeking behavior in animal models (Ren, Whittard et al. 2009; Katsidoni, Anagnostou et al. 2013) and a small trial in humans suggests attenuation of heroin craving in humans (Hurd, Yoon et al. 2015). However, CBD has limitations in terms of potency, safety, and oral bioavailability. We believe that we may be able to address these problems in our fully owned series of side chain modified derivatives, which have been protected in a non-provisional patent application WO2015/106108A2.

•One Noof ~~structural~~the ~~(or~~molecules ~~stereo~~covered ~~chemical)~~by ~~differences~~the ~~exist~~patent ~~between~~is KLS-13019, anwhich ~~active~~in ~~cannabinoid~~pre-clinical ~~ingredient~~studies, ~~manufactured~~including byPK ~~Purisys~~studies, has shown evidence of improved in vitro efficacy, improved safety, and improved ~~those~~oral ~~that~~bioavailability ~~are~~over ~~chemically~~CBD ~~extracted~~in side by side preclinical evaluation, and ~~isolated~~is ~~from~~not ~~plants~~a controlled substance. ~~They~~(Pharmacological ~~are~~Comparisons Between Cannabidiol and KLS-13019, inJournal ~~effect~~of Molecular Neuroscience, ~~nature-identical.;~~14 August 2018)

~~Purisys currently~~Preliminary ~~has~~Effects of KLS-13019 in CIPN model: In a ~~drug~~preliminary ~~master~~study, ~~file~~we treated eight mice with saline and sixteen mice with paclitaxel (~~“DMF”~~Days 1, 3, 5, and 7, 8.0 mg/kg IP). ~~for~~Half ~~its~~of the ~~ultra~~paclitaxel-~~high~~treated ~~purity~~mice ~~CBD~~were pretreated with ~~the~~KLS-13019 ~~FDA~~(2.5 Inmg/kg ~~November~~IP) ~~2019~~and half were pretreated with its vehicle alone. On days 9, 14, ~~Purisys~~and ~~received~~21 post initiation of injections, mechanical sensitivity was tested using von Frey filaments and compared with baseline sensitivities ~~advise~~prior ~~notice~~to ~~from~~treatment (Fig. 3). One-way ANOVA revealed a significant effect of KLS-13019 on Day 14 to prevent the ~~DEA~~development ~~that~~of paclitaxel-induced mechanical sensitivity [F(2, 21) = 4.67, p<0.05]. Dunnett’s multiple comparison’s test revealed a significant difference between the ~~Purisys~~saline ~~CBD~~and ~~has~~paclitaxel ~~been~~treated ~~removed~~groups, but not between the saline and KLS-13019+paclitaxel treated groups. Preliminary flow cytometry results with pooled cords from ~~Schedule~~three 1mice in each group revealed that paclitaxel-treated mice had increased numbers of CD4+ T cells and microglia in the ~~CSA~~whole spinal cord, and that this increase is prevented by KLS-13019 treatment.

~~On March~~E1. ~~11,~~Aim ~~2021,~~1. Research Plan. Determine target for the ~~chairman~~neuroprotective actions of ~~the~~CBD ~~House~~and ~~Judiciary~~KLS-13019. As ~~Committee~~mentioned above, ~~announced~~DRG ~~that~~neurons ~~the~~are ~~Marijuana~~a ~~Opportunity,~~primary ~~Reinvestment~~cytotoxic ~~and~~target ~~Expungement~~of chemotherapeutic ~~(MORE)~~agents. ~~Act~~In addition, ~~introduced~~spinal inmicroglia ~~2019,~~have ~~which~~been ~~passed~~heavily implicated in the ~~U.S.~~development ~~House~~and maintenance of ~~Representatives~~neuropathic inpain ~~December~~and ~~2020,~~have ~~will~~shown to bebecome ~~re-filed~~activated in ~~2021~~animal models of CIPN. At the conclusion of Aim 1, we intend to demonstrate that the neuroprotective properties ~~seeking~~can ~~ratification~~be reduced by ~~the~~pharmacological ~~Senate~~or gene knock-down of a relevant target in a statically significant manner.

~~If passed~~E2. byAim ~~the U~~2.S. ~~Senate~~Assess KLS-13019, ~~the~~CBD, ~~MORE Act would deschedule cannabis from the Controlled Substances Act~~ and ~~enact various criminal~~morphine ~~and~~against ~~social~~paclitaxel-induced ~~justice~~peripheral ~~reforms~~neuropathy. At ~~to cannabis, including~~ the ~~expungement~~conclusion of ~~prior~~Aim ~~convictions.~~2, ~~The~~we ~~MORE~~intend ~~Act~~to ~~also~~have ~~seeks~~demonstrated tothat ~~tax cannabis~~KLS-13019 ~~products~~performs atas 5%well toas ~~fund~~CBD ~~criminal~~(ip and ~~social~~po) ~~reform~~against ~~projects,~~CIPN ~~including~~and anCNS ~~Office~~inflammation ofand ~~Cannabis~~shows ~~Justice~~no ~~within~~antinociceptive ~~the~~tolerance ~~Department~~as ofcompared ~~Justice Office of Justice Programs responsible for administering grants~~ to ~~aid communities negatively affected by the war on drugs~~morphine. ~~(See: Controlled Substances Laws and Regulations).~~

~~Foreign~~CIPN procedure: Experiments are designed ~~Regulatory~~to ~~Agencies~~test the efficacy of novel CBD analogues in attenuating established mechanical sensitivity and inflammation associated with CIPN. Dr. Ward’s laboratory has been using the CIPN procedure for ten years and has demonstrated that CBD treatment can both prevent the development of (Ward et al 2011, 2014) and reverse established (King et al in revision, British Journal of Pharmacology) CIPN in mouse models. CBD and KLS-13019 and their vehicle controls will be tested in groups of mice treated with paclitaxel (8.0 mg/kg IP, days 1, 3, 5 and 7). Testing of each dose for each molecule will require a final sample size of eight. Molecules will be administered daily for three weeks, starting on Day 11 when peak mechanical allodynia has already been achieved. In the initial study, CBD (0.05 - 5 mg/kg ip) will be compared with three doses of KLS-13019 (e.g., 0.05, 0.5 and 5 mg/kg ip) and three doses of morphine (1.0 – 10 mg/kg ip; Neelakantan et al 2016). This will be followed by a study in which KLS-13019 will be assessed at three oral doses. In preliminary studies, we have dosed the mice with KLS-13019 (2.5 - 5 mg/kg ip) with no adverse effects. In addition, KLS-13019 was shown to produce no impairment in the mouse rotorod test at 100 mg/kg po in studies conducted at the Anticonvulsant Screening Program (NIH).

~~EMA~~Neuroinflammation assessment: Immunohistochemistry and flow cytometry will run in the PIs laboratory to evaluate markers of pain and inflammation associated with neuropathic pain, including astrocytic and microglial activation, CGRP, and T cell infiltration. Given the fact that we are observing CNS infiltration of T cells that is reversed by treatment with KLS-13019, cranial windows will be surgically implanted (as described in Ni, Tuma et al 2004) in additional groups of vehicle or KLS-13019 + paclitaxel treated mice prior to treatment to longitudinally assess the effect of paclitaxel with or without cannabinoid treatment on leukocyte rolling and adhesion across the development of CIPN.

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 requirementsE2. ~~The~~Aim ~~regulatory approval process outside the United States and the European Union generally includes all of the risks associated with obtaining FDA and EMA approval, but can involve additional testing~~3.Assess WeKLS-13019 ~~may need to partner with third parties in order to obtain approvals outside the United States~~ and ~~the~~ ~~European~~CBD ~~Union.~~against ~~In addition, in many countries worldwide, it is required that the product be approved for reimbursement before~~reinstatement ~~the~~of ~~product~~morphine ~~can be approved for sale in that country~~seeking. At ~~We may not obtain approvals from regulatory authorities outside~~ the ~~United States~~conclusion ~~and~~of ~~the~~Aim ~~European Union on a timely basis~~3, ~~if at all. Even if~~ we ~~were~~intend to ~~receive~~have ~~approval~~demonstrated inthat ~~the~~KLS-13019 ~~United~~attenuates ~~States or the European~~opioid-seeking ~~Union,~~behavior ~~approval~~as bywell ~~the~~as ~~FDA or the EMA does not ensure approval by regulatory authorities in other countries or jurisdictions~~CBD. Similarly, approval by one regulatory authority outside the United States and the European Union would not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA or the EMA. 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.

~~Therapeutic Goods Administration (TGA)~~41

~~Clinical~~Morphine Reinstatement: The Principal ~~trials~~Investigator ~~conducted~~has 20 years of experience with behavioral assays with specific expertise in ~~Australia~~rodent ~~are~~models ~~subject~~of substance abuse, including opioid self-administration. A standard rat model of morphine seeking will be used (Vassoler et al 2017) wherein rats make lever presses to ~~various~~receive ~~regulatory~~infusions ~~controls~~of morphine. Rats will be surgically implanted with chronically indwelling jugular catheters and trained to ~~ensure~~self-administer morphine (0.75 mg/kg/inf) in the ~~safety~~presence of ~~participants~~auditory and visual cues daily for 20 days, followed by 10 days of extinction wherein the morphine is replaced with saline and the conditioned cues are eliminated. During the last three days of extinction, rats will be treated with vehicle, CBD (5.0 mg/kg IP), or KLS-13019 (0.5 – 5.0 mg/kg IP). The ~~TGA~~following ~~regulates~~day rats will be exposed to a single reinstatement ~~the~~session ~~use~~wherein lever presses are again paired with auditory and visual cues but saline is delivered instead of ~~therapeutic~~morphine. ~~goods~~This ~~supplied~~experimental design inis ~~clinical~~based ~~trials~~on inRen ~~Australia~~et ~~under~~al ~~the~~2009 ~~therapeutic~~results ~~goods~~with ~~legislation~~CBD on cue-induced reinstatement of heroin seeking in rats.

36Status of Phase 1 STTR Grant Research

~~Clinical trial~~On ~~sponsors~~January ~~must~~4, be2017, ~~aware~~we ofapplied ~~the~~for ~~requirements~~a toPhase ~~import,~~1 ~~export,~~Small Business ~~manufacture~~Technology ~~and~~Transfer ~~supply~~(“STTR”) ~~therapeutic~~grant ~~goods~~from inthe ~~Australia~~NIH-NIDA. ~~The~~This grant application was made in collaboration with Temple ~~following~~University ~~avenues~~and ~~provide~~titled “Development of KLS-13019 for ~~the~~Chemotherapy ~~importation~~Induced ~~into~~Peripheral Neuropathy and~~/or~~ ~~supply~~Drug inDependence”. ~~Australia~~In ofDecember 2017, ~~‘unapproved’~~we ~~therapeutic~~were ~~goods~~informed ~~for use~~that inthe aPhase ~~clinical~~1 ~~trial:~~grant was awarded.

•We ~~Clinical~~have ~~Trial~~completed ~~Notification~~all ~~(“CTN”)~~of ~~scheme;~~our work related to the aforementioned grant and are currently in a peer review submission of our research results to the Journal of Molecular Neuroscience. Temple University has completed all three aims outlined in the grant proposal.

•On ~~Clinical~~December ~~Trial~~31, ~~Exemption~~2019, ~~(“CTX”)~~we, ~~scheme~~together with Temple University, filed a completion report with NIH-NIDA regarding the Phase 1 STTR grant. The results of this study were promising and have set forth our plans to file for a Phase 2 grant due for filing on or before April 7, 2020.

~~The~~In April 2020, the Company and Temple University ~~CTN~~filed ~~Scheme~~for a Phase 2 SBIR Grant with National Institutes of Health – National Institute of Neurological Disorders and Stroke (“NIH-NINDS”). Our application provided strong support to further the research and development of our treatment for CIPN. Phase 2 is afocused ~~notification~~on ~~process~~the ~~involving~~development, demonstration and delivery of the ~~following:~~innovation.

•In ~~The~~June ~~Australian~~2020, ~~clinical~~the ~~trial~~Company ~~sponsor~~was ~~must~~informed ~~notify~~that usits Phase 2 SBIR grant application received an impact/priority score of ~~the~~47. ~~intent~~Generally tospeaking, ~~sponsor~~impact/priority ascores ~~clinical~~of ~~trial~~10 ~~involving~~to an30 ~~‘unapproved’~~are ~~therapeutic~~most likely ~~good~~to be funded. ~~This~~Scores ~~must~~between ~~take~~31 ~~place~~and ~~before~~45 ~~starting~~might tobe ~~use~~funded; ~~the~~scores ~~goods~~greater than 46 are rarely funded. The ~~notification~~Company ~~form~~believed ~~must~~that bethere were ~~submitted~~elements ~~online~~of its initial Phase 2 SBIR grant application that were misunderstood and ~~accompanied~~believed byit still had a very strong application. After making several critical changes to the ~~relevant~~original ~~fee~~application, in January 2021, the Company resubmitted its Phase 2 SBIR grant application with NIH-NINDS and currently awaits response from NIH-NINDS.

•On WeMarch ~~may~~10, ~~give~~2021, ~~the~~we ~~sponsor~~were notified that our resubmitted application received a summary review and impact/priority score of ~~the~~20, ~~trial~~which ~~written~~is ~~notice~~considered by many to ~~provide~~be exceptional ~~specified~~and ~~information~~rare. ~~relating~~This toimpact/priority ~~goods~~score ~~notified~~and insummary attests to the ~~CTN~~novelty ~~form~~and advancement of our scientific discovery with KLS-13019.

•On WeSeptember do28, ~~not~~2021, ~~evaluate~~the ~~any~~Company ~~data~~received ~~relating~~a notice toof ~~the~~award ~~clinical~~for ~~trial~~a at$2.97 million Phase 2 STTR Study Grant from the ~~time~~National Institutes of ~~submission.~~Health ~~The~~– ~~Human~~National ~~Research~~Institute ~~Ethics~~of ~~Committee~~Neurological Disorders and Stroke under the HEAL Initiative (the “~~HREC~~NIH-NINDS Study Grant Award”). ~~reviews~~The NIH-NINDS Study Grant Award is funded through the ~~scientific~~NIH ~~validity~~HEAL Initiative (“Helping End Addiction Long-Term”) for Development of Therapies and Technologies Directed at Enhanced Pain Management. This NIH-NINDS Study Grant Award provides funding specifically in the ~~trial~~further ~~design,~~development of KLS-13019 for the ~~balance~~treatment of ~~risk~~chemotherapy ~~versus~~induced ~~harm~~neuropathic pain (“CIPN”). The grant award of $2.97 million sets forth the ~~therapeutic~~funding ~~good~~allocation of $977,054 ~~the~~in ~~ethical~~year ~~acceptability~~1; of$991,944 ~~the~~in ~~trial~~year ~~process~~2; and $1,001,774 in year 3 and ~~approves~~collectively ~~the~~budgets ~~trial~~investigational ~~protocol~~new drug (“IND”) application enabling studies. IND enabling studies to be performed, include but are not limited to animal toxicity studies and drug compound scale up studies under chemistry manufacturing and controls. The ~~HREC~~NIH-NINDS isStudy ~~also~~Grant ~~responsible~~Award ~~for~~budget ~~monitoring~~includes studies to be performed at Temple University; the ~~conduct~~University of ~~the~~Illinois; ~~trial~~and Purisys (formerly, Noramco).

• The institution or organization at which the trial will be conducted, referred to as the ‘Approving Authority,’ gives the final approval for the conduct of the trial at the site, having due regard to advice from the HREC42

•Reduction ~~It is the responsibility of the sponsor to ensure that all relevant approvals are~~ in ~~place~~Addiction ~~before~~Based ~~supplying~~Opiate ~~the~~Dependency – ~~‘unapproved’ therapeutic goods in the clinical trial.~~HEAL

~~The~~According to statistics compiled by the National ~~CTX~~Institutes ~~Scheme~~of Health for the HEAL Initiative (Helping End Addiction Long-term), the public health crisis of opioid misuse and addiction in America is anrapidly evolving. More than 47,000 Americans died of opioid overdose in 2017, and more than 2 million Americans live with addiction to opioids. Moreover, more than 50 million Americans suffer from chronic pain, and ~~approval~~of those, 25 million live with daily chronic pain and lack effective and safe non-opioid options for pain management.  The widespread use of opioids to treat acute and chronic pain contributed to the approximately 10.3 million people aged 12 years and older in the United States in 2018 who misused opioids, ~~process~~including ~~involving~~heroin. These staggering numbers are likely underestimates. They fail to capture the ~~following:~~full extent of the damage of the opioid crisis, which reaches across every domain of family and community life – from lost productivity and economic opportunity, to intergenerational and childhood trauma, to extreme strain on community resources, including first responders, emergency rooms, hospitals, and treatment centers. With the full support of the administration, NIH launched the Helping to End Addiction Long-term Initiative, or NIH HEAL Initiative, to provide scientific solutions to the opioid crisis and offer new hope for individuals, families, and communities affected by this devastating crisis.

•NIH-NINDS AHEAL ~~sponsor submits an application to us seeking approval to supply ‘unapproved’ therapeutic goods in a clinical trial. The application must be accompanied by the relevant fee.~~Initiative

•Launched Wein ~~evaluate~~April ~~summary~~2018, the NIH Helping ~~information~~to ~~about~~End ~~the~~Addiction ~~product~~Long-term ~~including~~(HEAL) ~~relevant,~~Initiative ~~but~~is ~~limited~~an aggressive, trans-agency effort to speed scientific solutions ~~data~~to (stem the national opioid public health crisis. The Initiative will advance research to reduce the risks of opioid use and misuse and improve pain management, thereby reducing reliance on opioids. NINDS is the lead Institute for pain research at NIH and leads the Executive Committee of the NIH Pain Consortium, which ~~may~~includes be23 ~~preclinical~~Institutes and ~~early~~Centers. ~~clinical~~The ~~data)~~NIH ~~prior~~Pain toConsortium’s mission includes improving the ~~start~~treatment of a ~~trial~~variety of pain conditions. NINDS will focus efforts in the NIH HEAL Initiative in developing non-addictive pain treatments that may displace the need for opioids, and importantly, serve as effective treatments for acute and chronic pain conditions for which opioids are not effective. This work will be informed by partners from the government, industry, academia, and patients suffering from pain.

•Research ~~The~~on ~~HREC~~Pain ~~is responsible for considering the scientific~~ and Next ~~ethical~~Generation ~~issues of the proposed trial protocol.~~Analgesics

•Although ~~The~~opioid ~~sponsor~~medications ~~must~~effectively treat ~~notify~~acute uspain and help relieve chronic pain for some patients, their addiction risk presents a dilemma for healthcare providers who seek to relieve suffering while preventing drug abuse and addiction. Little is yet known about the risk for addiction among those being treated for chronic pain or about how basic pain mechanisms interact with prescription opioids to influence addiction potential. To better understand this, NIDA launched a research initiative on “Prescription Opioid Use and Abuse in the Treatment of ~~each~~Pain.” ~~trial~~This initiative ~~conducted~~encourages a multidisciplinary approach using ~~the~~both ~~unapproved~~human ~~therapeutic~~and ~~good~~animal studies to examine factors (sincluding pain itself) ~~approved~~that predispose or protect against opioid abuse and addiction. Funded grants cover clinical neurobiology, genetics, molecular biology, prevention, treatment, and services research. This type of information will help develop screening and diagnostic tools that physicians can use to assess the potential for prescription drug abuse in their patients. Because opioid medications are prescribed for all ages and populations, NIDA is also encouraging research that assesses the ~~CTX~~effects ~~application~~of prescription opioid abuse by pregnant women, children, and adolescents, and how such abuse in these vulnerable populations might increase the lifetime risk of substance abuse and addiction.

~~Clinical trials~~PRIMARY ~~that~~TARGETS doFOR ~~not~~TOPICAL ~~involve~~MEDICAMENTS ~~‘unapproved’ therapeutic goods are not subject to requirements of the CTN or CTX schemes.~~AND ItMARKET ~~is the responsibility of the Australian clinical trial sponsor to determine whether a product is considered an ‘unapproved’ therapeutic good.~~ SIZE

~~Clinical trials~~The ~~that~~Company dohas ~~not~~completed formulation ~~involve~~of ~~‘unapproved’~~a ~~therapeutic~~topical ~~goods~~relief ~~are~~cream ~~not~~containing ~~subject~~LEAÔ toas ~~requirements of~~ the ~~CTN~~active orpharmaceutical ~~CTX schemes.~~ingredient Itfor isuse ~~the~~as ~~responsibility~~an ofOTC ~~the~~cosmetic ~~Australian~~skin ~~clinical~~care ~~trial sponsor to determine whether a~~ product ~~is considered an ‘unapproved’ therapeutic good~~.

~~On September~~Since ~~27,~~mid ~~2013~~2019, the ~~TGA~~Company ~~approved~~has ~~Nabiximols~~been ~~(Sativex ®),~~screening and aconducting ~~pharmaceutical~~preliminary ~~manufactured~~research byand GWdevelopment ~~Pharmaceuticals for~~of ~~its~~some ~~collaborator~~of ~~Novartis~~its ~~Pharmaceuticals~~patented, ~~Australia~~proprietary ~~Pty~~cannabidiol-derived ~~Limited,~~new inchemical ~~the~~entities ~~treatment~~ (“NCEs”), for ~~symptom~~use ~~improvement~~as intopical ~~patients~~solutions, ~~with moderate~~ointments, toand ~~severe~~creams ~~spasticity~~for ~~due~~disorders tosuch ~~multiple~~as ~~sclerosis~~diabetic ~~(“MS”)~~neuropathies, ~~who~~diabetic ~~have~~ulcers, ~~not~~and ~~responded~~for ~~adequately~~use toas ~~other~~an anti-~~spasticity~~pruritic. ~~medication~~(see: ~~and~~Business ~~who~~– Neuropathix ~~demonstrated~~Intellectual ~~clinically significant improvement in spasticity related symptoms during the initial trial of therapy.~~Properties)

In ~~Australia,~~ inpreclinical ~~2014~~testing, certain ~~the~~molecules ~~Advisory~~under ~~Council~~Patent on9,611,213 ~~Medicines~~were ~~Scheduling~~screened ~~recommended~~for ~~rescheduling~~neuroprotection ~~CBD~~and ~~from~~may ahave ~~prohibited~~the ~~substance~~potential tomechanism ~~being~~of action for reducing ainflammation ~~prescription~~and ~~medicine~~neuropathic ~~because,~~pain. ~~according~~These tomolecules ~~the~~indicate ~~Advisory~~that ~~Council~~they onare ~~Medicines~~more ~~Scheduling~~soluble than cannabidiol, ~~“there~~also isdeemed a ~~low~~neuroprotectant with ~~risk~~potential ofanti-inflammatory ~~misuse or~~properties. ~~abuse~~A asmolecule ~~cannabidiol~~that ~~does~~is ~~not~~potentially ~~possess~~more ~~psychoactive~~water ~~properties.”~~soluble ~~The~~than ~~TGA~~cannabidiol ~~accepted~~in this ~~recommendation,~~regard ~~and~~may ~~the decision~~be ~~took~~good ~~effect~~candidate(s) for use in ~~July~~topical ~~2015~~applications.

CBD is one of the cannabinoids which may be extracted as a therapeutic good from cannabis. From June 1, 2015, cannabidiol has been included under Schedule 4 (S4) Prescription Only Medicine of the Poisons Standard (/publication/poisonsstandard-susmp) when preparations for therapeutic use contain 2% or less of other cannabinoids found in cannabis. 43

37The Company has completed the following relating to LEATM (formerly, KLS-13022):

~~In February~~• ~~2016,~~Preclinical ~~the~~screening ~~Australian Federal Government passed legislation that amended the Narcotic Drugs Act, allowing the supply of suitable medicinal cannabis products~~ for ~~the~~consumer ~~management~~OTC ofcosmetic ~~painful and chronic conditions. This legislation does not relate to the decriminalization of cannabis for general cultivation or recreational~~ use ~~and~~under itCFR ~~does not include the provision of medicinal grade herbal cannabis, only processed, non-smokable medicinal grade products~~21.

~~Much of~~• ~~the~~Application ~~detail~~to ~~remains~~International ~~unclear.~~Nomenclature ~~For~~of ~~example,~~Cosmetic ~~the~~Ingredients legislation does not specify which products will be covered under the amendment, and it does not specify which particular conditions or symptoms will be eligible for treatment with cannabis-based products. Before products can be prescribed, they must be registered with the Therapeutic Goods Administration (~~TGA~~INCI) ~~or,~~completed into ~~rare circumstances,~~ receive ~~special approval from the TGA. The registration process requires evidence of testing and efficacy and it is therefore unlikely Australia will see~~ a ~~TGA~~compound ~~registered~~nomenclature ~~medicinal~~for ~~cannabis~~KLS-13022 ~~product that GPs can prescribe any time soon. Whilst there are currently no cannabis~~-~~based~~ ~~products~~Limonenyldihydroxybenzyl ~~that~~Ethoxycarbonyl ~~are~~Azetidine lawfully produced in Australia, the medicinal use of pharmaceutical products containing cannabinoids is not prohibited, as long as authorization for prescribing is granted from the Commonwealth Therapeutic Goods Administration and at this point in time, NSW Health(LEA).

~~Raw Materials~~• Received a registered trademark from the U.S. Patent and ~~Product~~Trademark ~~Manufacturing~~Office (“USPTO”) for LEATM, to be used as a branded product as a relief cream, containing LEA, to treat inflammatory disorders like eczema, psoriasis, radiation dermatitis and excessive UVB radiation (post sun burn).

~~The Company~~Based ~~does~~on ~~not~~preclinical ~~currently manufacture any API and relies solely upon third party manufacturers to produce research quantities~~testing of ~~its~~LEATM ~~compounds,~~versus ~~KLS-13019;~~CBD ~~KLS-13022;~~(cannabidiol) ~~and KLS-13023,~~ in ~~the~~cultured 5human ~~gram~~epidermal tokeratinocytes ~~100~~the ~~gram~~summary ~~scale~~of ~~for~~findings ~~its~~were ~~preclinical~~as ~~research.~~follows:

~~For the~~• ~~KLS-13023~~LEATM ~~compound,~~provided ~~the~~better ~~Company~~anti-inflammatory ~~relies~~activity ~~upon~~compared ~~Purisys~~ to ~~produce a highly purified synthetic~~ CBD. ~~Purisys~~for ~~has been manufacturing cannabidiol since 2016 (DMF33223). Today~~TNFa, ~~through our partnership with Purisys, we have the ability to produce on the largest commercial scale. Purisys’ ultra~~IL-~~high~~6 ~~purity CBD (“Purisys CBD”) is attractive for drug development projects~~ and ~~falls~~ significantly ~~below~~more ~~the~~potent ~~0.3%~~that ~~THC~~CBD ~~limits set in the 2018 Farm Bill~~ for ~~use in consumer products. Purisys’ patent~~IL-~~protected~~1b ~~manufacturing~~inhibition ~~process~~in ~~produces~~UVB airradiation ~~consistently~~induced ~~odorless, tasteless white powder highest-purity form of CBD that exhibits:~~inflammation.

• NoLEATM ~~heavy~~decreased ~~metals~~CXCL5 (elevels by 100% after UVB irradiation with IC50 of 0.g05 mM. ~~lead~~(CXCL5 is a small cytokine belonging to the chemokine family known as epithelial-derived neutrophil-activating peptide 78 (ENA-78). ~~from~~It ~~soil;~~is produced following the stimulation of cells with the inflammatory cytokines TNFa and IL-1b.)

• NoLEATM ~~pesticide~~decreases ~~residues;~~levels of four (4) inflammatory mediators at concentrations > 65 times less than toxic levels.

• NoLEATM ~~environmental~~is ~~influences~~an onantioxidant ~~quality~~that ~~such~~does asnot ~~rain,~~exhibit ~~sunlight~~cellular &irritation ~~soil~~and ~~nutrients;~~is locally restricted in its action (antioxidant activity of EC50 at 25 mM).

• NoLEATM ~~plant~~(3 ~~impurities~~μM) towas ~~remove;~~non-toxic at the highest concentration in culture media after 24 hours incubation.

• NoAlpha-tocopherol ~~microbial~~produced ora ~~mold~~modest ~~proliferation;~~anti-inflammatory ~~and~~effect (IL-6 inhibition = 46% at 10 μM).

• NoLEATM ~~structural~~provided ~~(or~~a ~~stereo~~maximum ~~chemical)~~95% ~~differences~~IL-6 ~~exist~~inhibition ~~between~~with anIC50 ~~active~~= ~~cannabinoid~~0.9 ~~ingredient~~μM, ~~manufactured~~suggesting bya ~~Purisys~~better ~~and~~UVA ~~those~~anti-inflammatory ~~that are chemically extracted and isolated from plants~~activity. ~~They are, in effect, nature-identical.~~

~~Purisys currently~~Based ~~has~~on athese ~~drug master file (“DMF”) for its ultra-high purity CBD with the FDA. In November 2019~~data, ~~Purisys~~it ~~received advise~~was ~~notice from the DEA~~ concluded that ~~the~~LEATM ~~Purisys~~provided ~~CBD~~positive ~~has~~photoaging ~~been removed from Schedule 1 of the CSA~~potential.

~~In the~~• ~~event~~Franz ~~the~~Cell ~~Company~~Dermal ~~pursues~~Penetration: aLEATM ~~strategy~~penetrated tothrough ~~move~~the ~~KLS-13023~~viable ~~into~~skin ~~FDA clinical trials~~(0.87-1.13%), ~~it has set up a manufacturing process utilizing Purisys as~~ the ~~bulk~~receptor ~~API~~solution ~~producer of ultra-high purity CBD and Catalent Pharma Solutions~~ (~~“Catalent”~~0.26-0.27%), ~~a manufacturer of formulated~~ and ~~packaged pharmaceuticals, will enable us to meet our objectives in~~ the ~~production~~stratum ofcorneum ~~target drug candidates that can be used in clinical trials and, beyond successful clinical trials, meet patient demand in commercial sales for each of our target disease indications.~~ (~~See: Neuropathix Studies on CBD~~2.50-3.84%).

~~Environmental Matters~~• Modified Draize Human Repeat Insult Patch Test (HRIPT) In 53 Health Volunteers resulted in:

• No ~~significant~~ ~~pollution~~adverse orevents ~~other types of hazardous emission result from our current operations, and we do not anticipate that our operations will be materially affected by federal, state~~ or ~~local~~reactions ~~provisions~~were ~~concerning environmental controls~~reported. ~~Our~~4 ~~costs~~subjects ofwithdrew ~~complying with~~for ~~environmental,~~personal ~~health and safety requirements have not been material~~reasons. Furthermore, compliance with federal, state and local requirements regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, have not had, nor are they expected to have, any material effect on the capital expenditures, earnings or competitive position of the Company. However, we will continue to monitor emerging developments in this area.

38• Lighter Cream and Heavier Cream elicited no visible erythematous reactions during the induction phase of the study.

~~Competition~~• There were no questionable reactions during the challenge phase (days 38 and 40), supporting the assessment that the test articles have low potential for irritation and sensitization.

~~There are~~Based ~~several~~on ~~companies~~these ~~developing~~data ~~cannabinoid~~it ~~therapeutics~~was concluded ~~for~~that athe ~~range~~test ofarticles ~~medical~~can ~~indications.~~be ~~The~~considered ~~cannabinoid~~as ~~therapeutic~~safe ~~area currently~~for ~~includes~~use ~~formulated~~under ~~extracts~~the conditions of the ~~Cannabis plant~~ ~~and synthetic formulations. These formulations include CBD or THC~~study, ~~or a combination of CBD~~ and ~~THC~~claims ~~as the active pharmaceutical ingredient. Certain companies~~ such as, ~~GW Pharmaceuticals~~“Dermatologically ~~plc~~Tested”, ~~have~~“Clinically ~~focused on plant-based CBD formulations~~Tested”, ~~while~~“Kind ~~other~~to ~~companies~~Skin” ~~such as Zynerba Pharmaceuticals, Inc.~~ and ~~Insys~~“Safe ~~Therapeutics, Inc.~~for ~~have~~Skin” ~~focused~~are ~~on synthetic CBD formulations~~substantiated.

~~Employees~~44

~~We currently~~Neuropathic ~~have seven full time employees. We plan to increase the number of employees in the areas of regulatory affairs~~Pain, ~~clinical research and testing, and marketing in 2021. There are no collective~~Anti-~~bargaining agreements with our employees~~Inflammation, ~~and we have not~~Anti-Pruritic ~~experienced~~& ~~work~~Skin ~~interruptions or strikes. We believe our relationship with employees is good and we provide health and life insurance for all employees.~~Ulcers

~~Company~~Target 1: Anti-Puritics ~~Website~~(Anti-Itch) – $3.85 Billion Global Market in 2019

WeIn 2019 it is estimated ~~maintain~~that the top ten product segments for use in U.S. pruritus therapeutics market accounted for USD$448.7 million in sales of products such as corticosteroids and antihistamines. The global compounded annual growth rate (“CAGR”) is expected to be 12.5% annually, which predicts a ~~corporate~~global ~~Internet~~market ~~website~~size ~~at:~~of ~~www~~USD$10.~~neuropathix~~97 billion by 2030, with U.~~com~~S. sales estimated at USD$1.295 billion.

~~The~~Growing ~~contents~~worldwide prevalence of ~~our~~atopic ~~website~~dermatitis, ~~are~~allergic ~~not~~contact ~~incorporated~~dermatitis, inand orurticaria ~~otherwise~~is expected to bedrive ~~regarded~~market asgrowth ~~part~~during the forecast period. The introduction of ~~this~~new ~~Annual~~products ~~Report~~based on ~~Form~~scientific 10mechanistic understanding such as the identification of new T-Kcell subsets, particularly Th17, and Th22 and the patent expiration of PROTOPIC (tacrolimus) is expected to open up new avenues for manufacturers to capitalize on over the forecast period.

WeCorticosteroids remain ~~file~~the ~~reports~~leading ~~with~~product ~~the~~segment. ~~Securities~~Topical ~~and~~applications ~~Exchange~~of ~~Commission~~corticosteroids ~~(“SEC”),~~have ~~which~~been ~~are~~found ~~available~~to onbe ~~our~~extremely ~~website~~effective ~~free~~in ofthe ~~charge. These~~treatment ~~reports~~and ~~include~~maintenance therapies ~~annual~~pertaining ~~reports~~to onpruritus. ~~Form 10-K~~However, ~~quarterly~~according ~~reports~~to ona ~~Form~~2007 ~~10-Q,~~article ~~current~~in ~~reports~~American onFamily ~~Form 8-K~~Physician, ~~“Section~~long-term ~~16”~~topical ~~filings~~corticosteroid onuse ~~Form~~is 3,associated ~~Form~~with 4,local and ~~Form~~systemic 5,adverse ~~and~~effects ~~other~~that ~~related~~may ~~filings,~~lead ~~each~~to ofthe ~~which~~underutilization isof ~~provided~~these oneffective agents. Common ~~our~~local ~~website~~adverse aseffects ~~soon~~include ~~as reasonably~~striae, ~~practical~~petechiae, ~~after~~telangiectasia, weskin ~~electronically~~thinning, ~~file~~atrophy, ~~such~~and ~~materials~~worsening ~~with~~acne. orThese effects ~~furnish~~are ~~them~~reported toinfrequently ~~the~~in ~~SEC.~~clinical ~~In addition~~trials, ~~the~~although ~~SEC~~trials ~~maintains a~~are ~~website~~primarily ~~(www.sec.gov)~~designed ~~that~~to ~~contains~~assess ~~reports,~~effectiveness ~~proxy~~rather than safety and ~~information~~tolerability. ~~statements,~~Most ~~and~~clinical ~~other~~trials ~~information~~of ~~regarding~~topical ~~issuers~~steroids ~~that file~~are ~~electronically~~of ~~with~~short ~~the~~duration ~~SEC~~and, ~~including~~therefore, ~~the~~are ~~Company~~unable to evaluate long-term toxicity.

~~ITEM~~Itching is a sensation that, if sufficiently 1Astrong, will provoke scratching or the desire to scratch. ~~RISK~~It ~~FACTORS~~is a frequent and distressing symptom of various dermatological and systemic diseases. It can also occur in some patients without any skin symptoms. Knowledge has been accumulated about the initiation of itch by external stimuli, but the neuronal substrate in the skin has not been completely identified. This has, fortunately, changed to some degree since a group of histamine-sensitive C-fibers were recently identified, which likely represent the afferent units that mediate itch sensations. Histamine, derived from mast cells, is the best known pruritogen. It induces different degrees of itching when applied in different concentrations into the skin. In most dermatological and systemic diseases, except urticaria, histamine is not the main mediator. There are other proinflammatory mediators to consider, such as substance P, proteases, interleukin-2, acetylcholine, vasoactive intestinal peptide (VIP) and opioid peptides.

~~Investing in~~Several ~~our~~key ~~common stock involves a high degree~~ characteristics of ~~risk. You should carefully consider~~ the ~~risks described below, as well as the other information in this Annual Report on Form 10~~anti-K,puritics including our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in our common stock. The occurrence of any of the events or developments described below could harm our business, financial condition, operating results, and growth prospects. In such an event, the market ~~price~~are ofset ~~our~~forth common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. below:

~~Summary~~ • Calcineurin inhibitor is identified as the most lucrative segment of ~~Risk~~the ~~Factors~~market on account of high usage rate of these drugs in combination therapy for the treatment of pruritus in patients suffering from chronic pruritus and growing market penetration rates. Moreover, the introduction of new products such as Pimecrolimus cream and Tacrolimus ointment is expected to further drive this market.

~~Our business~~• isAnti-histamines ~~subject~~owing to aits ~~number~~growing ofuse ~~risks~~as ~~that~~a ~~could~~first ~~cause~~line ~~actual~~treatment ~~results~~and topresence ~~differ~~of ~~materially~~drugs ~~from those indicated by forward-looking statements made~~ in ~~this~~pipeline ~~Annual~~with ~~Report~~expected oncommercialization ~~Form~~is ~~10-K~~also orexpected ~~presented elsewhere from time~~ to ~~time.~~grow ~~The~~at ~~following is~~ a ~~summary~~healthy ofrate ~~the principal~~during ~~risk factors associated with an investment in our securities. Further details regarding each risk included in~~ the ~~summary can~~forecast ~~be found further below~~period.

•Target We2: ~~have~~Anti ~~never~~Inflammatory – ~~generated~~$74 ~~any~~Billion Global ~~product~~Market ~~revenues, and do not expect to become profitable~~ in ~~the near future, if ever;~~2019

•In Wea ~~have~~research ~~incurred~~study ~~significant~~published in ~~losses~~April ~~since~~2018 ~~our~~– ~~inception~~Global Anti-Inflammatory Therapeutics Market Size, Market Share, Application Analysis, Regional Outlook, Growth Trends, Key Players, Competitive Strategies and ~~anticipate~~Forecasts, ~~that~~2018 weto ~~will~~2026 ~~continue~~–the Anti-inflammatory therapeutics market projected to US$ ~~incur~~130.6 ~~losses~~Bn by 2026 with CAGR of 8.5% throughout the forecast period from 2018 to 2026. Biologics and immune selective anti-inflammatory derivatives (ImSAIDs) are the promising drugs classes that will play the main role in the ~~foreseeable~~market. ~~future;~~Global anti-inflammatory therapeutics market from 2018-2026 study is based on exhaustive analysis with insights from industry stakeholders. The detailed study incorporates the market landscape and its growth scenarios for the forecasting period from 2018-2026.

•According ~~There~~to isWorld ~~substantial~~Health Organization ~~doubt~~(WHO), ~~about~~around ~~our~~235 ~~ability~~million toindividuals ~~continue~~experience asthe aill ~~going~~effects ~~concern,~~of ~~and~~asthma wearound ~~will~~the ~~require~~globe. ~~additional~~Symptomatic ~~capital~~help amid the inflammation gives alleviation to ~~fund~~the ~~our~~patients ~~operations,~~suffering ~~including~~from ~~clinical~~inflammatory ~~trials~~diseases. ~~for~~In ~~our~~spite ~~product~~of ~~candidates,~~the ~~which~~fact ~~may~~that ~~not~~there beare ~~available~~numerous onanti-inflammatory drugs ~~favorable~~present ~~terms~~in the market, ifstill, atthere ~~all;~~is an essential requirement for better and novel anti-inflammatory therapeutics drugs with slighter side effects and improved efficacy.

• The COVID-19 pandemic and actions taken by governmental authorities to mitigate its spread has significantly impacted economic conditions, and a future outbreak of COVID-19 or another highly contagious disease, could adversely affect our business activities, results of operations and financial condition;45

•Based Weon ~~are~~the ~~largely~~drug ~~dependent~~types, the onglobal ~~the~~anti-inflammatory ~~success~~therapeutics ofmarket ~~our~~is ~~product~~segmented ~~candidates~~into biologics, ~~KLS~~corticosteroids, immune selective anti-~~13019~~inflammatory derivatives (ImSAIDs), and ~~KLS~~non-~~13023~~steroidal anti-inflammatory drugs (NSAIDs); additionally, ~~which~~the ~~are~~indication ~~still~~studied in ~~preclinical~~this ~~development~~report ~~and~~are ~~will~~categorized ~~require~~into COPD, ~~significant~~multiple ~~capital~~sclerosis, ~~resources~~IBD, psoriatic arthritis, gout, and ~~years~~Others (Osteoarthritis, Systemic Lupus, Psoriasis). Rising prevalence of inflammatory ~~clinical~~diseases ~~development~~and ~~effort;~~the strong drug pipeline would additionally boost the anti-inflammatory therapeutics market.

•In Weaddition, ~~may~~they ~~not~~are also bedifficult ~~able~~ to ~~commence~~imitate ~~clinical~~due ~~trials~~to intheir ~~2021,~~complex molecular structure and ~~even~~origin. ifThe ~~our~~global ~~product~~anti-inflammatory ~~candidates~~market dohas ~~advance~~been ~~into~~driven ~~clinical~~by factors ~~trials,~~such weas ~~may~~increasing ~~experience~~autoimmune ~~difficulties~~and inrespiratory ~~managing~~conditions, ~~our~~new ~~growth~~drugs in pipeline and ~~expanding~~increasing ~~our~~adoption ~~operations;~~of anti-inflammatory drugs.

•In We2014, ~~are~~AstraZeneca had ~~subject~~five toanti-inflammatory ~~significant~~drugs ~~regulatory~~in ~~requirements,~~the ~~both~~final ~~within~~stages ~~the~~of ~~United~~drug ~~States~~development. ~~and~~These indrugs ~~certain~~are ~~foreign~~lesinurad, ~~jurisdictions~~sifalimumab, ~~which~~anifrolumab, ~~may~~mavrilimumab and ~~result~~brodalumab. ~~in,~~The ~~amongst~~companies ~~other~~have ~~things,~~filed ~~significant~~new ~~delays~~patents into ~~our~~overcome ~~ability~~the toissues ~~commence~~of ~~clinical~~patent ~~trials,~~expiries ifof wetheir ~~are~~existing ~~ever~~drugs, ~~approved~~and to dogain ~~so;~~a prominent ~~failure~~market toshare. ~~obtain~~The ~~regulatory~~key ~~approval~~companies ~~for~~profiled ~~our~~in ~~product~~this ~~candidates;~~report ~~difficulties~~include ~~marketing~~Pfizer, ~~our~~Inc., ~~products~~Abbvie, ifInc., weJohnson ~~obtain~~& ~~approval~~Johnson, toGlaxoSmithKline, Merck do& ~~so;~~CO., Inc., Novartis, F. Hoffman, La Roche AG, Eli Lily and ~~significant~~Company, ~~costs;~~AstraZeneca PLC, and Amgen.

•Target ~~Cannabis,~~3: ~~including~~Atopic ~~derivatives~~Dermatitis ~~thereof,~~/ ~~currently~~Eczema ~~remain~~– $3+ Billion ~~illegal~~Market ~~under~~in ~~federal~~North ~~law,~~America ~~and~~in ~~it is unclear when, if ever, that may change;~~2020

•In ~~Our~~a ~~product~~research ~~candidates,~~study ifpublished in ~~approved,~~February ~~may~~2020 be– ~~unable~~North toAmerica ~~achieve~~Atopic ~~broad~~Dermatitis Treat Market Research Study – the size of the atopic dermatitis treatment market ~~acceptance~~in North America is valued at USD$2.95 billion in 2020 and, ~~consequently,~~is ~~limit~~expected ~~our~~to ~~ability~~grow at a CAGR of 13.4% to ~~generate~~reach ~~revenue~~USD$5.52 billion by 2025. Atopic dermatitis is an inflammatory skin disease. The degree of its severity varies from ~~new~~patient ~~products;~~to patient. It usually begins in childhood and is mostly confined to flexural surfaces of the body. It is highly prevalent. It is more commonly known as eczema. Itching, redness of skin, cracking, and weeping are symptoms of it. It is a long term disease. Low humidity, cold weather, seasonal allergies are the common causes of it. Pattern of the disease and its severity determine the kind of treatment a patient with eczema is to receive.

•The ~~Any~~Eczema ~~inability~~Therapeutics Market tois ~~attract~~Dominated ~~and~~by ~~retain~~Topical ~~qualified~~Corticosteroids ~~key management and technical personnel would impair our ability to implement our business plan;~~(TCSs)

•Current Wecompetition ~~face~~in the ~~significant~~eczema ~~competition~~therapeutics market contains conventional forms of therapy such as topical corticosteroids, ~~which~~topical ~~may~~immunomodulators ~~result~~and emollients as the most prominent therapies. Among all the available treatment options, topical corticosteroids hold a large share and dominate the market. Topical corticosteroids are available in ~~other~~various ~~discovering~~strengths (mild, ~~developing~~moderate, orpotent ~~commercializing~~and ~~products~~very ~~before~~potent) usand orformulations (ointment, cream, lotion and many more), ~~successfully~~so ~~than~~that wethey can be used according to the severity of eczema. Calceurin inhibitors (Protopic (tacrolimus) and Elidel (pimecrolimus)) showed higher efficacy in comparison to corticosteroids and these products were widely used after their respective launches. However, in 2005 the FDA issued black box warnings for the calceurin inhibitors (Protopic and Elidel), which has resulted in declining sales of these products. Emollients have good efficacy as well as good safety. They hydrate, moisturize and repair the skin. These products do; not offer first line treatment, but they are useful as maintenance therapy in eczema patients.

•Significant WeUnmet Need ~~rely on third parties to conduct, supervise and monitor our preclinical and clinical trials, and if those third parties perform~~ in anEczema ~~unsatisfactory~~Therapeutics ~~manner,~~Market weCould ~~may~~Drive ~~not be able to obtain regulatory approval for or commercialize our product candidates;~~Market

•Eczema Weis ~~rely~~a onchronic ~~third~~condition characterized by frequent relapses known as flare-~~party~~ups. ~~manufacturers~~The ~~and~~market ~~suppliers~~has ~~and~~various weproducts ~~intend~~that toare ~~rely~~effective, onbut ~~third~~their ~~parties~~safety toprofile ~~produce~~is not ~~preclinical~~always satisfactory, ~~clinical~~leaving ~~and~~a ~~commercial~~significant ~~supplies~~unmet need in the market. The unmet need is also a result of ~~active~~the ~~pharmaceutical~~lack ~~ingredients,~~of oreffective ~~APIs,~~treatment options for ~~KLS-13019~~severe conditions; the need for a controlled and ~~KLS-13023~~targeted drug delivery system; low patience compliance and the black box warnings issued to Elidel and Protopic. The unmet need in eczema therapeutics could be filled by a new entrant with a better safety profile, enhanced patient compliance, and competitive pricing with respect to the available products.

•Target If4: wePsoriasis ~~are~~– $5+ ~~unable~~Billion Market toin ~~protect~~North ~~our~~America in ~~intellectual property rights or if our intellectual property rights are inadequate to protect our technology and product candidates, our competitive position could be harmed;~~2019

•Psoriasis is Wea ~~may~~common ~~become~~chronic ~~involved~~skin disorder. It is also associated with several comorbidities, such as obesity, hypertension, psoriatic arthritis, depression, and diabetes. Psoriasis is characterized by skin flares and inflammation that vary in ~~lawsuits~~severity, from minor localized patches to ~~protect~~substantial orbody ~~enforce~~surface ~~our~~involvement. ~~intellectual~~Around ~~property~~20% of diagnosed patients have moderate to severe psoriasis. In 2019 in the United States, psoriasis was a $8.48 billion market, of which ~~could~~90% beare ~~expensive~~from drugs targeting moderate to severe psoriasis patients where the skin manifestation affects more than 3% of the body. See Treatment of Psoriasis in Adults – Steven R. Feldman, ~~time~~MD, ~~consuming~~PhD, ~~and~~August 24, ~~unsuccessful~~2018. ~~and~~For ~~have~~such patients, psoriasis is often a ~~material~~debilitating ~~adverse~~condition ~~effect~~impacting ontheir quality of life and psychological well-being. Over the ~~success~~past decade, biologics have altered the landscape in the management of ~~our~~moderate ~~business;~~to severe psoriasis by achieving improved skin clearance, control of symptoms and quality of life for hundreds of thousands of individuals affected.

~~• We may not be able to protect our intellectual property rights throughout the world, and in developing countries in particular;~~46

•Psoriasis is Welinked doto ~~not~~pathogenesis ~~know~~caused ~~whether~~by andysregulation ~~active,~~of ~~liquid~~T-cell-dependent ~~and~~immune ~~orderly~~response, ~~trading~~as ~~market~~well ~~will~~as ~~develop~~hyperproliferation ~~for~~of ~~our~~keratinocytes, the ~~common~~predominant ~~stock~~cell ortype ~~what~~on the ~~market~~outer ~~price~~layer of ~~our~~skin. ~~common~~Biologics ~~stock~~target ~~will~~the becytokines ~~and,~~usually upregulated as a result, ~~it may be difficult for you to sell your shares~~ of ~~our~~the ~~common~~abnormal ~~stock;~~immune response.

• Target 5: ~~The~~Diabetic ~~market~~Foot ~~price~~Ulcers of– $3+ ~~our~~Billion ~~stock~~Market ~~may~~in ~~be volatile, and you could lose all or part of your investment;~~U.S.

•The ~~Our~~market for ~~common~~Diabetic ~~stock~~Foot Ulcers in the U.S. is ~~classified~~$3+ asbillion aand ~~“penny~~growing. ~~stock”~~There ~~under~~are ~~SEC~~29 ~~Rules~~million people living with diabetes and ~~Regulations~~86 million pre-diabetics in the U.S. Approximately 25% of diabetics will acquire a non-healing ulcer in their lifetime, which ~~means~~equates ~~there~~to ~~may~~approximately be3 ~~very~~million diabetic ~~limited~~ulcers ~~trading~~annually. ~~market~~Diabetic foot ulcers lead to over 73,000 amputations annually at a cost that is estimated to exceed $5 billion annually. Hospitalization costs are approximately $20,000 per patient with diabetic foot ulcers and $70,000 for ~~our~~an ~~shares;~~amputation. The global numbers are more startling. 400 million people are currently living with diabetes worldwide and that number is expected to increase to approximately 600 million by 2035.

•The ~~Insiders~~current ~~have~~approach ~~substantial~~to ~~influence~~treating ~~over~~diabetic usfoot ulcers ~~and~~requires ~~could~~offloading ~~delay~~the wound by using appropriate therapeutic footwear, daily saline or ~~prevent~~similar dressings to provide a ~~change~~moist inwound ~~corporate~~environment, debridement when necessary, antibiotic therapy if osteomyelitis or cellulitis is present, optimal control; of blood glucose, and evaluation and correction of peripheral arterial insufficiency. Wound coverage by cultured human cells or heterogeneic dressings/grafts, application of recombinant growth factors, and hyperbaric oxygen treatments also may be beneficial at times, but only if arterial insufficiency is not present. Among people with diabetes, most severe foot infections that ultimately require some part of the toe, foot or lower leg to be amputated start as a foot ulcer. See Diabetic Ulcers Treatment & Management, V.L. Rowe, MD, R. Khardori MD, PhD, FACP, Medscape, March 12, 2018.

•Foot ~~Because~~ulcers weare doespecially ~~not~~common ~~anticipate~~in ~~paying~~people who ~~any~~have ~~cash~~one ~~dividends~~or onmore ~~our~~of ~~capital stock in~~ the ~~foreseeable~~following ~~future,~~health ~~capital appreciation, if any, will be your sole source of gain; and~~problems:

• WePeripheral ~~have~~neuropathy. ~~issued~~This ~~preferred~~is ~~stock~~nerve ~~with~~damage ~~designations,~~in ~~rights~~the ~~and~~feet ~~preferences~~or ~~that~~lower ~~are~~legs. ~~superior~~Diabetes tois ~~that~~the most common cause of ~~our~~peripheral ~~common~~neuropathy. ~~stock~~When nerves in the feet are damaged, ~~and~~they wecan ~~may~~no ~~issue~~longer ~~additional~~warn ~~shares~~about pain or discomfort. When this happens, tight-fitting shoes can trigger a foot ulcer by rubbing on a part of ~~preferred~~the ~~stock~~foot that has become numb. People with peripheral neuropathy may not be able to feel when they've stepped on something sharp or when they have an irritating pebble in ~~the~~their ~~future~~shoes. They can injure their feet significantly and never know it, unless they examine their feet routinely for injury.

39Many elderly people and diabetics with vision problems also can't see their feet well enough to examine them for problems.

~~Risks Related~~• Circulatory problems. Any illness that decreases circulation to ~~Our~~the ~~Financial~~feet ~~Position~~can cause foot ulcers. Less blood reaches the feet, which deprives cells of oxygen. This makes the skin more vulnerable to injury, and ~~Capital~~it ~~Needs~~slows the foot’s ability to heal.

WePoor circulation in the leg arteries ~~have~~is ~~incurred~~called ~~significant~~peripheral ~~losses~~artery ~~since~~disease. ~~our~~It ~~inception~~also ~~and~~causes ~~anticipate~~pain ~~that~~in wethe ~~will~~leg ~~continue~~or tobuttock ~~incur~~during ~~losses~~walking. It is caused by atherosclerosis. This is a disease in ~~the~~which ~~future~~fatty deposits of cholesterol build up inside arteries.

~~We are~~• aAbnormalities ~~preclinical~~in ~~stage~~the ~~specialty~~bones ~~pharmaceutical~~or ~~company,~~muscles ~~engaged~~of inthe ~~developing next-generation synthetic cannabinoid therapeutics~~feet. ~~Since~~ ~~our~~Any ~~inception~~condition inthat ~~August~~distorts ~~2010,~~the wenormal ~~have~~anatomy ~~devoted substantially all~~ of ~~our resources to~~ the ~~development~~foot ofcan ~~our~~lead ~~product~~to ~~candidates, KLS-13019~~foot ~~and KLS-13023~~ulcers. WeThis ~~have~~is ~~generated~~particularly ~~significant~~true ~~operating~~if ~~losses~~the ~~since~~foot ~~our~~is ~~inception.~~forced ~~Our~~into ~~net~~shoes ~~(losses)~~that ~~income~~don’t ~~for~~fit the ~~years ended~~foot’s ~~December~~altered ~~31, 2020 and 2019 were approximately $(4~~shape.5 ~~million)~~Examples ~~and~~are ~~$(3.5~~claw ~~million)~~feet, ~~respectively.~~feet Aswith ~~of December 31~~fractures, ~~2020, we~~and ~~had~~cases ~~an accumulated deficit~~ of ~~$13,033,363.~~severe ~~Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations~~arthritis.

~~We expect~~More tothan ~~continue~~any toother ~~incur~~group, people ~~significant~~with ~~expenses~~diabetes ~~and~~have ~~operating~~a ~~losses~~particularly ~~for~~high ~~the~~risk ~~foreseeable~~of ~~future.~~developing Wefoot ~~anticipate~~ulcers. ~~these~~This ~~losses~~is ~~will increase~~because ~~as we continue~~ the ~~research~~long-term ~~and~~complications ~~development~~ of, ~~and clinical trials for, our product candidates. In addition to budgeted~~diabetes ~~expenses,~~often weinclude ~~may~~neuropathy ~~encounter unforeseen expenses, difficulties, complications, delays~~ and ~~other~~circulatory ~~unknown factors that may adversely affect our business~~problems. IfWithout ~~either~~prompt ofand ~~our~~proper ~~product candidates fails in clinical trials or does not gain regulatory approval~~treatment, ora ~~even if~~foot ~~approved,~~ulcer ~~fails to achieve market acceptance, we~~ may ~~never~~require ~~become~~hospital ~~profitable~~treatment. ~~Even if we achieve profitability in the future~~Or, weit may ~~not~~lead ~~be able~~ to ~~sustain~~deep ~~profitability~~infection inor ~~subsequent~~gangrene ~~periods~~and amputation.

~~Due to our limited operating history and history of losses, any predictions about our future success, performance or viability may not be accurate.~~47

~~We currently~~Governmental ~~have no commercial revenue and may never become profitable.~~Regulations

To date, the only revenue we have generated has been from the receipt of research grants and payments for research services. Our ability to generate revenue and become profitable depends upon our ability to obtain regulatory approval for, and successfully commercialize, KLS-13019, KLS-13023 or other product candidates that we may develop, in-license or acquire in the future.Manufacturing

~~Even if~~Although we ~~are~~would ~~able~~be reliant toupon ~~successfully achieve regulatory approval for these product candidates, we do not know what~~ the ~~reimbursement status~~manufacturing of our ~~product~~target drug candidates ~~will~~and beAPI orfrom ~~when~~well-established ~~any of these products will generate revenue for us~~manufacturers, ifmanufacturers atof ~~all. We have not generated,~~therapeutic ~~and~~products ~~do not expect to generate, any product revenue for the foreseeable future,~~ and wetheir ~~expect~~facilities toare ~~continue~~subject to ~~incur~~continual ~~significant operating~~review ~~losses~~and ~~for~~periodic ~~the~~inspections ~~foreseeable~~by ~~future due to~~ the ~~cost of research and development~~FDA, ~~preclinical~~the ~~studies~~EMA and ~~clinical~~other ~~trials, and~~comparable ~~the~~ foreign regulatory ~~approval~~authorities ~~process~~ for ~~our~~compliance ~~product~~with ~~candidates.~~current ~~The~~good ~~amount~~manufacturing ofpractices ~~future~~(“cGMP”) ~~losses is uncertain and will depend, in part, on the rate of growth of our expenses~~regulations. ~~Our ability to generate revenue from our product candidates also depends on a number of additional factors, including, without limitation, our ability to:~~

•Further, ~~successfully~~manufacturers ~~complete~~of ~~development~~controlled substances ~~activities,~~must ~~including~~obtain ~~the~~and ~~remaining~~maintain ~~preclinical~~necessary ~~studies~~DEA and ~~planned~~state ~~clinical~~registrations ~~trials~~and ~~for~~registrations ~~our~~with ~~product~~applicable ~~candidates;~~foreign regulatory authorities and must establish and maintain processes to ensure compliance with DEA and state requirements and requirements of applicable foreign regulatory authorities governing, among other things, the storage, handling, security, recordkeeping and reporting for controlled substances.

•If ~~complete~~we ~~and~~or ~~submit~~a ~~New~~regulatory agency ~~Drug~~discover ~~Applications~~previously ~~(“NDAs”)~~unknown toproblems with a product, such as adverse events of unanticipated severity or frequency, or problems with the ~~FDA~~facility where the product is manufactured, ~~and~~a ~~Marketing~~regulatory ~~Authorization~~agency ~~Applications~~may ~~(“MAAs”)~~impose torestrictions on that product, the ~~European~~manufacturing ~~Medicines~~facility or ~~Agency~~us, (including requiring recall or withdrawal of the ~~“EMA”)~~product from the market or suspension of manufacturing. If we, ~~and~~our ~~obtain~~product ~~regulatory~~candidates or ~~approval~~the ~~for~~manufacturing ~~indications~~facilities for ~~which~~our ~~there~~product iscandidates fail to comply with applicable regulatory requirements, a ~~commercial~~regulatory ~~market;~~agency may, among other things:

• ~~complete~~issue ~~and~~untitled ~~submit~~letters ~~applications~~or ~~to,~~warning ~~and obtain regulatory approval from, other foreign regulatory authorities~~letters;

• ~~manufacture~~mandate ~~any~~modifications ~~approved~~to ~~products~~promotional inmaterials ~~commercial~~or ~~quantities~~require ~~and~~us onto ~~commercially~~provide ~~reasonable~~corrective ~~terms~~information to healthcare practitioners;

• ~~develop~~require us to enter into a ~~commercial~~consent ~~organization~~decree, orwhich ~~find~~can ~~suitable~~include ~~partners,~~imposition toof ~~market~~various fines, ~~sell~~reimbursements ~~and~~for ~~distribute~~inspection ~~approved~~costs, ~~products~~required indue ~~the~~dates ~~markets~~for inspecific ~~which~~actions weand ~~have~~penalties ~~retained~~for ~~commercialization rights~~non-compliance;

• ~~achieve~~seek ~~acceptance~~an ~~among~~injunction ~~patients,~~or ~~clinicians~~impose ~~and~~civil ~~advocacy~~or ~~groups~~criminal ~~for~~penalties ~~any~~or ~~products~~monetary ~~we develop~~fines;

• ~~obtain~~suspend ~~coverage~~or ~~and~~withdraw ~~adequate~~regulatory ~~reimbursement from third parties, including government payors~~approval; ~~and~~

• ~~set~~suspend ~~a commercially viable price for~~ any ~~products~~ongoing ~~for~~clinical ~~which we may receive approval.~~trials;

~~We are~~• ~~unable~~refuse to ~~predict~~approve ~~the~~pending ~~timing~~applications or ~~amount~~supplements ~~of increased expenses, or when or if we will be able~~ to ~~achieve~~applications orfiled ~~maintain~~by ~~profitability. Even if we are able to complete the processes described above, we anticipate incurring significant costs associated with commercializing our product candidates.~~ us;

40• or require us to initiate a product recall.

~~There is~~The ~~substantial~~occurrence ~~doubt~~of ~~about~~any event or penalty described above may inhibit our ability to ~~continue~~commercialize asour product candidates and may otherwise have a ~~going~~material ~~concern~~adverse effect on our business, financial condition and results of operations.

~~On March~~Regulation ~~30, 2021, the report~~ of our independent registered public accounting firm on our December 31, 2020 audited financial statements includes an explanatory paragraph referring to our ability to continue as a going concern. As of December 31, 2020 and 2019, we had cash balances of $21,874 and $121,455, respectively. Management plans to raise additional capital through the issuance of common stock shares through the sale of registered securities and private investment in public equity. We expect that between our existing cash, cash equivalents and cash raised through our debt offering we will be able to sufficiently fund our operations and capital requirements for the next 12 months. Additional funding will be required to continue our R&D and other operating activities, as we have not reached successful commercialization of our products. These circumstances cast significant doubt as to our ability to continue as a going concern.CBD

WeKLS-13023 contains controlled ~~will~~substances ~~require~~as ~~additional~~defined ~~capital~~in the CSA. Controlled substances that are pharmaceutical products are subject to ~~fund~~a ~~our~~high ~~operations~~degree of regulation under the CSA, which establishes, among other things, certain registration, manufacturing quotas, security, recordkeeping, reporting, import, export and ifother werequirements ~~fail~~administered toby ~~obtain~~the ~~necessary~~DEA. ~~financing~~The DEA classifies controlled substances into five schedules: Schedule I, weII, ~~will~~III, IV or V substances. Schedule I substances, by definition, have a high potential for abuse, have no currently “accepted medical use” in the United States, lack accepted safety for use under medical supervision, and may not be ~~able~~prescribed, marketed or sold in the United States. Pharmaceutical products approved for use in the United States may be listed as Schedule II, III, IV or V, with Schedule II substances considered to ~~complete~~present the highest potential for abuse or dependence and Schedule V substances the lowest relative risk of abuse among such substances. Schedule I and II drugs are subject to the ~~development~~strictest controls under the CSA, including manufacturing and ~~commercialization~~procurement quotas, security requirements and criteria for importation. In addition, dispensing of ~~KLS-13019~~Schedule orII ~~KLS-13023~~drugs is further restricted. For example, they may not be refilled without a new prescription.

Our operations have consumed substantial amounts of cash since inception. We expect to continue to spend substantial and increasing amounts to conduct further research and development, preclinical testing and clinical trials of our product candidates, to seek regulatory approvals and reimbursement for our product candidates, and to launch and commercialize any product candidates for which we receive regulatory approval.48

AsWhile cannabis is a Schedule ofI ~~December~~controlled 31substance, ~~2020,~~products weapproved ~~had~~for ~~$21,874~~medical use in ~~cash~~the ~~and~~United ~~cash~~States ~~equivalents.~~that Wecontain ~~expect~~cannabis ~~that~~or ~~between~~cannabis ~~our~~extracts ~~existing~~must ~~cash~~be placed in Schedules II - V, ~~cash~~since ~~equivalents~~approval by the FDA satisfies the “accepted medical use” requirement. If and when KLS-13023 receives FDA approval, the DEA will make a scheduling determination and ~~continuing~~place ~~cash~~it ~~raises~~in ~~through~~a ~~our~~schedule ~~debt~~other ~~offering~~than weSchedule ~~will~~I bein ~~able~~order for it to ~~sufficiently~~be ~~fund~~prescribed to ~~our~~patients ~~operations~~in ~~and~~the ~~capital~~United ~~requirements~~States. If approved by the FDA, we expect the finished dosage forms of KLS-13023 to be listed by the DEA as ~~through~~a ~~April~~Schedule ~~2022~~II or III controlled substance. WeConsequently, ~~believe~~their ~~that~~manufacture, ~~these~~importation, ~~available~~exportation, ~~funds~~domestic distribution, storage, sale and legitimate use will be ~~sufficient~~subject to ~~complete~~ a ~~Phase~~significant 1degree ~~clinical~~of ~~trials~~regulation ~~for~~by ~~KLS-13019~~the DEA. The scheduling process may take one or more ~~for~~years ~~patients~~beyond ~~with~~FDA ~~chemotherapy~~approval, ~~induced~~thereby ~~peripheral~~significantly ~~neuropathy~~delaying the launch of KLS-13023. WeFurthermore, ~~anticipate~~if the FDA, ~~based~~DEA onor ~~current~~any ~~estimates~~foreign regulatory authority determines that KLS-13023 may have potential for abuse, it may require us to generate more clinical data than that ~~costs~~which ~~associated~~is ~~Phase~~currently 1anticipated, ~~clinical~~which ~~trials~~could ~~for~~increase ~~KLS-13019~~the ~~will~~cost beand/or ~~approximately~~delay ~~$2.75~~the ~~million~~launch of KLS-13023.

~~Our~~Because KLS-13023 contains ~~management~~active ~~believes~~ingredients ~~that~~of wecannabis, ~~will~~which ~~need~~are Schedule I substances, to ~~seek~~conduct ~~additional~~pre-clinical ~~sources~~studies ofand ~~capital~~clinical totrials ~~facilitate~~with ~~and~~KLS-13023 ~~carry~~in the ~~out~~United ~~our~~States ~~business~~prior ~~plan~~to approval, each of ~~proceeding with~~our ~~commencing~~research asites ~~Phase~~must 2submit ~~clinical~~a ~~trial~~research ~~for~~protocol ~~KLS-13019~~to ~~for~~the ~~patients~~DEA ~~with~~and ~~chemotherapy~~obtain ~~induced~~and ~~peripheral~~maintain ~~neuropathy;~~a ~~commencing~~DEA aresearcher ~~Phase~~registration 1that ~~clinical~~will ~~trial~~allow ~~for~~those sites to handle and dispense with KLS-~~13019~~13023 ~~for~~and ~~patients~~to ~~suffering~~obtain the product from our manufacturer. If the ~~effects~~DEA ofdelays ~~mild~~or ~~traumatic~~denies ~~brain~~the ~~injury;~~grant ~~and~~of ~~commencing~~ a ~~Phase~~research 1registration ~~clinical~~to ~~trial~~one ~~for~~or ~~KLS-13023~~more ~~for~~research ~~patients~~sites, ~~suffering~~the ~~with~~pre-clinical ~~OHE.~~studies ~~The~~or ~~cost~~clinical oftrials could ~~commencing~~be significantly delayed, and ~~conducting~~we ~~these~~could ~~trials~~lose ~~will likely~~and be inrequired ~~the~~to ~~tens~~replace ofclinical ~~millions~~trial ofsites, ~~dollars~~resulting in additional costs.

~~The progress~~We ofexpect ~~KLS-13019~~that ~~and~~ KLS-13023 ~~for~~will ~~the~~be ~~target~~scheduled as ~~indication~~Schedule isII ~~uncertain~~or ~~due~~III, toas ~~numerous~~a ~~factors,~~result ~~including,~~of ~~without~~which ~~limitation, the~~we ~~rate~~will ofalso ~~progress~~need ofto ~~clinical~~identify ~~trials,~~wholesale ~~the~~distributors ~~results~~with ofthe ~~preclinical~~appropriate ~~studies~~DEA registrations and ~~clinical~~authority ~~trials~~to ~~for~~distribute ~~such~~the ~~indication,~~products ~~the~~to ~~costs~~ pharmacies and ~~timing~~other ofhealthcare ~~seeking~~providers, and ~~obtaining~~these ~~FDA~~distributors ~~and~~would ~~other~~need ~~regulatory~~to ~~approvals~~obtain ~~for~~Schedule II ~~clinical~~or ~~trials,~~III ~~and~~distribution ~~FDA~~registrations. ~~guidance~~The ~~regarding~~failure ~~clinical trials~~to ~~for~~obtain, ~~such~~or ~~indication.~~delay Inin ~~addition~~obtaining, itor isthe ~~difficult~~loss toof ~~predict~~any ~~our~~of ~~spending~~those ~~for~~registrations ~~our~~could ~~product~~result in ~~candidates~~increased ~~prior~~costs to ~~obtaining FDA approval~~us. ~~Moreover,~~If ~~changing~~KLS-13023 ~~circumstances~~is ~~may~~a ~~cause~~Schedule usII todrug, ~~expend~~pharmacies ~~cash~~would ~~significantly~~have ~~faster~~to ~~than~~maintain weenhanced ~~currently~~security ~~anticipate,~~with alarms and monitoring systems and wethey ~~may~~must ~~need~~adhere to ~~spend~~recordkeeping ~~more~~and ~~cash~~inventory ~~than~~requirements. ~~currently~~This ~~expected~~may ~~because~~discourage ofsome ~~circumstances~~pharmacies ~~beyond~~from ~~our~~carrying ~~control~~the product. Furthermore, ~~For~~state ~~these~~and ~~reasons~~federal enforcement actions, ~~we are~~regulatory ~~unable~~requirements, toand ~~estimate~~legislation ~~the~~intended ~~actual~~to ~~funds~~reduce weprescription ~~will~~drug ~~require~~abuse, such ~~for~~as ~~development~~the ~~and~~requirement ~~any~~that ~~approved~~physicians ~~marketing~~consult ~~and~~a ~~commercialization~~state ~~activities. Our~~prescription ~~future~~drug ~~funding~~monitoring ~~requirements~~program, ~~both~~may ~~near~~make ~~and~~physicians ~~long-term,~~less ~~will~~willing ~~depend~~to onprescribe, and ~~many~~pharmacies ~~factors,~~to ~~including~~dispense, ~~but~~Schedule ~~not~~II ~~limited to:~~products.

•We may manufacture the commercial ~~initiation~~supply of KLS-13023 outside of the United States. If KLS-13023 is approved by the FDA and classified as a Schedule II or III substance, ~~progress~~an importer can import for commercial purposes if it obtains from the DEA an importer registration and files an application with the DEA for an import permit for each import. The DEA provides annual assessments/estimates to the International Narcotics Control Board, ~~timing~~which guides the DEA in the amounts of controlled substances that the DEA authorizes to be imported. The failure to identify an importer or obtain the necessary import authority, ~~costs~~including specific quantities, could affect the availability of KLS-13023 and have a material adverse effect on our business, results of ~~preclinical~~operations ~~studies~~and financial condition. In addition, an application for a Schedule II importer registration must be published in the Federal Register, and ~~clinical~~there ~~trials~~is a waiting period for ~~our~~third ~~product~~party ~~candidates;~~comments to be submitted.

•Individual states have also established controlled substance laws and regulations. Though state-controlled substance laws often mirror federal law, because the states ~~clinical~~are ~~development~~separate ~~plans~~jurisdictions, wethey ~~establish~~may ~~for~~separately schedule our product candidates; as well. While some states automatically schedule a drug based on federal action, other states schedule drugs through rulemaking or a legislative action. State scheduling may delay commercial sale of any product for which we obtain federal regulatory approval and adverse scheduling could have a material adverse effect on the commercial attractiveness of such product. We or our partners must also obtain separate state registrations, permits or licenses in order to be able to obtain, handle, and distribute controlled substances for clinical trials or commercial sale, and failure to meet applicable regulatory requirements could lead to enforcement and sanctions by the states in addition to those from the DEA or otherwise arising under federal law.

•We currently obtain the API ~~number~~for ~~and~~KLS-13023 ~~characteristics~~from a bulk manufacturer of pharmaceutical grade API in Switzerland. For KLS-13023, we plan to conduct Phase 1 clinical trials in Australia, subject to applicable regulatory approval. In addition, we may decide to develop, manufacture or commercialize our product candidates ~~that~~in additional countries. As a result, KLS-13023 will also be subject to controlled substance laws and regulations from the Therapeutic Goods Administration in Australia, Health Canada’s Office of Controlled Substances in Canada, and from other regulatory agencies in other countries where we may develop, manufacture or ~~may~~commercialize KLS-13023 in the future. We plan to submit NDA for KLS-~~license;~~13023 to the FDA upon completion of all requisite clinical trials and will require additional DEA approvals at such time as well.

~~• the terms of any collaboration agreements we may choose to execute;~~49

•On ~~the~~September ~~outcome~~27, ~~timing~~2018, the DOJ and ~~cost~~DEA ofannounced ~~meeting~~that ~~regulatory~~Epidiolex, ~~requirements~~the ~~established~~newly approved medication by the ~~DEA~~Food & Drug Administration, was being placed in Schedule V of the ~~FDA~~Controlled Substances Act, the ~~EMA~~least orrestrictive ~~other~~schedule ~~comparable~~of ~~foreign~~the ~~regulatory~~CSA. On ~~authorities;~~June 26, 2018, the FDA announced it approved Epidiolex for the treatment of seizures associated with two rare and severe forms of epilepsy, Lennox-Gastaut syndrome and Dravet syndrome, in patients two years of age and older. Epidiolex contains CBD.

•The CBD in Epidiolex is extracted from the ~~cost~~cannabis ofplant ~~filing~~and is the first FDA-approved drug to contain a purified extract from the plant. Schedule V drugs represents the least potential for abuse. Schedule V drugs, ~~prosecuting~~substances, ~~defending~~or chemicals are defined as drugs with lower potential for abuse than Schedule IV and ~~enforcing~~consist ~~our~~of ~~patent~~preparations ~~claims~~containing limited quantities of certain narcotics. Schedule V drugs are generally used for antidiarrheal, antitussive, and ~~other~~analgesic ~~intellectual~~purposes. ~~property~~Some ~~rights;~~examples of Schedule V drugs are: cough preparations with less than 200 milligrams of codeine or per 100 milliliters (Robitussin AC), Lomotil, Motofen, Lyrica, Parepectolin.

•Despite the ~~cost~~approvals by the FDA and DEA for Epidiolex, any of ~~defending~~these ~~intellectual~~foregoing ~~property~~factors, ~~disputes~~many of which are beyond our control, ~~including~~could ~~patent~~jeopardize ~~infringement~~our ~~actions~~ability ~~brought~~to byobtain ~~third~~regulatory ~~parties~~approval ~~against~~for ~~us;~~and successfully market KLS-13019 or KLS-13023. Moreover, because our business is almost entirely dependent upon these two product candidates, any such setback in our pursuit of regulatory approval would have a material adverse effect on our business and prospects.

•KLS-13019 does not contain CBD and is a new chemical entity that would not fall under the ~~effect~~CSA ofor ~~competing~~be ~~product~~deemed ~~and~~a ~~market~~Schedule ~~developments;~~1 controlled substance.

•KLS-13023 ~~costs~~is a formulation that does contain CBD. At present, CBD is deemed a Schedule 1 controlled substance by the DEA under the CSA. Like the drug molecule EpidiolexÒ, which was recently approved by the FDA for marketing and ~~timing~~sale for use in treating Dravet’s Syndrome and Lennox-Gasteau Syndrome (forms of child epilepsy), KLS-13023 would need to follow the ~~implementation~~guidance ofset ~~commercial~~forth ~~scale~~by ~~manufacturing~~the ~~activities;~~CSA, complete a successful human clinical trial and apply for rescheduling, as was the case with EpidiolexÒ, now a Schedule 5 drug.

•On January 14, 2019, we received written notice from the ~~cost~~DEA Drug and Chemical Evaluation Section, as follows: “Please be advised that your material meets the definition of ~~establishing~~‘Hemp’ and is not regulated under the CSA, oras ~~outsourcing~~long as it consists of high purity Cannabidiol (CBD) that contains approximately 0.1% delta-9- THC. (However, ~~sales~~if it contains more than 0.3% delta-9 THC, ~~marketing~~it is considered ‘Marihuana’ and ~~distribution~~would ~~capabilities~~be ~~for~~in ~~any~~Schedule ~~product~~1 ~~candidates~~of ~~for~~the ~~which~~CSA).” While wethis ~~may~~notice ~~receive~~is ~~regulatory~~an ~~approval~~official innotice ~~regions~~from ~~where~~the DEA regarding the scheduling of high purity CBD, we ~~choose~~will continue to ~~commercialize~~abide ~~our~~by ~~products~~the onCSA in all respects with regards to our ~~own~~treatment and handling of CBD.

41The active pharmaceutical ingredient (“API”) found in KLS-13023 is highly purified pharmaceutical grade synthetic CBD produced by Purisys. Purisys has been manufacturing cannabidiol since 2016 (DMF33223). Today, through our partnership with Purisys, we have the ability to produce on the largest commercial scale. Purisys’ ultra-high purity CBD (“Purisys CBD”) is attractive for drug development projects and falls significantly below the 0.3% THC limits set in the 2018 Farm Bill for use in consumer products. Purisys’ patent-protected manufacturing process produces a consistently odorless, tasteless white powder highest-purity form of CBD that exhibits:

~~We cannot~~• beNo ~~certain~~heavy ~~that~~metals ~~additional funding will be available on acceptable terms, or at all~~(e.g. Iflead) wefrom ~~are~~soil; ~~unable~~No topesticide raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our product candidates or one or more of our other research and development initiatives. residues;

~~Our federal~~• ~~and~~No ~~state~~environmental ~~government~~influences ~~grants~~on ~~could~~quality ~~subject~~such usas torain, ~~audits~~sunlight ~~and~~& ~~could~~soil ~~require us to repay substantial amounts of funds previously awarded to us.~~nutrients;

~~To date,~~• ~~most~~No ofplant ~~our~~impurities ~~revenue has been from the receipt of state and federal research grants. In connection with these grants, we may be subject~~ to ~~routine~~remove; ~~audits~~No bymicrobial government agencies. As part of an audit, these agencies may review our performance, cost structures and compliance with applicable laws, regulations, policies and standards and the terms and conditions of the grant. If any of our expenditures are found to be unallowable or ~~allocated~~mold ~~improperly,~~proliferation; ~~or if we have otherwise violated terms of the grant, the expenditures may not be reimbursed~~ and~~/or we may be required to repay funds already disbursed. Accordingly, an audit could result in a material adjustment to our results of operations and financial condition.~~

~~Raising additional~~• ~~capital~~No ~~may~~structural ~~cause~~(or ~~dilution~~stereo tochemical) ~~our~~differences ~~existing~~exist ~~stockholders,~~between ~~restrict~~an ~~our~~active ~~operations~~cannabinoid oringredient ~~require~~manufactured usby toPurisys ~~relinquish~~and ~~rights to~~those ~~our~~that ~~technologies~~are orchemically ~~product~~extracted ~~candidates~~and isolated from plants. They are, in effect, nature-identical.;

~~We may~~Purisys ~~seek~~currently ~~additional~~has ~~capital through~~ a ~~combination~~drug ofmaster ~~private~~file ~~and~~(“DMF”) ~~public~~for ~~equity offerings, debt financings, strategic partnerships~~its ~~and~~ultra-high ~~alliances,~~purity ~~and~~CBD ~~licensing~~with ~~arrangements. To~~ the ~~extent~~FDA. ~~that~~In weNovember ~~raise additional capital through the sale of equity or convertible debt securities~~2019, ~~existing~~Purisys ~~ownership~~received ~~interests~~advise ~~will~~notice befrom ~~diluted and~~ the ~~terms~~DEA ~~of such financings may include liquidation or other preferences~~ that ~~adversely affect~~ the ~~rights~~Purisys ofCBD ~~existing~~has ~~stockholders.~~been ~~Debt financings may be coupled with an equity component,~~removed ~~such~~from asSchedule ~~warrants~~1 ~~to purchase shares, which could also result in dilution~~ of ~~our~~the ~~existing stockholders’ ownership~~CSA. The incurrence of indebtedness would result in increased fixed payment obligations and could also result in certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business and may result in liens being placed on our assets and intellectual property. If we were to default on such indebtedness, we could lose such assets and intellectual property. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, or grant licenses on terms that are not favorable to us.

~~Risks Related to our Business and Industry~~50

~~Our business~~On ~~may~~March be11, ~~subject~~2021, tothe ~~risks~~chairman ~~arising~~of ~~from~~the ~~pandemic~~House Judiciary Committee, ~~epidemic~~announced that the Marijuana Opportunity, orReinvestment anand ~~outbreak~~Expungement of(MORE) ~~diseases~~Act, ~~such~~introduced asin 2019, which passed in the U.S. ~~outbreak~~House of ~~COVID~~Representatives in December 2020, will be re-19filed in 2021, seeking ratification by the Senate.

If a ~~pandemic~~passed by the U.S. Senate, ~~epidemic~~the orMORE ~~outbreak~~Act would deschedule cannabis from the Controlled Substances Act and enact various criminal and social justice reforms to cannabis, including the expungement of prior convictions. The MORE Act also seeks to tax cannabis products at 5% to fund criminal and social reform projects, including an ~~infectious~~Office ~~disease~~of ~~occurs~~Cannabis inJustice within the ~~United~~Department ~~States~~of orJustice ~~elsewhere,~~Office ~~our~~of ~~business~~Justice ~~may~~Programs beresponsible ~~adversely~~for administering grants to aid communities negatively affected by the war on drugs. (See: Controlled Substances Laws and Regulations).

~~COVID-19 has~~Foreign ~~spread~~Regulatory worldwide and has resulted in government authorities implementing numerous measures to try to contain it, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns. These measures have impacted, and may further impact, our workforce and operations, the operations of our partners, and those of our respective vendors and suppliers. Our critical business operations, including our headquarters, are located in regions which have been impacted by COVID-19. Our suppliers and partners worldwide have also been affected and may continue to be affected by COVID-19 related restrictions and closures.Agencies

The spread of COVID-19 has caused us to modify our business practices as we comply with state mandated requirements for safety in the workplace to ensure the health, safety and well-being of our employees. These measures include personal protective equipment, social distancing, cleanliness of the facilities and daily monitoring of the health of employees in our facilities, as well as modifying our policies on employee travel and the cancellation of physical participation in meetings, events and conferences. We may take further actions as required by government authorities or that we determine are in the best interests of our employees, partners and suppliers. However, we have not developed a specific and comprehensive contingency plan designed to address the challenges and risks presented by the COVID-19 pandemic and, even if and when we do develop such a plan, there can be no assurance that such plan will be effective in mitigating the potential adverse effects on our business, financial condition and results of operations.EMA

In order to market and sell our products in jurisdictions ~~addition~~other than the United States and the European Union, ~~while~~we must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The regulatory approval process outside the ~~extent~~United States and ~~duration~~the European Union generally includes all of the risks ~~COVID-19~~associated ~~pandemic~~with onobtaining FDA and EMA approval, but can involve additional testing. We may need to partner with third parties in order to obtain approvals outside the ~~global~~United ~~economy~~States and ~~our~~the ~~business~~European Union. In addition, in ~~particular~~many countries worldwide, it is ~~difficult~~required that tothe ~~assess~~product orbe ~~predict,~~approved for reimbursement before the ~~pandemic~~product ~~has~~can ~~resulted~~be approved for sale in, ~~and~~that country. We may ~~continue~~not obtain approvals from regulatory authorities outside the United States and the European Union on a timely basis, if at all. Even if we were to ~~result~~receive approval in the United States or the European Union, ~~significant~~approval ~~disruption~~by ofthe ~~global~~FDA ~~financial~~or the EMA does not ensure approval by regulatory authorities in other ~~markets~~countries or jurisdictions. Similarly, ~~which~~approval ~~may~~by ~~reduce~~one ~~our~~regulatory ~~ability~~authority tooutside ~~access~~the ~~capital,~~United ~~which~~States ~~could~~and ~~negatively~~the ~~affect~~European ~~our~~Union ~~liquidity.~~would Anot ensure ~~recession~~approval by regulatory authorities in other countries or ~~financial market~~jurisdictions ~~correction~~or ~~resulting~~by ~~from~~the FDA or the ~~lack~~EMA. ofWe ~~containment~~may ~~and~~not ~~spread~~be ofable ~~COVID-19~~to ~~could~~file ~~impact~~for marketing ~~overall~~approvals ~~technology~~and ~~spending,~~may ~~adversely affecting~~not ~~demand~~receive ~~for~~necessary approvals to commercialize our products, in any market. If we are unable to obtain approval of our ~~business~~product ~~and~~candidates by regulatory authorities in other foreign jurisdictions, the ~~value~~commercial prospects of those product candidates may be significantly diminished and our ~~common~~business ~~stock~~prospects could decline.

42Therapeutic Goods Administration (TGA)

~~The ultimate~~Clinical ~~impact~~trials ofconducted ~~the~~in ~~COVID-19~~Australia ~~pandemic~~are ~~or a similar health epidemic is highly uncertain and~~ subject to ~~change. The extent of~~various ~~the~~regulatory ~~impact~~controls ~~of the COVID-19 pandemic on our operational and financial performance, including our ability~~ to ~~execute~~ensure ~~our business strategies and initiatives in~~ the ~~expected~~safety ~~time frame, will depend on future developments, including, but not limited to, the duration and continued spread~~ of ~~the pandemic, its severity, the actions to contain the disease or treat its impact, further related restrictions on travel, all of which are uncertain and cannot be predicted~~participants. AnThe ~~extended~~TGA ~~period~~regulates ~~of economic disruption as a result of~~ the ~~COVID-19~~use ~~pandemic could have a material negative impact on our business, results~~ of ~~operations,~~therapeutic ~~access~~goods tosupplied ~~sources~~in ofclinical ~~liquidity~~trials ~~and~~in ~~financial~~Australia ~~condition,~~under ~~though~~ the ~~full~~therapeutic ~~extent~~goods ~~and duration is uncertain~~legislation.

~~We are~~Clinical ~~largely~~trial ~~dependent~~sponsors onmust ~~the~~be ~~success~~aware of ~~our~~the ~~product~~requirements to ~~candidates~~import, ~~KLS-13019~~export, manufacture and ~~KLS-13023,~~supply ~~which~~therapeutic ~~are~~goods ~~still~~ in ~~preclinical~~Australia. ~~development and~~The ~~will~~following ~~require~~avenues ~~significant~~provide ~~capital~~for ~~resources~~the importation into and/or supply ~~years~~in Australia of ~~clinical~~‘unapproved’ ~~development~~therapeutic ~~effort.~~goods for use in a clinical trial:

~~We currently~~• ~~have~~Clinical noTrial ~~products~~Notification on(“CTN”) ~~the~~scheme; ~~market,~~ and our product candidates, KLS-13019 and KLS-13023, are still in preclinical development. Our business depends almost entirely on the successful clinical development, regulatory approval and commercialization of KLS-13019 and KLS-13023, and additional preclinical testing and substantial clinical development and regulatory approval efforts will be required before we are permitted to commence commercialization, if ever. It will be several years before we can commence and complete a pivotal study for KLS-13019 or KLS-13023, if ever. For KLS-13019 and KLS-13023, we plan to conduct Phase 1, and possibly Phase 2, clinical trials in Australia, subject to applicable regulatory approval.

~~We plan~~• toClinical ~~submit~~Trial ~~NDAs~~Exemption ~~for~~(“CTX”) ~~KLS-13019 and KLS-13023 to the FDA upon completion of all requisite clinical trials~~scheme. The clinical trials and manufacturing and marketing of KLS-13019 and KLS-13023 will be subject to extensive and rigorous review and regulation by numerous government authorities in the United States, Australia, the European Union, Canada, and other jurisdictions where we intend to test and, if approved, market our product candidates. Before obtaining regulatory approvals for the commercial sale of any product candidate, we must demonstrate through preclinical testing and clinical trials that the product candidate is safe and effective for use in each target indication, and potentially in specific patient populations. This process can take many years and may include post-marketing studies and surveillance, which would require the expenditure of substantial resources. Of the large number of drugs in development for approval in the United States and the European Union, only a small percentage successfully complete the FDA or EMA regulatory approval processes, as applicable, and are commercialized. Accordingly, even if we are able to obtain the requisite financing to continue to fund our research, development and clinical programs, we cannot assure you that any of our product candidates will be successfully developed or commercialized.

~~Because~~The CTN ~~the~~Scheme ~~results~~is ofa ~~preclinical~~notification ~~testing~~process ~~are~~involving ~~not~~the ~~necessarily predictive of future results, KLS-13019 and KLS-13023 may not have favorable results in our planned clinical trials.~~following:

~~Any positive~~• ~~results~~The ~~from~~Australian ~~our~~clinical ~~preclinical~~trial ~~testing~~sponsor ofmust ~~KLS-13019~~notify ~~and~~us ~~KLS-13023 may not necessarily be predictive~~ of the ~~results~~intent ~~from our~~to ~~planned~~sponsor ~~clinical~~a ~~trials in humans. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in~~ clinical ~~trials~~trial ~~after~~involving ~~achieving~~an ~~positive~~‘unapproved’ ~~results~~therapeutic ~~in preclinical development, and we cannot be certain that we will not face similar setbacks~~good. ~~These~~This ~~setbacks~~must ~~have~~take ~~been~~place ~~caused~~before ~~by,~~starting among other things, preclinical findings made while clinical trials were underway or safety or efficacy observations made in clinical trials, including adverse events. Moreover, preclinical and clinical data are often susceptible to ~~varying~~use ~~interpretations~~the ~~and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA or EMA approval~~goods. IfThe wenotification ~~fail to~~form ~~produce~~must ~~positive~~be ~~results~~submitted inonline ~~our clinical trials of KLS-13019~~ and ~~KLS-13023,~~accompanied by the ~~development~~relevant ~~timeline and regulatory approval and commercialization prospects for KLS-13019 and KLS-13023, and, correspondingly, our business and financial prospects, would be materially adversely affected~~fee.

• We may ~~not~~give bethe ~~able~~sponsor toof ~~commence~~the ~~clinical~~trial ~~trials~~written innotice ~~2021;~~to ~~even~~provide ifspecified ~~KLS-13019~~information ~~and~~relating ~~KLS-13023~~to ~~advance~~goods ~~into~~notified ~~clinical trials, we may experience difficulties~~ in ~~managing~~the ~~our~~CTN ~~growth and expanding our operations~~form.

• We ~~have~~ do not ~~begun~~evaluate ~~clinical trials for~~ any ofdata ~~our~~relating ~~product candidates. While we expect~~ to ~~commence~~the clinical ~~trials~~trial inat the ~~U.S.~~time orof ~~Australia in~~submission. ~~2022~~The ~~and/or~~Human ~~2023~~Research ~~for~~Ethics ~~KLS-13019~~Committee ~~and~~(“HREC”) ~~KLS-13023,~~reviews wethe ~~have~~scientific ~~limited~~validity ~~resources to carry out these objectives. Our company has no history~~ of ~~conducting~~the ~~clinical~~trial ~~trials~~design, ~~which~~the isbalance aof ~~time-consuming,~~risk ~~expensive~~versus ~~and~~harm ~~uncertain~~of ~~process.~~the Intherapeutic ~~addition~~good, ~~while~~the weethical ~~have~~acceptability ~~experienced management and expect to contract out many~~ of the ~~activities~~trial ~~related to conducting clinical trials~~process, ~~we are a small company with only seven employees~~ and ~~therefore~~approves ~~have~~the ~~limited~~trial ~~internal resources both to conduct clinical trials and to monitor third-party providers~~protocol. AsThe ~~our~~HREC ~~product~~is ~~candidates~~also ~~enter~~responsible into and advance through preclinical studies and any clinical trials, we will need to expand our development, regulatory and manufacturing operations, either by expanding our internal capabilities or contracting with other organizations to provide these capabilities for ~~us.~~monitoring In the ~~future,~~conduct weof ~~expect~~the ~~to have to manage additional relationships with collaborators or partners, suppliers and other organizations~~trial. ~~Our ability to manage our operations and future growth will require us to continue to improve our operational, financial and management controls, reporting systems and procedures.~~

43• The institution or organization at which the trial will be conducted, referred to as the ‘Approving Authority,’ gives the final approval for the conduct of the trial at the site, having due regard to advice from the HREC

~~Failures or~~• ~~delays~~It inis the ~~completion~~responsibility of ~~our preclinical studies or~~ the ~~commencement~~sponsor ~~and~~to ~~completion~~ensure ofthat ~~our~~all ~~planned~~relevant ~~clinical~~approvals ~~trials~~are ~~of KLS-13019 or KLS-13023 could result~~ in ~~increased~~place ~~costs~~before tosupplying usthe ~~and~~‘unapproved’ ~~could~~therapeutic ~~delay,~~goods ~~prevent~~in orthe ~~limit~~clinical ~~our ability to generate revenue and continue our business~~trial.

To date, we have not commenced any clinical trials for KLS-13019 or KLS-13023. Successful completion of such clinical trials is a prerequisite to submitting an NDA to the FDA or an MAA to the EMA. Clinical trials are expensive, difficult to design and implement, can take many years to complete, and are uncertain as to outcome. A product candidate can unexpectedly fail at any stage of clinical development. The historic failure rate for product candidates is high due to scientific feasibility, safety, efficacy, changing standards of medical care and other variables. We expect to initiate clinical trials for KLS-13019 and KLS-13023 in 2022 and/or 2023. However, we do not know whether our clinical trials will begin or be completed on schedule, if at all, as the commencement and completion of clinical trials can be delayed or prevented for a number of reasons, including, among others:51

•The ~~delays~~CTX inScheme ~~reaching~~is oran approval process involving ~~failing to reach agreement on acceptable terms with prospective clinical trial sites,~~ the ~~terms of which can be subject to extensive negotiation and may vary significantly among different clinical trial sites;~~following:

• ~~delays~~A orsponsor ~~inability~~submits inan ~~manufacturing~~application orto ~~obtaining~~us ~~sufficient~~seeking ~~quantity~~approval orto ~~quality~~supply of‘unapproved’ atherapeutic ~~product~~goods ~~candidate~~in ora ~~other~~clinical ~~materials~~trial. ~~necessary~~The toapplication ~~conduct~~must ~~clinical~~be ~~trials~~accompanied ~~due~~by tothe ~~regulatory~~relevant ~~and manufacturing constraints;~~fee.

• ~~difficulties~~We ~~obtaining~~evaluate ~~institutional~~summary ~~review~~information ~~board,~~about orthe ~~IRB,~~product ~~DEA~~including orrelevant, ~~comparable~~but ~~foreign regulatory authority~~limited, orscientific ~~ethics~~data ~~committee~~(which ~~approval~~may tobe ~~conduct~~preclinical aand early clinical ~~trial~~data) atprior ato ~~prospective~~the ~~site~~start orof ~~sites;~~a trial.

• ~~challenges~~The inHREC ~~recruiting~~is ~~and~~responsible ~~enrolling~~for ~~patients~~considering ~~to participate in clinical trials, including~~ the ~~size~~scientific and ~~nature~~ethical ofissues ~~the patient population, the proximity~~ of ~~patients to clinical trial sites, eligibility criteria for~~ the ~~clinical~~proposed trial, ~~the nature of the clinical trial~~ protocol~~, the availability of approved effective treatments for the relevant indication and competition from other clinical trial programs for similar indications;~~.

• ~~severe~~The orsponsor ~~unexpected~~must ~~toxicities~~notify orus ~~drug-related~~of ~~side~~each ~~effects~~trial ~~experienced~~conducted byusing ~~patients~~the inunapproved ~~our~~therapeutic ~~clinical~~good(s) ~~trials~~approved orin bythe ~~individuals~~CTX ~~using drugs similar to our product candidates;~~application.

•Clinical ~~DEA~~trials orthat ~~comparable~~do ~~foreign~~not ~~regulatory~~involve ~~authority-related~~‘unapproved’ therapeutic ~~recordkeeping,~~goods ~~reporting~~are ornot ~~security~~subject ~~violations~~to atrequirements aof ~~clinical trial site, leading~~ the ~~DEA,~~CTN ~~state authorities~~ or ~~comparable~~CTX ~~foreign~~schemes. ~~regulatory~~It ~~authorities~~is tothe ~~suspend~~responsibility orof ~~revoke~~ the ~~site’s~~Australian ~~controlled~~clinical ~~substance~~trial sponsor ~~license~~to ~~and~~determine ~~causing~~whether a ~~delay~~product oris ~~termination~~considered ofan ~~planned~~‘unapproved’ ortherapeutic ~~ongoing clinical trials;~~good.

•Clinical ~~regulatory~~trials ~~concerns~~that ~~with~~do ~~cannabinoid~~not ~~products~~involve ~~generally~~‘unapproved’ therapeutic ~~and~~goods are not subject to requirements of the ~~potential~~CTN ~~for~~or ~~abuse~~CTX schemes. It is the responsibility of ~~those~~the ~~products;~~Australian clinical trial sponsor to determine whether a product is considered an ‘unapproved’ therapeutic good.

•On ~~difficulties~~September ~~retaining~~27, ~~patients~~2013, ~~who~~the ~~have~~TGA ~~enrolled~~approved inNabiximols (Sativex ®), a ~~clinical~~pharmaceutical ~~trial~~manufactured ~~who~~by ~~may~~GW ~~withdraw~~Pharmaceuticals for its collaborator Novartis Pharmaceuticals Australia Pty Limited, in the treatment for symptom improvement in patients with moderate to severe spasticity due to ~~lack~~multiple ofsclerosis ~~efficacy,~~(“MS”) who ~~side~~have ~~effects,~~not ~~personal~~responded ~~issues~~adequately orto ~~loss~~other anti-spasticity medication and who demonstrated clinically significant improvement in spasticity related symptoms during the initial trial of ~~interest;~~therapy.

•In ~~ambiguous~~Australia, orin ~~negative~~2014, ~~interim~~the ~~results;~~Advisory Council on Medicines Scheduling recommended rescheduling CBD from a prohibited substance to being a prescription medicine because, according to the Advisory Council on Medicines Scheduling, “there is a low risk of misuse or abuse as cannabidiol does not possess psychoactive properties.” The TGA accepted this recommendation, and the decision took effect in July 2015.

•CBD ~~lack~~is one of ~~adequate~~the ~~funding~~cannabinoids towhich ~~continue~~may be extracted as a therapeutic good from cannabis. From June 1, 2015, cannabidiol has been included under Schedule 4 (S4) Prescription Only Medicine of the ~~clinical~~Poisons ~~trial~~Standard (/publication/poisonsstandard-susmp) when preparations for therapeutic use contain 2% or less of other cannabinoids found in cannabis.

In ~~addition~~ February 2016, athe ~~clinical~~Australian ~~trial~~Federal ~~may~~Government bepassed ~~suspended~~legislation that oramended ~~terminated~~the byNarcotic usDrugs Act, allowing the ~~FDA,~~supply ~~IRBs,~~of ~~ethics~~suitable ~~committees,~~medicinal ~~data~~cannabis ~~safety~~products ~~monitoring~~for ~~board~~the management of painful and chronic orconditions. ~~other~~This ~~foreign~~legislation ~~regulatory~~does ~~authorities~~not ~~overseeing~~relate to the ~~clinical~~decriminalization ~~trial~~of atcannabis ~~issue~~for general cultivation or ~~other~~recreational ~~regulatory~~use ~~authorities~~and ~~due~~it does tonot ainclude ~~number~~ the provision of ~~factors~~medicinal grade herbal cannabis, ~~including~~only processed, ~~among~~non-smokable ~~others:~~medicinal grade products’

~~• failure to conduct the clinical trial in accordance with regulatory requirements or our clinical trial protocols;~~52

•Much ~~inspection~~ of the ~~clinical~~detail ~~trial~~remains ~~operations~~unclear. orFor ~~clinical~~example, the ~~trial~~legislation ~~sites~~does bynot specify which products will be covered under the ~~FDA~~amendment, ~~the~~and ~~DEA~~it does not specify which particular conditions or symptoms will be eligible for treatment with cannabis-based products. Before products can be prescribed, they must be registered with the ~~EMA~~Therapeutic Goods Administration (TGA) or, ~~other~~in ~~foreign~~rare ~~regulatory~~circumstances, ~~authorities~~receive special approval from the TGA. The registration process requires evidence of testing and efficacy and it is therefore unlikely Australia will see a TGA registered medicinal cannabis product that ~~reveals~~GPs ~~deficiencies~~can orprescribe ~~violations~~any time soon. Whilst there are currently no cannabis-based products that ~~require~~are uslawfully toproduced ~~undertake~~in ~~corrective~~Australia, ~~action~~the medicinal use of pharmaceutical products containing cannabinoids is not prohibited, ~~including~~as long as authorization for prescribing is granted from the ~~imposition~~Commonwealth ofTherapeutic aGoods ~~clinical~~Administration ~~hold;~~and at this point in time, NSW Health.

•Raw ~~unforeseen~~Materials ~~safety~~and ~~issues,~~Product ~~including any safety issues that could be identified in our ongoing toxicology studies;~~Manufacturing

•The ~~adverse~~Company ~~side~~does ~~effects~~not orcurrently ~~lack~~manufacture any API and relies solely upon third party manufacturers to produce research quantities of ~~effectiveness~~its compounds, KLS-13019; KLS-13022; and KLS-13023, in the 5 gram to 100 gram scale for its preclinical research.

•For ~~changes~~the KLS-13023 compound, the Company relies upon Purisys to produce a highly purified synthetic CBD. Purisys has been manufacturing cannabidiol since 2016 (DMF33223). Today, through our partnership with Purisys, we have the ability to produce on the largest commercial scale. Purisys’ ultra-high purity CBD (“Purisys CBD”) is attractive for drug development projects and falls significantly below the 0.3% THC limits set in ~~government~~the ~~regulations~~2018 orFarm ~~administrative~~Bill ~~actions~~for use in consumer products. Purisys’ patent-protected manufacturing process produces a consistently odorless, tasteless white powder highest-purity form of CBD that exhibits:

44• No heavy metals (e.g. lead) from soil;

~~We intend~~• toNo ~~expend~~pesticide our limited resources to pursue KLS-13019 and KLS-13023 for certain indications, and may fail to capitalize on other product candidates or other indications for KLS-13019 or KLS-13023 that may be more profitable or for which there is a greater likelihood of success.residues;

~~Because we~~• ~~have~~No ~~limited~~environmental ~~financial~~influences ~~and managerial resources, we are focusing~~ on ~~research~~quality ~~programs~~such ~~relating~~as ~~to KLS-13019 and KLS-13023 for certain indications~~rain, ~~which~~sunlight ~~concentrates~~& ~~the~~soil risk of product failure in the event KLS-13019 or KLS-13023 proves to be unsafe or ineffective or inadequate for clinical development or commercialization. In particular, we intend to study KLS-13019 in patients with chemotherapy induced peripheral neuropathy, and we intend to study KLS-13023 in patients with mild traumatic brain injury. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications for KLS-13019 or KLS-13023 that could later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on proprietary research and development programs relating to KLS-13019 and KLS-13023 may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for KLS-13019 and KLS-13023, we may relinquish valuable rights to KLS-13019 or KLS-13023 through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to KLS-13019 or KLS-13023.nutrients;

~~The regulatory~~• ~~approval~~No ~~processes~~plant ofimpurities ~~the FDA, the EMA and other comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable~~ to ~~obtain regulatory approval for our product candidates, our business will be substantially harmed.~~remove;

~~We are~~• ~~not~~No ~~permitted~~microbial ~~to market our product candidates in the United States~~ or ~~the~~mold ~~European~~proliferation; Union until we receive approval of an NDA from the FDA or an MAA from the EMA, respectively, or in any foreign countries until we receive the requisite approval from such countries. Prior to submitting an NDA to the FDA or an MAA to the EMA for approval of our product candidates, we will need to complete our ongoing preclinical studies, as well as Phase 1, Phase 2 and Phase 3 clinical trials. We are still conducting preclinical studies and have not yet commenced our clinical program or tested KLS-13019 or KLS-13023 in humans. For KLS-13019, we plan to conduct Phase 1, and possibly Phase 2, clinical in the U.S. or Australia, subject to applicable regulatory approval. We plan to conduct our Phase 1 clinical trials for KLS-13023 in U.S. or Australia, subject to applicable regulatory approval. We plan to submit NDAs for KLS-13019 and KLS-13023 to the FDA upon completion of all requisite clinical trials. Successfully initiating and completing our clinical program and obtaining approval of an NDA or MAA is a complex, lengthy, expensive and uncertain process, and the FDA or EMA may delay, limit or deny approval of our product candidates for many reasons, including, among others, because:

• weNo ~~may~~structural ~~not~~(or bestereo ~~able~~chemical) todifferences ~~demonstrate~~exist ~~that~~between ~~our~~an ~~product~~active ~~candidates~~cannabinoid ~~are~~ingredient ~~safe~~manufactured by Purisys and ~~effective~~those inthat ~~treating~~are ~~patients~~chemically toextracted ~~the~~and ~~satisfaction~~isolated offrom ~~the~~plants. ~~FDA~~They orare, ~~EMA;~~in effect, nature-identical.

•Purisys ~~the~~currently ~~results~~has a ofdrug ~~our~~master ~~clinical~~file ~~trials~~(“DMF”) ~~may~~for ~~not~~its ~~meet~~ultra-high purity CBD with the ~~level~~FDA. ofIn ~~statistical~~November or2019, ~~clinical~~Purisys ~~significance~~received ~~required~~advise bynotice from the ~~FDA~~DEA orthat ~~EMA~~the ~~for~~Purisys ~~marketing~~CBD ~~approval;~~has been removed from Schedule 1 of the CSA.

•In the event the Company pursues a strategy to move KLS-13023 into FDA orclinical ~~EMA~~trials, ~~may~~it ~~disagree~~has ~~with~~set up a manufacturing process utilizing Purisys as the ~~number,~~bulk ~~design~~API producer of ultra-high purity CBD and Catalent Pharma Solutions (“Catalent”), ~~size~~a manufacturer of formulated and packaged pharmaceuticals, ~~conduct~~will orenable us ~~implementation~~to ofmeet our objectives in the production of target drug candidates that can be used in clinical trials; and, beyond successful clinical trials, meet patient demand in commercial sales for each of our target disease indications. (See: Neuropathix Studies on CBD)

•Environmental ~~the FDA or EMA may require that we conduct additional clinical trials;~~

Filing Compare · NEUROPATHIX, INC.