UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 WASHINGTON,
D.C. 20549

 FORM

 (Mark
One)

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

 For
the fiscal year ended June 30, 2025

 OR

 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: 001-39685

 INMED
PHARMACEUTICALS INC.

 (Exact
name of registrant as specified in its charter)

 British Columbia, Canada

 98-1428279

 (State or other jurisdiction of
 incorporation or organization)

 (IRS employer
 Identification number)

 Suite 1445, 885 West Georgia St., Vancouver, British
 Columbia, Canada

 V6C 3E8

 (Address of principal executive office)

 (Zip Code)

 (604) 669-7207

 (Registrant's
telephone number, including area code)

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

 Title of Each Class

 Trading Symbol

 Name of Each Exchange On Which Registered

 Common Stock, no par value

 INM

 The Nasdaq Capital Market

 Securities
registered pursuant to Section 12(g) of the Act: None

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

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

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

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
 Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" and
"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.

by check mark whether the registrant has fi led 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 fi rm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 As
of December 31, 2024, the last business day of the Registrant's most recently completed second fiscal quarter, the aggregate market
value of the Company's voting and non-voting common equity held by non-affiliates of the Registrant was $ 3,316,582.

 On
September 17, 2025, there were 2,384,186 shares of the registrant's common shares, no par value, outstanding.

 DOCUMENTS
INCORPORATED BY REFERENCE

 Portions
of the registrant's definitive proxy statement for the registrant's 2024 Annual Meeting of Stockholders to be filed pursuant
to Regulation 14A within 120 days of the registrant's fiscal year ended June 30, 2025 are incorporated herein by reference into
Part III of this Annual Report (as defined below).

 InMed

 TABLE
OF CONTENTS

 Page

 Part
 I

 Item
 1.

 Business

 Item
 1A.

 Risk
 Factors

 Item
 1B.

 Unresolved
 Staff Comments

 Item
 1C.

 Cybersecurity

 Item
 2.

 Properties

 Item
 3.

 Legal
 Proceedings

 Item
 4.

 Mine
 Safety Disclosures

 Part
 II

 Item
 5.

 Market
 for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6.

 [Reserved]

 Item
 7.

 Management's
 Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A.

 Quantitative
 and Qualitative Disclosures About Market Risk

 Item
 8.

 Financial
 Statements and Supplementary Data

 Item
 9.

 in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A.

 Controls
 and Procedures

 Item
 9B.

 Other
 Information

 Item
 9C.

 Disclosure
 Regarding Foreign Jurisdictions that Prevents Inspections

 Part
 III

 Item
 10.

 Directors,
 Executive Officers and Corporate Governance

 Item
 11.

 Executive
 Compensation

 Item
 12.

 Security
 Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13.

 Certain
 Relationships and Related Transactions, and Director Independence

 Item
 14.

 Principal
 Accounting Fees and Services

 Part
 IV

 Item
 15.

 Exhibits
 and Financial Statement Schedules

 Item
 16.

 Signatures

 i

 PART
I

 Special
Note Regarding Forward-Looking Statements

 This
Annual Report on Form 10-K (this "Annual Report") contains "forward-looking statements" within the meaning of
United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable
Canadian securities law, which are included but are not limited to statements with respect to InMed Pharmaceuticals Inc.'s (the
"Company" "InMed", "we", "our", or "us") anticipated results and progress
of our operations, research and development in future periods, plans related to its business strategy, and other matters that may occur
in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of
amounts not yet determinable and assumptions of management. We may, in some cases, use words such as "anticipate", "believe",
"could", "estimate", "expect", "intend", "may", "plan", "predict",
"project", "will", "would", "budget", "possible", "should", "future",
and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements. These forward-looking
statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties.
You should not place undue reliance on these forward-looking statements. Any statements contained herein that are not statements of historical
facts may be deemed to be forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking
statements. Among the factors that could cause actual results to differ materially are the risks and uncertainties described under " Item
1A. Risk Factors " of this Annual Report, "Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations " of this Annual Report, and the following:

 Our ability to stem operating
 losses and our ability to obtain additional financing to fund our operations;

 The revenues of BayMedica,
 LLC ("BayMedica") and the commercial viability of its product portfolio;

 Our ability to effectively
 research, develop, manufacture and commercialize pharmaceutical drug candidates that will treat diseases with high unmet medical
 needs;

 The continued optimization
 of key, proprietary manufacturing approaches and technologies;

 Our ability to commercialize
 and, where required, register products in the pharmaceutical R&D programs ("Product Candidates") and those targeted
 to the health and wellness sector ("Products") in the United States and other jurisdictions;

 Our success in initiating
 discussions with potential partners for licensing various aspects of our Product Candidates;

 Our ability to successfully
 access existing manufacturing capacity via leases with third-parties or to transfer our manufacturing processes to contract manufacturing
 organizations;

 Our belief that our manufacturing
 approaches that we are developing are robust and effective and will result in commercially viable yields of cannabinoids and will
 be a significant improvement upon existing manufacturing platforms;

 Our ability to successfully
 scale up our IntegraSyn approach to cannabinoid manufacturing. We have created genetically engineered microbes that produce proprietary
 enzymes, which are then used to optimize subsequent biotransformation reactions or other cost-effective manufacturing approaches
 so that it may be a potential manufacturing method in the future which could reduce the need to source active pharmaceutical ingredients
 ("APIs") from third-party API manufacturers;

 The success of the key
 next steps in our manufacturing approaches, including continuing efforts to diversify the number of products produced, scaling-up
 the processes to larger vessels and identifying external vendors to assist in the commercial scale-up of the process;

 Our ability to successfully
 make determinations as to which research and development programs to continue based on several strategic factors;

 Our ability to continue
 to outsource the majority of our research and development activities through scientific collaboration agreements and arrangements
 with various scientific collaborators, academic institutions and their personnel;

 The success of work to
 be conducted under the research and development collaboration between us and various contract development and manufacturing organizations
 ("CDMOs");

 Our ability to develop
 our therapies through early human testing;

 Our ability to evaluate
 the financial returns on various commercialization approaches for our Product Candidates, such as a 'go-it-alone' commercialization
 effort, out-licensing to third parties, or co-promotion agreements with strategic collaborators;

 Our ability to find a partnership
 early in the development process for our various programs;

 Our ability to explore
 our manufacturing technologies as processes which may confer certain benefits, including cost, yield, speed, or all the above, when
 pursuing specific types of molecules, and filing a provisional patent application for same;

 Plans regarding our next
 steps, options, and targeted benefits of our manufacturing technologies;

 Our Products being bio-identical
 to the naturally occurring molecules, and offering superior ease, control and quality of manufacturing when compared to alternative
 methods;

 U.S. Food and Drug Administration
 ("FDA") regulatory acceptance of Product Candidates for potential use in the pharmaceutical industry;

 Our ability to successfully
 file, prosecute and defend patent applications;

 The potential for any of
 our patent applications to provide intellectual property protection for us;

 The termination or renegotiation
 of our supplier, technology and other material contracts, including the invoking of force majeure or termination clauses, and actual
 or threatened claims of our failure to comply with any obligations set forth under such contracts;

 The adequacy of, or gaps
 in, insurance coverage upon the occurrence of a catastrophic or other material adverse event, as well as our ability to (i) expand
 our insurance coverage to include the commercial sale of Products and Product Candidates and (ii) secure insurance coverage for shipping
 and storage of Product Candidates, and clinical trial insurance;

 Developing patentable New
 Chemical Entities ("NCE") which, if issued, will confer market exclusivity to us for the potential development into pharmaceutical
 Product Candidates, license, partner or sell to interested external parties;

 Our ability to initiate
 discussions and conclude strategic partnerships to assist with development of certain programs;

 Our ability to position
 ourselves to achieve value-driving, near term milestones for our Product Candidates with limited investment;

 Our ability to effectively
 execute our business strategy;

 The sufficiency of our
 internal controls, including any exposure arising from the failure to (i) establish and maintain effective internal control over
 financial reporting in accordance with applicable regulatory requirements, and (ii) fully remediate any material weakness identified
 with respect to such internal controls;

 Epidemics, pandemics, global
 health crises, or other public health events and concerns, and the effectiveness of associated vaccinations and treatments;

 Consolidation of our competitors
 and suppliers;

 Effects of new products
 and new technology on the market, including with respect to automation and the use of artificial intelligence ("AI");

 The impact of geopolitical,
 global, regional or local economic and financial market risks and challenges, applicability of foreign laws, including foreign labor
 and employment laws, foreign tax and customs regimes, and foreign currency exchange rate risk;

 Political disturbances,
 geopolitical instability and tensions, or terrorist attacks, and associated changes in global trade policies and economic sanctions,
 including, but not limited to, in connection with (i) the Russo-Ukrainian war and (ii) any impact, effect, damage, destruction and/or
 bodily harm directly or indirectly relating to the ongoing hostilities in the Middle East;

 The outcome
 of any legal proceedings, disputes, claims and administrative proceedings that arise in the ordinary course of our business
 activities, including our ongoing matter with a third party licensor; and

 Our failure to satisfy
 any applicable listing standards, including compliance with the minimum bid price rule, and the actual or threatened delisting of
 our securities by Nasdaq.

 This
list is not exhaustive of the factors, events, conditions and circumstances that may affect the "forward-looking statements"
and "forward-looking information" contained in this Annual Report. Although we have attempted to identify important factors
that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that
cause results not to be as anticipated, estimated or intended. Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated, or expected.
Moreover, new risks regularly emerge, and it is not possible for our management to predict or articulate all risks we face, nor can we
assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to
differ from those contained in any forward-looking statements, which differences could be material. We caution readers not to place undue
reliance on any such forward-looking statements, which speak only as of the date made and are based only on the information available
to us at that time. Except as required by law, we disclaim any obligation to subsequently revise any forward-looking statements to reflect
events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. We qualify
all of our forward-looking statements by these cautionary statements.

 ITEM
1. BUSINESS

 All
dollar amounts stated herein are in U.S. dollars unless specified otherwise.

 Overview

 We
are a pharmaceutical company developing a pipeline of proprietary small molecule drug candidates that are preferential signaling ligands
of the endogenous CB1 and CB2 receptors as well as other receptor targets linked to human disease. CB1 and CB2 receptors are each part
of the endocannabinoid system that is found throughout the human body and is responsible for many homeostatic functions. CB1 receptors
are primarily located in the brain and central nervous system, while CB2 receptors are involved in modulating neuroinflammation and immune
responses. Our research efforts target the treatment of diseases with high unmet medical needs. Together with our wholly owned subsidiary,
BayMedica, LLC, or BayMedica, we also have significant know-how in developing proprietary manufacturing approaches to produce and sell
bulk rare cannabinoids as ingredients for various market sectors.

 We
have sought to focus on the research and development of preferential signaling ligands of CB1 and CB2, and have produced a library of
novel, proprietary drug candidates, or Product Candidates. These Product Candidates are patentable new chemical entities, or NCEs, for
pharmaceutical development, aimed at targeting diverse clinical indications. Our current potential pharmaceutical pipeline consists of
three programs, with drug candidates targeting Alzheimer's disease, dry Age-Related Macular Degeneration, or dry AMD, and Epidermolysis
Bullosa, or EB.

 Our
INM-901 is a proprietary small molecule, disease modifying drug candidate being developed as a potential treatment for Alzheimer's
disease. INM-901 has multiple potential mechanisms of action as a preferential signaling agonist for both CB1 and CB2 receptors, as well
as impacting the peroxisome proliferator-activated receptor, or PPAR, signaling pathway. Combined, these mechanisms of action may offer
a unique treatment approach targeting several biological pathways associated with Alzheimer's disease.

 Outcomes
from our ocular research, based on the proprietary small molecule INM-089, indicate potentially promising neuroprotective effects in
the back of the eye, which may lead to the preservation of retinal function. Neuroprotection in dry AMD remains an unmet medical need
and a new treatment option may help solve this multifactorial disease.

 We
have completed a Phase 2 clinical trial of INM-755 (cannabinol) cream studying its safety and efficacy in treating symptoms related to
EB. Results from the Phase 2 clinical trial showed a positive indication of enhanced anti-itch activity for INM-755 cream versus the
control cream alone in an exploratory clinical evaluation. We are also pursuing strategic partnership opportunities for INM-755 in EB
and other itch-related skin conditions.

 Together
with BayMedica, our manufacturing capabilities include traditional approaches such as chemical synthesis and biosynthesis, as well as
a proprietary, integrated manufacturing approach called IntegraSyn. With multiple manufacturing approaches, we have sought to maintain
enhanced flexibility to select the most cost-effective method to deliver high quality, high purity Products and Product Candidates fit
for their intended uses. BayMedica's commercial business specializes in the B2B commercialization of bulk rare, non-intoxicating
cannabinoids as raw materials for the Health and Wellness sector that are bioidentical to those found in nature.

 Corporate
Information

 We
were originally incorporated in the Province of British Columbia, under the Business Corporations Act (British Columbia) (the
"BCBCA"), on May 19, 1981 (the "Incorporation Date"), and we have undergone a number of executive management,
corporate name and business sector changes since such Incorporation Date, ultimately changing our name to "InMed Pharmaceuticals
Inc." on October 6, 2014. Our principal executive offices are located at Suite 1445, 885 West Georgia Street, Vancouver, BC, V6C
3E8 and our telephone number is +1-604-669-7207. Our website is  The information that is contained on, or
that may be linked to or accessed through our website, is not incorporated, in whole or in part, into this Annual Report in any respect.
We have included our website address in this Annual Report solely as an inactive textual reference.

 Employees
and Human Capital

 Our
management team is comprised of highly experienced pharmaceutical and biotechnology executives with successful track records in researching,
developing, gaining approval for and commercializing novel medicines to treat serious diseases. Each member of our management team has
20 to 30+ years of industry experience, including our Chief Executive Officer ("CEO"), Chief Operating Officer ("COO"),
Chief Financial Officer ("CFO"), General Manager and VPs of Preclinical Drug Development, Discovery Research, Chemistry,
Synthetic Biology and of Sales & Marketing. Together, this management team has covered the spectrum of pharmaceutical drug discovery,
preclinical research, formulation development, manufacturing, human clinical trials, regulatory submissions and approval, and global
commercialization of pharmaceutical and wellness products. Additionally, the management team has significant experience in company formation,
capital raises, mergers and acquisitions, business development, and sales and marketing in the pharmaceutical and other industries. Our
Board is constituted of individuals with significant experience in the pharmaceutical and biotechnology industries. As of September 12,
2025, inclusive of our management team, we had 13 full-time employees, and we also utilize the services of several consultants. None
of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We believe that we
maintain strong relations with our employees.

 We
are committed to growing our business over the long-term. As a result of the competitive nature of the industry in which we operate,
employees have significant career mobility and opportunity, and as a result, the competition for experienced employees is great. The
existence of this competition, and the need for talented and experienced employees to realize our business objectives, underlies the
design and implementation of our compensation programs. At the same time, we seek to keep our approach to compensation simple and streamlined
to reflect the still relatively moderate size of the Company. We have, therefore, implemented compensation, leave and benefits programs
necessary to attract and retain the talented and experienced employees necessary to develop our business, including what we believe to
be competitive salaries, stock options awards to permanent employees (both upon initial hiring and on an annual basis thereafter), and
pay annual bonuses to permanent employees contingent on the achievement of corporate and/or personal objectives. We have developed an
Employee Handbook that contains all corporate policies and guidelines for professional behavior. Our policies and practices apply to
all employees, regardless of title. These guidelines include, among others, our Code of Business Conduct as well as our policies for
corporate disclosure, insider trading and whistle blower, all of which are posted on our website.

 For
all current and future pharmaceutical Product Candidates we intend to submit new drug applications ("NDAs") (or their international
equivalents) in most major jurisdictions, including the United States, either alone or with development/commercial partners.

 Our
Business Strategy

 Our
goal is to develop a pipeline of prescription-based Product Candidates targeting treatments for diseases with high unmet medical needs.

 Develop and produce proprietary
 small molecule Product Candidates for use in our drug development programs

 Advance pharmaceutical
 drug Product Candidates through preclinical and clinical development, thereby establishing important human proof-of-concept in multiple
 therapeutic applications

 These
activities are at various stages of development, including, with INM-901 (for the treatment of Alzheimer's disease), INM-089 (for
the treatment of dry AMD) and INM-755 (for the treatment of symptoms related to EB). We have the internal capabilities to design and
execute, together with multiple external vendors, the preclinical experimentation and clinical studies required to advance pharmaceutical
drug candidates towards commercialization.

 Actively seek avenues to
 accelerate drug development via licensing, partnering or sale to external companies

 We
do not currently have an internal organization for the sales, marketing and distribution of pharmaceutical products. With respect to
the commercialization of each Product Candidate, we may therefore rely on (i) a "go-it-alone" commercialization effort; (ii)
out-licensing to third parties; or, (iii) co-promotion agreements with strategic collaborators for our Product Candidates. The decision
to pursue a "go-it-alone" commercialization effort versus out-licensing to third parties will depend on various factors including,
but not limited to, the complexity of the Product Candidate and process, the expertise required and related cost of building any such
infrastructure for our Product Candidates. For INM-755 in EB, further advancement is contingent on identifying drug development and commercial
partnerships. The optimal commercial strategy for the INM-901 and INM-089 compounds will be evaluated in due course.

 Expand portfolio and revenues
 of Products into the existing distribution network and to end-product manufacturers of specialty health and wellness products

 Develop cost effective
 and scalable manufacturing processes for high quality Products and Product Candidates as APIs for our core internal drug candidate
 pipeline and for licensing opportunities of non-core drug candidates.

 Our
Strengths

 We
are a pharmaceutical drug development company as well as a developer and supplier of rare, naturally occurring cannabinoids that is focused
on commercializing important medicines to treat diseases with high unmet medical needs. Our key strengths include the following:

 Experienced
executive team and board of directors with proven track records.

 One
key critical success factor in the field of pharmaceutical drug development is the experience and skill set of the individuals leading
us. We have been successful in attracting and retaining executive and directors with extensive experience in all facets of the pharmaceutical
industry, including fundamental research and development, multiple manufacturing techniques, drug formulation, clinical trial execution,
regulatory approvals, pharmaceutical commercialization, company and capital formation, business development, legal, and corporate governance.
Our leadership team is well-poised to lead us through all facets of drug development and product commercialization, either internally
or externally via partnerships. It is this group of individuals that will help optimize our chances for success.

 Scope
of research and robust pharmaceutical pipeline

 Over
several years of dedicated research, we have built a robust pipeline of drug development candidates, including two preclinical programs
targeting Alzheimer's (INM-901) and ocular diseases (INM-088 for glaucoma and INM-089 for AMD), as well as a completed Phase 2
study in dermatology (INM-755). The INM-089 and INM-901 preclinical programs offer a differentiated treatment approach using proprietary,
disease-modifying small molecules that target the CB1 and CB2 receptors, which management believes is a key strength of the Company.

 Multiple
manufacturing approaches.

 Our
management team believes that our combined manufacturing technologies provide us with a competitive advantage to utilize the most cost-efficient
methodology (i.e. chemical synthesis, biosynthesis and IntegraSyn) for the development and commercialization of new Products and Product
Candidates to a wide spectrum of market opportunities.

 Early
mover status as a B2B supplier of non-intoxicating rare cannabinoids to the health and wellness sector.

 As
demonstrated by the launch of several non-intoxicating rare cannabinoids into the health and wellness sector, the team at BayMedica has
substantial expertise in the commercial manufacturing scale-up to produce rare cannabinoids at large scale as well as extensive sales
and marketing expertise. This know-how is important to establishing an early-mover status and to maintain cost leadership with regards
to specific rare cannabinoids.

 Diverse
portfolio of patent applications covering a spectrum of commercial opportunities.

 Success
in pharmaceutical markets often rests with the strength of intellectual property, including patents, to protect our commercialization
interests. We have filed several patents on our novel findings and expect to continue to do so. The acquisition of BayMedica brought
several additional new patent families to bolster our manufacturing as well as drug development opportunities.

and Development Pipeline of Therapeutic Drug Candidates

for the Treatment of Alzheimer's Disease ("AD")

 Traditionally,
Alzheimer's disease has been defined by the buildup of amyloid beta ("A ") plaques and neurofibrillary, also referred
to as tau protein, tangles within the brain, making it a central focus of neurological research for many years. However, more recently,
other factors such as neuroprotection and synaptic dysfunction are being recognized as contributors to disease progression.

 Our
early research demonstrating the neuroprotective capabilities of CB1 and CB2 agonists in the eye led us to investigate how such molecules
might play a role in protecting other neurons in the human body, potentially, impacting different diseases. To this end, we initiated
research on the neurons that are associated with the brain and how our proprietary CB1 and CB2 agonist drug candidates could affect neurodegenerative
diseases such as Alzheimer's, Parkinson's, and Huntington's. In October 2023, InMed announced it had selected and would
be advancing a lead AD drug candidate, named INM-901, following positive results from several proof-of-concept studies. INM-901 is a
proprietary small molecule drug candidate. which, based on preclinical studies in well-characterized AD study models, may address multiple
pathologies related to AD progression. In these preclinical study models, INM-901 demonstrated neuroprotective effects, statistically
significant reduction in neuroinflammation, the ability to extend the length of neurites signifying enhanced neuronal function, and improvement
in behavior, cognitive function and memory. These early studies show the potential of INM-901 to reverse neuronal damage from AD and
potentially provide disease-modifying effects.

 As
a small molecule compound, INM-901 may offer various modes of administration including oral delivery, which could overcome several limitations
associated with currently approved antibody therapies for AD, such as the high drug expenses, complicated and inconvenient drug administration
and its associated compliance and accessibility challenges.

 INM-901's
innate ability to safely cross the blood-brain barrier, promising preclinical studies, multifactorial mechanism of action and small molecule
profile offer a potentially attractive treatment option for AD.

 Alzheimer's
Disease Prevalence and Impact – A Major Medical and Societal Burden

 Alzheimer's
disease is a progressive neurodegenerative condition that predominantly afflicts the elderly, resulting in severe cognitive impairments.
It is a subset of dementia that impacts the part of the brain that controls memory and language and leads to increased morbidity and
mortality.

 According
to the U.S. Alzheimer's Disease Association, AD accounts for 60-80% of dementia cases and is the fifth leading cause of death for
people aged 65 and older. It's estimated that 6.9 million Americans are living with AD, and it's expected to grow to 12.7
million by 2050. About 1 in 9 people aged 65 and older has AD (10.7%), affecting 1 in 5 women and 1 in 10 men in their lifetime.

 The
disease has a major medical and societal burden with health and long-term care costs valued at $360 billion. In addition to the cost
to the healthcare system, it's estimated 11 million Americans are providing 18.4 billion hours of unpaid care valued at $350 billion
for people living with AD or other dementias, making it one of the costliest diseases to society.

 Additionally,
the emotional and mental health burden on patients and their caregivers cannot be overstated.

 Pathology
of Alzheimer's disease

 Alzheimer's
disease is a complex neurodegenerative disease with multiple pathologies leading to its development and progression. Hallmarks of the
disease point to the toxicity and disruption of proteostasis caused by misfolded amyloid beta protein and neurofibrillary tangles or
tau tangles. Amyloid-beta is a naturally occurring protein in the brain, but when abnormal levels of amyloid-beta clump together to form
plaques, it causes damage to neuronal cell function resulting in AD.

 The
focus of Alzheimer's research has been traditionally centered around amyloid-beta plaques and tau protein, which play a crucial
role in stabilizing microtubules within neurons, supporting their structure and function. Increased activity of enzymes called tau kinase
causes the tau protein to misfold and clump, creating neurofibrillary tangles which disrupt the normal functioning of neurons. The stage
and severity of AD is associated with an abundance of tau tangles.

 In
addition to these two aspects of Alzheimer's disease, neuroinflammation and synaptic dysfunction are also recognized as contributors
to AD progression. Microglia, the brain's immune cells, are involved in the removal of amyloid-beta and has been a focus of research
in neuroinflammation. Therapies targeting the modulation of microglial activity aim to reduce inflammation and protect neurons.

 Examples
of Current treatments in Neurodegenerative Diseases

 Brand

 Company

 Mechanism
 of Action

 Status

 Aducanumab
 (Aduhelm)

 Biogen

 Anti-amyloid beta target
 both insoluble and soluble aggregates

 Approved June 2021, discontinued
 November 2024

 Lecanemab
 (Leqembi)

 Biogen/ Eisai

 Anti-amyloid beta, electively
 binds to large, soluble A protofibrils

 Approved January 2023

 Donanemab
 (Kisunla)

 Eli Lilly

 Anti-amyloid beta, target
 pyroglutamated AB in plaques

 Approved July 2024

 Gantenerumab

 Roche

 Anti-amyloid beta, target
 aggregated forms of AB including oligomers and plaques

 Phase 3 failed November
 2022

 Remternetug
 (LY3372993)

 Eli Lilly

 Anti-tau, O-GlcNAcase Inhibitor

 Phase 3

 BIIB080

 Biogen

 Anti-Tau, antisense oligonucleotide
 (ASO)

 Phase 2

 Semorinemab

 Genentech

 Anti-tau

 Phase 2 Failed

 Currently
approved medications for AD generally fall into two main categories. The first category comprises drugs designed to address symptoms
related to memory and cognitive function. While these medications cannot halt the damage that AD inflicts on brain cells, they can help
alleviate or stabilize symptoms for a limited duration by influencing specific chemicals responsible for transmitting messages between
nerve cells in the brain. Essentially, these medications are aimed at preserving neurotransmitters. However, they do not replace the
deteriorating ones and thus do not impede the disease's progression.

 Until
recently, cholinesterase inhibitors and glutamate regulators were the only treatments available to people living with AD. These drugs
are intended to improve cognitive and behavioral symptoms and do not address the prevention or progression of the disease.

 In
recent years, there has been a growing emphasis on developing disease-modifying treatments that target the underlying biology of AD.
One major focus of these research and development endeavors has centered on addressing the accumulation of amyloid plaques and the removal
of both these plaques and tau proteins. This approach aligns with the long-standing amyloid hypothesis, which posits that AD is triggered
by the buildup of (A) in the brain. This accumulation leads to neuronal toxicity within the central nervous system, disrupting
neuronal and synaptic function, ultimately culminating in neuronal degeneration and cell death.

 Since
2021, three disease-modifying treatments have been approved for the treatment of mild cognitive impairment due to Alzheimer's disease.
All three treatments primarily address symptoms related to memory and cognitive function via the reduction of beta-amyloid plaques. Aduhelm,
the first of these drugs to be approved by the FDA has since been discontinued by Biogen. These disease-modifying medications are aimed
at removing amyloid plaque build-up between the neurons in the brain; however, they do not restore or rebuild deteriorating neurons and
thus do not reverse Alzheimer's disease progression. In addition, these treatments are related to some significant side effects,
including amyloid-related imaging abnormalities ("ARIA") with edema (brain swelling), requiring brain scans once or twice
a year. The administration of these treatments, which include an intravenous infusion every 2-4 weeks, also presents a challenge.

 Role
of CB1 and CB2 Agonists in Alzheimer's disease:

 Numerous
studies have indicated dysregulation of the Endocannabinoid System ("ECS"), which encompasses receptors, endocannabinoids,
and synthesizing/metabolizing enzymes, in various neurodegenerative conditions, notably AD. These investigations have unveiled the potential
of CB1 and CB2 agonists, both endogenous and synthetic, in mitigating the harmful effects of AD pathology. These CB1 and CB2 agonists
have been suggested to diminish A toxicity, reduce tau hyper-phosphorylation, and suppress neuroinflammatory responses while curbing
the production of reactive oxygen species ("ROS"). As a result, they may enhance the survival of neurons in the aftermath
of A aggregation.

 CB1
and CB2 agonists exert their biological effects through two primary membrane receptors, endogenous CB1 and CB2 receptors, which are widely
distributed in the central nervous system and peripheral tissues. Activation of CB1 has demonstrated its ability to alleviate neurotoxicity
in various AD models. Conversely, CB2 agonism and increased expression have been associated with the removal of A by macrophages.

 The
precise molecular mechanisms responsible for safeguarding specific neuronal populations remain elusive. However, several observations
support this concept:

 a)
CB1 and CB2 agonists possess a capacity to exert broad effects on multiple molecular targets, including critical brain structures and
behavior;

 b)
CB1 and CB2 agonists act not only through ECS receptors but also interact with other non-ECS receptors such as transient receptor potential
vanilloid 1, peroxisome proliferator-activated receptors ("PPARs"), and transcription factors such as nuclear factor kappa-light-chain-enhancer
of activated B cells ("NFkB"); and

 c)
CB1 and CB2 agonists exhibit anti-inflammatory properties, modulate neurotransmitter release, and limit oxidative stress, collectively
contributing to the enhancement of neuronal viability.

 AD
is a progressive neurodegenerative condition primarily driven by the toxicity and disruption of proteostasis caused by misfolded A
protein. CB1 and CB2 agonists have emerged as promising agents capable of preserving neuronal integrity and functionality, offering a
potential strategy to slow down disease progression and enhance the quality of life for affected individuals. Furthermore, CB1 and CB2
agonists exhibit the capacity to mitigate neuroinflammation, shield against beta-amyloid-induced neurotoxicity, and mitigate neurodegeneration
in animal models of AD. Additionally, research has unveiled dysregulation of the ECS in the brains of AD patients, which could contribute
to the cognitive and behavioral symptoms associated with the disease.

is highly lipophilic (dissolves in fats, oils and lipids) and can easily cross the blood-brain barrier, a capability that renders it
a promising candidate for pharmaceutical use in the treatment of neurological disorders.

 The
use of CB1 and CB2 agonists in AD treatment holds great promise; however, further research is needed to fully understand the mechanisms
to develop safe and effective CB1 and CB2 agonists-based therapeutics.

 INM-901:
A Multi-factorial Approach to Treating Alzheimer's disease

 While
progress has been made recently in the development of new treatments for AD, there are no treatments addressing the multiple aspects
of this complex disease such as neuroinflammation, neuroprotection, synaptic dysfunction or the restoration of the damaged neurons –
factors that may help to restore brain function loss or reverse the damage caused by AD.

 Preclinical
studies indicate that INM-901 may target multiple biological pathways. InMed has conducted several in vitro and in vivo
studies to test the pharmacological effects of INM-901 in well-characterized AD preclinical models.

 Figure
1. Multiple Mechanisms of Action

 Figure
2. Neuroprotection of human neuronal cells

 Phyto-cannabinoids
("pCBx") promote neuroprotection. (A) Amyloid peptide (A, 5 M) induces cytotoxicity in SHSY5Y
cells. A 1-42 insult induced approximately ~45% cytotoxicity of the SH-SY5Y cells. (B) Concurrent exposure of A
with pCBx at 5 M and 10 M concentrations protected cells from A induced toxicity in a dose-dependent manner. Cell
viability was determined by MTT assay.

 Figure
3. Neurogenesis of human neuronal cells

 Cannabinoid
pCBx promotes neuritogenesis. Tuj1 Tubulins are building blocks of microtubules. As such, Tuj1 expression can reveal the fine
details of axonal structures and dendrites. Therefore, changes in Tuj1 expression can be directly correlated with neuronal health and
communication. (A) Photomicrographs illustrating Tuj1 expression in control and pCBx (5 and 10 M) treated cells. The formation
of extended neurites and arborization is evident upon pCBx treatment.

demonstrates anti-inflammatory effects

 Neuroinflammation
plays a key role in the progression of Alzheimer's disease and is a hallmark of neurodegenerative disorders. INM-901 has demonstrated
the ability to reduce neuroinflammation in both in vivo and ex vivo models, reinforcing its potential as a disease-modifying
therapeutic candidate.

 In
a long-term (seven-month dosing) in vivo study, INM-901 demonstrated statistically significant, dose-dependent reductions in several
pro-inflammatory cytokines in plasma, including tumor necrosis factor alpha ("TNF- "), interleukin-1 beta ("IL-1 "),
and interferon gamma ("IFN- "). In addition, INM-901-treated groups showed reduced plasma levels of neurofilament light
chain ("NfL"), a biomarker associated with neurodegeneration. mRNA analysis from brain tissue revealed reduced expression
of glial fibrillary acidic protein ("GFAP"), CD-33, and Toll-like receptor 2 ("TLR-2"), all of which are associated
with neuroinflammatory responses in Alzheimer's disease.

 Further
supporting these findings, an ex vivo study using lipopolysaccaride ("LPS")-induced inflammation in animal brain tissue
demonstrated that INM-901 significantly reduced the expression of NLRP3, a key inflammasome marker, as well as the cytokines IL-6, IL-1,
IL-2 and KC/GRO. These anti-inflammatory effects were observed in a dose-dependent manner and were statistically significant. The data
support INM-901's direct anti-inflammatory activity independent of amyloid-beta or tau-related pathology.

shows behavioral improvements in in vivo models

treatment in the well-established 5xFAD AD mouse model led to improvement in cognitive function and memory, locomotor activity, anxiety-based
behavior, and sound awareness. InMed's most recent study evaluated INM-901 using a longer treatment duration and subjects with
more advanced disease to validate and expand upon previous findings, which have demonstrated improvements in cognitive function, anxiety-related
behavior, and sensory responsiveness.

of INM-901 Iong-term 5xFAD study:

 Hippocampal
 RNA Expression - Several genes associated with inflammation, the endocannabinoid system,
 synaptic dysfunction and oxidative stress and apoptosis (cell death) were evaluated following
 treatment. In some cases, INM-901 demonstrated a dose-dependent trend towards a return to
 non-diseased baseline following treatment.

 Anti-inflammation
 – Treatment with INM-901 resulted in a significant reduction in the inflammatory biomarkers
 IFN-, TNF-, IL-1, KC-GRO, IL-2 and NfL, suggesting a dose-dependent therapeutic
 effect in neuroinflammation.

 Immunohistochemistry
 - Amyloid-beta immunoreactivity is reduced following INM-901 treatment in a dose-dependent
 manner. The microtubule-associated protein 2 ("MAP2") is a protein found in the
 neurons, especially in the dendrites and is involved in neurite outgrowth and signal transduction
 of the neurons, is partially restored with INM-901 treatment.

 Behavior
 – Cognitive function, anxiety-related behavior, and sensory responsiveness were restored
 or approaching normal following INM-901 treatment in diseased animals.

Interacts with Specific Receptors in the Brain

 Studies
of INM-901 demonstrate activity as a preferential signaling ligand for CB1 and CB2 and impacts the peroxisome proliferator-activated
receptors ("PPAR") signaling pathway. Research indicates that activating CB1 and CB2 receptors may induce neuroprotective
effects and may help to protect brain cells from damage and death. Enhancing the activity of these receptors may help to slow down the
progression of the AD, in which neuronal cell death is a hallmark. Moreover, the activation of these receptors, along with other cellular
receptors, has also been shown to have an impact on neuroinflammation. As neuroinflammation is believed to contribute to the progression
of AD, targeting these receptors could help alleviate this inflammatory response.

is a Proprietary Small Molecule Compound

is a small molecule compound, one of several cannabinoid analogs developed by our scientists. Cannabinoids are small molecules known
to be highly lipophilic and can safely cross the blood-brain barrier, enabling the potential therapeutic modulation of brain signaling
and making them promising pharmaceutical targets for neurological diseases such as AD.

 Small
molecule drugs have several advantages that contribute to their widespread use. Those advantages include oral administration (making
it convenient for patients to comply), good bioavailability (allowing these compounds to be efficiently absorbed), ability to cross the
blood-brain barrier (enabling therapeutic modulation in brain signaling), stability in storage and transport (ease of drug handling and
dose adjustment) and low-cost manufacturing.

 Key
Outcomes from INM-901 Studies

 In
Vitro Studies

 Treated
 groups display neuroprotection and extended neurite length, a potential marker for improved
 neuronal function. Neurites promote cell-to-cell communication, essential for brain signaling

 Treated
 groups demonstrated dose- dependent cell survival and proliferation

 In
Vivo Studies

 Showed
 a reduction in neurofilament light chain, marker of cellular damage

 Demonstrated
 statistically significant, dose-dependent reductions in several pro-inflammatory cytokines
 in plasma

 Showed
 improvement in cognitive function and memory, locomotor activity, anxiety-based behavior,
 and sound awareness

 Ex
Vivo Studies

 Demonstrated
 reduced levels of NLRP3 and IL-1, two inflammasome markers increasingly implicated
 in the pathogenesis of Alzheimer's disease and other neuroinflammatory diseases.

 Treatment
 resulted in a dose-dependent and statistically significant reduction in several key pro-inflammatory
 markers, including IL-6, IL-1, KC/Gro, and IL-2.

 Reduced
 key pro-inflammatory markers, independent of amyloid-beta or tau pathology, signifying potential
 to treat other dementia-related diseases.

Next Steps

& Development

 Additional proof-of-concept
 ("PoC") studies are planned to further elucidate the various effects of INM-901 in AD disease

 On-going Chemistry, Manufacturing
 and Controls ("CMC") activities for drug substance and oral drug product

 On-going studies of receptor
 interactions (mechanism of action ("MoA")) and Distribution/Metabolism/Pharmacokinetics ("DMPK")

 Dose Ranging and other non-GLP studies, with GLP studies
 to follow

 Seeking
 business development partnerships

 Key
Milestones

 November 3, 2021 —
 we announced the filing of an international patent application demonstrating neuroprotection and enhanced neuronal function using
 a rare cannabinoid for the potential treatment of neurodegenerative diseases such as Alzheimer's Disease, Parkinson's
 Disease, Huntington's Disease and others. This Patent Cooperation Treaty (PCT) application, entitled "Compositions and
 Methods for Treating Neuronal Disorders with Cannabinoids", specifies a rare cannabinoid that may inhibit or slow the progression
 of neurodegenerative diseases by providing neuroprotection in a population of affected neurons. Furthermore, the PCT application
 also demonstrates the subject cannabinoid compound can also be used to promote neurite outgrowth, signifying the potential to enhance
 neuronal function. The rare cannabinoid included in the PCT application is new to InMed's portfolio.

 November 16, 2022 —
 we announced announces the launch of its neurodegenerative disease program (INM-900 series), investigating the effects of cannabinoid
 analogs in diseases such as Alzheimer's, Huntington's and Parkinson's. In addition, Dr. Ujendra Kumar of the Faculty
 of Pharmaceuticals Sciences at UBC has been awarded an Alliance grant from NSERC, with InMed as the named industry partner. The funding
 will support the research and development studies of InMed's cannabinoid pharmaceutical candidates, investigating their potential
 therapeutic effects in neurodegenerative diseases. The collaboration project is entitled "Pharmacological Characterization
 of Phytocannabinoids and the Endocannabinoid System".

 June 1, 2023 — we
 announced that results from a neurodegenerative disease study was presented in a scientific poster at the Canadian Neuroscience Meeting
 in Montreal from May 28-31, 2023. The InMed sponsored research, entitled " Cannabinoids modulate cytotoxicity and neuritogenesis
 in Amyloid-beta-treated neuronal cells", demonstrated the ability of a specific rare cannabinoid ("pCBx") in
 our INM-900 series of potential candidates that reduces amyloid toxicity and tau protein expression while enhancing neuronal cell
 growth and neuritogenesis markers in vitro, all considered to be important targets in the potential treatment of neurodegenerative
 diseases such as Alzheimer's.

 October 2, 2023 —
 we announced the selection of a lead Alzheimer's disease drug candidate, named INM-901, following positive results from several
 proof-of-concept studies in a validated Alzheimer's disease treatment model. InMed will be advancing INM-901, a cannabinoid
 analog, in its pharmaceutical drug development program. In vitro Alzheimer's disease studies showed that INM-901 treated
 groups display neuroprotection and extended neurite length, a potential marker for improved neuronal function. INM-901 treated groups
 in an in vivo Alzheimer's disease model demonstrated improved behavioral, cognitive and memory outcomes in several Alzheimer's
 proof-of-concept studies.

 April 4, 2024 — we
 announced additional preclinical data demonstrating INM-901's positive pharmacological effects in the potential treatment of
 Alzheimer's Disease ("AD"). Additionally, the studies demonstrated INM-901 is a preferential signaling agonist
 of the CB1and CB2 receptors and impacts the PPAR signaling pathway, reduced neuroinflammation and improved neuronal function, and
 that mRNA data supports the observations made in the previously released behavior studies in locomotor activity, cognition and memory.

 April 18, 2024 —
 we announced the addition of Dr. David G. Morgan, a renowned leader in neurodegenerative disease to its Scientific Advisory Board
 ("SAB") reinforcing our commitment to advancing it's INM-901 program in the treatment of Alzheimer's disease.

 July
 2024- we announced positive results from initial data sets from a long-term (7 months of
 dosing) in vivo preclinical Alzheimer's Disease ("AD") study of INM-901
 which confirms previously reported findings from a short-term (3 months of dosing) pilot
 study. This long-term dosing study was conducted using the 5xFAD amyloidosis model with extended
 dosing duration and increased sample size as compared to the short-term study. All assessments
 of the INM-901-treated AD groups showed a positive trend towards behavior similar to the
 untreated disease-free group, with most assessments demonstrating a clear dose response.
 Furthermore, INM-901-treated AD groups achieved a statistically significant improvement in
 certain behavior criteria in comparison to the placebo-treated AD groups.

 August
 2024 - we confirmed INM-901 as an oral formulation that will be utilized in its development
 programs for Alzheimer's disease. Preclinical studies have demonstrated that INM-901,
 a proprietary small molecule drug candidate, can be administered orally and achieve therapeutic
 levels in the brain comparable to those obtained through intraperitoneal ("IP")
 injection, which is a common route of administration for preclinical investigation of neurodegenerative
 diseases.

 October
 2024 – We announced the appointment of Dr. Barry Greenberg to its Scientific Advisory
 Board. Dr. Greenberg is the Director of the Alzheimer's Disease Translational Center
 and an Associate Professor in the Department of Neurology at the Johns Hopkins University
 School of Medicine.

 October
 2024 – we filed an additional international patent application, under the Patent Cooperation
 Treaty (PCT), focused on the pharmaceutical composition and method of use for the proprietary
 small molecule drug candidate INM-901 for treating neurodegenerative diseases, including
 Alzheimer's disease.

 January
 2025 – we announced positive results from a long-term in vivo preclinical Alzheimer's
 Disease ('AD') study. In the study, INM-901 demonstrated a reduction in several
 plasma and brain markers of neuroinflammation, a recognized contributor to Alzheimer's
 disease development and progression.

 June
 2025 – we announced new preclinical data demonstrating that INM-901 significantly reduces
 inflammation in ex vivo models of neuroinflammation, further supporting its potential
 as a therapeutic candidate in Alzheimer's disease. The study evaluated INM-901 in an
 ex vivo model of lipopolysaccharide (LPS)-induced inflammation in animal brain tissue,
 which is designed to induce a strong expression of pro-inflammatory cytokines IL-6, IL-1,
 IL-2, and KC/Gro and inflammasome marker NLRP3. Results demonstrated that INM-901 treatment
 can reduce pro-inflammatory cytokines and may have a direct impact on neuroinflammation independent
 of the influence of amyloid beta or tau aggregation. This study model offers insight into
 INM-901's potential therapeutic impact on brain inflammation that may underlie a broad
 range of neurodegenerative diseases, including Alzheimer's disease.

 July
 2025 – we presented new preclinical data from its INM-901 program at the Alzheimer's
 Association International Conference (AAIC) 2025, the world's leading forum for Alzheimer's
 disease ("AD") and dementia research. Data was presented in a scientific poster
 entitled, "Therapeutic Potential of INM-901 in Mitigating Alzheimer's Disease
 Pathology: Insights from a Long-term 5xFAD Mouse Model Study". The Alzheimer's
 disease preclinical study measured hippocampal RNA expression, inflammatory markers, immunohistochemistry
 and behavioral differences following long-term treatment with INM-901 and as compared to
 healthy and to untreated diseased subjects in a well-established model.

for the Treatment of Age-related Macular Degeneration ("AMD")

 Introduction

 While
conducting the preclinical studies of a previous drug candidate, INM-088 in glaucoma, which involved comparing various naturally occurring
compounds including InMed's proprietary small molecule candidates, it was discovered that one of InMed's candidates was demonstrating
interesting pharmacological effects in the back of the eye. Further preclinical studies of this compound using AMD study models demonstrated
significant functional and pathological improvements. InMed has selected drug candidate INM-089, a proprietary small molecule analog
of INM-088, for further preclinical development in the potential treatment of dry AMD.

 AMD
is a progressive eye disease that causes damage to the macula which affects a person's central vision. AMD is common amongst the
elderly and is a leading cause of vision loss. Dry AMD is the most common form of AMD, accounting for 80% of AMD cases according to the
American Academy of Ophthalmology.

 Until
recently, there were no approved pharmaceutical treatments for people with dry age-related macular degeneration. In 2023, the FDA approved
two new treatments which are complement inhibitors for advanced stages of dry AMD (called geographic atrophy ("GA")).

 In
vitro and in vivo studies of INM-089 have demonstrated neuroprotection of photoreceptors, improvement of the integrity of
the retinal pigment epithelium, a reduction in extracellular autofluorescent deposits (a hallmark of AMD), preservation of the retinal
function in the back of the eye and improvement in the thickness of the outer nuclear layer of the retina.

 As
a small molecule, INM-089 is likely deliverable via various modes of administration, such as a topical eye drop or intravitreal injection
("IVT") formulations.

 Pathology
of Age-related Macular Degeneration

 AMD
is a progressive eye disease that causes damage to the macula which is part of the retina at the back of the eye. The macula controls
the sharp vision straight ahead of you, and damage to the macular affects a person's central vision.

 There
are two principal forms of AMD, atrophic (non-exudative) dry AMD and neovascular (exudative) wet AMD. Wet AMD constitutes about 10%-20%
of all cases of AMD and occurs when an abnormal blood vessel grows in or under the retina leading to central vision loss. Dry AMD is
the most common form affecting nearly 80%-90% of all patients with AMD. It is associated with the gradual loss of the outer nuclear layer
("ONL") photoreceptors and the retinal pigment epithelium ("RPE") thinning, formation of drusen deposits, and
loss of the vessels in the retinal choriocapillaris. Advanced stage of dry AMD is characterized by GA at the center of the macula extending
through the outer neuroretina, RPE and choroid. GA is characterized by the atrophy of RPE, photoreceptors, choriocapillaris, and ONL.
The loss of functional RPE and photoreceptors in GA is not endogenously replaced and can result in complete sight loss.

 AMD
is a leading cause of vision loss in adults

 According
to the World Health Organization, 196 million people worldwide live with age-related macular degeneration. An estimated 19.8M Americans
aged 40+, about 12.6% of the population, suffer from AMD. While AMD does not cause complete vision loss, it affects central vision and
impairs one's ability to perform daily tasks such as cooking, reading and driving.

 As
the name suggests, aging is a strong risk factor for developing AMD. Adults aged 50 or older, smoke, have a diet of high saturated fat,
have cardiovascular disease or have a family history of AMD are more at risk of developing AMD. People of European ancestry are more
likely to develop AMD than Blacks, Hispanics or Asians. In addition, people with blue eyes have higher incidence rates of AMD than someone
with brown eyes.

 Early
detection is key to slowing the progression of AMD. A sign of whether you might have AMD is when straight lines look wavy.

 A
Major Unmet Medical Need for New AMD Treatments

 Until
recently, there were no approved pharmaceutical treatments for people with dry age-related macular degeneration, which accounts for about
80%-90% of AMD cases.

 In
2023, the FDA approved two new treatments which are complement inhibitors for advanced stages of dry AMD (or geographic atrophy). These
complement inhibitors are injected directly into the eye every one to two months.

 Syforvre
(pegcetacoplan), developed by Apellis Pharmaceuticals, was approved by the FDA in February of 2023 for the treatment of geography atrophy,
the late stage of dry AMD. Syforvre, a C3 complement inhibitor, is injected into each eye every 25-60 days and reduces
the rate of lesion growth in the eye.

 In
August 2023, the FDA approved Iveric's Izervay (avacincaptad pegol), a complement C5 inhibitor, which aims to reduce
an immune response that damages retinal cells. Similar to Syforvre, the drug is approved for geographic atrophy and is
administered via intravitreal injection every month. According to the Alzheimer's Association, these new complement inhibitor drugs
slow the development of GA by about 14%-20%, but do not improve eyesight, nor restore lost vision. Side effects of these new treatments
include inflammation, bleeding beneath the clear lining of the eye, blurred vision and fluid pressure, and some patients develop wet
AMD.

 In
addition to the new complement inhibitors, there are surgical implants and ongoing clinical drug trials. An ophthalmologist may recommend
specific vitamins to slow the progression of AMD in its intermediate stage.

 The
approval of complement inhibitors offers hope to people living with dry AMD, however, the modest effect, inconvenient drug delivery and
the increased risk of developing wet AMD may outweigh the benefit for some patients and their physicians. There remains a large unmet
medical need for more effective and convenient treatments for the large patient population affected by dry AMD.

 Treatments
approved or in late-stage development for Geographic Atrophy (advanced dry AMD)

 Brand

 Company

 Mechanism
 of Action

 Status

 Syforvre

 Apellis Pharmaceuticals

 Complement C3 inhibitor

 Approved February 2023

 Izervay

 Iveric

 Complement C5 inhibitor

 Approved August 2023

 Tinlarebant

 Belite Bio

 Targets retinol binding
 protein 4 (RBP4)

 Phase 3

 ANX007

 Annexon Biosciences

 Anti-C1q antibody

 Initiating Phase 3

 JNJ-1887/HMR59

 Hemmera/ Janssen

 Increase expression of
 soluble form of CD59

 Phase 2

 IONIS-FB-LRx / RG6299

 Ionis /Roche

 Anti-sense complement factor
 B inhibitor

 Phase 2

 Danicopan (ALXN2040)

 Alexion

 Complement Factor D inhibitor

 Phase 2

 Role
of CB1 and CB2 agonists in ocular disease

 Mounting
scientific e is pointing to the neuroprotective effects of CB1 and CB2 agonists, supporting their therapeutic potential in ocular diseases
such as AMD and glaucoma, in which neuroprotection is key to preserving the nerve cells in the eyes and potentially slowing or reversing
eye damage. Several preclinical studies conducted by InMed in three of its drug development programs have consistently shown the neuroprotective
effects of naturally occurring CB1 and CB2 agonists and their analogs in well-recognized study models.

 In
was during this research of INM-088 when InMed scientists observed the ability of a novel CB1 and CB2 agonist, now called INM-089, to
proactively protect the nerve cells in the back of the eye. As a result of this discovery, InMed launched the INM-089 drug development
program for the potential treatment of AMD.

 INM-089:
Small molecule compound acting as a selective dual CB1 / CB2 agonist

 CB1
and CB2 receptors are both part of the endocannabinoid system and are found throughout the body and are responsible for many homeostatic
functions. CB1 receptors are primarily located in the brain and central nervous system, while CB2 receptors are involved in modulating
neuroinflammation and immune responses. Activation of CB1 and CB2 receptors has been shown to have neuroprotective effects and protect
cells from damage and death.

is a small molecule compound, one of several proprietary CB1and CB2 agonists discovered and developed by our team of scientists.

in vitro and in vivo studies to date

 Preclinical
studies of INM-089 demonstrate significant functional and pathological improvements in an AMD disease study model. Results from several
 in vitro and in vivo studies demonstrate INM-089's pharmacological effects in the potential treatment of dry AMD:

 INM-089 provides neuroprotection
 of retinal cells;

 INM-089 improves the integrity
 of the retinal pigment epithelium ("RPE");

 INM-089 reduces extracellular
 autofluorescent ("AF") deposits, including drusen, a hallmark of dry AMD;

 INM-089 preserves photoreceptor
 function and retinal cells in the back of the eye; and

 INM-089 improves thickness
 of outer nuclear layer ("ONL") of the retina where photoreceptors are located.

 Based
on widely accepted ocular research, the thickness of the outer nuclear layer is strongly correlated with photoreceptor preservation and
visual acuity.

Study: Neuroprotective effects

demonstrates neuroprotective effects in pressure-induced toxicity in vitro model in retinal ganglion cells in a dose-dependent
manner.

Study: Photoreceptor Function Preservation

 In
a light-induced toxicity in vivo AMD model, a single intravitreal injection was performed at the back of the eye to deliver either
INM-089, INM-088 or vehicle control. INM-089 outperforms INM-088 ('CBN' in the graph below) and vehicle control in preserving
photo-receptor function.

Study: Autofluorescent Extracellular Deposit Level

 In
a light-induced toxicity in vivo AMD model, a single intravitreal injection was performed at the back of the eye to deliver either
INM-089 or vehicle control. INM-089 reduced build-up of autofluorescent extracellular deposits, which causes damage to the macular. The
build-up of autofluorescent deposits such as drusen is a hallmark of dry AMD.

 Selection
of intravitreal ('IVT') formulation for INM-089

 InMed
selected an intravitreal ("IVT") formulation for INM-089 as a drug candidate to be utilized in our ongoing development
program. InMed's proprietary IVT formulation, combined with the INM-089 active pharmaceutical ingredient ("API"), has
been successfully delivered to the targeted area of the eye in preclinical studies in doses of up to 10 times the calculated safety margin
relative to the therapeutic dose level. This INM-089 IVT formulation will be used in the next stages of preclinical studies, including
GLP-enabling studies and subsequent stages of clinical development. Additionally, InMed completed a series of dose-ranging in vivo studies.
The information from the dose-ranging study will guide us in selecting the appropriate doses for the pivotal preclinical toxicology studies.

 Intravitreal
injection has been the established method for the effective delivery of drugs to the back of the eye and remains the standard of care
among retinal specialists. Topical formulations, such as eye drops, face significant challenges in delivering highly lipophilic drugs
to this target tissue because the complex anatomy and protective barriers of the eye hinder effective drug permeation.

Next Steps

& Development

 CMC activities for drug
 substance and drug product scale up and supply

 On-going studies of receptor
 interactions (MoA) and DMPK

 GLP studies to follow

 INM-755
for the Treatment of Epidermolysis Bullosa ('EB')

 Introduction

 INM-755
(cannabinol, or 'CBN') cream is a proprietary, topical product candidate intended as a therapy in dermatological diseases.
The first clinical indication under development is treatment of symptoms related to EB. EB is a collective name for a group of genetic
disorders of connective tissues characterized by skin fragility leading to extensive blistering and wounding. It affects skin and mucous
membranes, particularly of the gastrointestinal tract, genitourinary and respiratory systems. EB is a debilitating disease affecting
a small proportion of people in the United States, thus earning it an orphan-disease status. The disease has no definitive cure, and
all current treatments are directed towards symptom relief. There are, however, a number of products, mainly gene therapies, currently
in clinical trials, in which a cure is being explored, according to several recent scientific publications. Our preclinical research
has identified a specific Product Candidate, CBN, that may prove beneficial to patients: first, by addressing certain key disease hallmarks
(which may include wound healing, infection, pain, inflammation, and itch); and second, by regulating the expression of various proteins
(keratins) that may compensate for reduced expression of others.

 The
active ingredient in INM-755, CBN, is an agonist for both CB 1 and CB2 receptors, with a higher affinity for CB2, which means it should
have a greater effect on the immune system than on the central nervous system. The distribution of CB1 and CB2 receptors in sensory nerves
and inflammatory cells in the skin makes it an attractive pharmaceutical agent for dermal treatments in medical conditions characterized
by inflammation and pain.

of Completed Clinical Trials

 Phase
1 Clinical Trials (Studies 755-101-HV and 755-102-HV)

 A
regulatory application to support our first Phase 1 clinical trial in healthy volunteers with INM-755 (755-101-HV) was submitted November
4, 2019 and approved December 6, 2019 in the Netherlands. The initial Phase 1 clinical trial evaluated the safety, tolerability, and
pharmacokinetics of INM-755 cream in 22 healthy volunteers with normal, intact skin; the volunteers had cream applied once daily for
a period of 14 days. All subjects in this first clinical trial completed treatment and evaluations by March 27, 2020. Database completion
and data analyses were delayed by pandemic restrictions. Study results were reported November 25, 2020. A blinded interim safety review
from the first 16 subjects in this Phase 1 clinical trial were included in a regulatory application that was approved April 17, 2020,
for a second Phase 1 clinical trial of 8 healthy volunteers to test the local safety and tolerability of applying sterile INM-755 cream
to small wounds once daily for 14 days. As with the initial Phase 1 trial, the second clinical trial (755-102-HV) was conducted with
two different drug concentrations and a vehicle control. Enrollment began in early July 2020 and the clinical trial completed treatment
and evaluations at the end of September 2020. Study results were reported January 8, 2021.

 Phase
2 Clinical Trial (Study 755-201-EB)

 Regulatory
applications to support this global trial were filed for review by the National Competent Authorities and Ethics Committees in 8 countries
for 13 clinical sites. Approvals were obtained in all countries (Austria, France, Germany, Greece, Israel, Italy, Serbia, and Spain)
as of March 2022. Enrollment and patient treatment began in December 2021 and completed in April 2023.

 The
goal of the Phase 2 study was to obtain safety and preliminary efficacy of INM-755 cream in treating symptoms and wound healing in patients
with EB, using a within-patient design in which matched index areas were randomized to INM-755 cream or vehicle (no drug) cream in a
blinded manner. A target of up to 20 patients were to be enrolled with treatment for 28 days, the longest period supported by nonclinical
toxicology studies.

 No
single primary endpoint was set for the trial to allow for possible variations in presenting symptoms in each patient. These include
the presence of open wounds, wound pain associated with dressing changes, background wound pain, wound itch, and itch in non-wound areas.
To this end, InMed's goal was to harvest data from the trial to evaluate the ability of INM-755 to treat chronic non-wound itch
and to heal wounds and treat associated pain and itch.

 The
Phase 2 Trial enrolled a total of 19 patients. Data from one patient were excluded from efficacy analyses due to a significant protocol
deviation. Of the 18 remaining patients whose data were considered reliable for clinical review, 17 were treated for chronic non-wound
itch and one patient was treated for wound-related itch. The remaining endpoints (pain, wound healing) could not be analyzed due to too
few enrollees with such symptoms.

 Of
the 18 participants assessed, chronic itch improved by a clinically meaningful amount in 12 patients (66.7%), of whom:

 6 patients (33.3%) had
 the same level of itch improvement with INM-755 cream as with control cream;

 5 patients (27.8%) treated
 with INM-755 showed meaningful anti-itch activity beyond that of the control cream; and

 1 patient (5.6%) showed
 better itch reduction with the control cream.

 In
summary, results from the Phase 2 clinical trial showed a positive indication of enhanced anti-itch activity for INM-755 cream versus
the control cream alone in an exploratory clinical evaluation. The results for non-wound itch were not statistically significant in this
small trial due, in part, to the clinically important anti-itch effect of the underlying control cream. We are, nevertheless, encouraged
by and satisfied with the INM-755 clinical data for non-wound itch treatment. That the majority of the assessed patients in the trial
showed clinically meaningful improvement in non-wound itch from the application of INM-755, be it with similar outcomes to the control
cream or better than the control cream, can be considered impressive.

 Based
on the safety and efficacy data for treating non-wound itch in this EB study, as well as previous safety data from Phase 1 trials, we
are now seeking R&D and commercial partnership opportunities for any continued development of INM-755 cream. Continued development
of INM-755 cream will likely move beyond EB into broader indications involving chronic itch, with potentially much larger target populations
and commercial opportunities than offered solely by the EB indication.

 Key
Milestones for the EB Program:

 April 30, 2020 —
 we announced clinical trial application approval in the Netherlands for Study 755-102-HV, a randomized, double-blind, vehicle-controlled
 Phase 1 study designed to evaluate the safety and tolerability of INM-755 (two strengths) applied daily for 14 days on epidermal
 wounds in 8 healthy volunteers.

 November 25, 2020 —
 we announced the top-line results of Study 755-101-HV ("Study 101"). Study 101 was a randomized, vehicle-controlled,
 double-blind, Phase 1 trial, which examined the safety and tolerability of two strengths of INM-755 cream on intact skin in 22 healthy
 adult volunteers over a 14-day treatment period. The Study 101 results indicate that INM-755 was safe and well-tolerated on intact
 skin, caused no systemic or serious adverse effects. In addition, there were no subject withdrawals due to adverse events. Drug concentrations
 in the blood were very low, as expected.

 January 8, 2021 —
 we announced the top-line results of Study 755-102-HV ("Study 102"). Study 102 was a randomized, double-blind, vehicle
 controlled, single-center study, in 8 healthy adult volunteers to test the tolerability of 14 days of application of the INM-755
 cream on epidermal wounds under treatment procedures designed to simulate wound care for Epidermolysis Bullosa ("EB")
 patients with open wounds. Results of Study 102 indicate that INM-755 cream was safe and well-tolerated on induced open epidermal
 wounds, caused no systemic or serious adverse effects. In addition, there were no subject withdrawals due to adverse events. These
 data from Study 101 and Study 102 support moving forward into clinical trials in patients with EB.

 April 28, 2021 —
 we announced that we filed Clinical Trial Applications ("CTAs") in Austria, Israel and Serbia as part of a Phase 2 clinical
 trial of INM-755 (cannabinol) cream in EB. Additional CTAs for 755-201-EB (the '201 study) will be submitted to National Competent
 Authorities ("NCAs") and Ethics Committees ("ECs") in France, Germany, Greece, and Italy in the coming weeks.

 September 30, 2021 —
 we announced commencement of a Phase 2 clinical trial, the 755-201-EB study, of INM-755 (cannabinol) cream in the treatment of EB,
 marking the first time cannabinol has advanced to a Phase 2 clinical trial to be studied as a therapeutic option to treat a disease.
 The 755-201-EB study is designed to enroll up to 20 patients. InMed will evaluate the safety of INM-755 (cannabinol) cream and its
 preliminary efficacy in treating symptoms and wound healing over a 28-day treatment period. All four subtypes of inherited EB; EB
 Simplex, Dystrophic EB, Junctional EB, and Kindler Syndrome are eligible for this study.

 July 25, 2022 — we
 announced, based on the safety data of the first five adult patients who completed treatment with INM-755 CBN cream for the treatment
 of symptoms in the Phase 2 clinical trial, an independent Data Monitoring Committee agreed it was safe to allow the enrollment of
 adolescent patients, defined as persons aged twelve to seventeen.

 March 28, 2023 —
 we announced we had concluded enrollment of our Phase 2 clinical trial using investigational drug INM-755 cannabinol ("CBN")
 cream for the treatment of patients with EB. The Phase 2 study enrolled 19 of its targeted 20 patients.

 June 22, 2023 — we
 announced safety and efficacy results from the Phase 2 clinical trial (755-201-EB) for the treatment of symptoms in patients with
 EB.

 Next
Steps

 We
believe INM-755 has potential for further advancement in the treatment of chronic itch and related conditions. However, progression of
the program will only occur in partnership with a suitable collaborator. To date, we have not been successful in our partnering efforts,
as we have deprioritized this initiative to focus resources on other corporate and business development opportunities.

 Rare
Cannabinoid Products in the Health and Wellness Sector

has a revenue-generating commercial business unit that leverages our significant expertise in synthetic biology and chemistry to develop
efficient, scalable, and proprietary manufacturing approaches to produce high quality, regulatory-compliant, non-intoxicating rare cannabinoids
("Products") for consumer applications. BayMedica is currently commercializing Products as a B2B supplier to distributors
and manufacturers in the health and wellness sector, including nutraceuticals, cosmetics, functional foods and beverages, as well as
animal health markets. BayMedica currently has a robust portfolio of non-intoxicating Products including: cannabichromene ("CBC"),
cannabidivarin ("CBDV") tetrahydrocannabivarin ("THCV") and cannabicitran ("CBT").

 Following
the acquisition of BayMedica in 2021, a key priority in 2022 was accelerating commercial activities and building out a robust product
portfolio as a supplier of Products to the health and wellness sector. While there was slower than expected revenue growth in 2022, we
have seen increased demand through 2023 and the first half of 2024 due to better research of rare cannabinoids, companies and brands
looking for product innovation and effects-based outcomes, and the ability of companies like ours to reliably supply high quality and
consistent Products. During the financial year ended June 30, 2025, BayMedica achieved sales of approximately $4.9 million.

will continue to evaluate opportunities for potential structured supply arrangements and collaborations for the commercial business.
Sales and marketing efforts will remain focused on Products that contribute highest margins where BayMedica continues to hold a strong
competitive position.

 Chemical
Synthesis-Derived Cannabinoids Commercialized by BayMedica

 Cannabichromene
(CBC)

 The
high cost of goods for rare / minor cannabinoids (e.g. CBC) extracted and purified from the plant made adoption of these more difficult
due to the cost of manufacture and cost to include in the final marketed product(s). Chemical synthesis has provided a consistent, scalable
approach to produce CBC and other minor cannabinoids at a highly competitive cost of goods with consistent batch to batch variability
and high purity of the cannabinoid. BayMedica has successfully manufactured and commercialized the rare cannabinoid CBC, for sale to
distributors into the health and wellness industry. The development of a scalable process for the manufacturing of CBC began in 2018
using well established chemical synthesis protocols.

 In
2019, a Material Services Agreement was completed with a multinational contract research, development and manufacturing organization
("Chemistry CDMO") to facilitate the optimization and scale-up of BayMedica's proprietary CBC manufacturing process
using commercially available starting materials sourced from various manufacturers. We scaled to a batch size of greater than 1kg by
calendar 2019 at which time we contracted a leading U.S. manufacturer to provide the final purification of CBC to greater than 95% purity.
This manufacturer also operates a North American based toll-processing facility with the capability to process from 10kg to metric ton
quantities of our crude CBC material under food-grade GMP conditions. By late 2019, our Chemistry CDMO had scaled the process to greater
than 10kg, and by year end 2019 to almost 30kg with final purification at the NA contractor. We commenced commercial sales of CBC in
November 2019.

 Large
scale manufacturing of crude CBC began at our Chemistry CDMO in 2020 at >40kg. The emergence of the Covid-19 pandemic significantly
impacted sales beginning in calendar 2020. Large scale production continues with current batch sizes exceeding 200kg.

 Cannabicitran
("CBT")

 We
have developed a process for the efficient chemical synthesis of CBT through both in-house R&D efforts and via our Chemistry CDMO.
We began scaling this process and conducted downstream processing and purification trials in late calendar 2021. We received initial
purchase orders and commenced commercial sales of CBT in calendar 2022.

 Cannabidivarin
("CBDV")

 Beginning
in early 2021, BayMedica worked internally and with external parties to access and develop manufacturing technologies for the chemical
synthesis of the rare, non-intoxicating "varin" cannabinoid, CBDV. In calendar 2021, via a Chemistry CDMO, we successfully
scaled CBDV synthesis to commercial quantities. In April 2022, we commenced B2B sales of CBDV to the health and wellness sector. As of
fiscal 2023, a new source of CBDV was secured to provide a lower cost of goods replacement to the previously produced CBDV. Sales of
this CBDV were initiated in the second quarter of calendar 2024.

 Tetrahydrocannabivarin
("THCV")

 As
part of the R&D into manufacturing techniques to synthesize and produce CBDV, we also began researching and developing processes
to convert CBDV to the non-intoxicating rare cannabinoid THCV. In conjunction with our Chemistry CDMO and our in-house team, we developed
a robust pilot-scale process that produces THCV. We have now developed a purification process to produce the finished THCV material.
We began scale-up of our novel process with this CDMO in the first quarter of calendar 2022 and commenced sales in second half of calendar
2022. A new, more cost-effective, manufacturing approach for the supply of THCV was initiated in calendar 2023 with initial sales in
the third quarter of calendar 2023. We will continue to assess further initiatives to reduce cost of goods for THCV.

 Analogs
of Cannabinoids / New Chemical Entities ("NCE")

 In
addition to the natural cannabinoids above, we have leveraged our expertise in pharmaceutical chemistry and biosynthesis to produce a
number of novel cannabinoid analogs and variants of pharmaceutical interest.

 In
the field of pharmaceutical drug development, the term analog is used to describe structural and functional similarity between an original
(or parent) molecule and one that has been somewhat modified. While any company researching a naturally occurring compound, like cannabinoids,
cannot own a patent on the molecule itself for commercial exclusivity, a modified molecule, which has certain structural and pharmacological
similarities with the original compound, can be patented. As well, modifications of the original molecule (ie, the analog) can be designed
to confer certain improvement in activity of the parent, such as an elevation of the desired physiological effects, a decrease in unwanted
side effects, improvement in aspects related to drug delivery to targeted tissues, etc., or a combination of these targeted outcomes.
We have filed patents covering numerous structural additions and modifications of the naturally occurring cannabinoids. Each individual
modification to each individual cannabinoid represents a NCE which can be patented. If issued, this patent family will confer market
exclusivity to us for the analogs that we intend to develop into pharmaceutical Product Candidates, license, partner or sell to interested
external parties.

 Notable
Milestones:

 May 21, 2015 —
 we commenced the development of our biosynthesis process for the manufacturing of cannabinoids through a research collaboration with
 Dr. Vikramaditya Yadav from the Department of Biological and Chemical Engineering at the University of British Columbia under a project
 titled "The Metabolic Engineering of yeast and bacteria for synthesis of cannabinoids and Cannabis derived terpenoids".
 On May 31, 2017, we signed a Technology Assignment Agreement with the University of British Columbia whereby we retain sole worldwide
 rights to all patents emergent from the technology under development in exchange for a royalty of less than 1% on sales revenues
 from products utilizing cannabinoids manufactured using the technology (the "1% royalty") and a single digit royalty
 on sub-licensing revenues. On May 15, 2018, we extended our Collaborative Research Agreement with the University of British Columbia
 for an additional three years, which expired in 2021. Other than the 1% royalty, we do not have any ongoing financial commitments
 under these arrangements with the University of British Columbia.

 February 2019 —
 we entered into a separate process development collaboration by way of a Master Service Agreement with the Almac Group (UK)("Almac"),
 a seasoned GMP pharmaceutical Contract CDMO. Almac was initially tasked to develop a down-stream purification process to support
 the fermentation optimization activities at the National Research Council of Canada. In addition, we also engaged Almac to assist
 in the development of an "alternative" manufacturing process for cannabinoids which integrates the best available technologies
 across the spectrum of pharmaceutical drug production. This process is now referred to as IntegraSyn. In May 2020, we announced our
 working relationship with Almac on an integrated approach to augment current biosynthesis-based methods for cannabinoid production.
 The companies have been engaged in developing a streamlined cannabinoid manufacturing process, specifically optimizing the upstream
 cannabinoid assembly processes as well as downstream purification processes, to achieve cost-efficient, GMP-grade active pharmaceutical
 ingredients for prescription-based cannabinoid medications. Almac is an international, privately-owned organization which has grown
 organically over the past five decades now employing over 5,600 highly skilled personnel across 18 facilities including Europe, the
 United States and Asia. We retain all rights to this new process while Almac retains certain rights-of-first refusal on the production
 and supply of certain precursors, or starting materials, for this alternative process.

 Other
Milestones Include:

 September 2020 —
 we announced the filing of a PCT patent application as part of a growing portfolio of intellectual property related to the IntegraSyn
 manufacturing approach for producing low-cost, pharmaceutical-grade cannabinoids (refer to "Intellectual Property", immediately
 below).

 April 2021 — we announced
 that the IntegraSyn cannabinoid manufacturing approach has achieved a level of 2g/L cannabinoid yield, a milestone that signals commercial
 viability and supports advancement to large-scale production in the coming months. Having achieved a 2g/L yield level, we will now
 focus on manufacturing scale-up to larger batch sizes while continuing process and enzyme optimization, targeting increased cannabinoid
 yield and further reducing the overall cost of goods. In parallel, we continue to prepare the manufacturing process to be Good Manufacturing
 Practice ("GMP")-ready for pharmaceutical quality production.

 April,
 2022 We announced the publication of a patent application in North America for several cannabinoid
 analogs. This patent application has broad claims directed to their molecular structure,
 uses and methods of manufacturing. The patent application entitled, "Cannabinoid Analogs
 and Methods for their Preparation", describes several new cannabinoid-related chemical
 compounds that have not been previously described.

 January
 2025 – we were granted an international Patent Cooperation Treaty ('PCT')
 patent in the first of several jurisdictions where the patent has been filed. Titled "Cannabinoid
 analogs and methods for their preparation". This patent protects the use of several
 proprietary small molecule compounds and methods of their preparation, including the drug
 candidates screened for InMed's Alzheimer's disease and dry age-related macular
 degeneration programs.

 Intellectual
Property

 A
patent is a monopoly granted by a government for a period of up to 20 years. A patent provides an enforceable legal right to prevent
others from exploiting an invention being a product, device, system, substance, process or method in the country of grant. For an invention
to be patentable, it must be novel, involve an inventive step and useful at the time of filing the initial patent application for that
invention. At 18 months from the initial patent application, the detailed description of the invention is published. In order to secure
patent protection, a patent application is filed with the patent office in each country of interest, the application is considered under
the patent laws of that country, and a patent will issue if the application meets the patentability criteria of that country. After a
patent expires or lapses, anyone can then use the invention.

 The
grant of a patent does not guarantee validity, and a patent may be challenged by third parties at a patent office by re-examination in
some countries or through the courts by revocation proceedings. The grant of a valid patent does not mean that the invention may be exploited
in a given country without infringing third party intellectual property rights in that country.

 The
owner of a patent has the exclusive right to prevent others from making, selling, importing or otherwise using the patented invention
for the life of the patent. Patent infringement occurs when someone makes, hires, uses, imports or sells the patented invention, or a
product made by a patented method, or offers to do these things, within the country covered by the patent without the permission of the
owner of the patent.

 Adequate
protection of intellectual property is a means to ensure that we can commercialize our intellectual property and reduce the likelihood
of imitation by competitors. We intend to utilize patents available to protect our IP wherever commercially realizable. In addition,
we also rely on trade secrets and process know-how to protect our intellectual property. While we cannot patent the naturally occurring
individual cannabinoids used in our Products and Product Candidates, there are a number of other approaches to protect our inventions.
These include:

 patents on individual or
 combinations of cannabinoids that provide novel methods for treating diseases;

 cannabinoid delivery technology,
 formulations designed specifically to increase the safety and efficacy of drug treatments; and

 manufacturing processes
 for cannabinoids.

 The
patent methodologies listed above will be designed with the intention to maximize the protection of our multi-faceted approach to developing
novel cannabinoid medicines. We typically file patent applications in US, Canada, European Union ("EU") and other selected
commercially significant foreign jurisdictions.

 InMed
Patent Portfolio – August 2025

 Subject
 Matter

 Scope

 Ownership/
 Origin

 Filing
 Status /

 Filing Date

 Reference Number –

 Nos.

 Earliest
 Potential/

 Expiry 2

 Jurisdictions
 - Status

 Metabolic
 engineering of E. coli for the biosynthesis of cannabinoid products

 InMed, UBC 1

 filed 09/05/2018

 WO2019/046941

 AU 2018329232

 US 12077802

 2038

 Granted: AU, US Pending:
 CA, EP, JP

 Compositions
 and methods for biosynthesis of terpenoids or cannabinoids in a heterologous system

 InMed, UBC 1

 filed 3/6/2020

 WO2020/176998

 JP (patent no. TBD)

 2040

 Pending: AU, CA, EP,

 JP (allowed), SG, US

 Ocular
 drug delivery formulation

 (Hydrogel)

 Formulation, Use

 InMed

 filed 05/08/2018

 WO2018/205022

 AU 2018266262

 EP 3621656

 IN 426267

 JP 7323458

 SG 11201910450S

 US 12083229

 2038

 Granted: AU, EP, IN, JP,
 SG, US

 Pending: CA

 Compositions
 and methods for use of cannabinoids for neuroprotection

 Use

 InMed

 filed 04/24/2020

 WO2020/215164

 IL (patent no. TBD)

 JP 7633179

 2040

 Granted: JP Pending: AU,
 CA, CN, EP,

 IL (allowed), MX, SG, US, ZA

 Topical
 formulations of cannabinoids and use thereof in the treatment of pain

 Formulation, Use

 InMed

 filed 09/21/2018

 WO2019/056123

 US 12357604

 2038

 Granted: US

 Pending: EP

 Use
 of topical formulations of cannabinoids in the treatment of epidermolysis bullosa and related connective tissue disorders

 Use

 InMed

 filed 05/04/2017

 WO2017/190249

 AU 2017260706

 IL 262702

 JP 7054691

 JP 7342183

 US 12042479

 2037

 Granted: AU, IL, JP, JP,
 US

 Pending: CA, EP,

 Compositions
 and methods for treating neuronal disorders with cannabinoids

 Use

 InMed

 filed 10/21/2022

 WO 2022/082313

 2041

 Pending: AU, CA, CN, EP,
 IL, JP, MX, US

 Compositions
 and Methods for Use of Cannabinol Compounds in Neuroprotection

 New Chemical Entity, Composition,
 Use

 InMed

 filed 5/8/2024

 PCT/US2024/028445

 2043

 Pending:

 PCT (National stage application filings due April/May 2026)

 Cannabinoids
 Compounds and Methods for Treatment

 Composition, Use

 InMed

 filed 10/23/2024

 PCT/US2024/052535

 2043

 Pending:

 PCT (National stage application filings due April/May 2026)

 Cannabinoid
 analogs and methods for their preparation

 New Chemical Entity; Manufacturing
 Process

 InMed

 PCT Application filed 10/31/2019

 WO2020/092823

 MX 417531

 2039

 Granted: MX Pending: AU, CA, CN,
 EP, IL, IN, IN, JP, US

 PCT
= Patent Cooperation Treaty. Members in this treaty includes over 150 countries including USA, Canada, Europe and others. Patents typically
expire 20 years from their filing dates, if granted, the patent expiry may be extended by patent agencies and/or health regulatory authorities.

 UBC is a co-inventor and
 has assigned all commercial rights to InMed in exchange for a royalty of less than 1% on sales revenues from products utilizing cannabinoids
 manufactured using the technology and a single digit royalty on any sub-licensing revenues.

Patent Portfolio – August 2025

 Subject
 Matter

 Scope

 Ownership/
 Origin

 Filing
 Status /

 Filing Date

 Reference Number

 Earliest
 Potential/

 Expiry 2

 Jurisdictions

 Recombinant
 production systems for prenylated polyketides of the cannabinoid family

 filed 05/10/2018

 WO2018/209143

 AU 2018265408

 US 10837031

 US 11555211

 MX 411852

 2038

 Granted: AU, US, US, MX

 Pending: AU, CA, CN, EP, IN

 Preparation
 of cannabichromene and related cannabinoids

 filed 12/23/2020

 WO2021/133989

 US (patent no. TBD)

 2040

 Pending: CA, CN, EP, IN,
 JP,

 US (allowed)

 Genetically
 modified yeast for the production of cannabigerolic acid, cannabichromenic acid and related cannabinoids

 filed 01/20/2021

 WO2021/150636

 2041

 Pending: CA, CN, EP, IN,
 JP, US

 Acyl
 activating enzymes for preparation of cannabinoids

 filed 01/20/2022

 WO2022/159589

 2042

 Pending: CA, EP, IN, JP,
 US

 PCT
= Patent Cooperation Treaty. Members in this treaty includes over 150 countries including USA, Canada, Europe and others. Patents typically
expire 20 years from their filing dates, if granted, the patent expiry may be extended by patent agencies and/or health regulatory authorities.

 As
of July 2025, we have a total of thirteen patent families covering the following areas:

 Six patent families covering
 novel methods for treating diseases including two for our INM-755 program (WO/2017/190249 and WO/2019/056123), one for our INM-088
 program (WO/2020/215164), two for treating neurodegenerative diseases for our INM-901 program (WO/2022/082313, PCT/US2024/052535)
 and one for our INM-089 program (PCT/US2024/028445). If these patents applications are granted and all maintenance fees or annuities
 are paid, these patents are expected to expire in 2037-2043. In some situations, the patent may be eligible for adjustment or extension
 of the patent terms due to delay in the patent office during the prosecution phase. The expiration date above does not include the
 adjustments or extensions;

 Eight patent families covering
 manufacturing process for cannabinoids of interest (WO2019/046941, WO2020/176998, WO2018/209143, WO2020/092823, WO2020/102430, WO2021/133989,
 WO2021/150636 and WO2022/159589). If these patents applications are granted and all maintenance fees or annuities are paid, these
 patents are expected to expire in 2038-2042. In some situations, the patent may be eligible for adjustment or extension of the patent
 terms due to delay in the patent office during the prosecution phase. The expiration date above does not include the adjustments
 or extensions; and

 One patent family covering
 a delivery technology for the ocular program (WO/2018/205022).

 If
these patents applications are granted and all maintenance fees or annuities are paid, these patents are expected to expire in 2038.
In some situations, the patent may be eligible for adjustment or extension of the patent terms due to delay in the patent office during
the prosecution phase. The expiration date above does not include the adjustments or extensions.

 The
Patent Cooperation Treaty ("PCT") is an international patent law treaty, which provides a unified procedure for filing patent
applications to protect inventions in each of its member states. There are 151 member countries within the PCT, enabling near-global
patent coverage through successful patent prosecution in the U.S., Japan, Europe, Canada, Australia, New Zealand, China, Brazil, Russia,
India and many other countries. We have several filed patent applications currently either in the provisional stage or PCT stage of review
as shown above. None have been granted to date. We retain the full commercial rights to all of these patents with any exceptions noted
in the above table.

 Government
Regulations

 The
research, development, testing, manufacture, quality control, packaging, labeling, storage, record-keeping, distribution, import, export,
promotion, advertising, marketing, sale, and reimbursement of pharmaceutical products are extensively regulated by governmental
authorities in the United States and other jurisdictions. The processes for obtaining regulatory approvals in the United States and in
foreign countries and jurisdictions, along with compliance with applicable statutes and regulations and other requirements, both pre-approval
and post-approval, require the expenditure of substantial time and financial resources. The regulatory requirements applicable to product
development, approval and marketing are subject to change, and regulations and administrative guidance often are revised or reinterpreted
by the agencies in ways that may have a significant impact on our business.

 Licensure
and Regulation of Biological Products in the United States

 In
the United States, the FDA regulates human drugs under the Federal Food, Drug, and Cosmetic Act (the "FDCA") and, in the
case of biological products, also under the Public Health Service Act, and their implementing regulations. The failure to comply with
the applicable U.S. requirements may result in the FDA's refusal to approve any pending applications or delays in development and
may subject an applicant to administrative or judicial sanctions, such as issuance of warning letters, or the imposition of fines, civil
penalties, product recalls, product seizures, total or partial suspension of production or distribution, and injunctions and/or civil
or criminal prosecution brought by the FDA and the U.S. Department of Justice or other governmental entities. The FDA must approve all
product candidates, including the Product Candidates, for therapeutic indications before they may be marketed in the United States.

 Other
U.S. Healthcare Laws and Regulations

 In
the United States, biopharmaceutical manufacturers and their products are subject to extensive regulation at the federal and
state level, such as laws intended to prevent fraud and abuse in the healthcare industry. These laws, some of which apply only to approved
products, include: (i) federal false claims, false statements, and civil monetary penalties laws prohibiting, among other things, any
person from knowingly presenting, or causing to be presented, a false claim for payment of government funds or knowingly making, or causing
to be made, a false statement to get a false claim paid; (ii) federal healthcare program anti-kickback law, which prohibits, among other
things, persons from offering, soliciting, receiving, or providing remuneration, directly or indirectly, to induce either the referral
of an individual for, or the purchasing or ordering of, a good or service for which payment may be made under federal healthcare programs
such as Medicare and Medicaid; (iii) the federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), which,
in addition to privacy protections applicable to healthcare providers and other entities, prohibits executing a scheme to defraud any
healthcare benefit program or making false statements relating to healthcare matters; (iv) the FDCA, which among other things, strictly
regulates marketing, prohibits manufacturers from marketing such products prior to approval or for off-label use, and regulates the distribution
of samples; (v) federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government
or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government
healthcare programs; (vi) federal transparency law, which requires pharmaceutical companies to report certain payments to healthcare
providers; (vii) state laws and regulations analogous to the above; and (viii) laws and regulations prohibiting bribery and corruption
such as the U.S. Foreign Corrupt Practices Act ("FCPA") (as defined below), which, among other things, prohibits U.S. companies
and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments
or anything else of value to foreign government officials, employees of public international organizations or foreign government-owned
or affiliated entities, candidates for foreign public office, and foreign political parties or officials thereof. Violations of these
laws are punishable by criminal and/or civil sanctions, including, in some instances, exclusion from participation in federal and state
health care programs, such as Medicare and Medicaid. Ensuring compliance is time consuming and costly. Similar healthcare laws and regulations
exist in the EU and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers
and laws governing the privacy and security of personal information.

 U.S.
 Privacy Law

 In
the U.S., there are numerous state and federal laws and regulations governing the security and privacy of personal information. Additionally,
state and federal regulators have begun to pay more attention to companies' data processing activities. At the state level, laws
require companies to safeguard personal information and take action in the event of a data breach (e.g., notifying governmental authorities
and data subjects). State attorney generals have been active in using their consumer protection authority to investigate companies'
data security practices. A number of states have passed laws governing data privacy and many others have similar legislation under consideration.
Although many of these laws contain exceptions for certain health data, these exceptions are not comprehensive. All of these laws give
rights to residents in their states and require businesses to take certain actions with respect to those rights (similar to the General
Data Protection Regulation ("GDPR") in effect in the EU, but with notable differences). At the federal level in the United
States, the Federal Trade Commission has been active in using its Section 5 authority to bring enforcement actions against companies
for deceptive or unreasonable data processing activities.

 ITEM
1A. RISK FACTORS

of Risk Factors

 The
following is a summary of material risks that could affect us. This summary may not contain all of our material risks, and it is qualified
in its entirety by the more detailed risk factors set forth below.

 Our prospects depend on
 the success of our Product Candidates, which are in the early stages of development with a statistically high probability of failure
 and are subject to lengthy, time-consuming and inherently unpredictable regulatory processes.

 If clinical trials of our
 Product Candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce
 positive results, we would incur additional costs or experience delays in completing, or ultimately be unable to complete, the development
 and commercialization of our Product Candidates.

 We intend to expend our
 limited resources to pursue our Product Candidates for certain indications and may fail to capitalize on other Product Candidates
 or other indications for our Product Candidates that may be more profitable or for which there is a greater likelihood of success.

 Our Product Candidates
 contain compounds that may be classified as "controlled substances", the use of which may generate public controversy
 and restrict their development or commercialization.

 Any actual or threatened
 delisting of our securities by Nasdaq due to our inability to satisfy applicable listing standards, including compliance with the
 minimum bid price rule, could have a material and adverse effect on our business, operations and financial condition, and the liquidity
 and value of our securities.

 Research restrictions,
 product shipment delays or prohibitions could have a material adverse effect on our business, results of operations and financial
 condition.

 Our relationships with
 customers and third-party payors are subject to applicable anti-kickback, fraud and abuse, and other healthcare laws and regulations,
 which could expose us to, among other things, sanctions, penalties, damages, reputational harm and diminished profits and future
 earnings.

 Our insurance may be insufficient
 to cover losses that may occur as a result of our operations.

 There may be changes in
 laws, regulations and guidelines which are detrimental to our business.

 Controlled substance legislation
 may differ in other jurisdictions and could restrict our ability to market our products internationally, which could materially and
 adversely affect our financial results.

 Failure to protect our
 information technology infrastructure against cyber-based attacks, network security breaches, service interruptions, or data corruption
 could significantly disrupt our operations and adversely affect our business and operating results.

 Our failure to comply with
 data protection laws and regulations could lead to government enforcement actions and significant penalties against us, adversely
 impacting our operating results.

 The market prices for our
 common shares, no par value (the "Common Shares"), are volatile and are anticipated to fluctuate in the near term.

 Raising additional capital
 may cause dilution to our existing shareholders, restrict our operations or require us to relinquish rights to our technologies or
 Product Candidates.

 Future offerings of debt
 or equity securities may rank senior to our Common Shares.

 For as long as we are an
 "emerging growth company" we intend to take advantage of reduced disclosure and governance requirements applicable to
 emerging growth companies, which could result in our Common Shares being less attractive to investors and could make it more difficult
 for us to raise capital.

 If we fail to maintain
 an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial
 condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value
 of our Common Shares.

 Our disclosure controls
 and procedures may not prevent or detect all errors or acts of fraud.

 Deficiencies in disclosure
 controls and procedures and internal control over financial reporting could result in a material misstatement in our financial statements,
 and our ability to identify and effectively remediate any such material weaknesses that could have a material and adverse effect.

 Future sales and issuances
 of, and rights to purchase, our Common Shares, including by officers and directors could materially dilute the percentage ownership
 of our shareholders and may cause our share price to fall.

 We (i) have incurred significant
 losses since our inception and (ii) anticipate we will incur losses in the future, and our operating losses have raised substantial
 doubt regarding our ability to continue as a going concern

 We will require additional
 capital to fund our operations and if we fail to obtain necessary financing, we will not be able to complete the development and
 commercialization of our Product Candidates.

 We currently have limited
 commercial revenue and may never become profitable.

 Our success is largely
 dependent upon our patents, proprietary technology, and other intellectual property.

 Obtaining and maintaining
 our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed
 by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

 We may become subject to
 claims or become involved in lawsuits related to intellectual property.

 We may become involved
 in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming and unsuccessful, and materially
 and adversely effect our business.

 Our
 industry follows an outsourcing trend in non-clinical discovery stages which could impact
 the Company's business model.

 If we are not able to adequately
 prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly
 diminished.

 We may not be able to protect
 our intellectual property rights throughout the world.

 Patent terms may be inadequate
 to protect our competitive position on our Product Candidates.

 Intellectual property rights
 do not necessarily address all potential threats to our competitive advantage.

 We rely heavily on contract
 manufacturers over whom we have limited control and our existing collaboration agreements and any that we may enter into in the future
 may not be successful.

 Risk
Factors

 Investing
in our Common Shares involves a high degree of risk. Therefore, you should carefully consider each of the following risks, together with
all other information set forth in this Annual Report, including the consolidated financial statements and the related notes, before
making a decision to buy our Common Shares. If any of the following risks actually occurs, our business could be harmed. In that case,
the trading price of our Common Shares could decline, and you may lose all or part of your investment.

 Risks
Related to our Business and Industry

 Our
prospects depend on the success of our Product Candidates which are at early stages of development with a statistically high probability
of failure.

 Given
our early stage of development, we can make no assurance that our research and development programs will result in regulatory approval
or commercially viable products. To achieve profitable operations, we, alone or with others, must successfully develop, gain regulatory
approval, and market our future products. We currently have no products that have been approved by the FDA, Health Canada ("HC"),
or any similar regulatory authority. To obtain regulatory approvals for our Product Candidates being developed and to achieve commercial
success, clinical trials must demonstrate that the Product Candidates are safe for human use and that they demonstrate efficacy. We have
no products or technologies which are currently in human clinical trials. Additionally, we have no products for commercial sale or licensed
for commercial sale, nor do we expect to have any such products for the next several years.

 Many
potential pharmaceuticals products never reach the stage of clinical testing and even those that do have only a small chance of successfully
completing clinical development and gaining regulatory approval. Our Product Candidates may fail for a number of reasons, including,
but not limited to, being unsafe for human use or due to the failure to provide therapeutic benefits equal to or better than the standard
of treatment at the time of testing. Positive results of early preclinical research may not be indicative of the results that will be
obtained in later stages of preclinical or clinical research. Similarly, positive results from early-stage clinical trials may not be
indicative of favorable outcomes in later-stage clinical trials. We can make no assurance that any future studies, if undertaken, will
yield favorable results.

 The
early stage of our product development makes it particularly uncertain whether any of our product development efforts will prove to be
successful and meet applicable regulatory requirements, and whether any of our Product Candidates will receive the requisite regulatory
approvals, be capable of being manufactured at a reasonable cost or be successfully marketed. If we are successful in developing our
current and future Product Candidates into approved products, we will still experience many potential obstacles, such as the need to
develop or obtain manufacturing, marketing and distribution capabilities. If we are unable to successfully commercialize any of our products,
our financial condition and results of operations may be materially and adversely affected.

 Even
if our Product Candidates advance through preclinical studies and clinical trials, we may experience difficulties in managing our growth
and expanding our operations.

 We
have limited resources to carry out objectives for our current and future preclinical studies and clinical trials. Since our inception
as a pharmaceutical company in October 2014, we have conducted numerous preclinical experiments and are currently conducting early-stage
clinical trials, which is a time-consuming, expensive and uncertain process. In addition, while we have experienced management and expect
to contract out many of the activities related to conducting these programs, we are a small company with less than 15 employees and,
therefore, have limited internal resources both to conduct preclinical studies and clinical trials and to monitor third-party providers.
As our Product Candidates advance through preclinical studies and 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. In the future, we expect to have to manage additional relationships with collaborators or partners, suppliers and
other organizations. 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.

 The
threat or actual adoption of tariffs, retaliatory tariffs and duties, trade barriers and restrictions, and related international trade
conflicts, including by the United States, Canada or other jurisdictions, could materially impact the macroeconomic framework in which
we operate.

 Since
taking office in January 2025, the current U.S. presidential administration has issued numerous executive orders, including with respect
to international and domestic policies, and there were significant changes to tariffs by the U.S. and other countries. In particular,
new U.S. tariffs were announced, including additional tariffs on imports from Canada, China, India, Japan, South Korea, Taiwan, Vietnam
and the European Union, among others. In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports
from the U.S. and other retaliatory measures. Various modifications and delays to the U.S. tariffs have been announced and further changes
are expected to be made in the future, which may include additional sector-based tariffs or other measures. The ultimate impact remains
uncertain and will depend on several factors, including whether additional or incremental U.S. tariffs or other measures are announced
or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and
duration of these measures. If disputes and conflicts further escalate, actions by the governments in response could be significantly
more severe and restrictive. Trade disputes, tariffs, restrictions and other political tensions between the U.S. and other countries
may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market
instability, and economic recessions or downturns. The ultimate impact of current or future tariffs and trade restrictions remains uncertain.
While we actively monitor these risks and manage our supply chains accordingly, prolonged economic or geopolitical disruptions could
adversely affect our business, ability to access the capital markets or other financing sources, results of operations, financial conditions
and prospects. In addition, tariffs and other trade developments have and may continue to heighten the risks related to the other risk
factors described elsewhere in this annual report of form 10K. The ultimate outcome and consequences of the implementation
of tariffs or other restrictive trade measures by the U.S. and other countries (including in the form of reciprocal measures) remains
highly uncertain. Any trade wars, through the implementation of tariffs or otherwise, could materially and adversely affect us, directly
and indirectly, including by adversely impacting the supply chains for our operations, declining consumer confidence, inflation, lower
economic expectations, and increasing the costs of services we provide and utilize.

 Any
actual or threatened delisting of our securities by Nasdaq could have a material and adverse effect on our business, operations and financial
condition, and could, among other things, limit investors' ability to make transactions in our securities and subject us to additional
trading restrictions.

 As
 previously reported, on March 19, 2024, we received written notification from the Nasdaq
 Staff that we were granted an additional 180-day compliance period, or until September 16,
 2024, or the Extended Compliance Period, to regain compliance with Nasdaq's Minimum
 Bid Price Rule. We were unable to regain compliance during the Extended Compliance Period
 and on September 17, 2024, we received an additional notification from the Nasdaq Staff stating
 that due to the deficiency, our securities would be delisted from Nasdaq on September 26,
 2024, unless we appealed Nasdaq's determination to Nasdaq's Panel. We subsequently
 timely requested the Hearing before the Panel to appeal the determination by Nasdaq and present
 our plan to regain and sustain compliance with the Minimum Bid Price Rule. On October 31,
 2024, the Hearing was held before the Panel regarding our request for (i) continued listing
 on Nasdaq and (ii) additional time to regain compliance with the Minimum Bid Price Rule.
 On November 1, 2024, the Panel issued its determination, or the Panel Determination Letter,
 to us granting our request for the continued listing of the common shares on Nasdaq, but
 subject to us evidencing compliance with the Minimum Bid Price Rule for ten consecutive trading
 days as of the Requisite Compliance Date of December 2, 2024, and of other conditions stipulated
 by the Panel Determination Letter. On November 14, 2024, we effected the Reverse Stock Split
 of our issued and outstanding common shares, by a ratio of 20-to-1. Trading of our common
 shares on Nasdaq on a split-adjusted basis began as of November 14, 2024. We effected the
 Reverse Stock Split in order to regain compliance with the Minimum Bid Price Rule, and on
 December 2, 2024, we received a written notification from the Nasdaq Staff that (i) we had
 regained compliance with the Minimum Bid Price Rule prior to the Requisite Compliance Date,
 and (ii) the Panel had therefore determined to continue the listing of our common shares
 on the Nasdaq Stock Market and was closing this matter.

 While
the Panel determined to continue the listing of our common shares on the Nasdaq Stock Market, there can be no assurances, however, that
we will be successful in remaining in compliance with the continued listing requirements and maintaining the listing of our common shares
on Nasdaq in the future. Delisting from Nasdaq could materially and adversely affect our ability to raise additional financing through
the public or private sale of equity securities, would significantly affect the ability of investors to trade our securities and would
negatively affect the value and liquidity of our securities, including our common shares. The actual or threatened delisting of our securities
could also have other material and adverse consequences, including the potential loss of confidence by employees and other stakeholders,
the loss of institutional investor interest and fewer business development opportunities, limited availability of market quotations for
our securities, reduced liquidity with respect to our securities, a determination that our common shares is "penny stock,"
which will require brokers trading in shares of our common shares to adhere to more stringent rules, possibly resulting in a reduced
level of trading activity in the secondary trading market for our shares of our common shares, and limited amount of news and analyst
coverage of us. To the extent that our common shares became eligible to trade on the Over-The-Counter ("OTC") Bulletin Board,
another over-the-counter quotation system, or on the pink sheets, an investor may find it more difficult to dispose of their common shares
or obtain accurate quotations as to the market value of our common shares.

 Furthermore,
the National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating
the sale of certain securities, which are referred to as "covered securities." Because our Common Shares are currently listed
on Nasdaq, such securities will be deemed covered securities. Although the states will be preempted from regulating the sale of our securities,
the federal statute does allow states to investigate companies if there is a suspicion of fraud and, if there is a finding of fraudulent
activity, then the states can regulate or bar the sale of covered securities in a particular case. Additionally, if we were no longer
listed on Nasdaq, our securities would not be covered securities and we would be subject to regulations in each state in which we offer
our securities.

 If
we have difficulty enrolling patients in clinical trials, the completion of the trials may be delayed or cancelled.

 As
our Product Candidates advance from preclinical testing to clinical testing, and then through progressively larger and more complex clinical
trials, we will need to enroll an increasing number of patients that meet the eligibility criteria for those trials. The factors that
affect our ability to enroll patients are largely uncontrollable and include, but are not limited to, the following:

 size and nature of the
 patient population;

 inclusion and exclusion
 criteria for the trial;

 design of the study protocol;

 competition with other
 companies for clinical sites or patients;

 the perceived risks and
 benefits of the product candidate under study;

 the patient referral practices
 of physicians; and

 the number, availability,
 location and accessibility of clinical trial sites.

 As
a result of the foregoing factors, we may have difficulty enrolling or maintaining the enrollment of patients in any clinical trials
conducted for our products, which may result in the delay or cancellation of such trials. The delay or cancellation of any clinical trials
could shorten any periods during which we may have the exclusive right to commercialize our Product Candidates or allow our competitors
to bring products to market before us, which would impair our ability to successfully commercialize our Product Candidates and may harm
our financial condition, results of operations and prospects.

 If
clinical trials of our Product Candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do
not otherwise produce positive results, we would incur additional costs or experience delays in completing, or ultimately be unable to
complete, the development and commercialization of our Product Candidates.

 Before
obtaining marketing approval from regulatory authorities for the sale of our Product Candidates, we must conduct preclinical studies
in animals and extensive clinical trials in humans to demonstrate the safety and efficacy of the Product Candidates. Clinical testing
is expensive and difficult to design and implement, can take many years to complete and has uncertain outcomes. The outcome of preclinical
studies and early clinical trials may not predict the success of later clinical trials and interim results of a clinical trial do not
necessarily predict final results. A number of companies in the pharmaceutical and biotechnology industries have suffered significant
setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety profiles, notwithstanding promising results in earlier
trials. We do not know whether the clinical trials we may conduct will demonstrate adequate efficacy and safety to result in regulatory
approval to market any of our Product Candidates in any jurisdiction. A product candidate may fail for safety or efficacy reasons at
any stage of the testing process. A major risk we face is the possibility that none of our Product Candidates under development will
successfully gain market approval from the FDA or other regulatory authorities, resulting in us being unable to derive any commercial
revenue from them after investing significant amounts of capital in multiple stages of preclinical and clinical testing.

 If
we experience delays in clinical testing, we will be delayed in commercializing our Product Candidates, and our business may be substantially
harmed.

 We
cannot predict whether any clinical trials will begin as planned, will need to be restructured, or will be completed on schedule, or
at all. Our product development costs will increase if we experience delays in clinical testing. Significant clinical trial delays could
shorten any periods during which we may have the exclusive right to commercialize our Product Candidates or allow our competitors to
bring products to market before us, which would impair our ability to successfully commercialize our Product Candidates and may harm
our financial condition, results of operations and prospects. The commencement and completion of clinical trials for our products may
be delayed for a number of reasons, including delays related, but not limited, to:

 failure
 by regulatory authorities to grant permission to proceed or placing the clinical trial on
 hold;

 import/export
 and research restrictions for cannabinoid-based pharmaceuticals may delay or prevent clinical
 trials in various geographical jurisdictions;

 patients
 failing to enroll or remain in our trials at the rate we expect;

 suspension
 or termination of clinical trials by regulators for many reasons, including concerns about
 patient safety or failure of our contract manufacturers to comply with current good manufacturing
 practice ("cGMP") requirements;

 any
 changes to our manufacturing process that may be necessary or desired;

 delays
 or failure to obtain clinical supply from contract manufacturers of our products necessary
 to conduct clinical trials;

 Product
 Candidates demonstrating a lack of safety or efficacy during clinical trials;

 patients
 choosing an alternative treatment for the indications for which we are developing any of
 our Product Candidates or participating in competing clinical trials and/or scheduling conflicts
 with participating clinicians;

 patients
 failing to complete clinical trials due to dissatisfaction with the treatment, side effects
 or other reasons;

 reports
 of clinical testing on similar technologies and products raising safety and/or efficacy concerns;

 clinical
 investigators not performing our clinical trials on their anticipated schedule, dropping
 out of a trial, or employing methods not consistent with the clinical trial protocol, regulatory
 requirements or other third parties not performing data collection and analysis in a timely
 or accurate manner;

 failure
 of our Contract Research Organization ("CROs"), to satisfy their contractual
 duties or meet expected deadlines;

 inspections
 of clinical trial sites by regulatory authorities or Institutional Review Boards ("IRBs")
 or ethics committees finding regulatory violations that require us to undertake corrective
 action, resulting in suspension or termination of one or more sites or the imposition of
 a clinical hold on the entire study;

 one
 or more Institutional Review Boards ("IRBs") or ethics committees rejecting,
 suspending or terminating the study at an investigational site, precluding enrollment of
 additional subjects, or withdrawing its approval of the trial; or

 failure
 to reach agreement on acceptable terms with prospective clinical trial sites.

 Our
product development costs will increase if we experience delays in testing or approval or if we need to perform more or larger clinical
trials than planned. Additionally, changes in regulatory requirements and policies may occur, and we may need to amend study protocols
to reflect these changes. Amendments may require us to resubmit our study protocols to regulatory authorities or IRBs or ethics committees
for re-examination, which may impact the cost, timing or successful completion of that trial. Delays or increased product development
costs may have a material adverse effect on our business, financial condition and prospects.

 Our
IntegraSyn manufacturing approach may prove unsuccessful in achieving yields and/or cost levels required to be economically competitive
with alternative methods of manufacturing.

 Given
the early stage of development of the IntegraSyn program and the risks inherent in research and development, it is too early to project
the commercial viability of cannabinoids produced via this process. Potential negative outcomes from this program include but are not
limited to:

 the
 technology fails to produce sufficient quantities of cannabinoids or ones for which we or
 others have a need; or

 the
 cost structure of the technology is such that it is not commercially competitive with alternate
 methods of cannabinoid manufacturing leading to the technology having no value proposition
 nor incremental value to us.

 Negative
results from clinical trials or studies of others and adverse safety events involving the targets of our products may have an adverse
impact on our future commercialization efforts.

 From
time to time, studies or clinical trials on various aspects of pharmaceutical products are conducted by academic researchers, competitors
or others. The results of these studies or trials, when published, may have a significant effect on the market for the pharmaceutical
product that is the subject of the study. The publication of negative results of studies or clinical trials or adverse safety events
related to our Product Candidates, or the therapeutic areas in which our Product Candidates compete, could adversely affect the price
of our Common Shares and our ability to finance future development of our Product Candidates, and our business and financial results
could be materially and adversely affected.

 We
intend to expend our limited resources to pursue our Product Candidates for certain indications and may fail to capitalize on other Product
Candidates or other indications for our Product Candidates that may be more profitable or for which there is a greater likelihood of
success.

 Because
we have limited financial and managerial resources, we are focusing on research programs relating to our Product Candidates for certain
indications, primarily for the treatment of EB, which concentrates the risk of product failure in the event our Product Candidates prove
to be unsafe or ineffective or inadequate for clinical development or commercialization. As a result, we may forego or delay pursuit
of opportunities with other Product Candidates or for other indications that could later prove to have greater commercial potential.
We may also deem it advisable to refocus our clinical development programs based on clinical trial results.

 The
regulatory approval processes of the FDA, HC, the European Medicines Agency ("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.

 We
are not permitted to market our Product Candidates in any jurisdiction until we receive formal approval from the appropriate regulatory
authorities. For example, 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 preclinical studies and clinical trials. Successfully completing our clinical program and obtaining approval of
an application seeking commercialization approval is a complex, lengthy, expensive and uncertain process, and the regulatory authorities
may delay, limit or deny approval of our Product Candidates for many reasons, including, among others, because:

 we
 may not be able to demonstrate that our Product Candidates are safe and effective in treating
 patients to the satisfaction of the regulatory authorities such as the FDA, HC or EMA;

 the
 results of our clinical trials may not meet the level of statistical or clinical significance
 required by the regulatory authorities for marketing approval;

 the
 regulatory authorities may disagree with the number, design, size, conduct or implementation
 of our clinical trials;

 the
 regulatory authorities may require that we conduct additional clinical trials;

 the regulatory authorities
 or other applicable foreign regulatory authorities may not approve the formulation, labeling or specifications of our Product Candidates;

 the
 contract manufacturing organizations and other contractors that we may retain to conduct
 our clinical trials may take actions outside of our control that materially adversely impact
 our clinical trials;

 the
 regulatory authorities may find the data from clinical studies and clinical trials insufficient
 to demonstrate that our Product Candidates are safe and effective for their proposed indications;

 the
 regulatory authorities may disagree with our interpretation of data from our preclinical
 studies and clinical trials;

 the
 regulatory authorities may not accept data generated at our clinical trial sites or may disagree
 with us over whether to accept efficacy results from clinical trial sites outside the United
 States, Canada or outside the European Union, as applicable, where the standard of care is
 potentially different from that in the United States, Canada or in the European Union, as
 applicable;

 if
 our applications are submitted to the regulatory authorities, the regulatory authorities
 may have difficulties scheduling the necessary review meetings in a timely manner, may recommend
 against approval of our application or may recommend or require, as a condition of approval,
 additional preclinical studies or clinical trials, limitations on approved labeling or distribution
 and use restrictions;

 the
 FDA may require development of a Risk Evaluation and Mitigation Strategy which would use
 risk minimization strategies to ensure that the benefits of certain prescription drugs outweigh
 their risks, as a condition of approval or post-approval, and the EMA may grant only conditional
 marketing authorization or impose specific obligations as a condition for marketing authorization,
 or may require us to conduct post-authorization safety studies;

 the
 FDA, Drug Enforcement Administration ("DEA"), HC, EMA or other applicable foreign
 regulatory agencies may not approve the manufacturing processes or facilities of third-party
 manufacturers with which we contract or DEA or other applicable foreign regulatory agency
 quotas may limit the quantities of controlled substances available to our manufacturers;
 or

 the
 FDA, HC, EMA or other applicable foreign regulatory agencies may change their approval policies
 or adopt new regulations.

 In
the United States, our activities are potentially subject to additional regulation by various federal, state and local authorities in
addition to the FDA, including, among others, the Centers for Medicare and Medicaid Services, other divisions of the United States Department
of Health and Human Services ("HHS"), (for example, the Office of Inspector General), the Department of Justice ("DOJ"),
and individual United States Attorney offices within the DOJ, and state and local governments. Because of the breadth of these laws and
the narrowness of available statutory and regulatory exemptions, it is possible that some of our business activities could be subject
to challenge under one or more of such laws. If our operations are found to be in violation of any of the federal and state laws described
above or any other governmental regulations that apply to us, we may be subject to penalties, including criminal and significant civil
monetary penalties, damages, fines, imprisonment, exclusion from participation in government programs, injunctions, recall or seizure
of products, total or partial suspension of production, denial or withdrawal of pre marketing product approvals, private "qui tam"
actions brought by individual whistleblowers in the name of the government or refusal to allow us to enter into supply contracts, including
government contracts, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate
our business and our results of operations. To the extent that any of our products are sold in a foreign country, we may be subject to
similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance,
anti-fraud and abuse laws, and implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare
professionals.

 Any
of these factors, many of which are beyond our control, could increase development costs, jeopardize our ability to obtain regulatory
approval for and successfully market our Product Candidates and generate product revenue.

 We
intend to conduct clinical trials for our Product Candidates in several international jurisdictions, and acceptance by all regulatory
authorities for such "international" data is not certain.

 We
intend to conduct clinical trials for our Product Candidates both inside and outside the United States. To date, all of our clinical
development has been conducted outside of the United States. Ultimately, we plan to submit NDAs for our Product Candidates to the FDA
and other regulatory authorities upon completion of all requisite clinical trials. As an example, although the FDA may accept data from
clinical trials conducted outside the United States, acceptance of such study data by the FDA is subject to certain conditions. For example,
the clinical trial must be conducted in accordance with FDA regulations relating governing human subject protection and the conduct of
clinical trials, which are referred to as "Good Clinical Practice" ("GCP") requirements and the FDA must be able
to validate the data from the clinical trial through an onsite inspection if it deems such inspection necessary. Where data from foreign
clinical trials are intended to serve as the sole basis for marketing approval in the United States, the FDA will not approve the application
on the basis of foreign data alone unless those data are considered applicable to the U.S. patient population and U.S. medical practice,
the clinical trials were performed by clinical investigators of recognized competence, and the data is considered valid without the need
for an on-site inspection by the FDA or, if the FDA considers such an inspection to be necessary, the FDA is able to validate the data
through an on-site inspection or other appropriate means. In addition, such clinical trials would be subject to the applicable local
laws of the foreign jurisdictions where the clinical trials are conducted. There can be no assurance the FDA or any other regulatory
authorities will accept data from clinical trials conducted outside of the United States or other international jurisdictions. If the
FDA or any other regulatory authorities do not accept any such data, it would likely result in the need for additional clinical trials,
which would be costly and time-consuming and delay aspects of our development plan.

 In
addition, the conduct of clinical trials outside the United States could have a significant impact on us. Risks inherent in conducting
international clinical trials include:

 foreign
 regulatory requirements that could burden or limit our ability to conduct our clinical trials;

 administrative
 burdens of conducting clinical trials under multiple foreign regulatory schema;

 foreign
 currency fluctuations which could negatively impact our financial condition since certain
 payments are paid in local currencies;

 manufacturing,
 customs, shipment and storage requirements;

 cultural
 differences in medical practice and clinical research; and

 diminished
 protection of intellectual property in some countries.

 Our
Product Candidates contain compounds that may be classified as "controlled substances", the use of which may generate public
controversy and restrict their development or commercialization.

 If
a drug has a potential for abuse, the NDA or other regulatory submission must include a description and analysis of studies or information
related to abuse of the drug, including a proposal for scheduling (for example, in the U.S. under the federal Controlled Substances Act
("CSA"). A description of any studies related to overdosage is also required, including information on dialysis, antidotes,
or other treatments, if known. While we believe there would be relatively minimal abuse potential with our Product Candidates given the
low drug concentration and topical route of administration, we could be incorrect or they may be perceived as having the potential for
substance abuse. In either case, there may be a negative effect on our ability to successfully develop or commercialize our Product Candidates.
Since our Product Candidates contain purified substances that are chemically identical to those occurring in nature, they may, therefore,
be classified as "controlled substances", and their regulatory approval may generate public controversy. Political and social
pressures and adverse publicity could lead to delays in approval of, and increased expenses for, our Product Candidates. These pressures
could also limit or restrict the introduction and marketing of our Product Candidates. Despite that fact that our APIs, which are the
ingredients that give medicines their effects, are synthetically made and, therefore, we have no interaction with the Cannabis plant,
adverse publicity from Cannabis misuse or adverse side effects from Cannabis or other cannabinoid products may adversely
affect the commercial success or market penetration achievable for our Product Candidates. The nature of our business attracts a high
level of public and media interest, and in the event of any resultant adverse publicity, our reputation may be harmed. Furthermore, if
our Product Candidates are classified as "controlled substances", they may be subject to import/export and research restrictions
that could delay or prevent the development of our products in various geographical jurisdictions. The successful commercialization of
our Product Candidates may require permits or approvals from regulatory bodies, such as the DEA, that regulate controlled substances.

 If
any of our Product Candidates receives marketing approval and we or others later identify undesirable side effects caused by the Product
Candidate, our ability to market and derive revenue from the product candidates could be compromised.

 In
the event that any of our Product Candidates receive regulatory approval and we or others identify undesirable side effects caused by
one of our products, any of the following adverse events could occur, which could result in the loss of significant revenue to us and
materially and adversely affect our results of operations and business: (i) regulatory authorities may withdraw their approval of the
product or seize the product; (ii) we may be required to recall the product or change the way the product is administered to patients;
(iii) additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product
or any component thereof; (iv) we may be subject to fines, injunctions or the imposition of civil or criminal penalties; (v) regulatory
authorities may require the addition of labeling statements, such as a "black box" warning or a contraindication; (vi) we
may be required to create a Medication Guide outlining the risks of such side effects for distribution to patients; (vii) we could be
sued and held liable for harm caused to patients; (viii) the product may become less competitive; and (ix) our reputation being harmed.

restrictions, product shipment delays or prohibitions could have a material adverse effect on our business, results of operations and
financial condition.

on and the shipment, import and export of our Product Candidates and the API used in our Product Candidates will require research permits,
import and export licenses by many different authorities. For instance, in the United States, the FDA, U.S. Customs and Border Protection,
and the DEA; in Canada, the Canada Border Services Agency, and HC; in Europe, the EMA and the European Commission; in Australia and New
Zealand, the Australian Customs and Border Protection Service, the Therapeutic Goods Administration, the New Zealand Medicines and Medical
Device Safety Authority and the New Zealand Customs Service; and in other countries, similar regulatory authorities, regulate the research
on and import and export of pharmaceutical products that contain controlled substances. Specifically, the import and export process require
the issuance of import and export licenses by the relevant controlled substance authority in both the importing and exporting country.
We may not be granted, or if granted, maintain, such licenses from the authorities in certain countries. Even if we obtain the relevant
licenses, shipments of API and our Product Candidates may be held up in transit, which could cause significant delays and may lead to
product batches being stored outside required temperature ranges. Inappropriate storage may damage the product shipment resulting in
delays in clinical trials or, upon commercialization, a partial or total loss of revenue from one or more shipments of API or our Product
Candidates. Once shipment is complete, we or the research contractors we are working with may also suffer further delays or restrictions
as a result of regulations governing research on cannabinoids. A delay in a clinical trial or, upon commercialization, a partial or total
loss of revenue from one or more shipments of API or our Product Candidates could have a material adverse effect on our business, results
of operations and financial condition. The aforementioned examples and lists of various authorities that may currently, or in the future,
affect our ability to conduct research on or import or export our Product Candidates and/or API, should not be construed as exhaustive
or comprehensive in any way.

 Healthcare
legislation, including potentially unfavorable pricing regulations or other healthcare reform initiatives, may increase the difficulty
and cost for us to obtain marketing approval of and commercialize our Product Candidates.

 Particularly
in the United States but also in other jurisdictions, there have been a number of legislative and regulatory changes and proposed changes
in recent years regarding the healthcare system that could prevent or delay marketing approval of our Product Candidates, restrict or
regulate post-approval activities or affect our ability to profitably sell any Product Candidates for which we obtain marketing approval.
Healthcare reform measures that have been and may be adopted in the future may result in more rigorous coverage criteria, new payment
methodologies and additional downward pressure on the price that we receive for any approved product, and could seriously harm our future
revenue. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from
private payors. The implementation of cost containment measures or other healthcare reforms may compromise our ability to generate revenue,
attain profitability or commercialize our products.

 Any
Product Candidates we develop may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare
reform initiatives, thereby materially and adversely impacting our business.

 The
regulations that govern marketing approvals, pricing and reimbursement for new drugs vary widely from country to country. Some countries
require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing
or product licensing approval is granted. In some foreign markets, drug pricing remains subject to continuing governmental control even
after initial approval is granted. Although we intend to monitor these regulations, our programs are currently in the early stages of
development and we will not be able to assess the impact of price regulations for a number of years. As a result, we might obtain regulatory
approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product
and negatively impact the revenues we are able to generate from the sale of the product in that country.

 Our
ability to commercialize any products also will depend in part on the extent to which reimbursement for these products and related treatments
will be available from government health administration authorities, private health insurers and other organizations. Even if we succeed
in bringing one or more products to the market, these products may not be considered cost-effective, and the amount reimbursed for any
products may be insufficient to allow us to sell our products on a competitive basis. Because our programs are in the early stages of
development, we are unable at this time to determine their cost effectiveness or the likely level or method of reimbursement. Increasingly,
the third-party payors who reimburse patients or healthcare providers, such as government and private insurance plans, are requiring
that drug companies provide them with predetermined discounts from list prices and are seeking to reduce the prices charged or the amounts
reimbursed for pharmaceutical products. If the price we are able to charge for any products we develop, or the reimbursement provided
for such products, is inadequate in light of our development and other costs, our return on investment could be adversely affected.

 Increased
scrutiny on drug pricing or changes in pricing regulations could restrict the amount that we are able to charge for our Product Candidates,
which could adversely affect our revenue and results of operations.

 Drug
pricing by pharmaceutical companies is currently under increased scrutiny and is expected to continue to be the subject of intense political
and public debate in the United States and other jurisdictions. Specifically, there have been several recent U.S. Congressional inquiries
and hearings with respect to pharmaceutical drug pricing practices, including in connection with the investigation of specific price
increases by several pharmaceutical companies. Additionally, several states have recently passed laws designed to, among other things,
bring more transparency to drug pricing, and other states may pursue similar initiatives in the future. We cannot predict the extent
to which our business may be affected by these or other potential future legislative or regulatory developments. However, increased scrutiny
on drug pricing, negative publicity related to the pricing of pharmaceutical drugs generally, or changes in pricing regulations could
restrict the amount that we are able to charge for our Product Candidates, which could have a material adverse effect on our revenue
and results of operations.

 Negative
publicity may adversely affect us and our business.

 Media
coverage and public statements that insinuate improper actions by us, regardless of their factual accuracy or truthfulness, may result
in negative publicity, litigation or governmental investigations by regulators. Addressing negative publicity and any resulting litigation
or investigations may distract management, increase costs and divert resources. Negative publicity may have an adverse impact on our
reputation and the morale of our employees, which could have a material adverse effect on our business, financial condition, results
of operations and cash flows.

 Even
if we are able to commercialize our Product Candidates, they may not receive coverage and adequate reimbursement from third-party payors,
which could harm our business.

 The
availability of reimbursement by governmental and private payors is essential for most patients to be able to afford their treatments.
Sales of our Product Candidates, if approved, will depend substantially on the extent to which the costs of these Product Candidates
will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by
government health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not
available, or is available only to limited levels, we may not be able to successfully commercialize our Product Candidates. Even if coverage
is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize
a sufficient return on our investment.

 In
the United States, the Medicare Modernization Act, established the Medicare Part D program and provided authority for limiting the number
of drugs that will be covered in any therapeutic class thereunder. The Medicare Modernization Act, including its cost reduction initiatives,
could decrease the coverage available for any of our approved products. Furthermore, private payors often follow Medicare in setting
their own coverage policies. Therefore, any reduction in coverage that results from the Medicare Modernization Act may result in a similar
reduction from private payors.

 There
is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. In the United States, the
principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services (the
"CMS"), an agency within the HHS, as CMS decides whether and to what extent a new medicine will be covered and reimbursed
under Medicare. Private payors tend to follow CMS to a substantial degree.

 The
intended use of a drug product by a physician can also affect pricing. For example, CMS could initiate a National Coverage Determination
administrative procedure, by which the agency determines which uses of a therapeutic product would and would not be reimbursable under
Medicare. This determination process can be lengthy, thereby creating a long period during which the future reimbursement for a particular
product may be uncertain.

 Outside
the United States, particularly in EU Member States, the pricing of prescription drugs is subject to governmental control. In these countries,
pricing negotiations or the successful completion of Health Technology Assessment ("HTA") procedures with governmental authorities
can take considerable time after receipt of marketing authorization for a product. In addition, there can be considerable pressure by
governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures. Certain countries
allow companies to fix their own prices for medicines but monitor and control company profits. Political, economic and regulatory developments
may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing
used by various EU Member States and parallel distribution, or arbitrage between low-priced and high-priced EU member states, can further
reduce net realized prices. In some countries, we or our collaborators may be required to conduct a clinical trial or other studies that
compare the cost-effectiveness of our Product Candidates to other available therapies in order to obtain or maintain reimbursement or
pricing approval. Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement
levels within the country of publication and other countries. If reimbursement of any product candidate approved for marketing is unavailable
or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business, financial condition, results of operations
or prospects could be adversely affected.

 Our
relationships with customers and third-party payors will be subject to applicable anti-kickback, fraud and abuse, federal exclusion or
debarment, and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages,
reputational harm and diminished profits and future earnings.

 Healthcare
providers, physicians and third-party payors play a primary role in the recommendation and prescription of any Product Candidates for
which we obtain marketing approval. Our future arrangements with third-party payors and customers may expose us to broadly applicable
fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships
through which we market, sell and distribute our products for which we obtain marketing approval. As a pharmaceutical company, even though
we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, certain
federal and state healthcare laws and regulations pertaining to fraud and abuse and patients' rights are and will be applicable
to our business. Restrictions under applicable federal and state healthcare laws and regulations that may affect our ability to operate
include the following:

 the
 U.S. federal healthcare Anti-Kickback Statute impacts our marketing practices, educational
 programs, pricing policies and relationships with healthcare providers or other entities,
 by prohibiting, among other things, persons from knowingly and willfully soliciting, offering,
 receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce
 or reward, or in return for, either the referral of an individual for, or the purchase, order
 or recommendation of, any good or service, for which payment may be made under a federal
 healthcare program such as Medicare and Medicaid;

 federal
 civil and criminal false claims laws and civil monetary penalty laws impose criminal and
 civil penalties, including through civil whistleblower or qui tam actions, against individuals
 or entities for, among other things, knowingly presenting, or causing to be presented, false
 or fraudulent claims for payment of government funds (including through reimbursement by
 Medicare or Medicaid or other federal health care programs), which has been applied to impermissible
 promotion of pharmaceutical products for off-label uses, or making a false statement or record
 to avoid, decrease or conceal an obligation to pay money to the federal government;

 the
 U.S. Health Insurance Portability and Accountability Act ("HIPPA"), as
 amended by the Health Information Technology for Economic and Clinical Health Act ("HITECH
 Act"), among other things, imposes criminal and civil liability for executing a scheme
 to defraud any healthcare benefit program and also prohibits knowingly and willfully falsifying,
 concealing or covering up a material fact or making any materially false, fictitious or fraudulent
 statement or representation, or making or using any false writing or document knowing the
 same to contain any materially false, fictitious or fraudulent statement or entry in connection
 with the delivery of or payment for healthcare benefits, items or services;

 the
 U.S. federal Physician Payment Sunshine Act, being implemented as the Open Payments Program,
 requires applicable manufacturers of covered drugs, devices, biologics and medical supplies
 to report annually to HHS information related to payments and other transfers of value to
 physicians and teaching hospitals, and ownership and investment interests held by physicians
 and their immediate family members;

 analogous
 state laws and regulations, such as state anti-kickback laws, false claims laws and privacy
 and security of health information laws, may apply to sales or marketing arrangements, claims
 involving healthcare items or services reimbursed by non-governmental third-party payors,
 including private insurers, or health information; and

 certain
 state laws require pharmaceutical companies to adopt codes of conduct consistent with the
 pharmaceutical industry's voluntary compliance guidelines and the relevant compliance
 guidance promulgated by the federal government; restrict certain marketing-related activities
 including the provision of gifts, meals, or other items to certain health care providers;
 and/or require drug manufacturers to report information related to payments and other transfers
 of value to physicians and certain other healthcare providers or marketing expenditures.

 Comparable
laws and regulations exist in the countries within the European Economic Area ("EEA"). Although such laws are partially based
upon EU, law, they may vary from country to country. Healthcare specific, as well as general EU and national laws, regulations and industry
codes constrain, for example, our interactions with government officials and healthcare professionals, and the collection and processing
of personal health data. Non-compliance with any of these laws or regulations could lead to criminal or civil liability.

 Efforts
to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve
substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current
or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations
are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant
civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion from government funded healthcare programs, such
as Medicare and Medicaid, and the curtailment or restructuring of our operations. If any physicians or other healthcare providers or
entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal,
civil or administrative sanctions, including exclusions from government funded healthcare programs.

 Failure
to comply with the FCPA, the CFPOA, and other global anti-corruption and anti-bribery laws could subject us to penalties and other adverse
consequences.

 The
FCPA and the Corruption of Foreign Public Officials Act ("CFPOA"), as well as any other applicable domestic or foreign anti-corruption
or anti-bribery laws to which we are or may become subject generally prohibit corporations and individuals from engaging in certain activities
to obtain or retain business or to influence a person working in an official capacity and requires companies to maintain accurate books
and records and internal controls, including at foreign-controlled subsidiaries. It is illegal to pay, offer to pay or authorize the
payment of anything of value to any foreign government official, government staff member, political party or political candidate in an
attempt to obtain or retain business or to otherwise influence a person working in an official capacity.

 Compliance
with these anti-corruption laws and anti-bribery laws may be expensive and difficult, particularly in countries in which corruption is
a recognized problem. In addition, these laws present particular challenges in the pharmaceutical industry, because, in many countries,
hospitals are operated by the government, and physicians and other hospital employees are considered to be foreign officials. Certain
payments by other companies to hospitals in connection with clinical trials and other work have been deemed to be improper payments to
governmental officials and have led to FCPA enforcement actions.

 Our
internal control policies and procedures may not protect us from reckless or negligent acts committed by our employees, future distributors,
licensees or agents. We can make no assurance that they will not engage in prohibited conduct, and we may be held liable for their acts
under applicable anti-corruption and anti-bribery laws. Noncompliance with these laws could subject us to investigations, sanctions,
settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties
or injunctions, suspension or debarment from contracting with certain persons, the loss of export privileges, whistleblower complaints,
reputational harm, adverse media coverage, and other collateral consequences. Any investigations, actions or sanctions or other previously
mentioned harm could have a material negative effect on our business, operating results and financial condition.

 Any
change in export or import controls, anti-corruption laws, economic sanctions or related legislation, or change in the countries, governments,
persons, or technologies targeted by such restrictions or legislation, could result in decreased use of our products by customers or
in our decreased ability to offer our products internationally, which would harm our business, operating results and financial condition.
Furthermore, failure to comply with export or import controls or with anti-corruption or economic sanctions laws may expose us to government
investigations, more onerous compliance requirements and significant penalties, which could harm our business, operating results and
financial condition. In addition, responding to any action will likely result in a significant diversion of management's attention
and resources and an increase in professional fees. Enforcement actions and sanctions could harm our business, operating results and
financial condition.

 From
time to time, including our ongoing matter with a third party licensor, we may be subject to legal proceedings, disputes, claims and
administrative proceedings that arise in the ordinary course of our business activities that could cause us to incur significant expenses,
divert our management's attention, and materially harm our business, financial condition, and operating results.

 We
currently are, or in the future may be, involved in legal proceedings that from time to time may arise from the operation of our business
and, as such, we could incur substantial judgments, fines, legal fees, or other costs. From time to time, we may be the subject of complaints
or litigation from customers, employees, vendors, or other third parties for various actions. We also may be involved in litigation involving
claims related to breach of contract, tortious conduct, employment and labor law matters, and others. These matters could require significant
judgment, and there can be no assurance that our expectations or estimates will prove correct. Certain of these matters may include speculative
claims for substantial or indeterminate amounts of damages and include claims for injunctive or equitable relief. Additionally, our legal
costs for any of these matters, either alone or in the aggregate, could be significant. The damages sought against us in these matters
could be substantial. Although we maintain liability insurance for certain legal claims, if one or more of the claims were to greatly
exceed our insurance coverage limits or if our insurance policies do not cover a claim, our expenses could increase significantly and
management's focus could be diverted away from our operations, which could have a material adverse effect on our business, financial
condition, results of operations, and cash flows.

 On
February 15, 2021, BayMedica entered into an exclusive technology license agreement (the "Agreement") with a third party
(the "Licensor") pursuant to which it agreed to license a proprietary process in the United States where it has a pending
U.S. patent application in exchange for certain annual royalty payments contingent on the net sales of products made using the licensed
process. On April 29, 2025, BayMedica received a letter from the Licensor stating its intention to commence arbitration proceedings pursuant
to the Agreement, together with a Notice of Arbitration (the "Patent License Matter"). Such arbitration proceedings will
be subject to final, binding and non-appealable arbitration under the Arbitration Act, 1991 (Ontario) and determined pursuant to Ontario
law. In its Notice of Arbitration, the Licensor takes the position that the annual royalty payments are meant to function as guaranteed
annual minimum payments required to be made for the duration of the Agreement regardless of net sales. The Licensor seeks relief against
BayMedica including (a) approximately US$3.4 million in annual payments for the years 2022 through 2024 and (b) a declaration that BayMedica
is liable to pay certain guaranteed annual minimum payments of approximately US$2.3 million for the remainder of the term of the Agreement.
BayMedica disputes the amount owing and to be paid over the duration of the Agreement. While we are not able to predict the outcome of
the Patent License Matter with any certainty, an unfavorable outcome to BayMedica would have a material adverse impact on the Company's
business and financial condition and on BayMedica's ability to continue operations. For additional information, see Note 12, Commitments
and Contingencies in the Notes to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report and the section titled
"Legal Proceedings" in Part I, Item 3 of this Annual Report.

 Federal
 legislation and actions by state and local governments may permit reimportation of drugs
 from/to foreign countries where the drugs are sold at lower prices than in the country of
 origination, which could materially adversely affect our business and financial condition.

 We
may face competition for our Product Candidates, if approved, from cheaper generics and/or cannabinoid therapies sourced from foreign
countries that have placed price controls on pharmaceutical products. This is referred to as parallel importation. For instance, the
Medicare Modernization Act contains provisions that may change U.S. importation laws and expand pharmacists' and wholesalers'
ability to import cheaper versions of an approved drug and competing products from Canada, where there are government price controls.
These changes to U.S. importation laws will not take effect unless and until the Secretary of HHS certifies that the changes will pose
no additional risk to the public's health and safety and will result in a significant reduction in the cost of products to consumers.
The Secretary of HHS has so far declined to approve a reimportation plan. Proponents of drug reimportation, including certain state legislatures,
may attempt to pass legislation that would directly allow reimportation under certain circumstances. Legislation or regulations allowing
the reimportation of drugs, if enacted, could decrease the price we receive for any products that we may develop, including our Product
Candidates, and adversely affect our future revenues and prospects for profitability.

 We
 are dependent upon our key personnel to achieve our business objectives.

 We
depend on key personnel, the loss of any of whom could harm our business. Our future performance and development will depend to a significant
extent on the efforts and abilities of its executive officers, key employees, and consultants. The loss of the services of one or more
of these individuals could harm our business. Our success will depend largely on our continuing ability to attract, develop and retain
skilled employees and consultants in our business. Because of the specialized scientific and managerial nature of our business, we rely
heavily on our ability to attract and retain qualified scientific, technical and managerial personnel. The competition for qualified
personnel in our field is intense. Due to this intense competition, we may be unable to continue to attract and retain qualified personnel
necessary for the development of our business or to recruit suitable replacement personnel. Any delay in replacing such persons, or an
inability to replace them with persons of similar expertise, would have a material adverse effect on our business, financial condition
and results of operations.

 Our
employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements,
which could subject us to significant liability and harm our reputation.

 We
are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures to comply with
regulations of domestic or foreign regulatory authorities. In addition, misconduct by employees could include intentional failures to
comply with certain development standards, to report financial information or data accurately, or to disclose unauthorized activities
to us. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could
result in regulatory sanctions and serious harm to our reputation. While prohibited, it is not always possible to identify and deter
employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged
risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance
with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting
our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant
fines or other sanctions.

 Our
internal computer systems, or those of our contractors or consultants, may fail or suffer security breaches, which could result in a
material disruption of our product development programs.

 Despite
the implementation of cyber security measures, our internal computer systems and those of our contractors and consultants are vulnerable
to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.
Such events could cause interruptions of our operations. For example, the loss of preclinical data or data from any future clinical trial
involving our product candidates could result in delays in our development and regulatory filing efforts and significantly increase our
costs. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data, or inappropriate disclosure
of confidential or proprietary information, we could incur liability and the development of our product candidates could be delayed.

 Our
insurance may be insufficient to cover losses that may occur as a result of our operations.

 We
currently maintain directors' and officers' liability insurance, clinical trial insurance and property and general liability
insurance and intend in the future to obtain shipping and storage insurance for Product Candidates. This insurance may not remain available
to us or be obtainable by us at commercially reasonable rates, and the amount of our coverage may not be adequate to cover any liability
we incur. Future increases in insurance costs, coupled with the increase in deductibles, will result in higher operating costs and increased
risk. If we were to incur substantial liability and such damages were not covered by insurance or were in excess of policy limits, or
if we were to incur such liability at a time when we were not able to obtain liability insurance, our business, results of operations
and financial condition could be materially adversely affected.

 Our
insurance costs may increase significantly, we may be unable to obtain the same level of insurance coverage and our insurance coverage
may not be adequate to cover all possible losses we may suffer.

 We
generally renew our insurance policies annually. If the cost of coverage becomes too high or if we believe certain coverage becomes inapplicable,
we may need to reduce our policy limits, increase retention amounts or agree to certain exclusions from our coverage to reduce the premiums
to an acceptable amount or to otherwise reduce coverage for certain occurrences. On the other hand, we may determine that we either do
not have certain coverage that would be prudent for our business and the risks associated with our business or that our current coverages
are too low to adequately cover such risks. In either event, we may incur additional or higher premiums for such coverage than in prior
years.

 Among
other factors, national security concerns, catastrophic events, pandemics such as the COVID-19 pandemic, or any changes in any applicable
statutory requirement binding insurance carriers to offer certain types of coverage could also adversely affect available insurance coverage
and result in, among other things, increased premiums on available coverage (which may cause us to elect to reduce our policy limits
or not renew our coverage) and additional exclusions from coverage. As cyber incidents and threats continue to evolve, we may be required
to expend additional, perhaps significant, resources to continue to update, modify or enhance our protective measures or to investigate
and remediate any vulnerability to cyber incidents. Although we maintain and monitor our information technology systems and maintain
coverage to indemnify us from losses arising from cyber-attacks, such systems and insurance coverage may not be sufficient to protect
against or cover all the losses we may experience as a result of any cyberattacks.

 We
may suffer damage due to a casualty loss (such as fire, natural disasters, pandemics and acts of war or terrorism) or other losses, such
as those related to labor, professional liability or certain actions or inactions by our management, directors, employees or others,
that could severely disrupt its business or subject us to claims by third parties who are injured or harmed. Although we maintain insurance
that we believe to be adequate, such insurance may be inadequate or unavailable to cover all the risks to which our business and assets
may be exposed, including risks related to certain litigation. Should an uninsured loss (including a loss that is less than the applicable
deductible or that is not covered by insurance) or loss in excess of insured limits occur, it could have a significant adverse impact
on our business, results of operations or financial condition.

 There
may be changes in laws, regulations and guidelines which are material and detrimental to our business.

 Our
operations are subject to a variety of laws, regulations and guidelines relating to pharmacology, cannabinoids and drug delivery, as
well as laws and regulations relating to health and safety, the conduct of operations, and the protection of the environment. While,
to the knowledge of our management, we are currently in compliance with all such laws, changes to such laws, regulations and guidelines
due to matters beyond our control may cause adverse effects to our operations and financial condition. These changes may require us to
incur substantial costs associated with legal and compliance fees and ultimately require us to alter our business plan. In addition,
if the governments of Canada or the United States were to enact or amend laws relating to our industry, it may decrease the size of,
or eliminate entirely, the market for our Product Candidates, may introduce significant new competition into the market and may otherwise
potentially materially and adversely affect our business, results of operations and financial condition.

 If
we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely
affected.

 The
research and development that we carry out either directly or through third parties involves, and may in the future involve, the use
of potentially hazardous materials and chemicals. Our operations may produce hazardous waste products. Although we believe that our safety
procedures for handling and disposing of these materials comply with the standards mandated by local, state and federal laws and regulations,
the risk of accidental contamination or injury from these materials cannot be eliminated. If an accident occurs, we could be held liable
for resulting damages, which could be substantial. We are also subject to numerous environmental, health and workplace safety laws and
regulations and fire and building codes. Although we maintain workers' compensation insurance as prescribed by the Province of
British Columbia to cover us for costs and expenses, we may incur due to injuries to our employees, this insurance may not provide adequate
coverage against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be asserted
against us. Additional federal, state and local laws and regulations affecting our operations may be adopted in the future. We may incur
substantial costs to comply with, and substantial fines or penalties if we violate, any of these laws or regulations.

 Our
proprietary information, or that of our customers, suppliers and business partners, may be lost or we may suffer security breaches.

 In
the ordinary course of our business, we may collect and store sensitive data, including intellectual property, data from preclinical
studies, clinical trial data, our proprietary business information and that of our customers, suppliers and business partners, and personally
identifiable information of our customers, clinical trial subjects and employees, in our data centers and on our networks. The secure
processing, maintenance and transmission of this information is critical to our operations. Despite our security measures, our information
technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions.
Although to our knowledge we have not experienced any such material security breach to date, any such breach could compromise our networks
and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of
information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory
penalties, disrupt our operations, damage to our ability to obtain patent protection for our Product Candidates, damage to our reputation,
and cause a loss of confidence in our products and our ability to conduct clinical trials, which could adversely affect our business
and reputation and lead to delays in gaining regulatory approvals.

 We
expect to face intense competition, often from companies with greater resources and experience than we have.

 The
pharmaceutical industry is highly competitive and subject to rapid change. The industry continues to expand and evolve as an increasing
number of competitors and potential competitors enter the market. Many of these competitors and potential competitors have substantially
greater financial, technological, managerial and research and development resources and experience than we have. Some of these competitors
and potential competitors have more experience than we have in the development of pharmaceutical products, including validation procedures
and regulatory matters. Other companies researching in the same disease areas may develop products that are competitive or superior to
our Product Candidates. Other companies working in cannabinoid research may develop products targeting the same diseases that we are
focused on that are competitive or superior to our Product Candidates. In addition, there are non-FDA approved Cannabis / cannabinoid
preparations being made available from companies in the so-called "medical marijuana" industry, which may be competitive
to our products. If we are unable to compete successfully, our commercial opportunities will be reduced and our business, results of
operations and financial conditions may be materially harmed.

 Industry
consolidation may lead to increased competition and costs, and may harm our operating results.

 We
rely on certain third parties to provide supplies and services necessary for our business. Any reduction in market participants and available
suppliers and vendors, whether through transactions or consolidation, could result in fewer alternatives for sourcing key supplies and
services. Such consolidation could result in a shortage of supplies and services thereby increasing the cost of such supplies and services,
and potentially inhibit the ability of suppliers and vendors to deliver on time, if at all. Cost increases and delays in, or the unavailability
of, critical supplies and services could have a material and adverse effect on our results of operations.

 If
we receive regulatory approvals, we intend to market our Product Candidates in multiple jurisdictions where we have limited or no operating
experience and may be subject to increased business and economic risks that could affect our financial results.

 If
we receive regulatory approvals, we may plan to market our Product Candidates in jurisdictions where we have limited or no experience
in marketing, developing and distributing our products. Certain markets have substantial legal and regulatory complexities that we may
not have experience navigating. We are subject to a variety of risks inherent in doing business internationally, including risks related
to the legal and regulatory environment in non-U.S. jurisdictions, including with respect to privacy and data security, trade control
laws and unexpected changes in laws, regulatory requirements and enforcement, as well as risks related to fluctuations in currency exchange
rates and political, social and economic instability in foreign countries. If we are unable to manage our international operations successfully,
our financial results could be adversely affected.

 Controlled
substance legislation may differ in other jurisdictions and could restrict our ability to market our products internationally, which
would result in increased business and economic risks that could affect our financial results.

 Controlled
substance legislation may differ in other jurisdictions and could restrict our ability to market our products internationally. Most countries
are parties to the Single Convention on Narcotic Drugs 1961, which governs international trade and domestic control of narcotic substances,
including Cannabis extracts. Countries may interpret and implement their treaty obligations in a way that creates a legal obstacle
to our obtaining marketing approval for Product Candidates in those countries. These countries may not be willing or able to amend or
otherwise modify their laws and regulations to permit our Product Candidates to be marketed or achieving such amendments to the laws
and regulations may take a prolonged period of time. We would be unable to market our Product Candidates in countries with such obstacles
in the near future or perhaps at all without modification to laws and regulations.

 Product
liability lawsuits against us could cause us to incur substantial liabilities.

 Our
use of our Product Candidates in clinical trials and the sale of our Product Candidates, if approved, exposes us to the risk of product
liability claims. Product liability claims might be brought against us by patients, healthcare providers or others selling or otherwise
coming into contact with our Product Candidates. For example, we may be sued if any product we develop allegedly causes injury or is
alleged to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include
allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, including as a result
of interactions with alcohol or other drugs, negligence, strict liability, and a breach of warranties. Claims could also be asserted
under local jurisdiction consumer protection acts. If we become subject to product liability claims and cannot successfully defend ourselves
against them, we could incur substantial liabilities. In addition, regardless of merit or eventual outcome, product liability claims
may result in, among other things:

 withdrawal
 of patients from our clinical trials;

 substantial
 monetary awards to patients or other claimants;

 decreased
 demand for our Product Candidates following marketing approval, if obtained;

 damage
 to our reputation and exposure to adverse publicity;

 increased
 FDA warnings on product labels or increased warnings imposed by the EMA or other regulatory
 authorities;

 litigation
 costs;

 distraction
 of management's attention from our primary business;

 loss of revenue; and

 the
 inability to successfully commercialize our Product Candidates, if approved.

 Our
current clinical trial liability insurance coverage may not be sufficient to reimburse us for any expenses or losses we may suffer. Moreover,
insurance coverage is becoming increasingly expensive and, in the future, we may not be able to maintain insurance coverage at a reasonable
cost or in sufficient amounts to protect us against losses due to liability. If we obtain marketing approval for our Product Candidates,
we intend to expand our insurance coverage to include the sale of commercial products; however, we may be unable to obtain product liability
insurance on commercially reasonable terms or in adequate amounts. Large judgments have been awarded in class action lawsuits based on
drugs that had unanticipated side effects. The cost of any product liability litigation or other proceedings, even if resolved in our
favor, could be substantial, particularly in light of the size of our business and financial resources. A product liability claim or
series of claims brought against us could cause our share price to decline and, if we are unsuccessful in defending such a claim or claims
and the resulting judgments exceed our insurance coverage, our financial condition, results of operations, business and prospects could
be materially adversely affected.

 Failure
to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions, or
data corruption could significantly disrupt our operations and adversely affect our business and operating results.

 We
rely on information technology, telephone networks and systems, including the internet, to process and transmit sensitive electronic
information and to manage or support a variety of business processes and activities. We use enterprise information technology systems
to record, process and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory,
financial reporting, legal and tax requirements. Despite the implementation of security measures, our information technology systems,
and those of our third-party contractors and consultants, are vulnerable to a cyber-attack, malicious intrusion, breakdown, destruction,
loss of data privacy or other significant disruption. Any such successful attacks could result in the theft of intellectual property
or other misappropriation of assets, or otherwise compromise our confidential or proprietary information and disrupt our operations.
Cyber-attacks are becoming more sophisticated and frequent, and our systems could be the target of malware and other cyber-attacks. We
have invested in our systems and the protection of our data to reduce the risk of an intrusion or interruption, and we monitor our systems
on an ongoing basis for any current or potential threats. Nonetheless, our computer systems are subject to penetration and our data protection
measures may not prevent unauthorized access. We can give no assurances that these measures and efforts will prevent interruptions or
breakdowns. If we are unable to detect or prevent a security breach or cyber-attack or other disruption from occurring, then we could
incur losses or damage to our data, or inappropriate disclosure of our confidential information or that of others; and we could sustain
damage to our reputation, suffer disruptions to our research and development and incur increased operating costs including increased
cybersecurity and other insurance premiums, costs to mitigate any damage caused and protect against future damage, and be exposed to
additional regulatory scrutiny or penalties and to civil litigation and possible financial liability. For instance, the loss of preclinical
or clinical data could result in delays in our development and regulatory filing efforts and significantly increase our costs.

 Certain
macroeconomic and geopolitical conditions, which are outside of our control, as well as the evolution of methods and techniques used
by bad actors, may also make us more susceptible to a cybersecurity attack. For example, tensions between Russia and several western
nations (and their respective allies) in connection with the Russia-Ukraine War could result in retaliatory actions being undertaken
by supporters of Russia, including in the form of espionage, phishing campaigns and other forms of cyber-attacks. Moreover, pro-Russian
ransomware cybercriminals and gangs have previously publicly threatened to augment their hacking efforts in response to the implementation
of sanctions and other responsive actions taken by western countries (and their allies). Increasing costs associated with information
security, such as increased investment in technology, the cost of compliance and costs resulting from consumer fraud could cause our
business and results of operations to suffer materially. Likewise, within a few hours of the commencement of the Hamas-Israel conflict,
activist hackers commenced cyberattacks against both Israeli and Palestinian websites, and in a short period, had targeted dozens of
government websites and media outlets. Such cyber-intrusions included DDOS attacks, attempts to overload websites with 'junk'
traffic and ultimately bring down the site.

 The
methods and techniques used by cyber threat actors to gain entry into our network and access our computer systems, software and data
will become more advanced with the use of Artificial Intelligence ("AI") and may become increasingly difficult or impossible
to detect and prevent. As these threats continue to evolve, we may be required to invest significant additional resources to modify and
enhance our information security and controls or to investigate and remediate any security vulnerabilities. While our technology infrastructure
is designed to safeguard and protect personal and business information, we have limited ability to monitor the implementation of similar
safeguards by our vendors.

 Any
cyberattack, unauthorized intrusion, malicious software infiltration, network disruption, corruption of data, misuse or theft of private
or other sensitive information, or inadvertent acts by our own employees, could result in the disclosure or misuse of confidential or
proprietary information, which could have a material adverse effect on our business operations or that of our clients. If we experience
a significant data security breach, fail to detect and appropriately respond to a significant data security breach, or fail to comply
with the various cybersecurity regulations, including the California Consumer Privacy Act and the California Privacy Rights Act in the
United States, we could be exposed to government enforcement actions and private litigation. These losses may exceed our insurance coverage
for such incidents. In addition, our employees and clients could lose confidence in our ability to protect their personal and proprietary
information, which could cause them to terminate their relationships with us. Any loss of confidence arising from a significant data
security breach could hurt our reputation, further damaging our business.

 Our
failure to comply with data protection laws and regulations could lead to government enforcement actions and significant penalties against
us, and adversely impact our operating results.

 We
are subject to various domestic and international data protection laws and regulations (i.e., laws and regulations that address privacy
and data security). The legislative and regulatory landscape for data protection continues to evolve, and in recent years there has been
an increasing focus on privacy and data security issues. Numerous laws, including data breach notification laws, health information privacy
laws and consumer protection laws, govern the collection, use and disclosure of health-related and other personal information. In addition,
we may obtain health information from third parties (e.g., healthcare providers who prescribe our products) that are subject to privacy
and security requirements under HIPAA regulations.

 EU
Member States, Australia and other countries have also adopted data protection laws and regulations, which impose significant compliance
obligations. For example, the collection and use of personal data in the EU is governed by the provisions of the General Data Protection
Regulation ("GDPR"). The GDPR and the national implementing legislation of the EU Member States impose strict obligations
and restrictions on the ability to collect, analyze and transfer personal data, including health data from clinical trials and adverse
event reporting. In particular, these obligations and restrictions concern the consent of the individuals to whom the personal data relates,
the information provided to the individuals, the rights of individuals to control personal data and the security and confidentiality
of the personal data. The related UK GDPR and the UK Data Protection Act of 2018, which ensures that the United Kingdom has in effect
the same high standards for data protection in place as under the GDPR, impose stringent operational requirements in the United Kingdom
(including through restrictions on processing of personal data and cross-border transfers of personal data, and mandatory breach reporting
to regulators and, under certain circumstances, to the individuals whose personal data was compromised in the breach). In addition, the
Australian Privacy Act 1986 (Cth), and other laws in the states and territories in Australia where we conduct certain of our clinical
trials, apply similar restrictions on our ability to collect, analyze and transfer medical records and other patient data.

 Other
new laws and regulations are rapidly coming into effect while existing legislation is quickly evolving. In the United States, the SEC
adopted new rules requiring public companies to disclose information about a material cybersecurity incident, including any breach of
personal data, within four business days of determining that it has experienced a material cybersecurity incident. Likewise, several
privacy laws in the United States came into effect in 2023, including in California, Virginia, Colorado, Connecticut and Utah, and new
state privacy laws that have or will come into effect in 2024, including in Montana, Oregon and Texas, all of which give new data privacy
rights to their respective residents and impose significant obligations on controllers and processors of consumer data.

 There
is additionally increasing U.S. and foreign activity in the regulation of AI, and other similar uses of technology. For example, in Europe,
there is a proposed regulation (the Artificial Intelligence Act) that, if adopted and approved, could impose onerous and substantial
obligations related to the use of AI-related systems. Additionally, several states and localities in the United States have enacted measures
related to the use of AI and machine learning in products and services. In October 2023, the President of the United States issued an
executive order on the Safe, Secure and Trustworthy Development and Use of AI, emphasizing the need for transparency, accountability
and fairness in the development and use of AI tools, and AI is the subject of evolving review by various governmental and regulatory
agencies, including the SEC and the Federal Trade Commission. Depending on how these AI laws and regulations are interpreted, and to
the extent that our business practices, products and services utilize AI, we could be subject to, and need to comply with, such obligations.
Moreover, our development and use of AI, and the uncertain regulatory environment, could result in reputational harm, liability or other
material and adverse consequences to our financial condition and business operations. The introduction of AI technologies into new or
existing products may also result in new or enhanced governmental or regulatory scrutiny, litigation, confidentiality or security risks,
ethical concerns, or other complications that could adversely affect our business, reputation, or financial results. The intellectual
property ownership and license rights, including copyright, surrounding AI technologies has not been fully addressed by courts or national
or local laws or regulations, and the use or adoption of third-party AI technologies into our products and services may result in exposure
to claims of copyright infringement or other intellectual property misappropriation. Uncertainty around new and emerging AI technologies,
such as generative AI, may require additional investment in the development and maintenance of proprietary datasets and machine learning
models, development of new approaches and processes to provide attribution or remuneration to creators of training data, and development
of appropriate protections and safeguards for handling the use of customer data with AI technologies, which may be costly and could impact
our expenses if we decide to expand generative AI into our product offerings. AI technologies, including generative AI, may create content
that appears correct but is factually inaccurate or flawed. Our customers or others may rely on or use this flawed content to their detriment,
which may expose us to brand or reputational harm, competitive harm, and/or legal liability. The use of AI technologies presents emerging
ethical and social issues, and if we enable or offer solutions that draw scrutiny or controversy due to their perceived or actual impact
on customers or on society as a whole, we may experience brand or reputational harm, competitive harm, and/or legal liability.

 Existing
privacy-related laws and regulations in the United States and other countries are evolving and are subject to potentially differing interpretations,
and various U.S. federal and state or other international legislative and regulatory bodies may expand or enact laws regarding privacy
and data security-related matters. Due to the fact that privacy and information security laws and regulations are subject to change from
time to time, our compliance with them may result in cost increases due to necessary systems changes and the development of new processes.
Any new or modified laws and regulations may require that we modify our data processing practices and policies, and incur substantial
costs and expenses in an effort to comply with such laws and regulations. These laws are complex and there is no ubiquitous approach
to maintaining compliance. Requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another
or may conflict with other rules or our practices. If we fail to comply with any of these laws and regulations, we could be subjected
to legal risk and other adverse effects to our business and operations.

 A
claim or series of claims brought against us alleging a failure to comply with these laws, or changes in the way in which these laws
are implemented, could lead to government enforcement actions and significant penalties against us, and adversely impact our operating
results and could cause our share price to decline and, if we are unsuccessful in defending such a claim or claims and the resulting
judgments exceed our insurance coverage, our financial condition, results of operations, business and prospects could be materially adversely
affected.

 Our
results of operations could be materially and adversely affected if we cannot keep pace with technological changes impacting the development
of our products and implementation of our business needs, including with respect to automation and the use of AI.

 Our
success depends on our ability to keep pace with rapid technological changes affecting the development of our products and implementation
of our business needs. Emerging technological trends such as AI, machine learning and automation are impacting industries and business
operations. If we do not sufficiently invest in new technology and industry developments, appropriately implement new technologies or
evolve our business at sufficient speed and scale in response to such developments, or if we do not make the right strategic investments
to respond to these developments, our products, results of operations and ability to develop and maintain our business could be negatively
affected. Our competitors or other third parties may incorporate AI technologies into their services, products and business more quickly
or more successfully than us, which could impair our ability to compete effectively and materially and adversely affect our results of
operations and financial condition.

 Climate
change may have an impact on our business.

 While
we seek to mitigate our business-related risks associated with climate change, we recognize that there are inherent climate-related risks
wherever business is conducted. Any of our locations may be vulnerable to the adverse effects of climate change. Changing market dynamics,
global policy developments, and the increasing frequency and impact of extreme weather events on critical infrastructure in the United
States, Canada and elsewhere have the potential to disrupt our business, the business of our suppliers, and the business of our customers,
and may cause us to experience higher attrition, losses and additional costs to maintain or resume operations. In particular, we rely
on data centers to deliver our solutions, which consume significant amounts of energy. To the extent that energy prices increase as a
result of carbon pricing or other measures, this could affect our cost structure.

 Our
success depends on our ability to continue to innovate and create new products and enhancements to our existing products.

 To
keep pace with technological developments, satisfy increasingly sophisticated customer requirements and achieve market acceptance, we
must enhance and improve existing products and continue to introduce new products and services. If we are unable to successfully develop
new products, integrate acquired products or enhance and improve existing products or if we fail to position and/or price our products
to meet market demand, our business and operating results will be adversely affected. Accelerated product introductions and short product
life cycles require high levels of expenditures for research and development that could adversely affect our results of operations. Further,
the introduction of new products could require long development and testing periods and may not be introduced in a timely manner or may
not achieve the broad market acceptance necessary to generate significant revenue. Further, if a competitor develops a new, less expensive
product using a different technological approach to delivering informational services over existing networks, our products would no longer
be competitive. Conversely, even if we are successful in rapidly developing new products ahead of our competitors, if we do not cost-effectively
manage our inventory levels of existing products when making the transition to new products, our financial results could be negatively
affected by write-offs as a result of high levels of obsolete inventory. If any of the foregoing were to occur, our operating results
could be materially and adversely impacted.

 Risks
Related to our Securities

 The
market prices for our Common Shares are volatile and will fluctuate.

 The
trading price of our Common Shares has been and could remain volatile, and the market price of our Common Shares may decrease. The market
price of our Common Shares has historically experienced and may continue to experience significant volatility. The volatile nature of
our Common Share price may cause investment losses for our stockholders. In addition, the market price of stock in small capitalization
biotech companies is often driven by investor sentiment, expectation, and perception, all of which may be independent of fundamental,
objective, and intrinsic valuation metrics or traditional financial performance metrics, thereby exacerbating volatility.

 The
market price for our Common Shares is anticipated to be volatile and subject to wide fluctuations in response to numerous factors, many
of which are beyond our control, including the following: (i) actual or anticipated fluctuations in our quarterly financial results;
(ii) recommendations by securities research analysts; (iii) changes in the economic performance or market valuations of other issuers
that investors deem comparable to ours; (iv) addition or departure of our executive officers or members of our Board and other key personnel;
(v) release or expiration of lock-up or other transfer restrictions on outstanding Common Shares; (vi) sales or perceived sales of additional
Common Shares; (vii) liquidity of the Common Shares; (viii) significant acquisitions or business combinations, strategic partnerships,
joint ventures or capital commitments by or involving us or our competitors; and (ix) news reports relating to trends, concerns, technological
or competitive developments, regulatory changes and other related issues in our industry or target markets. Financial markets often experience
significant price and volume fluctuations that affect the market prices of equity securities of public entities and that are, in many
cases, unrelated to the operating performance, underlying asset values or prospects of such entities. Accordingly, the market price of
our Common Shares may decline even if our operating results, underlying asset values or prospects have not changed. Additionally, these
factors, as well as other related factors, may cause decreases in asset values that are deemed to be other than temporary, which may
result in impairment losses. As well, certain institutional investors may base their investment decisions on consideration of our environmental,
governance and social practices and performance against such institutions' respective investment guidelines and criteria, and failure
to meet such criteria may result in limited or no investment in our Common Shares by those institutions, which could materially adversely
affect the trading price of our Common Shares. There can be no assurance that continuing fluctuations in price and volume will not occur.
If such increased levels of volatility and market turmoil continue for a protracted period of time, our operations could be materially
adversely impacted and the trading price of our Common Shares may be materially adversely affected.

 Raising
additional capital may cause dilution to our existing shareholders, restrict our operations or require us to relinquish rights to our
technologies or Product Candidates.

 We
will seek additional capital through a combination of private and public equity offerings, debt financings, strategic partnerships and
alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities,
existing ownership interests will be diluted and the terms of such financings may include liquidation or other preferences that adversely
affect the rights of existing shareholders. Debt financings may be coupled with an equity component, such as warrants to purchase shares,
which could also result in dilution of our existing shareholders' ownership. 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.

 Future
offerings of debt or equity securities may rank senior to our Common Shares.

 If
we decide to issue debt or equity securities in the future ranking senior to our Common Shares or otherwise incur additional indebtedness,
it is possible that these securities or indebtedness will be governed by an indenture or other instrument containing covenants restricting
our operating flexibility and limiting our ability to pay dividends to shareholders. Additionally, any convertible or exchangeable securities
that we issue in the future may have rights, preferences and privileges, including with respect to dividends, more favorable than those
of Common Shares and may result in dilution to shareholders. Because our decision to issue debt or equity securities in any future offering
or otherwise incur indebtedness will depend on market conditions and other factors beyond our control, we cannot predict or estimate
the amount, timing or nature of our future offerings or financings, any of which could reduce the market price of our Common Shares and
dilute their value.

 More
generally, our level of indebtedness could have significant and adverse effects on our business. For example, our level of indebtedness
and the terms of our debt agreements could: (i) make it more difficult for us to satisfy our financial obligations under our indebtedness
and our contractual and commercial commitments and increase the risk that we may default on our debt obligations; (ii) prevent us from
raising the funds necessary to repurchase notes tendered to us if we undergo a change of control; (iii) require us to use a substantial
portion of our cash flow from operations to pay interest and principal on the Second Amended and Restated Credit Agreement and other
debt, which would reduce the funds available for working capital, capital expenditures and other general corporate purposes; (iv) limit
our ability to obtain additional financing for working capital, capital expenditures, acquisitions and other investments, or general
corporate purposes, which may limit our ability to execute our business strategy; (v) limit our ability to refinance our current or future
indebtedness on terms that are commercially reasonable, if at all; (vi) heighten our vulnerability to downturns in our business, our
industry or in the general economy, and restrict us from exploiting business opportunities or making acquisitions; (vii) place us at
a competitive disadvantage compared to those of our competitors that may have proportionately less debt; (viii) limit management's
discretion in operating our business; and (ix) limit our flexibility in planning for, or reacting to, changes in our business, the industry
in which we operate or the general economy. Each of these factors may have a material and adverse effect on our financial condition and
viability. Our ability to satisfy our other debt obligations will depend on our future operating performance, which will be affected
by prevailing economic conditions and financial, business and other factors affecting our company and industry, many of which are beyond
our control.

 Future
sales of Common Shares by our officers, directors and affiliates may negatively impact the market price for our Common Shares.

 Subject
to compliance with applicable securities laws, our directors and officers and their affiliates may sell some or all of their Common Shares
in the future. No prediction can be made as to the effect, if any, such future sales of Common Shares may have on the market price of
the Common Shares prevailing from time to time. However, the future sale of a substantial number of Common Shares by our directors and
officers and their affiliates, or the perception that such sales could occur, could adversely affect prevailing market prices for our
Common Shares.

 We
do not currently pay dividends on our Common Shares and have no intention to pay dividends on our Common Shares for the foreseeable future.

 No
dividends on our Common Shares have been paid by us to date. We do not intend to declare or pay any cash dividends in the foreseeable
future. Payment of any future dividends will be at the discretion of our Board of Directors, after taking into account a multitude of
factors appropriate in the circumstances, including our operating results, financial condition and current and anticipated cash needs.
In addition, the terms of any future debt or credit facility may preclude us from paying any dividends unless certain consents are obtained
and certain conditions are met.

 We
are exposed to risks related to currency exchange rates.

 We
currently hold most of our cash, cash equivalents and short-term investments in U.S. dollars which is our functional currency. A portion
of our current operations is conducted in Canadian dollars. Exchange rate fluctuations between other currencies and the U.S. dollar create
risk in several ways, including the following:

 weakening of the Canadian
 dollar may decrease the value of our Canadian dollar cash, cash equivalents and short-term investments;

 weakening of the U.S. dollar
 may increase the cost of operations and products/services sourced in Canada;

 the exchange rates on non-U.S.
 dollar transactions and cash deposits can distort our financial results; and

 commercial product pricing
 and profit margins are affected by currency fluctuations.

 For
as long as we are an "emerging growth company" we intend to take advantage of reduced disclosure and governance requirements
applicable to emerging growth companies, which could result in our Common Shares being less attractive to investors and could make it
more difficult for us to raise capital as and when we need it.

 We
are an "emerging growth company," as defined in the JOBS Act, and we have taken advantage, and intend to continue to take
advantage, of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging
growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404
of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any
golden parachute payments not previously approved.

 Investors
may find our Common Shares less attractive because we rely on these exemptions, which could contribute to a less active trading market
for our Common Shares or volatility in our share price. In addition, we may be less attractive to investors and it may be difficult for
us to raise additional capital as and when we need it. Investors may be unable to compare our business with other companies in our industry
if they believe that our financial accounting is not as transparent as other companies in our industry. If we are unable to raise additional
capital as and when we need it, our financial condition and results of operations may be materially and adversely affected.

 We
may take advantage of these reporting exemptions until we are no longer an emerging growth company.

 There
remains increased focus from lawmakers and regulators on corporate Environmental, Social and Governance ("ESG") practices,
including climate change and related ESG disclosure requirements.

 Expectations
regarding voluntary ESG initiatives and disclosures may result in increased costs (including but not limited to increased costs related
to compliance, stakeholder engagement, contracting and insurance), changes in demand for certain products, enhanced compliance or disclosure
obligations, or other adverse impacts to our business, financial condition or results of operations. In addition, standards for tracking
and reporting ESG matters continue to evolve, and our business may be impacted by new laws, regulations or investor criteria in the United
States, Europe and around the world related to ESG. In March 2024, the SEC adopted new rules that will require registrants to provide
certain climate-related information in their registration statements and annual reports. The rules require information about a registrant's
climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition.
The required information about climate-related risks will also include disclosure of a registrant's greenhouse gas emissions. In
addition, the rules will require registrants to present certain climate-related financial metrics in their audited financial statements.
The SEC's newly adopted climate-related disclosure rules may require us to incur significant additional costs to comply, including
the implementation of significant additional internal controls processes and procedures regarding matters that have not been subject
to such controls in the past and expanded data collection, analysis and certification with respect to greenhouse gas emissions reporting
that may not be complete or accurate, and impose increased oversight obligations on our management and board of directors. These and
other regulations, disclosure-related and otherwise, including California laws S.B. 253, S.B. 261 and A.B. 1305 and the EU's Corporate
Sustainability Reporting Directive, may increase our costs as well as increase scrutiny regarding our ESG efforts, which may enhance
the risks discussed in this risk factor. These legal and regulatory requirements, as well as investor expectations related to ESG practices
and disclosures are subject to change, can be unpredictable, and may be difficult and expensive for us to comply with. If we fail to
adapt to or comply with all laws, regulations, policies and related interpretations, our business and reputation could be negatively
impacted, and our share price and access to/cost of capital could be materially and adversely affected. Additionally, many of our customers
and suppliers may be subject to similar expectations, which may augment or create additional risks, including risks that may not be known
to us.

 If
we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately
report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result,
the value of our Common Shares.

 We
will be required, under Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness
of our internal control over financial reporting. This assessment includes disclosure of any material weaknesses identified by our management
in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control
over financial reporting that results in more than a reasonable possibility that a material misstatement of annual or interim financial
statements will not be prevented or detected on a timely basis. Section 404 of the Sarbanes-Oxley Act also generally requires an attestation
from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. However,
for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of the exemption permitting
us not to comply with the independent registered public accounting firm attestation requirement.

 Our
compliance with Section 404 will require that we incur substantial accounting expense and expend significant management efforts. We may
not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process,
if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our
internal control over financial reporting is effective. We cannot assure you that there will not be material weaknesses or significant
deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial
reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows. This
may expose us, including individual executives, to potential liability which could significantly affect our business. If we are unable
to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm
determines we have a material weakness in our internal control over financial reporting once that firm begins its audits of internal
control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market
price of our Common Shares could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory
authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other
effective control systems required of public companies, could also restrict our future access to the capital markets.

 Our
disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

 Our
disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file
or submit under the Securities Exchange Act of 1934 is accumulated and communicated to management, recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures
or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the control system are met.

 These
inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of
simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more
people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements
or insufficient disclosures due to error or fraud may occur and not be detected.

 Deficiencies
in disclosure controls and procedures and internal control over financial reporting could result in a material misstatement in our financial
statements.

 We
could be adversely affected if there are deficiencies in our disclosure controls and procedures or in our internal controls over financial
reporting. The design and effectiveness of our disclosure controls and procedures and our internal controls over financial reporting
may not prevent all errors, misstatements or misrepresentations. Consistent with other entities in similar stages of development, we
have a limited number of employees currently in the accounting group, limiting our ability to provide for segregation of duties and secondary
review. A lack of resources in the accounting group could lead to material misstatements resulting from undetected errors occurring from
an individual performing primarily all areas of accounting with limited secondary review. Deficiencies in internal controls over financial
reporting which may occur could result in material misstatements of our results of operations, restatements of financial statements,
other required remediations, a decline in the price of our Common Shares, or otherwise materially adversely affect our business, reputation,
results of operations, financial condition or liquidity.

 We
have incurred, and will continue to incur, increased costs as a result of operating as a public company, and our management has been
required, and will continue to be required, to devote substantial time to new compliance initiatives.

 As
a public company, we have incurred and are continuing to incur significant legal, accounting and other expenses and these expenses may
increase even more after we are no longer an "emerging growth company." We are subject to the reporting requirements of the
Exchange Act and the rules adopted, and to be adopted, by the SEC. Our management and other personnel devote a substantial amount of
time to these compliance initiatives.

 Moreover,
these rules and regulations have substantially increased our legal and financial compliance costs and made some activities more time-consuming
and costly. The increased costs have increased our net loss. These rules and regulations may make it more difficult and more expensive
for us to maintain sufficient director's and officer's liability insurance coverage. We cannot predict or estimate the amount
or timing of additional costs we may continue to incur to respond to these requirements. The ongoing impact of these requirements could
also make it more difficult for us to attract and retain qualified persons to serve on our Board, our Board committees or as executive
officers.

 Future
sales and issuances of our Common Shares or rights to purchase Common Shares pursuant to our equity incentive plan could result in additional
dilution of the percentage ownership of our shareholders and may cause our share price to fall.

 We
expect that significant additional capital will be needed in the future to continue our planned operations. To raise capital, we may
sell substantial amounts of Common Shares or securities convertible into or exchangeable for Common Shares. These future issuances of
Common Shares or Common Share-related securities to purchase Common Shares, together with the exercise of outstanding options and any
additional shares issued in connection with acquisitions, if any, may result in material dilution to our investors. Such sales may also
result in material dilution to our existing shareholders, and new investors could gain rights, preferences and privileges senior to those
of holders of our Common Shares.

to our 2017 Amended and Restated Stock Option Plan, and as amended at our Annual General Meeting in November 2020, our compensation committee
is authorized to grant equity-based incentive awards in the form of options to purchase common shares to our directors, executive officers
and other employees and service providers. As of September 12, 2025, there were 42,332 options available for future allocation pursuant
to the 20% of the issued and outstanding shares allowed to be issued according to the terms of the Plan. Future equity incentive grants
under our stock option plan may result in material dilution to our shareholders and may have an adverse effect on the market price of
our common shares.

 Provisions
in our corporate charter documents and certain Canadian laws could delay or deter a change of control.

 Provisions
in our articles and our by-laws, as well as certain provisions under the BCBCA and applicable Canadian securities laws, may discourage,
delay or prevent a merger, acquisition, tender offer or other change in control of us that some shareholders may consider favorable.
In addition, because our Board is responsible for appointing the members of our management team, these provisions may frustrate or prevent
any attempts by our shareholders to replace or remove our current management by making it more difficult for shareholders to replace
members of our Board. As well, our preferred shares are available for issuance from time to time at the discretion of our Board, without
shareholder approval. Our articles allow our Board, without shareholder approval, to determine the special rights to be attached to our
preferred shares, and such rights may be superior to those of our Common Shares.

 In
addition, limitations on the ability to acquire and hold our Common Shares may be imposed by the Competition Act in Canada. This legislation
permits the Commissioner of Competition of Canada (the "Commissioner"), to review any acquisition of a significant interest
in us. This legislation grants the Commissioner jurisdiction to challenge such an acquisition before the Canadian Competition Tribunal
if the Commissioner believes that it would, or would be likely to, result in a substantial lessening or prevention of competition in
any market in Canada. The Investment Canada Act subjects an acquisition of control of a company by a non-Canadian to government review
if the value of our assets, as calculated pursuant to the legislation, exceeds a threshold amount. A reviewable acquisition may not proceed
unless the relevant minister is satisfied that the investment is likely to result in a net benefit to Canada. Any of the foregoing could
prevent or delay a change of control and may deprive or limit strategic opportunities for our shareholders to sell their shares.

 If
securities or industry analysts publish inaccurate or unfavorable research about our business, our share price and trading volume may
decline.

 The
trading market for our Common Shares depends in part on the research and reports that securities or industry analysts publish about us
or our business. If one or more of the analysts who cover us downgrade our shares or publish inaccurate or unfavorable research about
our business, our shares price may decline. If one or more of these analysts cease coverage of our company or fail to publish reports
on us regularly, demand for our shares may decrease, which may cause our shares price and trading volume to decline.

 We
are incorporated in Canada, with our assets and officers primarily located in Canada, with the result that it may be difficult for investors
to enforce judgments obtained against us or some of our officers.

 We
are a company organized and existing under the laws of British Columbia, Canada. Many of our directors and officers and the experts named
in this Annual Report are residents of Canada or otherwise reside outside the United States, and all or a substantial portion of their
assets, and a substantial portion of our assets, are located outside the United States. It may be difficult for holders of Common Shares
who reside in the United States to effect service within the United States upon those directors, officers and experts who are not residents
of the United States. It may also be difficult for holders of securities who reside in the United States to realize in the United States
upon judgments of courts of the United States predicated upon our civil liability and the civil liability of our directors, officers
and experts under the U.S. federal securities laws. Our Canadian counsel has advised us that there is doubt as to the enforceability
in Canada against us or against our directors, officers and experts who are not residents of the United States, in original actions or
in actions for enforcement of judgments of courts of the United States, of liabilities predicated solely upon U.S. federal or state securities
laws.

 Conversely,
some of our directors and officers reside outside Canada and some of our assets are also located outside Canada. Therefore, it may not
be possible for you to enforce in Canada against our assets or those directors and officers residing outside Canada, judgments obtained
in Canadian courts based upon the civil liability provisions of the Canadian securities laws or other laws of Canada.

 Risks
Related to our Financial Position and Capital Needs

 Our
operating losses have raised substantial doubt regarding our ability to continue as a going concern.

 Our
operating losses raise substantial doubt about our ability to continue as a going concern. As a result, our independent registered public
accounting firms included an explanatory paragraph in its report on our financial statements as of and for the years ended June 30, 2025
and June 30, 2024 with respect to this uncertainty. The perception of our ability to continue as a going concern may make it more difficult
for us to obtain financing for the continuation of our operations and could result in the loss of confidence by investors, suppliers
and employees.

 We
have incurred significant losses since our inception and anticipate that we will continue to incur losses in the future.

 Since
our inception as a pharmaceutical company in October 2014, we have devoted substantially all of our resources to the development of our
proprietary Product Candidates. We have generated significant operating losses since our inception with an accumulated deficit to June
30, 2025 of approximately $118.0 million. Our net loss for the fiscal years ended June 30, 2025 and 2024 was approximately $8.2 million
and $7.7 million, respectively. 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.

 We
expect to continue to incur significant expenses and operating losses for the foreseeable future. We anticipate these losses will increase
as we continue the research and development of, and clinical trials for, our Product Candidates. In addition to budgeted expenses, we
may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.
If our Product Candidates fail in preclinical or clinical trials, or do not gain regulatory approval, or even if approved, fail to achieve
market acceptance, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability
in subsequent periods.

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

 We
will require additional capital to fund our operations and if we fail to obtain necessary financing, we will not be able to complete
the development and commercialization of our Product Candidates.

 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.

 As
of June 30, 2025, we had approximately $11.1 million in cash, cash equivalents and short-term investments, which, we currently estimate
funds our operations into the fourth quarter of calendar 2026 (being the second fiscal quarter of 2027), depending on the level and timing
of realizing revenues from the sale of BayMedica inventory as well as the level and timing of our operating expenses. Our ability to
develop our research and development programs is subject to accessing additional capital, including through the sale of equity, partnership
revenues, and out-licensing activities. There is no assurance that we will be successful in these efforts.

 The
progress of our Product Candidates for both current and prospective target indication(s) is uncertain because it is difficult to predict
our spending for our Product Candidates up to the time that we seek FDA approval due to numerous factors, including, without limitation,
the rate of progress of clinical trials, the results of preclinical studies and clinical trials for such indication, the costs and timing
of seeking and obtaining FDA and other regulatory approvals for clinical trials and FDA guidance regarding clinical trials for such indication.
Moreover, changing circumstances may cause us to expend cash significantly faster than we currently anticipate, and we may need to spend
more cash than currently expected because of circumstances beyond our control. For these reasons, we are unable to state unequivocally
the actual funds we will require for development and any approved marketing and commercialization activities. Our future funding requirements,
both near and long-term, will depend on many factors, including, but not limited to:

 the
 initiation, progress, timing, costs and results of preclinical studies and clinical trials
 for our Product Candidates;

 any
 change in the clinical development plans or target indications for these Product Candidates;

 the
 number and characteristics of Product Candidates that we develop or may in-license;

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

 the
 outcome, timing and cost of meeting regulatory requirements established by the Drug Enforcement
 Administration ("DEA"), the FDA, the European Medicines Agency, Health Canada
 ("HC"), or other comparable foreign regulatory authorities;

 the
 cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual
 property rights;

 the
 cost of defending intellectual property disputes, including patent infringement actions brought
 by third parties against us;

 the
 effect of competing product and market developments;

 the
 costs and timing of the implementation of commercial scale manufacturing activities; and

 the
 cost of establishing, or outsourcing, sales, marketing and distribution capabilities for
 any Product Candidates for which we may receive regulatory approval in regions where we choose
 to commercialize our products on our own.

 We
cannot be certain that additional funding will be available on acceptable terms, or at all. If we are unable to 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.

 Any
doubt about our ability to continue as a going concern may materially and adversely affect the price of our Common Shares, and it may
be more difficult for us to obtain financing. Any doubt about our ability to continue as a going concern may also adversely affect our
relationships with current and future collaborators, contract manufacturers and investors, who may become concerned about our ability
to meet our ongoing financial obligations. If potential collaborators decline to do business with us or potential investors decline to
participate in any future financings due to such concerns, our ability to increase our financial resources may be limited. We have prepared
our financial statements on a going concern basis, which assumes that we will be able to meet our commitments, realize our assets and
discharge our liabilities in the normal course of business. Our consolidated financial statements do not include any adjustment to reflect
the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that
may result from the outcome of this uncertainty.

 We
may have difficulties identifying, successfully completing or integrating acquisitions, or maintaining or growing our acquired businesses.

 We
remain committed to our growth strategy of organically growing our strategic portions of our business while assessing strategic acquisitions,
dispositions, partnerships and other strategic transactions. While we believe we have the experience required to execute this strategy,
we do not have control over the market conditions prevailing or likely to prevail in the future, which may impact the ability to execute
this strategy. There can be no assurances that we will be able to identify suitable acquisition candidates available for sale at reasonable
valuations, consummate any acquisition or successfully integrate any acquired business into our operations. Moreover, there can be no
assurance that we will be able to access further financial resources for other suitable acquisition opportunities that may become available
to us. We have and will likely continue to have competition for acquisition opportunities from other parties including those that have
greater financial resources or are willing to pay higher valuation multiples. To the extent we were to pursue or engage in any transactions,
including acquisitions and dispositions, there is no guarantee that such transactions will be successful or, even if consummated, improve
our operating results and financial condition. We may incur costs, breakage fees or other expenses in connection with any such transactions,
and any such transactions may ultimately have a material adverse effect on our operating results.

 Acquisitions
involve significant risks and uncertainties, including, but not limited to, the following:

 unanticipated
 costs and liabilities;

 difficulties
 in marketing and integrating new products, software, businesses, operations and technology
 infrastructure in an efficient, effective and secure manner, including the integration of
 businesses where a portion or all of the business is in an adjacent industry;

 the
 inability to achieve synergy and cost reduction targets assumed at the time of acquisition;

 difficulties
 in maintaining customer and key supplier relations, including changing contract manufacturers
 as a result of lower volumes of business;

 the
 potential loss of key employees of the acquired businesses, including as a result of cultural
 differences between the acquired company and our own;

 the
 diversion of the attention of our senior management from the operation of our daily business;

 the
 potential adverse effect on our net debt and liquidity position as a result of all or a portion
 of an acquisition purchase price being paid in cash;

 the
 potential significant increase of our interest expense, leverage and debt service requirements
 if we incur additional debt to pay for an acquisition;

 the
 potential issuance of securities that would dilute our shareholders' percentage ownership;

 the
 potential to incur restructuring and other related expenses, including significant transaction
 costs that may be incurred regardless of whether a potential strategic acquisition or investment
 is completed;

 use
 of resources that are needed in other areas of our business;

 the
 inability to maintain uniform standards, controls, policies and procedures, including the
 inability to establish and maintain adequate internal controls over financial reporting,
 and remediate, in whole or in part, any material weaknesses or significant deficiencies identified
 with respect to internal controls over financial reporting;

 difficulties
 in entering markets in which we have no or limited direct prior experience and where competitors
 in such markets have stronger market positions;

 difficulties
 in securing required regulatory approvals or otherwise satisfy closing conditions for a proposed
 transaction in a timely manner, or at all;

 potential
 impairment charges on higher levels of goodwill and intangible assets as a result of impairment
 testing performed on a regular basis;

 higher
 amortization expenses related to acquired definite-lived intangible assets; and

 becoming
 subject to intellectual property or other litigation.

 We
currently have limited commercial revenue and may never become profitable.

 In
addition to the limited revenues from our BayMedica Products, our ability to generate revenue and become profitable depends upon our
ability to obtain regulatory approval for, and successfully commercialize, our Product Candidates that we may develop, in-license or
acquire in the future.

 Even
if we are able to successfully achieve regulatory approval for these Product Candidates, we do not know what the reimbursement status
of our Product Candidates will be or when any of these products will generate revenue for us, if at all. We have not generated, and do
not expect to generate, any revenue from Product Candidates for the foreseeable future, and we expect to continue to incur significant
operating losses for the foreseeable future due to the cost of research and development, preclinical studies and clinical trials and
the regulatory approval process for our Product Candidates. The number of future losses is uncertain and will depend, in part, on the
rate of growth of our expenses.

 Our
ability to generate revenue and become profitable depends upon a number of additional factors, including our ability to:

 successfully
 complete development activities, including the remaining preclinical studies and ongoing
 and planned clinical trials for our Product Candidates;

 in-license
 or acquire in the future, Product Candidates and other potential lines of business that we
 may develop;

 complete
 and submit NDAs to the FDA and Marketing Authorization Applications ("MAAs")
 to the EMA, and obtain regulatory approval for indications for which there is a commercial
 market;

 complete
 and submit applications to, and obtain regulatory approval from, other foreign regulatory
 authorities;

 manufacture
 any approved products in commercial quantities and on commercially reasonable terms;

 develop
 a commercial organization, or find suitable partners, to market, sell and distribute approved
 products in the markets in which we have retained commercialization rights;

 achieve
 acceptance among patients, clinicians and advocacy groups for any products we develop;

 obtain
 coverage and adequate reimbursement from third parties, including government payors; and

 set
 a commercially viable price for any products for which we may receive approval.

 We
are unable to predict the timing or amount of increased expenses, or when or if we will be able to achieve or maintain profitability.
Even if we are able to complete the processes described above, we anticipate incurring significant costs associated with commercializing
our Product Candidates.

in tax laws and unanticipated tax liabilities could adversely affect our effective income tax rate and ability to achieve profitability.

 We
are subject to income taxes in the United States and Canada. As our operations expand, we may become subject to income tax in jurisdictions
outside of the United States and Canada. Our effective income tax rate in the future could be adversely affected by a number of factors
including changes in the mix of earnings (losses) in countries with differing statutory tax rates, changes in the valuation of deferred
tax assets and liabilities and changes in tax laws. We regularly assess all of these matters to determine the adequacy of our tax provision
which is subject to discretion. If our assessments are incorrect, it could have an adverse effect on our business and financial condition.
There can be no assurance that income tax laws and administrative policies with respect to the income tax consequences generally applicable
to us or to our subsidiaries will not be changed in a manner which adversely affects our shareholders.

 Our
ability to use our net operating loss carryforwards and other tax attributes may be materially limited.

 As
of June 30, 2025, we had net operating loss ("NOL") carryforwards of approximately $97.3 million available to offset future
taxable income in Canada and the United States. These NOL carry-forwards begin to expire in 2026.

 Our
NOL carryforwards could expire unused and be unavailable to offset future income tax liabilities. Under provisions in the Canadian Income
Tax Act, and corresponding provisions of Canadian provincial law, if a corporation undergoes an "ownership change," generally
defined as a greater than 50% change, by value, the corporation's ability to use its pre-change Canadian NOLs and other pre-change
tax attributes, such as research and development tax credits, to offset its post-change income may be limited. Specifically, NOLs from
a business before the change of control may be carried forward to taxation years after the change of control, but only if the same business
is carried forward on after the change in control with a reasonable expectation of profit, and only to offset income from that business
or a similar business. We have not performed any analyses under the applicable provisions in the Canadian Income Tax Act and cannot forecast
or otherwise determine our ability to derive benefit from our various federal or provincial tax attribute carryforwards. As a result,
if we earn net taxable income, our ability to use our pre-change NOL carryforwards to offset Canadian federal taxable income may be subject
to limitations, which could potentially result in increased future tax liability to us. In addition, at the provincial level, there may
be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase provincial
taxes owed.

 In
addition, we may experience ownership changes in the future as a result of subsequent shifts in our share ownership, including in any
future offerings, some of which may be outside of our control. If we determine that an ownership change has occurred and our ability
to use our NOL carryforwards is materially limited, it would harm our future operating results by effectively increasing our future tax
obligations.

to accounting standards may adversely impact the manner in which we report our financial position and operating results.

 There
are ongoing projects conducted by the Financial Accounting Standards Board in the United States that are expected to result in new pronouncements
that continue to evolve, which could adversely impact the manner in which we report our financial position and operating results.

 Natural
disasters, public health crises, political crises, or other catastrophic events may adversely affect our business affairs, results of
operations, financial condition, liquidity, availability of credit and foreign exchange exposure.

in the global economic environment have created market uncertainty and volatility in recent years. The market and demand for metal commodities
and related products has in recent years been adversely affected by global economic uncertainty, reduced confidence in financial markets,
the COVID-19 pandemic, including any resurgence thereof, bank failures and credit availability concerns. These macro-economic events
negatively affected the mining and minerals sectors in general. Global financial conditions remain subject to sudden and rapid destabilizations
in response to economic shocks. A slowdown in the financial markets or other economic conditions, including but not limited to reduced
consumer spending, decreased employment rates, adverse business conditions, high inflation, high fuel and energy costs, high consumer
debt levels, a lack of available credit, the state of turmoil in the financial markets, high interest rates and/or tax rates, may adversely
affect our growth and profitability. Future economic shocks may be precipitated by a number of causes, including the slowdown in the
Chinese economy, a rise in the price of oil and other commodities, climate change disasters, geopolitical instability, including as a
direct or indirect result of the Russo-Ukraine war and the ongoing Israel-Hamas conflict, further wars or acts of terrorism, the devaluation
and volatility of global stock markets and natural disasters. Any sudden or rapid destabilization of global economic conditions could
impact the our ability to obtain equity or debt financing in the future on terms favorable to us or at all. In such an event, our operations
and financial condition could be adversely impacted.

 We
assess on a quarterly basis the carrying values of our assets. Should market conditions and commodity prices worsen and persist in a
worsened state for a prolonged period of time, an assessment of our assets for impairment may be required.

 The
ongoing Russo-Ukraine War and the Israel-Hamas conflict, including the actual or perceived threat of an exacerbation of such conflicts,
could have a material and adverse effect on our business, operations and financial condition.

 Russia's
invasion of Ukraine in February 2022 has caused, and could continue to cause, increased volatility across the global financial markets,
increased inflation, and turbulence in the markets in which we operate. In response to actions undertaken by Russia in Ukraine, several
countries (including Canada, the United States and other western governments) have imposed stringent economic sanctions and export control
measures, and may impose additional sanctions or export control measures in the near-term, which have included severe and complete restrictions
on exports and other commerce and business dealings involving Russia, certain regions of Ukraine, Belarus and/or particular entities
and individuals.

 Likewise,
the recent and ongoing conflict in the Middle East has impacted and could continue to impact the global economy for the foreseeable future,
and is threatening to spread, and may in the future spread, into other Middle Eastern countries. The conflicts have caused, and could
intensify, volatility in market prices, and the extent and duration of the military actions, sanctions and resulting market disruptions
could be significant and could potentially have a substantial negative impact geopolitical stability and on our business for an unknown
period of time.

 In
addition, any further changes in regulations or shifts in political conditions are beyond our control and may materially and adversely
affect our business, or if significant enough, may significantly impede our ability to transact in certain countries. Operations may
be affected in varying degrees by government regulations with respect to restrictions on production, price controls and foreign exchange
restrictions.

 While
we do not have any direct significant exposure or connection to Russia, Ukraine, Belarus or the Middle East at large, it is uncertain
as to how such events and any related economic sanctions could impact the global economy. Any negative developments in respect thereof
could have a material and adverse effect on our business, operations, financial condition, and the value of our securities.

 High
rates of global inflation, the occurrence of a recession and higher interest rates could have a material and adverse impact on our business,
results of operations and financial condition.

 Our
business and financial condition have been, and we believe will continue to be, impacted by adverse and uncertain macroeconomic conditions,
including inflation, interest rates, fluctuations or volatility in capital markets or foreign currency exchange rates, the threat of
new or increased tariffs, escalating trade tensions and changes in trade agreements, and geopolitical events around the world, such as
the impact from recent U.S. tariff activity as well as ongoing conflicts between Russia and Ukraine and in the Middle East. In recent
years, the global markets experienced, higher rates of inflation as a result of several market factors, including in the form of increased
costs pertaining to labor, materials and overhead. Inflation rates in the U.S. significantly increased in recent years resulting in action
by the U.S. federal government to increase interest rates, adversely affecting capital markets activity. Interest rates are sensitive
to factors that are beyond our control, including domestic and international economic conditions, including inflation, and the policies
of various governmental and regulatory agencies, including the Federal Reserve Board in the United States (the "Federal Reserve").
Interest rates may remain at current levels for the near-term, and this new interest rate environment could materially and adversely
affect our business, the counterparties with which we interact and the global economy at large.

 While
we experienced increases in the cost of labor and materials, we believe that our financial condition and results of operations have thus
far not been materially impacted by inflationary pressures. However, to the extent the current rates of inflation and shifts in fiscal
and monetary policy result in prolonged and slower growth or a recession, it could have a material and adverse effect on the demand for
our products and services and, in the process, our business, results of operations and financial condition as a whole, including with
respect to our ability to maintain current levels of gross margin and general and administrative expenses as a percentage of total revenue.
Moreover, in the event that a global recession were to occur, it could adversely impact the critical counterparties that we engage, including
in the form of a decrease in the products and services they seek to obtain from us. Relatively high interest rates will increase cost
of capital and the cost of borrowings for any other corporate purpose. As a result, if we need or seek significant borrowings and interest
rates remain elevated or increase, the cost of such borrowing to us could be significant, which may have a significant adverse impact
on our financial condition and results of operations. We continue to monitor our operations and will seek to take appropriate actions
to mitigate the potential impact of heightened inflation on our business. Nevertheless, there can be no assurances that we will be successful
in doing so, if at all.

 Material
and adverse developments impacting the financial services industry at large, including the occurrence of actual (or widespread concerns
regarding the potential occurrence of) defaults, illiquidity, operational failures and non-performance by financial institutions and
critical counterparties, could have a material and adverse effect on our business, financial condition and results of operations.

 The
occurrence of actual (or widespread concerns regarding the potential occurrence of) illiquidity, operational failures, defaults, non-performance
or other material and adverse developments that impact financial institutions and transactional counterparties, or other entities within
the financial services industry at large, have previously caused, and could continue to cause, market-wide liquidity issues, bank-runs
and general contagion across the global financial industry. For example, on March 10, 2023, Silicon Valley Bank ("SVB") was
closed by the California Department of Financial Protection and Innovation and the Federal Deposit Insurance Corporation (the "FDIC")
was subsequently appointed as a receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each placed
into receivership. While the U.S. Federal Reserve Board, the FDIC and the U.S. Department of Treasury collectively agreed to guarantee
all deposits, above and beyond the limit on insured deposits of $250,000 at these financial institutions, there can be no assurance that
there will not be additional bank failures or issues in the broader financial system. Likewise, there is no guarantee that any of the
U.S. Department of Treasury, the FDIC or the Federal Reserve Board will provide access to any additional uninsured funds in the future
in the event of the closure or failure of any other banks or financial institutions, or that they would do so promptly or in a timely
fashion. Additionally, substantial and rapid increases in interest rates and inflation have led to a decline in the trading value of
previously issued government securities with interest rates below current market interest rates. While the U.S. Department of Treasury,
Federal Reserve and the FDIC have announced a program to provide up to $25 billion of loans to financial institutions secured by certain
of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments,
the liquidity needs of financial institutions, including as a result of widespread demands for customer withdrawals, may exceed the capacity
of such program.

 Furthermore,
we and other parties with who we conduct business and engage commercially may be unable to access critical funds in deposit accounts
or other accounts held with a closed or failing financial institution or pursuant to lending arrangements with such financial institutions.
Accordingly, in such instance, our ability to pay our obligations, and any of our counterparties' ability to pay their respective
obligations, or enter into new commercial arrangements requiring additional payments, could be materially and adversely affected.

 Risks
Related to our Intellectual Property

 Our
success is largely dependent upon our patents, proprietary technology, and other intellectual property.

 Our
success will depend, in part, on our ability to obtain patents, protect our trade secrets and operate without infringing on the proprietary
rights of others. Patents and other proprietary rights are essential to our business. We rely on trade secret, patent, copyright and
trademark laws, and confidentiality and other agreements with employees and third parties, all of which offer only limited protection.
Our general policy has been to file patent applications to protect our inventions and improvements to our inventions that are considered
important to the development of our business. In certain cases, we have chosen to protect our intellectual property by treating it as
confidential internal know-how. Our success will depend in part on our ability to obtain patents, defend patents, maintain internal know-how/trade
secret protection and operate without infringing on the proprietary rights of others. Interpretation and evaluation of pharmaceutical
patent claims present complex legal and factual questions. Further, patent protection may not be available for some of the products or
technology we are developing. If we are placed in a position where we must spend significant time and money defending or enforcing our
patents, designing around patents held by others or licensing patents or other proprietary rights held by others, our business, results
of operations and financial condition may be harmed. In seeking to protect our inventions using patents it is important to note that
we have no assurance that:

 patent
 applications will result in the issuance of patents;

 additional
 proprietary products developed will be patentable;

 patents
 issued will provide adequate protection or any competitive advantages;

 patents
 issued will not be successfully challenged by third parties;

 commercial
 exploitation of our inventions does not infringe the patents or intellectual property of
 others; or

 we
 will be able to obtain any extensions of the patent term.

 A
number of pharmaceutical, biotechnology and medical device companies and research and academic institutions have developed technologies,
filed patent applications or received patents on various technologies that may be related to our business. Some of these technologies,
applications or patents could limit the scope of the patents, if any, that we may be able to obtain. It is also possible that these technologies,
applications or patents may preclude us from obtaining patent protection for our inventions. Further, there may be uncertainty as to
whether we may be able to successfully defend any challenge to our patent portfolio. Moreover, we may have to participate in derivation
proceedings, inter partes review proceedings, post-grant review proceedings, or opposition proceedings in the various jurisdictions
around the world. An unfavorable outcome in a derivation proceeding, an inter partes review proceeding, a post-grant review proceeding,
or an opposition proceeding could preclude us or our collaborators or licensees from making, using or selling products using the technology,
or require us to obtain license rights from third parties. It is not known whether any prevailing party would offer a license on commercially
acceptable terms, if at all. Further, any such license could require the expenditure of substantial time and resources and could harm
our business. If such licenses are not available, we could encounter delays or prohibition of the development or introduction of our
product. In the case of intellectual property where we have chosen to protect it by treating it as internal knowhow, there can be no
assurance that others with greater expertise or access to greater resources do not develop similar or superior technology that impairs
the competitive value of our internal know-how.

 Moreover,
a number of aspects of intellectual property protection in the field of AI are currently under development, and there is uncertainty
and ongoing litigation in different jurisdictions as to the degree and extent of protection warranted for AI and machine learning systems,
as well as relevant system input and outputs. If we fail to obtain protection for the intellectual property rights concerning our AI
technologies, or later have our intellectual property rights invalidated or otherwise diminished, our competitors may be able to take
advantage of our research and development efforts to develop competing products, and our business, financial condition and operations
could be materially and adversely impacted.

 Obtaining
and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements
imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

 The
U.S. Patent and Trademark Office ("PTO") and various foreign national or international patent agencies require compliance
with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. Periodic maintenance
fees on any issued patent are due to be paid to the PTO and various foreign national or international patent agencies in several stages
over the lifetime of the patent. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in
accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or
patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could
result in abandonment or lapse of patent rights include, but are not limited to, failure to timely file national and regional stage patent
applications based on our international patent application, failure to respond to official actions within prescribed time limits, non-payment
of fees and failure to properly legalize and submit formal documents. If we fail to maintain the patents and patent applications covering
our Product Candidates, our competitors might be able to enter the market, which would have a material adverse effect on our business.

 We
may become subject to claims by third parties asserting that we or our employees have misappropriated their intellectual property or
claiming ownership of what we regard as our own intellectual property.

 Our
commercial success depends upon our ability to develop, manufacture, market and sell our Product Candidates, and to use our related proprietary
technologies without violating the intellectual property rights of others. We may become party to, or threatened with, future adversarial
proceedings or litigation regarding intellectual property rights with respect to our Product Candidates, including interference or derivation
proceedings before the PTO or other international patent offices. Third parties may assert infringement claims against us based on existing
patents or patents that may be granted in the future. If we are found to infringe a third party's intellectual property rights,
we could be required to obtain a license from such third party to continue commercializing our Product Candidates. However, we may not
be able to obtain any required license on commercially reasonable terms or at all. Under certain circumstances, we could be forced, including
by court order, to cease commercializing the applicable product candidate. In addition, in any such proceeding or litigation, we could
be found liable for monetary damages. A finding of infringement could prevent us from commercializing our Product Candidates or force
us to cease some of our business operations, which could materially harm our business. Any claims by third parties that we have misappropriated
their confidential information or trade secrets could have a similar negative impact on our business.

 While
our preclinical studies are ongoing, we believe that the use of our Product Candidates in these preclinical studies fall within the scope
of the exemptions provided by 35 U.S.C. Section 271(e) in the United States, which exempts from patent infringement liability activities
reasonably related to the development and submission of information to the FDA. As our Product Candidates progress toward clinical trials
and, ultimately, commercialization, the possibility of a patent infringement claim against us increases. We attempt to ensure that our
Product Candidates and the methods we employ to manufacture them, as well as the methods for their uses we intend to promote, do not
infringe other parties' patents and other proprietary rights. There can be no assurance they do not, however, and competitors or
other parties may assert that we infringe their proprietary rights in any event.

 We
may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming and unsuccessful
and have a material adverse effect on the success of our business.

 Competitors
may infringe our patents or misappropriate or otherwise violate our intellectual property rights. To counter infringement or unauthorized
use, litigation may be necessary in the future to enforce or defend our intellectual property rights, to protect our trade secrets or
to determine the validity and scope of our own intellectual property rights or the proprietary rights of others. Also, third parties
may initiate legal proceedings against us to challenge the validity or scope of intellectual property rights we own. These proceedings
can be expensive and time consuming. Many of our current and potential competitors have the ability to dedicate substantially greater
resources to defend their intellectual property rights than we can. Accordingly, despite our efforts, we may not be able to prevent third
parties from infringing upon or misappropriating our intellectual property. Litigation could result in substantial costs and diversion
of management resources, which could harm our business and financial results. In addition, in an infringement proceeding, a court may
decide that a patent owned by us is invalid or unenforceable or may refuse to stop the other party from using the technology at issue
on the grounds that our patents do not cover the technology in question. An adverse result in any litigation proceeding could put one
or more of our patents at risk of being invalidated, held unenforceable or interpreted narrowly. Furthermore, because of the substantial
amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information
could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings,
motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could
have a material adverse effect on the price of our common shares.

 If
we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and
products could be significantly diminished.

 We
rely on trade secrets to protect our proprietary technologies, especially where we do not believe patent protection is appropriate or
obtainable. However, trade secrets are difficult to protect. We rely in part on confidentiality agreements with our current and former
employees, consultants, outside scientific collaborators, sponsored researchers, contract manufacturers, vendors and other advisors to
protect our trade secrets and other proprietary information. These agreements may not effectively prevent disclosure of confidential
information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition,
we cannot guarantee that we have executed these agreements with each party that may have or have had access to our trade secrets. Any
party with whom we or they have executed such an agreement may breach that agreement and disclose our proprietary information, including
our trade secrets, and we may not be able to obtain adequate remedies for such breaches.

 Enforcing
a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome
is unpredictable. In addition, some courts are less willing or unwilling to protect trade secrets. If any of our trade secrets were to
be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they disclose
such trade secrets, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to
or independently developed by a competitor or other third-party, our competitive position would be harmed.

 We
may not be able to protect our intellectual property rights throughout the world.

 Filing,
prosecuting and defending patents on all of our Product Candidates throughout the world would be prohibitively expensive. Therefore,
we have filed applications and/or obtained patents only in key markets such as the United States, Canada, Japan and Europe. Competitors
may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may
be able to export otherwise infringing products to territories where we have patent protection but where enforcement is not as strong
as that in the United States. These products may compete with our products in jurisdictions where we do not have any issued patents and
our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.

 Many
companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions.
The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other
intellectual property protection, particularly those relating to pharmaceuticals, which could make it difficult for us to stop the infringement
of our patents or marketing of competing products in violation of our proprietary rights generally. For example, an April 2016 report
from the Office of the United States Trade Representative identified a number of countries, including India and China, where challenges
to the procurement and enforcement of patent rights have been reported. Several countries, including India and China, have been listed
in the report every year since 1989. As a result, proceedings to enforce our patent rights in certain foreign jurisdictions could result
in substantial cost and divert our efforts and attention from other aspects of our business and could be unsuccessful.

terms may be inadequate to protect our competitive position on our Product Candidates for an adequate amount of time.

 Given
the amount of time required for the development, testing and regulatory review of new Product Candidates, patents protecting such candidates
might expire before or shortly after such candidates are commercialized. We expect to seek extensions of patent terms in the United States
and, if available, in other countries where we are prosecuting patents. In the United States, the Drug Price Competition and Patent Term
Restoration Act of 1984 permits a patent term extension of up to five years beyond the normal expiration of the patent, which is limited
to the approved indication (or any additional indications approved during the period of extension). However, the applicable authorities,
including the FDA and the PTO, and any equivalent regulatory authorities in other countries, may not agree with our assessment of whether
such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request.
If this occurs, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our
clinical and preclinical data and launch their product earlier than might otherwise be the case.

 Intellectual
property rights do not necessarily address all potential threats to our competitive advantage.

 The
degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations,
and may not adequately protect our business, or permit us to maintain our competitive advantage. For example:

 others
 may be able to make compounds that are the same as or similar to our Product Candidates but
 that are not covered by the claims of the patents that we own;

 we
 might not have been the first to make the inventions covered by the issued patents or pending
 patent applications that we own;

 we
 might not have been the first to file patent applications covering certain of our inventions;

 others
 may independently develop similar or alternative technologies or duplicate any of our technologies
 without infringing our intellectual property rights;

 it
 is possible that our pending patent applications will not lead to issued patents;

 issued
 patents that we own may not provide us with any competitive advantages, or may be held invalid
 or unenforceable as a result of legal challenges;

 our
 competitors might conduct research and development activities in the United States and other
 countries that provide a safe harbor from patent infringement claims for certain research
 and development activities, as well as in countries where we do not have patent rights and
 then use the information learned from such activities to develop competitive products for
 sale in our major commercial markets; or

 the
 patents of others may have an adverse effect on our business.

 Risks
Related to our Third Parties

 We
rely heavily on contract manufacturers over whom we have limited control. If we are subject to quality, cost or delivery issues with
the preclinical and clinical grade materials supplied by contract manufacturers, our business operations could suffer significant harm.

 We
currently have no manufacturing capabilities and rely on contract research, development and manufacturing organization ("CDMOs")
to manufacture our Product Candidates for preclinical studies and clinical trials. We rely on CDMOs for manufacturing, filling, packaging,
testing, storing and shipping of drug products in compliance with cGMP, regulations applicable to our products. The FDA and other regulatory
agencies ensure the quality of drug products by carefully monitoring drug manufacturers' compliance with cGMP regulations. The
cGMP regulations for drugs contain minimum requirements for the methods, facilities and controls used in manufacturing, processing and
packaging of a drug product. If our CDMOs increase their prices or fail to meet our quality standards, or those of regulatory agencies
such as the FDA, and cannot be replaced by other acceptable CDMOs, our ability to obtain regulatory approval for and commercialize our
Product Candidates may be materially adversely affected.

 The
APIs used in all of our Product Candidates are currently sourced from either contract manufacturers or, for smaller quantities, from
research material suppliers, that typically utilize synthetic chemistry as their manufacturing method. This is intended to be an interim
step to enable us to proceed with developing our formulation, execute preclinical toxicology studies and progress through Phase 1 and
2 clinical trials, after which time we anticipate that we will have been able to successfully scale-up our IntegraSyn manufacturing approach
so that it will be GMP ready at pharmaceutical grade. Bridging studies consisting of chemical analysis and, possibly, animal studies
may be required in order to switch our APIs from the current external manufacturing sources to our internally manufactured products.
There is no guarantee that we will be successful in scaling up our IntegraSyn manufacturing process for cannabinoids, or successfully
complete any required bridging studies, or be able to successfully transfer our IntegraSyn manufacturing process to a CDMO. The key risks
and challenges associated with the development of the IntegraSyn process include: failure to continue optimization and development of
the process manufacturing steps from the current scale while maintaining the same or greater output of the selected cannabinoid; equipment
and techniques may not be able to be scaled up using existing commercial processing equipment; supply of the key starting materials for
the process may not be secured to ensure stability and security of commercial supply; and, failure of the large scale process to consistently
produce the selected cannabinoid within set specifications and meeting the process parameters and in process controls to enable the manufacturing
process to be validated for GMP commercial production of an API, among others. Failing to accomplish these or other criteria for the
IntegraSyn manufacturing process with a CDMO may mean that we are not able to produce certain cannabinoids in a cost-effective manner.
This could result in us not being able to successfully commercialize or utilize our APIs in our Product Candidates, if any, that may
obtain regulatory approval.

 Our
existing collaboration agreements and any that we may enter into in the future may not be successful.

 We
also have relationships with scientific collaborators at academic and other institutions, some of whom conduct research at our request
or assist us in formulating our research and development strategies. These scientific collaborators are not our employees and may have
commitments to, or consulting or advisory contracts with, companies that conflict in interests with and pose a competitive threat to
us. Moreover, to the extent that we decide to enter into collaboration agreements, we will face significant competition in seeking appropriate
collaborators. Collaboration arrangements are complex and time consuming to negotiate, document and implement. We may not be successful
in our efforts to establish, implement and maintain collaborations or other alternative arrangements if we choose to enter into such
arrangements and our selected partners may be given, and may exercise, a right to terminate their agreement with us without cause. Our
Collaborative Research Agreement with the University of British Columbia may be terminated by either party upon 30 calendar days written
notice. The terms of any collaboration or other arrangements that we may establish may not be favorable to us.

 For
all of the aforesaid reasons and others set forth in this Annual Report, an investment in Common Shares and any other securities that
we may offer from time to time involves a high degree of risk. Any person considering an investment in our Common Shares or any other
of our securities should be aware of these and other factors set forth in this Annual Report and should consult with his or her legal,
tax and financial advisors prior to making an investment in our Common Shares or any other of our securities that may be offered from
time to time. Our Common Shares and any other securities that we may offer from time to time should only be purchased by persons who
can afford to lose all of their investment.

 ITEM
1B. UNRESOLVED STAFF COMMENTS

 None.

 Item
1C. Cybersecurity

 Risk
Management and Strategy

 We
regularly assess, identify, and manage material risks from cybersecurity threats, and have integrated these processes into our overall
risk management systems and processes. We routinely assess material risks from cybersecurity threats, including any potential unauthorized
occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability
of our information systems or any information residing therein.

 We
conduct risk assessments at least annually to identify cybersecurity threats. These risk assessments include identifying reasonably foreseeable
potential internal and external risks, the likelihood of occurrence and any potential damage that could result from such risks, and the
sufficiency of existing policies, procedures, systems, controls and other safeguards we have put in place to manage such risks. Our risk
management process also encompasses cybersecurity risks associated with the use of our major third-party vendors and service providers.
Additionally, we maintain cyber coverage through our insurance carrier to mitigate risks associated with cybersecurity incidents, subject
to customary terms and exclusions.

 Following
these risk assessments, we design, implement, and maintain reasonable safeguards to minimize the identified risks; reasonably address
any identified gaps in existing safeguards; update existing safeguards as necessary; and monitor the effectiveness of our safeguards.
Moreover, we remain committed to investing in the development and improvement of our security processes and controls, as well as maintaining
our technology infrastructure. These processes include a plan for notifying, informing, consulting, analyzing, and communicating any
risks or incidents to a range of internal stakeholders, including executive management and the Board of Directors, as well as external
stakeholders, as deemed necessary and appropriate based on the circumstances. We believe we have allocated adequate resources related
to our cybersecurity risk management processes and have designated our Chief Financial Officer with the responsibility of managing the
cybersecurity risk assessment and mitigation process.

 As
part of our overall risk management program, we provide required training to employees in high-risk areas on cybersecurity and will distribute
standard operating procedures to all employees. For additional information regarding whether any risks from cybersecurity threats, including
as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including
our business strategy, results of operations, or financial condition, please refer to Item 1A, "Risk Factors," in this Annual
Report.

 Governance

 One
of the key functions of our Board of Directors is informed oversight of our risk management process, including risks arising from cybersecurity
threats. Our Chief Financial Officer and Chief Operating Officer are primarily responsible for assessing and managing material risks
from cybersecurity threats on a day-to-day basis. Our Board of Directors is responsible for monitoring and assessing strategic risk exposure,
and our management team is additionally responsible for the day-to-day management of the material risks we face. Our Board of Directors
administers its cybersecurity risk oversight function directly as a whole. We additionally utilizes the assistance of a third-party service
provider, an information technology solutions service provider located in Richmond, BC, for purposes of broadly managing its cybersecurity
risks.

 ITEM
2. PROPERTIES

 Our
corporate headquarters are located at Suite 1445 - 885 West Georgia Street, Vancouver, British Columbia V6C 1B4, Canada. This lease was
signed in July 2024 and the office space occupies approximately 2,243 square feet with a monthly basic rental rate and operating charges
of an estimated C$12,296 over the two-year term of the agreement.

 In
July 2019, we entered into a facility lease agreement for approximately 4,000 square feet of office space in Vancouver, BC, which served
as our corporate headquarters until August 2024, when the lease expired. We did not take the option to renew for an additional three-year
period.

 In
October 2023, BayMedica entered into an amended facility lease agreement for approximately 7,000 square feet of office space in San Francisco,
California with average monthly operating charge of $30,134 over the three and a half-year term of the agreement. The lease expires in
April 2027.

 We
believe substantially all of our property and equipment is in good condition and that we have sufficient capacity to meet our current
operational needs. We further believe that, should it be needed, suitable additional space is available to accommodate any expansion
of our operations, but such space may not be available in the same building, if and when such space is needed.

 ITEM
3. LEGAL PROCEEDINGS

 From
time to time, we may be subject to various legal proceedings, claims and administrative proceedings that arise in the ordinary course
of our business activities. Although the results of the litigation and claims cannot be predicted with certainty, as of the date of this
Annual Report, with the exception of the Patent License Matter discussed below in which BayMedica, our wholly-owned subsidiary, is involved,
we do not believe we are party to any claim, proceeding or litigation the outcome of which, if determined adversely to us, would individually
or in the aggregate be reasonably expected to have a material adverse effect on our business. Regardless of the outcomes, however, litigation
can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

 On
February 15, 2021, BayMedica entered into an exclusive technology license agreement (the "Agreement") with a third party
(the "Licensor") pursuant to which it agreed to license a proprietary process in the United States where it has a pending
U.S. patent application in exchange for certain annual royalty payments contingent on the net sales of products made using the licensed
process. The royalty payments were to be made for the period beginning on the first commercial sale of the licensed product and ending
on the later of the expiration of the Licensor's patent rights or ten years after the first commercial sale of such licensed product.
On April 29, 2025, BayMedica received a letter from the Licensor stating its intention to commence arbitration proceedings pursuant the
Agreement, together with a Notice of Arbitration (the "Patent License Matter"). Such arbitration proceedings will be subject
to final, binding and non-appealable arbitration under the Arbitration Act, 1991 (Ontario) and determined pursuant to Ontario law. In
its Notice of Arbitration, the Licensor takes the position that the annual royalty payments are meant to function as guaranteed annual
minimum payments required to be made for the duration of the Agreement regardless of net sales. The Licensor seeks relief against BayMedica
including (a) approximately US $3.4M in annual payments for the years 2022 through 2024 and (b) a declaration that BayMedica is liable
to pay certain guaranteed annual minimum payments of approximately $2.3M for the remainder of the term of the Agreement. BayMedica disputes
the amount owing and to be paid over the duration of the agreement. BayMedica vehemently contests the Licensor's interpretation
of the Agreement and its position in the Patent License Matter, and intends to take all necessary steps to vigorously defend the Patent
License Matter. While we are not able to predict the outcome of the Patent License Matter with any certainty, an unfavorable outcome
to BayMedica would have a material adverse impact on the Company's business and financial condition and on BayMedica's ability
to continue operations.

 ITEM
4. MINE SAFETY DISCLOSURES

 Not
applicable.

 PART
II

 ITEM 5.
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Market
Information

 Our
shares are listed on the on the Nasdaq Capital Market ("Nasdaq") under the trading symbol "INM").

 There
were approximately 7,521 holders of record of our Common Shares as of September 12, 2025. On September 12, 2025, the last reported sales
price per share of our Common Shares was $2.14 per share.

 Unregistered
Sales of Equity Securities

 None.

 Repurchases
of Equity Securities

 None.

 ITEM
6. [RESERVED]

 ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 This
discussion and analysis contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act, and is subject to the safe harbor created by those sections. For more information, see "Special Note Regarding
Forward-Looking Statements." When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties
that impact our business. In particular, we strongly encourage you to review the risks and uncertainties described in "Risk Factors"
in this Annual Report, and other filings we make from time to time with the SEC. These risks and uncertainties could cause actual results
to differ materially from those projected or implied by our forward-looking statements contained in this report. These forward-looking
statements are made as of the date of this report, and we do not intend, and do not assume any obligation, to update these forward-looking
statements, except as required by law.

 The
following discussion and analysis should be read in conjunction with our audited consolidated financial statements for the year ended
June 30, 2025, and the related notes thereto, which have been prepared in accordance with U.S. GAAP. Additionally, the following discussion
and analysis should be read in conjunction with our audited consolidated financial statements included in this Annual Report. Throughout
this discussion, unless the context specifies or implies otherwise the terms "InMed," "Company," "we,"
"us," and "our" refer to InMed Pharmaceuticals Inc.

 All
dollar amounts stated herein are in U.S. dollars unless specified otherwise.

 Overview

 We
are a pharmaceutical drug development company with a pipeline of proprietary small molecule drug candidates that are preferential signaling
ligands of the endogenous CB1 and CB2 receptors as well as other receptor targets linked to human disease. CB1 and CB2 receptors are
each part of the endocannabinoid system that is found throughout the human body and is responsible for many homeostatic functions. CB1
receptors are primarily located in the brain and central nervous system, while CB2 receptors are involved in modulating neuroinflammation
and immune responses. Our research efforts target the treatment of diseases with high unmet medical needs. Together with our wholly owned
subsidiary, BayMedica, LLC, or BayMedica, we also have significant know-how in developing proprietary manufacturing approaches to produce
and sell bulk rare cannabinoids as ingredients for various market sectors.

 We
have sought to focus on the research and development of preferential signaling ligands of CB1 and CB2, and have produced a library of
novel, proprietary drug candidates, or Product Candidates. These Product Candidates are patentable new chemical entities, or NCEs, for
pharmaceutical development, aimed at targeting diverse clinical indications. Our current potential pharmaceutical pipeline consists of
three programs, with drug candidates targeting Alzheimer's disease, dry Age-Related Macular Degeneration, or dry AMD, and Epidermolysis
Bullosa, or EB.

 Our
INM-901 is a proprietary small molecule, disease modifying drug candidate being developed as a potential treatment for Alzheimer's
disease. INM-901 has multiple potential mechanisms of action as a preferential signaling agonist for both CB1 and CB2 receptors, as well
as impacting the peroxisome proliferator-activated receptor, or PPAR, signaling pathway. Combined, these mechanisms of action may offer
a unique treatment approach targeting several biological pathways associated with Alzheimer's disease.

 Outcomes
from our ocular research, based on the proprietary small molecule INM-089, indicate potentially promising neuroprotective effects in
the back of the eye, which may lead to the preservation of retinal function. Neuroprotection in dry AMD remains an unmet medical need
and a new treatment option may help solve this multifactorial disease.

 We
have completed a Phase 2 clinical trial of INM-755 (cannabinol) cream studying its safety and efficacy in treating symptoms related to
EB. Results from the Phase 2 clinical trial showed a positive indication of enhanced anti-itch activity for INM-755 cream versus the
control cream alone in an exploratory clinical evaluation. We are also pursuing strategic partnership opportunities for INM-755 in EB
and other itch-related skin conditions.

 Together
with BayMedica, our manufacturing capabilities include traditional approaches such as chemical synthesis and biosynthesis, as well as
a proprietary, integrated manufacturing approach called IntegraSyn. With multiple manufacturing approaches, we have sought to maintain
enhanced flexibility to select the most cost-effective method to deliver high quality, high purity Products and Product Candidates fit
for their intended uses. BayMedica's commercial business specializes in the B2B commercialization of bulk rare, non-intoxicating
cannabinoids as raw materials for the Health and Wellness sector that are bioidentical to those found in nature

 Recent
Developments

 Reverse
Stock Split

 On
November 14, 2024, the Company effected a reverse stock split of the Company's issued and outstanding Common Shares, by a ratio
of 20-to-1 (the "Reverse Stock Split"). Accordingly, all Common Shares, stock options, warrants, as well as per share information,
for all periods presented in the consolidated financial statements and notes thereto have been adjusted retrospectively to
reflect this Reverse Stock Split.

 Private
Offering

 On
June 24, 2025, we entered into a securities purchase agreement, or the Purchase Agreement, with the Selling Shareholder, for the sale
and issuance of an aggregate of 1,952,363 common shares (or pre-funded warrants in lieu thereof) at a purchase price of $2.561 per share
(or pre-funded warrant in lieu thereof). In addition, we agreed to issue to the Selling Shareholder short-term preferred investment options
to purchase up to an aggregate of 1,952,363 common shares at an exercise price of $2.436 per share. The foregoing transaction is referred
to herein as the Private Placement. On June 26, 2025, the parties consummated the Private Placement.

 The
terms of the Purchase Agreement provided the Selling Shareholder the option of purchasing the pre-funded warrants in lieu of common shares
in such manner as to result in the same aggregate purchase price being paid by the Selling Shareholder to us.

 At
the closing of the Private Placement, we issued to the Selling Shareholder (i) pre-funded warrants to purchase an aggregate of 1,952,363
common shares and (ii) preferred investment options to purchase up to an aggregate of 1,952,363 common shares. No common shares were
issued to the Selling Shareholder at the closing of the Private Placement. The Company received gross proceeds of approximately $5.0
million and paid approximately $0.5 million in transaction costs

 The
pre-funded warrants have an exercise price of $0.0001 per pre-funded warrant and can be exercised at any time from the date and time
of issuance until the pre-funded warrants are exercised in full. The terms of the pre-funded warrants preclude a holder thereof from
exercising such holder's pre-funded warrants, and us from giving effect to such exercise, if after giving effect to the issuance
of common shares upon such exercise, the holder (together with the holder's affiliates and any other persons acting as a group
together with the holder or any of the holder's affiliates) would beneficially own in excess of 9.99% of the number of common shares
outstanding immediately after giving effect to the issuance of common shares upon such exercise.

 The
preferred investment options issued to the Selling Shareholder in the Private Placement have an exercise price of $2.436 per share, became
exercisable immediately upon issuance and will expire eighteen (18) months from the effective date of the Resale Registration Statement
(as defined below). The terms of such preferred investment options preclude a holder thereof from exercising such holder's preferred
investment option, and the Company from giving effect to such exercise, if after giving effect to the issuance of common shares upon
such exercise, the holder (together with the holder's affiliates and any other persons acting as a group together with the holder
or any of the holder's affiliates) would beneficially own in excess of 4.99% of the number of common shares outstanding immediately
after giving effect to the issuance of common shares upon such exercise.

 A
holder may increase or decrease the beneficial ownership thresholds relating to the pre-funded warrants and preferred investment options
specified above, except that the issuance of 9.99% can be no sooner than 61 days after notifying us and that the beneficial ownership
limitation may not exceed 9.99% in any event. The Selling Shareholder has elected 4.99% for the pre-funded warrants and 9.99% for the
preferred investment options as of the date hereof.

 In
connection with the Private Placement, we entered into a Registration Rights Agreement with the Selling Shareholder, dated June 24, 2025,
or the Registration Rights Agreement. The Registration Rights Agreement grants the Selling Shareholder certain registration rights and
obligates us to file one or more registration statements with the Securities and Exchange Commission, or the SEC, by certain dates, covering
the resale of the common shares issuable upon exercise of the pre-funded warrants and preferred investment options sold in the Private
Placement, or the Resale Registration Statement. The Company has met all such obligations and timely filed related Resale Registration
Statements.

 The
pre-funded warrants and preferred investment options described above were offered in a private placement under Section 4(a)(2) of the
Securities Act and Regulation D promulgated thereunder and, along with the common shares underlying the pre-funded warrants and preferred
investment options, have not been registered under the Securities Act or applicable state securities laws. Accordingly, the pre-funded
warrants, preferred investment options and the common shares underlying the pre-funded warrants and preferred investment options may
not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements
and in accordance with applicable state securities laws. The securities were offered and sold only to accredited investors.

 The
foregoing descriptions of the Purchase Agreement, the Registration Rights Agreement, and the pre-funded warrants and the preferred investment
options issued in the Private Placement are not complete and are qualified in their entirety by the full text of such documents, copies
of which are filed as exhibits to this Annual Report.

 Existing
Investment Option Amendment

 Concurrently
with our entry into the Purchase Agreement, we and the Selling Shareholder entered into an Amendment Letter, dated June 24, 2025, or
the Existing Investment Option Amendment, to amend 199,115 preferred investment options issued to the Selling Shareholder on October
24, 2023, or the Existing Investment Options, with an exercise price of $16.60, pursuant to which the Existing Investment Options were
amended to be exercisable for 199,115 common shares at a reduced exercise price of $2.436 per share in consideration for the Selling
Shareholder's participation in the Private Placement and the payment by the Selling Shareholder to us cash consideration of $0.125
per Existing Investment Option.

 The
foregoing description of the Existing Investment Option Amendment is not complete and is qualified in its entirety by the full text of
the Existing Investment Option Amendment, a copy of which is filed as an exhibit to this Annual Report.

 Engagement
Letter

 We
entered into an engagement letter with H.C. Wainwright & Co., LLC, or Wainright, dated June 24, 2025, or the Engagement Letter, pursuant
to which Wainwright agreed to serve as our exclusive agent, advisor or underwriter in certain offerings, including the Private Placement.
We agreed to pay Wainwright a cash fee, or as to an underwritten offering an underwriter discount, equal to 7.5% of the aggregate gross
proceeds raised in each offering. Upon any exercise for cash of any privately-placed warrants or options issued to investors in each
offering, we agreed to pay Wainwright a cash fee of 7.5% of the aggregate gross exercise price paid in cash with respect such exercise.
In addition, pursuant to the Engagement Letter, we also agreed to grant to Wainwright, or its designees, at each closing, warrants (or
warrant equivalents) to purchase that number of common shares of the Company equal to 6.5% of the aggregate number of common shares of
(or common shares equivalent, if applicable) placed in each offering (and if an offering includes a "greenshoe" or "additional
investment" component, such number of common shares underlying such "greenshoe" or "additional investment"
component, with the warrants and/or warrant equivalents granted to Wainwright issuable upon the exercise of such component). Upon any
exercise for cash of any privately-placed warrants or warrant equivalents issued to investors in each offering, we agreed to issue to
Wainwright (or its designees), warrants and/or warrant equivalents to purchase that number of common shares equal to 6.5% of the aggregate
number of such common shares underlying the warrants and/or warrant equivalents that have been so exercised. Warrants and/or warrant
equivalents issued to Wainwright will have a term of five years (or such other term the privately-placed warrants or warrant equivalents
issued to investors in the applicable offering) and an exercise price equal to 125% of the offering price per share (or unit, if applicable)
in the applicable offering and if such offering price is not available, the market price of the common shares on the date an offering
is commenced, such price being referred to herein as the Offering Price. If warrants and/or warrant equivalents are issued to investors
in an offering, the warrants issued to Wainwright are required to have the same terms as the warrants and/or warrant equivalents issued
to the investors in the applicable offering, except that the warrants and/or warrant equivalents issued to Wainwright shall have an exercise
price equal to 125% of the Offering Price.

 We
also agreed to pay Wainwright a management fee equal to 1.0% of the gross proceeds raised in each offering, $20,000 for non-accountable
expenses (to be increased to $50,000 in the case of a public offering), up to $35,000 for fees and expenses of legal counsel and other
out-of-pocket expenses (to be increased to $90,000 in the case of a public offering), plus certain additional amounts in special circumstances.
The Engagement Letter has indemnity and other customary provisions.

 In
accordance with the Engagement Letter, in connection with the Private Placement, we issued to Wainwright preferred investment options,
or placement agent preferred investment options, to purchase an aggregate of 126,904 common shares. The preferred investment options
issued to Wainwright have an exercise price of $3.2013 per share, became exercisable immediately upon issuance and will expire eighteen
(18) months from the effective date of the Resale Registration Statement. A holder of the preferred investment options issued to Wainwright
is precluded from exercising such holder's preferred investment option, and we are precluded from giving effect to such exercise,
if after giving effect to the issuance of common shares upon such exercise, the holder (together with the holder's affiliates and
any other persons acting as a group together with the holder or any of the holder's affiliates) would beneficially own in excess
of 4.99% of the number of common shares outstanding immediately after giving effect to the issuance of common shares upon such exercise.
A holder may increase or decrease the aforementioned beneficial ownership threshold, except that the beneficial ownership limitation
may not exceed 9.99% in any event.

 The
placement agent preferred investment options issued to Wainwright, and the common shares issuable upon exercise thereof, were issued
in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act as transactions not involving a public
offering and in reliance on similar exemptions under applicable state laws.

 The
foregoing description of the placement agent preferred investment options issued to Wainwright is not complete and is qualified in their
entirety by the full text of such document, the form of which is filed as an exhibit to this Annual Report.

 Standby
Equity Purchase Agreement

 On
December 13, 2024, we entered into a Standby Equity Purchase Agreement, or the SEPA, with YA II PN, LTD, or the Investor, to sell up
to $10 million in the aggregate of common shares at any time during the 36-month period following the effective date of the SEPA, or
the Effective Date.

 On
June 13, 2025, we and the Investor entered into a certain Amendment to Standby Equity Purchase Agreement, or the SEPA Amendment, pursuant
to which we and the Investor agreed to amend certain of the provisions set forth under Section 6.02 of the SEPA. Pursuant to the SEPA
Amendment, the Company may, from time to time, suspend, in our sole discretion, the use of the registration statement related to the
common shares under the SEPA by providing written notice to the Investor in the event that we determine in good faith that such suspension
is necessary: (A) to delay the disclosure of material nonpublic information concerning us, the disclosure of which at the time is not,
in our good faith opinion, in our best interest; or (B) to amend or supplement the registration statement or prospectus so that the registration
statement or prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or a Black
Out Period. During any such Black Out Period, the Investor has agreed not to sell any common shares pursuant to the registration statement,
but it may sell common shares pursuant to an exemption from the registration requirements under U.S. securities laws subject to compliance
with all applicable laws. Further, pursuant to the SEPA Amendment, we agreed to not impose any Black Out Period that is more restrictive
(including, without limitation, as to duration) than the comparable restrictions that we may impose on transfers of our equity securities
by our directors and senior executive officers. In addition, we shall not deliver any advance notice during any Black Out Period. If
the public announcement of such material, nonpublic information is made during a Black Out Period, the Black Out Period shall terminate
immediately after such announcement, and we shall be obligated to immediately notify the Investor of the termination of the Black Out
Period.

 Special
Meeting of the Shareholders

 On
June 13, 2025, we held a special meeting of our shareholders, or the Special Meeting, for the purpose of approving, in accordance with
Nasdaq Listing Rules 5635(b) and 5635(d), the potential issuance of 20% or more of our issued and outstanding common shares pursuant
to the SEPA, or the Share Issuance Proposal.

 After
counting the number of common shares present in person and by proxy, it was determined that a quorum for the transaction of business
at the Special Meeting was not present. While approximately 60% of the voted common shares were in favor of the Share Issuance Proposal,
in the absence of a quorum, no business was able to be conducted at the Special Meeting, including a vote on the Share Issuance Proposal.
The board of directors continues to assess whether we will (x) hold a subsequent special meeting of our shareholders at a later date
with respect to the Share Issuance Proposal and/or (y) include the Share Issuance Proposal in our definitive proxy statement for our
2025 annual general meeting of shareholders

Program Updates

 On
June 24, 2025, the Company reported new preclinical data demonstrating that INM-901 significantly reduces inflammation in ex vivo models
of neuroinflammation, further supporting its potential as a therapeutic candidate in Alzheimer's disease.

 The
study evaluated INM-901 in an ex vivo model of lipopolysaccharide (LPS)-induced inflammation in animal brain tissue, which is designed
to induce a strong expression of pro-inflammatory cytokines IL-6, IL-1, IL-2, and KC/Gro and inflammasome marker NLRP3. Results
demonstrated that INM-901 treatment can reduce pro-inflammatory cytokines and may have a direct impact on neuroinflammation independent
of the influence of amyloid beta or tau aggregation. This study model offers insight into INM-901's potential therapeutic impact
on brain inflammation that may underlie a broad range of neurodegenerative diseases, including Alzheimer's disease.

 Key
Findings from the Study:

 significantly reduced levels of NLRP3 and IL-1, two inflammasome markers increasingly
 implicated in the pathogenesis of Alzheimer's disease and other neuroinflammatory diseases.

 treatment resulted in a dose-dependent and statistically significant reduction in several
 key pro-inflammatory markers, including IL-6, IL-1, KC/Gro, and IL-2.

 reduced key pro-inflammatory markers, independent of amyloid-beta or tau pathology, signifying
 potential to treat other dementia-related diseases.

 On
July 27, 2025, the Company reported INM-901 treatment in the well-established 5xFAD AD mouse model led to improvement in cognitive function
and memory, locomotor activity, anxiety-based behavior, sound awareness. InMed's most recent study evaluated INM-901 using a longer
treatment duration and subjects with more advanced disease to validate and expand upon previous findings, which have demonstrated improvements
in cognitive function, anxiety-related behavior, and sensory responsiveness.

of INM-901 Long-term 5xFAD study:

 Hippocampal
 RNA Expression - Several genes associated with inflammation, the endocannabinoid system,
 synaptic dysfunction and oxidative stress and apoptosis (cell death) were evaluated following
 treatment. In some cases, INM-901 demonstrated a dose-dependent trend towards a return to
 non-diseased baseline following treatment.

 Inflammation
 – Treatment with INM-901 resulted in a significant reduction in the inflammatory biomarkers
 IFN-, TNF-, IL-1, KC-GRO, IL-2 and NfL, suggesting a dose-dependent therapeutic
 effect in neuroinflammation.

 Immunohistochemistry
 - Amyloid-beta (A) immunoreactivity is reduced following INM-901 treatment in a dose-dependent
 manner. MAP2, the microtubule-associated protein 2 is a protein found in the neurons, especially
 in the dendrites and is involved in neurite outgrowth and signal transduction of the neurons,
 is partially restored with INM-901 treatment.

 Behavioral
 – Cognitive function, anxiety-related behavior, and sensory responsiveness were restored
 or approaching normal following INM-901 treatment.

 Economic
and Trade Policy Uncertainty

 We
continue to monitor the potential impact of evolving trade policies, including the threat of additional tariffs imposed by the U.S. and
other jurisdictions. While no specific tariffs have been implemented that directly and materially affect our operations, the potential
for future changes in cross-border trade arrangements and import/export duties contributes to broader economic uncertainty and could
impact the counterparties with whom we commercially engage. As of the date of this Annual Report, management has not identified any material
and adverse effects on our financial position, results of operations, or estimates related to credit losses or asset impairments as a
result of the implementation of such tariffs and trade policies; however, the ultimate outcome and impact of such trade policies are
not fully ascertainable as of the date hereof. See "Risk Factors—The threat or actual adoption of tariffs, retaliatory tariffs
and duties, trade barriers and restrictions, and related international trade conflicts, including by the United States, Canada or other
jurisdictions, could materially impact the macroeconomic framework in which we operate."

 Components
of Results of Operations

 Revenue

 Our
revenue consists of manufacturing and distribution sales of bulk rare cannabinoid Products, which are recognized at a point in time.
We recognize revenue when control over the products has been transferred to the customer and we have a present right to payment.

 Cost
of Sales

 Cost
of sales consist primarily of the purchase price of goods and cost of services rendered, freight costs, warehousing costs, and purchasing
costs. Cost of sales also includes production and labor costs for our manufacturing business.

 Operating
Expenses

and Development Expenses

and development and patent expenses represent costs incurred by us for the discovery, development, and manufacture of our Products and
Product Candidates and include:

 external
 research and development expenses incurred under agreements with contract research organizations
 ("CROs"), CDMOs and consultants;

 salaries, payroll taxes,
 employee benefits expenses for individuals involved in research and development efforts;

 research supplies; and

 legal and patent office
 fees related to patent and intellectual property matters.

 We
expense research and development costs as incurred. We recognize expenses for certain development activities, such as preclinical studies
and manufacturing, based on an evaluation of the progress to completion of specific tasks using data or other information provided to
us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern
of expenses incurred. Non-refundable advance payments for goods or services to be received in the future for use in research and development
activities are recorded as prepaid expenses. These amounts are recognized as an expense as the goods are delivered or the related services
are performed, or until it is no longer expected that the goods will be delivered, or the services rendered.

 External
costs represent a significant portion of our research and development expenses, which we track on a program-by-program basis following
the nomination of a development candidate. Our internal research and development expenses consist primarily of personnel-related expenses,
including salaries, benefits and stock-based compensation expense. We do not track our internal research and development expenses on
a program-by-program basis as the resources are deployed across multiple projects.

 The
successful development of our Products and Product Candidates is highly uncertain. At this time, we cannot reasonably estimate or know
the nature, timing, and estimated costs of the efforts that will be necessary to complete the remainder of the development of our Product
Candidates or to develop and commercialize additional Products. We are also unable to predict when, if ever, material net cash inflows
will commence from our Product Candidates, if approved. This is due to the numerous risks and uncertainties associated with development,
including the uncertainty related to:

 the
 timing and progress of preclinical and clinical development activities;

 the
 number and scope of preclinical and clinical programs we decide to pursue;

 our
 ability to raise additional funds necessary to complete preclinical and clinical development
 and commercialization of our Product Candidates, to further advance the development of our
 manufacturing technologies, and to develop and commercialize additional Products, if any;

 our
 ability to maintain our current research and development programs and to establish new ones;

 our
 ability to establish sales, licensing or collaboration arrangements;

 the
 progress of the development efforts of parties with whom we may enter into collaboration
 arrangements;

 the
 successful initiation and completion of clinical trials with safety, tolerability and efficacy
 profiles that are satisfactory to the FDA or any comparable foreign regulatory authority;

 the
 receipt and related terms of regulatory approvals from applicable regulatory authorities;

 the
 availability of materials for use in production of our Products and Product Candidates;

 our
 ability to secure manufacturing supply through relationships with third parties or establish
 and operate a manufacturing facility;

 our
 ability to consistently manufacture our Product Candidates in quantities sufficient for use
 in clinical trials;

 our
 ability to obtain and maintain intellectual property protection and regulatory exclusivity,
 both in the United States and internationally;

 our
 ability to maintain, enforce, defend and protect our rights in our intellectual property
 portfolio;

 the
 commercialization of our Product Candidates, if and when approved, and of new Products;

 our
 ability to obtain and maintain third-party payor coverage and adequate reimbursement for
 our Product Candidates, if approved;

 the
 acceptance of our Product Candidates, if approved, by patients, the medical community and
 third-party payors;

 competition
 with other products; and

 a
 continued acceptable safety profile of our Product Candidates following receipt of any regulatory
 approvals.

 A
change in the outcome of any of these variables with respect to the development of any of our Products or Product Candidates would significantly
change the costs and timing associated with the development of those Products or Product Candidates.

and development activities account for a significant portion of our operating expenses. Research and development expenses decreased in
fiscal 2025 as compared to fiscal 2024, largely due to the retirement of our Senior Vice-President, Clinical & Regulatory at the
end of June 2024. We do not currently have plans to fill this position. However, we expect our research and development expenses to increase
significantly in future periods as we continue to implement our business strategy, which includes advancing our drug candidates and our
manufacturing technologies through the extensive preclinical testing and into clinical development, expanding our research and development
efforts, including hiring additional personnel to support our research and development efforts, ultimately seeking regulatory approvals
for our drug candidates that successfully complete clinical trials, and further developing selected R&D and commercial activities.
In addition, drug candidates in later stages of clinical development generally incur higher development costs than those in earlier stages
of clinical development, primarily due to the increased size and duration of later-stage clinical trials. Accordingly, although we expect
our research and development expenses to increase as our drug candidates advance into later stages of clinical development, we do not
believe that it is possible, at this time, to accurately project total program-specific expenses through to commercialization. There
are numerous factors associated with the successful commercialization of any of our Product Candidates, including future trial design
and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development.

and Administrative Expenses

and administrative expenses consist of personnel-related costs, including salaries, benefits and stock-based compensation expense, for
our personnel in executive, finance and accounting, human resources, business operations and other administrative functions, investor
relations activities, legal fees related to corporate matters, fees paid for accounting and tax services, consulting fees, patent costs
and facility-related costs.

 Amortization
and Depreciation

 Intangible
assets are comprised of intellectual property that we acquired in 2014 and 2015 and trade secrets, product formulation knowledge, and
patents that we acquired in October 2021. The acquired intellectual property and patents are amortized on a straight-line basis based
on their estimated useful lives. Equipment and leasehold improvements are depreciated using the straight-line method based on their estimated
useful lives.

Payments

payments is the stock-based compensation expense related to our granting of stock options to employees and others. The fair value, at
the grant date, of equity-settled share awards is charged to our loss over the period for which the benefits of employees and others
providing similar services are expected to be received. The vesting components of graded vesting employee awards are measured separately
and expensed over the related tranche's vesting period. The amount recognized as an expense is adjusted to reflect the number of
share options expected to vest. The fair value of awards is calculated using the Black-Scholes option pricing model, which considers
the exercise price, current market price of the underlying shares, expected life of the award, risk-free interest rate, expected volatility
and the dividend yield.

 Other

 Other
income consists primarily of interest income earned on our cash, cash equivalents and short-term investments.

 Results
of Operations

 We
have two operating and reportable segments based on the management approach which designates the internal reporting used by the Chief
Operating Decision Maker ("CODM"), which is our Chief Executive Officer and the senior management team, for making decisions
and assessing performance as the source of our reportable segments. The CODM allocates resources and assesses the performance of each
operating segment based on potential licensing opportunities, historical and potential future product sales, operating expenses, and
operating income (loss) before interest and taxes. We have determined our reportable segments to be InMed Pharmaceuticals ("InMed
Pharma") and BayMedica Commercial based on the information used by the CODM.

 Comparison
of the year ended June 30, 2025 and 2024 for InMed Pharma Segment

 Year
 Ended

 2025

 2024

 Change

 %
 Change

 (in thousands)

 Operating expenses:

 and development

 2,821

 3,079

 (258
)

 (8
)%

 General and administrative

 5,415

 5,042

 %

 Amortization and depreciation

 (7
)

 (3
)%

 Foreign
 exchange loss

 (34
)

 (55
)%

 Total operating expenses

 8,474

 8,400

 %

 Interest and other income

 (377
)

 (71
)%

 expense

 (372
)

 -

 (372
)

 (100
)%

 Net loss

 $
 (8,690
)

 $
 (7,867
)

 $
 (823
)

 (10
)%

and Development Expenses

and development expenses decreased by $0.3 million in our InMed Pharma segment, or 8%, for the year ended June 30, 2025 as compared to
the year ended June 30, 2024. The decrease in research and development expenses was due primarily to a decrease in external contractors
and personnel compensation. This was offset by an increase in research supplies. However, we expect our research and development expenses
to increase significantly in future periods as we continue to implement our business strategy.

and administrative expenses

and administrative expenses increased by $0.4 million in our InMed Pharma segment, or 7%, for the year ended June 30, 2025 as compared
to the year ended June 30, 2024. The increase results primarily from a combination of changes including higher legal expenses, and consulting
fees. This was offset by a decrease in office and administrative fees.

 Interest
and other income

 Interest
and other income decreased by $0.4 million in our InMed segment, or 71% for the year ended June 30, 2025, as compared to the year ended
June 30, 2024. The decrease primarily results from the loss of a sublessor during the year ended June 30, 2025, and the reduction in
our average cash on hand during the current year.

Expense

expense increased by $0.4 million in our InMed segment, or 100% for the year ended June 30, 2025 as compared to the year ended June 30,
2024. The increase primarily results from the fees incurred in relation to the SEPA agreement.

 Comparison
of the year ended June 30, 2025 and 2024 for the BayMedica Segment

 Year
 Ended

 2025

 2024

 Change

 %
 Change

 (in thousands)

 Sales

 $
 4,943

 $
 4,598

 $

 %

 Cost of sales

 3,236

 3,497

 (261
)

 (7
)%

 Gross profit

 1,707

 1,101

 %

 Operating expenses:

 Research and development

 (105
)

 (76
)%

 General and administrative

 1,143

 %

 Amortization
 and depreciation

 -

 -
 %

 Total operating expenses

 1,178

 %

 Interest and other income

 -

 (5
)

 (100
)%

 Tax
 expense

 -

 (7
)

 (100
)%

 Net Income

 $

 $

 $

 %

 Sales

 Sales
increased by $0.3 million in our BayMedica segment, or 8%, for the year ended June 30, 2025 as compared to the year ended June 30, 2024.
The increase in sales results from expanded marketing efforts and increased demand in certain cannabinoid products. BayMedica will continue
to evaluate opportunities for potential structured supply arrangements and collaborations for the commercial business. Sales and marketing
efforts will remain focused on products that contribute highest margins, where BayMedica continues to hold a strong competitive position.

 Cost
of Sales

 Cost
of goods sold decreased by $0.3 million in our BayMedica segment, or 7%, for the year ended June 30, 2025 as compared to the year ended
June 30, 2024. The decrease in cost of goods sold is primarily the result of the Company lowering its supply chain costs and a decrease
in write-down of inventories to net realizable value during the year ended June 30, 2025.

and Development Expenses

and development expenses decreased by less than $0.1 million in our BayMedica segment, or 76%, for the year ended June 30, 2025 as compared
to the year ended June 30, 2024. The decrease in research and development expenses was primarily due to a decrease in external contractors.

and administrative expenses

and administrative expenses increased by approximately $0.4 million in our BayMedica segment, or 51%, for the year ended June 30, 2025
as compared to the year ended June 30, 2024. The increase results primarily from a combination of changes including higher salaries and
employee benefits, and marketing expenses.

 Liquidity
and Capital Resources

 Since
our inception, we have generated revenue from BayMedica product sales and no sales from any other sources and have incurred significant
operating losses and negative cash flows from our operations. We have not yet commercialized any of our Product Candidates and we do
not expect to generate revenue from sales of any Product Candidates for several years, if at all. We have funded our operations to date
primarily with proceeds from the sale of Common Shares.

 As
of June 30, 2025, we had cash, cash equivalents and short-term investments of $11.1 million.

 The
following table summarizes our cash flows for each of the periods presented:

 (in
 thousands)

 Year
 Ended
 2025

 Year
 Ended
 2024

 Net cash used in operating activities

 $
 (7,767
)

 $
 (6,986
)

 Net cash used in investing activities

 -

 (9
)

 Net cash provided
 by financing activities

 12,271

 4,654

 Net increase (decrease)
 in cash and cash equivalents

 $
 4,504

 $
 (2,341
)

 Operating
Activities

the year ended June 30, 2025, we used cash in operating activities of $7.8 million, primarily resulting from our net loss of $8.2 million
combined with $1.0 million used in changes in our non-cash working capital, partially offset by non-cash share-based compensation expenses.

the year ended June 30, 2024, we used cash in operating activities of $7.0 million, primarily resulting from our net loss of $7.7 million
combined with $0.4 million used in changes in our non-cash working capital, partially offset by non-cash share-based compensation expenses
and inventory write-down.

 Investing
Activities

the year ended June 30, 2025, cash used in investing activities of $nil resulted from the purchases and sale of short-term investments.

the year ended June 30, 2024, cash used in investing activities of less than $0.01 million resulted from the purchases of property and
equipment.

 Financing
Activities

the year ended June 30, 2025, cash provided by financing activities of $12.3 million consisted of $8.1 million in gross proceeds derived
from the sale of common stock, $5.0 million in gross proceeds derived from the sale of warrants, offset by total transaction costs of
$0.9 million.

the year ended June 30, 2024, cash provided by financing activities of $4.7 million consisted of $5.2 million in gross proceeds derived
from the 2023 Private Placement, offset by total transaction costs of $0.5 million.

 Funding
Requirements

 We
expect our expenses to increase substantially in connection with our ongoing research and development activities, particularly as we
continue the research and development of and the clinical trials for our Product Candidates. In addition, we expect to incur additional
costs associated with operating as a US-listed public company and associated with any required investment into BayMedica's R&D
efforts targeting cannabinoid analogs. As a result, we expect to incur substantial operating losses and negative operating cash flows
for the foreseeable future.

 In
accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2014-15,
Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern (Subtopic 205-40), we have evaluated whether
there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern
within one year after the date that the consolidated financial statements are issued.

 Through
June 30, 2025, we have funded our operations primarily with proceeds from the sale of our Common Shares. We have incurred recurring losses
and negative cash flows from operations since its inception, including net losses of $8.2 million and $7.7 million for the years ended
June 30, 2025 and 2024, respectively. In addition, we have an accumulated deficit of $117.2 million as of June 30, 2025.

 As
of the issuance date of these consolidated annual financial statements, we expect our cash, cash equivalents and short-term investments
of $11.1 million as of June 30, 2025 will be sufficient to fund our operating expenses and capital expenditure requirements into the
fourth quarter of calendar 2026, depending on the level and timing of realizing BayMedica revenues from the sale of bulk rare cannabinoids
in the health & wellness sector as well as the level and timing of our operating expenses. Our future viability is dependent on our
ability to raise additional capital to finance its operations. We have concluded that there is substantial doubt about our ability to
continue as a going concern within one year after the date that the consolidated financial statements are issued.

 We
expect to continue to seek additional funding through equity financings, debt financings or other capital sources, including collaborations
with other companies, government contracts or other strategic transactions. We may not be able to obtain financing on acceptable terms,
or at all. The terms of any financing may adversely affect the holdings or the rights of our existing stockholders.

 Our
funding requirements and timing and amount of our operating expenditures will depend largely on:

 the scope, progress, results
 and costs of discovery research, preclinical development, laboratory testing and clinical trials for our Product Candidates;

 the scope, progress, results
 and costs of development of our manufacturing technologies;

 the number of and development
 requirements for other Products and Product Candidates that we pursue;

 the costs, timing and outcome
 of regulatory review of our Product Candidates;

 our ability to enter into
 contract manufacturing arrangements for supply of materials and manufacture of our Products and Product Candidates and the terms
 of such arrangements;

 the impact of any acquired,
 or in-licensed, externally developed product(s) and/or technologies;

 our ability to establish
 and maintain strategic collaborations, licensing or other arrangements, including sales arrangements, and the financial terms of
 such arrangements;

 the sales, costs and timing
 of future commercialization activities, including product manufacturing, sales, marketing and distribution, for any of our Products
 and for Product Candidates for which we may receive marketing approval;

 the costs and timing of
 preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights
 and defending any intellectual property-related claims;

 expansion costs of our
 operational, financial and management systems and increases to our personnel, including personnel to support our clinical development,
 manufacturing and commercialization efforts and our operations as a dual listed company;

 the costs to obtain, maintain,
 expand and protect our intellectual property portfolio; and

 the level and timing of
 realizing revenues from the BayMedica commercial operations.

 A
change in the outcome of any of these, or other variables with respect to the development of any of our Products and Product Candidates,
could significantly change the costs and timing associated with their development. We will need to continue to rely on additional financing
to achieve our business objectives.

 In
addition to the variables described above, if and when any of our Product Candidates successfully complete development, we will incur
substantial additional costs associated with regulatory filings, marketing approval, post-marketing requirements, maintaining our intellectual
property rights, and regulatory protection, in addition to other commercial costs. We cannot reasonably estimate these costs at this
time.

 Until
such time, if ever, as we can generate substantial revenues from either our Products or Product Candidates, we expect to finance our
cash needs through a combination of equity or debt financings and collaboration arrangements. We currently have no credit facility or
committed sources of capital. To the extent that we raise additional capital through the future sale of equity securities, the ownership
interests of our shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely
affect the rights of our existing common shareholders. If we raise additional funds through the issuance of debt securities, these securities
could contain covenants that would restrict our operations. We may require additional capital beyond our currently anticipated amounts,
and additional capital may not be available on reasonable terms, or at all. If we raise additional funds through collaboration arrangements
or other strategic transactions in the future, we may have to relinquish valuable rights to our technologies, future revenue streams,
Products or Product Candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds
through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate development or future commercialization
efforts or grant rights to develop and market Products or Product Candidates that we would otherwise prefer to develop and market ourselves.

 Off-Balance
Sheet Arrangements

the periods presented, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and
regulations promulgated by the SEC.

 Critical
Accounting Estimates and Accounting Policies

 We
periodically review our financial reporting and disclosure practices and accounting policies to ensure that they provide accurate and
transparent information relative to the current economic and business environment. As part of this process, we have reviewed our selection,
application and communication of critical accounting policies and financial disclosures. Management has discussed the development and
selection of the critical accounting policies with the Audit Committee of the Board of Directors and the Audit Committee has reviewed
the disclosure relating to critical accounting policies in this Management's Discussion and Analysis.

 This
discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements included
as part of this report, which have been prepared in accordance with U.S. GAAP. The preparation of our consolidated financial statements
requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the revenue and expenses
incurred during the reported periods. We base estimates on our historical experience, known trends and various other factors that we
believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of
assets and liabilities that are not apparent from other sources. Actual results may differ from these estimates under different assumptions
or conditions.

 The
full details of our accounting policies are presented in Note 2 of our audited consolidated financial statements for the year ended June
30, 2025. These policies are considered by management to be essential to understanding the processes and reasoning that go into the preparation
of our consolidated financial statements and the uncertainties that could have a bearing on its financial results. The significant accounting
policies that we believe to be most critical in fully understanding and evaluating our financial results are research and development
costs and share based payments.

 Use
of Estimates

 The
preparation of financial statements in compliance with US GAAP requires management to make estimates and assumptions that affect the
reported amount of assets and liabilities as of the balance sheet date, and the corresponding revenues and expenses for the periods reported.
It also requires management to exercise judgment in applying the Company's accounting policies. In the future, actual experience
may differ from these estimates and assumptions. The areas involving a higher degree of judgment or complexity, or areas where assumptions
and estimates are significant to these consolidated financial statements are the application of the going concern assumptions, determining
the fair value of share-based payments, income tax provisions, write-down of inventories to net realizable value, warrant valuations,
and the assumptions used in the determination of research & development accruals.

 Actual
results could differ from those estimates.

& Development costs:

and development costs is a critical accounting estimate due to the magnitude and nature of the assumptions that are required to calculate
third-party accrued and prepaid research and development expenses. Research and development costs are charged to expense as incurred
and include, but are not limited to, personnel compensation, including salaries and benefits, services provided by CROs that conduct
preclinical and clinical studies, costs of filing and prosecuting patent applications, and lab supplies.

 The
amount of expenses recognized in a period related to service agreements is based on estimates of the work performed using an accrual
basis of accounting. These estimates are based on services provided and goods delivered, contractual terms and experience with similar
contracts. We monitor these factors and adjust our estimates accordingly.

payments:

 The
fair value, at the grant date, of equity share awards is charged to income or loss over the period for which the benefits of employees
and others providing similar services are expected to be received, generally the vesting period. The corresponding accrued entitlement
is recorded in contributed surplus. The amount recognized as an expense is adjusted to reflect the number of share options expected to
vest. The fair value of awards is calculated using the Black-Scholes option pricing model which considers the following factors:

 Exercise price;

 Current market price of
 the underlying shares;

 Expected life of the award;

 Risk-free interest rate;

 Expected volatility; and

 Dividend yield.

 Management
determines costs for share-based payments using market-based valuation techniques. The fair value of the market-based and performance-based
share awards are determined at the date of grant using generally accepted valuation techniques. Assumptions are made and judgment used
in applying valuation techniques. These assumptions and judgments include estimating the future volatility of the stock price, expected
dividend yield, forfeiture rates and corporate performance. For employee awards, we use the "simplified method" to determine
the expected term of options. Under this method, the expected term represents the average of the vesting period and the contractual term.
Such judgments and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates. If we had made
different judgments and assumptions than those described previously, the amount of our share-based payments expense, net loss and net
loss per common shares amounts could have been materially different.

 Recent
Accounting Pronouncements

 The
Company has reviewed recent accounting pronouncements and concluded that they are either not applicable to the Company or that there
was no material impact or no material impact is expected in these consolidated financial statements as a result of
future adoption.

 In
November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income - Expense Disaggregation Disclosures,
which requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The amendments
in this update improve financial reporting by requiring that public business entities disclose additional information about specific
expense categories in the notes to financial statements at interim and annual reporting periods. This ASU should be applied on a prospective
basis, with retrospective application permitted. The amendments in this update are effective for fiscal years beginning after December
15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently
evaluating the future effect the adoption of this ASU will have on our consolidated financial statements and related disclosures.

 In
December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure
of specific categories meeting a quantitative threshold within the income tax rate reconciliation, as well as disaggregation of income
taxes paid by jurisdiction. This ASU, which can be applied either prospectively or retrospectively, is effective for annual periods beginning
after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this ASU and expects to include
updated income tax disclosures in its fiscal year 2026.

 In
November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280): Improvements
to Reportable Segment Disclosures, which enhances reportable segment disclosure requirements primarily through expanded disclosures
around significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim
periods within fiscal years beginning after December 15, 2024. The amendments should be applied retrospectively to all prior periods
presented in the financial statements. The Company has adopted this accounting pronouncement.

 ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

 We
are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required
under this item.

 ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial Statements of

 InMed

 For
the Years Ended June 30, 2025 and 2024

 F- 1

 InMed

 (Expressed
in U.S. Dollars)

2025

 Page

 Consolidated Financial Statements

 Report of Independent Registered Public Accounting Firm (PCAOB Firm ID 199)

 Report of Independent Registered Public Accounting Firm (PCAOB Firm ID 688)

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Shareholders' Equity

 Consolidated Statements of Cash Flows

 Notes to the Consolidated Financial Statements

 F- 2

 Report
of Independent Registered Public Accounting Firm

 To the Stockholders and Board of Directors of

 InMed Pharmaceuticals Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated
balance sheet of InMed Pharmaceuticals Inc. (the "Company") as of June 30, 2025, the related consolidated statements of operations,
changes in shareholders' equity and cash flows for the year ended June 30, 2025, and the related notes (collectively referred to
as the "financial statements"). In our opinion,, the financial statements present fairly, in all material respects, the financial
position of the Company as of June 30, 2025, and the results of its operations and its cash flows for the year ended June 30, 2025, in
conformity with accounting principles generally accepted in the United States of America.

 Explanatory Paragraph – Going Concern

 The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has a significant
working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

 Basis for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.

 Our audit included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 /s/ CBIZ CPAs P.C.

 CBIZ CPAs P.C.

 We have served as the Company's auditor since 2025

 New York, NY

September 22, 2025

 F- 3

 REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

 To the Shareholders and Board of Directors of

 InMed Pharmaceuticals
Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated
balance sheet of InMed Pharmaceuticals Inc. (the "Company") as of June 30, 2024, the related consolidated statements of operations,
changes in shareholders' equity and cash flows for the year ended June 30, 2024, and the related notes (collectively referred to
as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial
position of the Company as of June 30, 2024, and the results of its operations and its cash flows for the year ended June 30, 2024, in
conformity with accounting principles generally accepted in the United States of America.

 Explanatory Paragraph – Going Concern

 The accompanying financial statements
have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has incurred
recurring losses and negative cash flows and has an accumulated deficit that raise substantial doubt about the Company's ability to continue
as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

 Basis for Opinion

 These financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on
our audit s. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audit in accordance
with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an
understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audit included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 /s/ Marcum LLP

 Marcum LLP

 We have served as the Company's auditor
from 2023 through 2025.

 New York, NY

 September 27, 2024, except for the effects of Note 14, Reverse
Stock Split, as to which the date is July 31, 2025

 F- 4

 InMed

 CONSOLIDATED
BALANCE SHEETS

 Expressed
in U.S. Dollars

 2025

 2024

 $

 $

 ASSETS

 Current

 Cash
 and cash equivalents

 11,075,871

 6,571,610

 investments

 43,384

 43,064

 Accounts receivable (less provision for credit losses of $ 2,424 and $ nil as of June 30, 2025 and 2024, respectively)

 465,104

 352,838

 Inventories,
 net

 961,173

 1,244,324

 Prepaids
 and other current assets

 321,747

 477,749

 Total
 current assets

 12,867,279

 8,689,585

 Non-Current

 Property,
 equipment and ROU assets, net

 992,199

 1,249,999

 Intangible
 assets, net

 1,620,562

 1,783,198

 Other
 assets

 100,000

 100,000

 Total
 Assets

 15,580,040

 11,822,782

 LIABILITIES
 AND SHAREHOLDERS' EQUITY

 Current

 payable and accrued liabilities

 1,404,283

 1,654,011

 Current
 portion of lease obligations

 435,507

 317,797

 Total
 current liabilities

 1,839,790

 1,971,808

 Non-current

 Lease
 obligations, net of current portion

 305,755

 644,865

 Total
 Liabilities

 2,145,545

 2,616,673

 Commitments
 and Contingencies (Note 12)

 Shareholders' Equity

 Common shares, no par value, unlimited authorized shares: 2,002,186 and 445,908 as of June 30, 2025 and 2024, respectively, issued and outstanding

 91,221,174

 82,784,400

 Additional
 paid-in capital

 39,322,644

 35,368,899

 deficit

 ( 117,237,892
)

 ( 109,075,759
)

 other comprehensive income

 Total
 Shareholders' Equity

 13,434,495

 9,206,109

 Total
 Liabilities and Shareholders' Equity

 15,580,040

 11,822,782

 Related
 Party Transactions (Note 13)

 The
accompanying notes form an integral part of these consolidated financial statements.

 F- 5

 InMed

 CONSOLIDATED
STATEMENTS OF OPERATIONS

 Expressed
in U.S. Dollars

 For the Year Ended

 June
 30,

 2025

 2024

 $

 $

 Sales

 4,942,633

 4,597,730

 Cost
 of sales

 3,236,047

 3,496,817

 Gross
 profit

 1,706,586

 1,100,913

 Operating
 Expenses

 and development

 2,853,920

 3,217,517

 and administrative

 6,557,822

 5,798,226

 Amortization
 and depreciation

 212,839

 219,600

 Foreign
 Exchange Loss

 28,471

 61,921

 Total
 operating expenses

 9,653,052

 9,297,264

 Other
 Income (Expense)

 Interest
 and other income

 155,882

 527,901

 expense

 ( 371,549
)

 -

 Loss
 before income tax expense

)

 ( 7,668,450
)

 tax expense

 -

 ( 7,100
)

 Net
 loss for the year

)

 ( 7,675,550
)

 Net
 loss per share for the year

 Basic
 and diluted

 ( 8.36
)

 ( 20.14
)

 Weighted
 average outstanding common shares

 Basic
 and diluted

 975,985

 381,053

 The
accompanying notes form an integral part of these consolidated financial statements.

 F- 6

 InMed

 CONSOLIDATED
STATEMENTS OF SHAREHOLDERS' EQUITY

 For the years
ended June 30, 2025 and 2024

 Expressed
in U.S. Dollars

 Common
 Shares

 Additional

 Paid-in
 Capital

 Deficit

 Other
 Comprehensive

 Total

 #

 $

 $

 $

 $

 $

 Balance
 July 1, 2024

 445,908

 82,784,400

 35,368,899

 ( 109,075,759
)

 9,206,109

 Proceeds
 from ATM (Note 8)

 313,242

 1,905,583

 -

 -

 -

 1,905,583

 Proceeds
 from SEPA (Note 8)

 1,208,336

 6,224,716

 -

 -

 -

 6,224,716

 Proceeds
 from Private Placement

 -

 -

 5,024,891

 -

 -

 5,024,891

 Share issuance
 costs

 -

 ( 269,559
)

 ( 614,419
)

 -

 -

 ( 883,978
)

 Exercise of pre-funded
 warrants

 34,700

 576,034

 ( 576,034
)

 -

 -

 -

 Loss
 for the period

 -

 -

 -

)

 -

)

 compensation

 -

 -

 119,307

 -

 -

 119,307

 Balance
 June 30, 2025

 2,002,186

 91,221,174

 39,322,644

 ( 117,237,892
)

 13,434,495

 Common
 Shares

 Additional

 Paid-in
 Capital

 Deficit

 Other
 Comprehensive

 Total

 #

 $

 $

 $

 $

 $

 Balance
 July 1, 2023

 166,370

 77,620,252

 35,741,115

 ( 101,400,209
)

 12,089,727

 Proceeds from Private
 Placement

 163,637

 3,240,006

 1,976,187

 -

 -

 5,216,193

 Share issuance
 costs

 -

 -

 ( 562,151
)

 -

 -

 ( 562,151
)

 Exercise
 of pre-funded warrants

 115,901

 1,924,142

 ( 1,923,967
)

 -

 -

 Loss
 for the period

 -

 -

 -

 ( 7,675,550
)

 -

 ( 7,675,550
)

 compensation

 -

 -

 137,715

 -

 -

 137,715

 Balance
 June 30, 2024

 445,908

 82,784,400

 35,368,899

 ( 109,075,759
)

 9,206,109

 The
accompanying notes form an integral part of these consolidated financial statements.

 F- 7

 InMed

 CONSOLIDATED
STATEMENTS OF CASH FLOWS

 For the years
ended June 30, 2025 and 2024

 Expressed
in U.S. Dollars

 2025

 2024

 $

 $

 Cash provided by (used in):

 Operating Activities

 Net loss

)

 ( 7,675,550
)

 Items not requiring cash:

 Amortization and depreciation

 212,839

 219,600

 Share-based compensation

 119,307

 137,714

 Amortization of right-of-use
 assets

 321,885

 384,918

 Interest income received
 on short-term investments

 ( 34
)

 ( 1,250
)

 Unrealized foreign exchange
 loss

 75,928

 12,262

 Inventory write-down

 -

 305,812

 Credit losses

 2,424

 -

 Changes in operating assets and liabilities:

 283,151

 66,220

 Prepaids and other currents
 assets

 173,980

 20,284

 Other non-current assets

 -

 4,908

 Accounts receivable

 ( 114,690
)

 ( 92,439
)

 Accounts payable and accrued
 liabilities

 ( 249,728
)

 45,282

 Deferred rent

 -

 ( 16,171
)

 Lease
 obligations

 ( 429,880
)

 ( 397,422
)

 Total
 cash used in operating activities

 ( 7,766,951
)

 ( 6,985,832
)

 Investing Activities

 Purchase of property and
 equipment

 -

 ( 9,293
)

 Sale of short-term investments

 42,270

 42,082

 Purchase
 of short-term investments

 ( 42,270
)

 ( 42,082
)

 Total
 cash used in investing activities

 -

 ( 9,293
)

 Financing Activities

 Proceeds from the exercise
 of pre-funded warrants

 -

 Proceeds from the private
placement

 8,130,299

 5,216,194

 Proceeds from the sale of
 pre-funded warrants

 5,024,891

 -

 Share issuance costs

 ( 883,978
)

 ( 562,151
)

 Total
 cash provided by financing activities

 12,271,212

 4,654,218

 Increase (decrease) in cash
 and cash equivalents during the year

 4,504,261

 ( 2,340,907
)

 Cash
 and cash equivalents beginning of the year

 6,571,610

 8,912,517

 Cash
 and cash equivalents end of the year

 11,075,871

 6,571,610

 SUPPLEMENTARY CASH FLOW
 INFORMATION:

 Cash Paid During the Year
 for:

 taxes

 $
 -

 $
 7,100

 Interest

 $
 -

 $
 -

 SUPPLEMENTARY
 DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

 Preferred
 investment options to its placement agent

 $
 281,810

 $
 325,699

 Fair
 value of warrant modification recorded as equity issuance costs

 $
 116,482

 $
 3,508,749

 Recognition
 of Right-of-use asset and corresponding operating lease

 $
 187,223

 $
 968,376

 The
accompanying notes form an integral part of these consolidated financial statements.

 F- 8

 1.

 CORPORATE INFORMATION
 AND CONTINUING OPERATIONS

 Business

 InMed
Pharmaceuticals Inc. ("InMed" or the "Company") was incorporated in the Province of British Columbia on May 19,
1981 under the Business Corporations Act of British Columbia. InMed is a pharmaceutical drug development company with a pipeline of proprietary
small molecule drug candidates targeting the treatment of diseases with high unmet medical needs as well as developing proprietary manufacturing
approaches to produce and sell bulk rare cannabinoids as ingredients for various market sectors.

 The
Company's shares are listed on the Nasdaq Capital Market ("Nasdaq") under the trading symbol "INM". InMed's
office and principal place of business is located at Suite 1445, 885 West Georgia Street, Vancouver, B.C., Canada, V6C 3E8.

 Going
Concern

 In
accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2014-15,
Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated
whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability
to continue as a going concern within one year after the date that the consolidated financial statements are issued.

 Through
June 30, 2025, the Company has funded its operations primarily with proceeds from the sale of Common Shares. The Company has incurred
recurring losses and negative cash flows from operations since its inception, including net losses of approximately $ 8.2 million
and $ 7.7 million for the years ended June 30, 2025 and 2024, respectively. In addition, the Company had an accumulated deficit of
approximately $ 117.2 million as of June 30, 2025. The Company expects to continue to generate operating losses for the foreseeable
future.

 As
of the issuance date of these consolidated annual financial statements, the Company expects its cash, cash equivalents and short-term
investments of $ 11.1 million as of June 30, 2025 will be sufficient to fund its operating expenses and capital expenditure requirements
into the fourth quarter of calendar 2026, depending on the level and timing of realizing BayMedica revenues from the sale of bulk rare
cannabinoids in the health & wellness sector as well as the level and timing of the Company's operating expenses. The future
viability of the Company is dependent on its ability to raise additional capital to finance its operations. The Company has concluded
that there is substantial doubt about its ability to continue as a going concern within one year after the date that the consolidated
financial statements are issued.

 The
Company expects to continue to seek additional funding through equity financings, debt financings or other capital sources, including
collaborations with other companies, government contracts or other strategic transactions. The Company may not be able to obtain financing
on acceptable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company's existing
shareholders.

 In
connection with the Company's assessment of going concern considerations in accordance with Subtopic 205-40, management has determined
that the Company's liquidity condition raises substantial doubt about the Company's ability to continue as a going concern,
which is considered to be for a period of one year from the issuance of these financial statements. These consolidated financial statements
do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts of classification
of liabilities that might result from the outcome of this uncertainty. Such adjustments could be material.

 F- 9

 2.

 SIGNIFICANT ACCOUNTING
 POLICIES

 Basis
of Presentation

 These
consolidated financial statements have been prepared in accordance with generally accepted accounting principles as applied in the United
States ("US GAAP") and pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC")
for financial information.

 On
November 14, 2024, the Company effected a reverse stock split of the Company's issued and outstanding Common Shares, by a ratio
of 20-to-1 (the "Reverse Stock Split"). Accordingly, all Common Shares, stock options, warrants, as well as per share information,
for all periods presented in the consolidated financial statements and notes thereto have been adjusted retrospectively to
reflect this Reverse Stock Split.

 Reclassifications

 Certain
prior year amounts in the consolidated financial statements and the notes thereto have been reclassified where necessary to conform to
the current year's presentation. These reclassifications did not affect the prior period's total assets, total liabilities,
shareholders' equity, net loss or net cash used in operating activities. During the year ended June 30, 2024, the Company reclassed
prior year costs from research and development to general and administrative.

 Use
of Estimates

 The
preparation of financial statements in compliance with US GAAP requires management to make estimates and assumptions that affect the
reported amount of assets and liabilities as of the balance sheet date, and the corresponding revenues and expenses for the periods reported.
It also requires management to exercise judgment in applying the Company's accounting policies. In the future, actual experience
may differ from these estimates and assumptions. The areas involving a higher degree of judgment or complexity, or areas where assumptions
and estimates are significant to these consolidated financial statements are the application of the going concern assumptions, determining
the fair value of share-based payments, income tax provisions, write-down of inventories to net realizable value, warrant valuations,
and the assumptions used in the determination of research & development accruals.

 Actual
results could differ from those estimates.

 Basis
of Consolidation

 These
consolidated financial statements include the accounts of the Company and its subsidiaries, InMed Pharmaceutical Ltd; BayMedica, LLC;
Biogen Sciences Inc.; and Sweetnam Consulting Inc. Biogen Sciences Inc. and Sweetnam Consulting Inc. are inactive subsidiaries. A subsidiary
is an entity that the Company controls, either directly or indirectly, where control is defined as the power to govern the financial
and operating policies of an entity so as to obtain benefits from its activities. All inter-company transactions and balances including
unrealized income and expenses arising from intercompany transactions are eliminated in preparing these consolidated financial statements.

 Foreign
Currency

 The
functional currency of the Company and its subsidiaries is the U.S. Dollar. These consolidated financial statements are presented in
U.S. Dollars. References to "$" and "US$" are to United States ("U.S.") dollars and references to
"C$" are to Canadian dollars.

 F- 10

 Cash
and Cash Equivalents

 Cash
and cash equivalents include cash-on-hand, demand deposits with financial institutions and other short-term, highly liquid investments
with original maturities of three months or less when acquired that are readily convertible to known amounts of cash and subject to an
insignificant risk of change in value. As of June 30, 2025 and 2024, the Company held $ 4,479,809 and $ 1,939,482, respectively, of cash
equivalents in a money market fund that is considered Level 1 in the financial instruments hierarchy due to the readily available quoted
prices in active markets for identical instruments.

Investments

investments include fixed and variable rate guaranteed investment certificates, with terms greater than three months and less than twelve
months. Due to the short-term nature of these investments the fair value of the investments approximates the current value. Guaranteed
investment certificates are convertible to known amounts of cash and are subject to an insignificant risk of change in value.

Receivable

receivable are recorded at invoiced amounts, net of any credit losses. The provision for credit losses is the Company's best estimate
of the amount of probable credit losses in existing accounts receivable.

 The
Company evaluates the collectability of accounts receivable on a regular basis based upon various factors including the financial condition
and payment history of customers, an overall review of collections experience on other accounts and economic factors or events expected
to affect future collections experience.

in the allowance for expected credit losses for trade accounts receivable are presented in the table below:

 Years
 Ended June 30,

 2025 and 2024

 Balance as of July 1, 2023

 $
 66,775

 Provision

 —

 Write-offs

 ( 66,775
)

 Balance as of June 30, 2024

 —

 Provision

 2,424

 Balance as of June 30, 2025

 $
 2,424

 Concentration
of Credit Risk and Other Risks and Uncertainties

 At
times, cash balances may exceed the Federal Deposit Insurance Corporation ("FDIC") or Canadian Deposit Insurance Corporation
("CDIC") insurable limits. The Company has not experienced any losses related to these balances. The uninsured cash balance
as of June 30, 2025, was $ 8.0 million. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents.

 The
Company's customers are primarily concentrated in the United States.

 F- 11

 Concentration
of customers

 The
following table summarizes the information about the Company's concentration of customers:

 Customer A

 Customer B

 Customer C

 Customer D

 Customer E

 Customer F

 Customer G

 Twelve
 Months Ended June 30, 2025

 Revenues,
 customer concentration risk

 %

 %

 *

 *

 *

 *

 *

 Twelve
 Months Ended June 30, 2024

 Revenues,
 customer concentration risk

 %

 %

 %

 %

 %

 *

 *

 As
 of June 30, 2025

 receivable, customer concentration risk

 %

 %

 *

 %

 *

 %

 %

 As
 of June 30, 2024

 receivable, customer concentration risk

 %

 %

 %

 %

 %

 *

 *

 *

 Less than 10%.

 Deferred
Offering Costs

 The
Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity
financings as deferred offering costs until such financings are consummated. After the consummation of equity or debt financings, these
related costs are recorded in shareholders' equity or liabilities as a reduction of proceeds generated as a result of the offering.
If the planned financing is abandoned, the deferred offering costs are thereafter expensed as a charge to other income (expense) in the
consolidated statement of operations. As of June 30, 2025 and 2024, the Company recorded $ nil and $ 106,299 in deferred offering costs,
respectively. During the year ended June 30, 2025 and 2024 the Company expensed $ 20,000 and $ nil, respectively.

are initially valued at weighted average cost and subsequently valued at the lower of weighted average cost and net realizable value.
Costs included in inventories are the purchase price of goods and cost of services rendered, freight costs, warehousing costs, purchasing
costs and production and labor costs related to manufacturing.

 In
determining any valuation allowances, the Company reviews inventory for obsolete, redundant, and slow-moving goods. As of June 30, 2025
and 2024, the Company has $ nil and $ 103,434, respectively, as a valuation allowance to reduce weighted average cost to net realizable
value. During the year ended June 30, 2025 and 2024, the Company recorded an inventory write-down due to net realizable value of $ nil and
$ 103,136 respectively, and recorded an inventory write-down due to obsolescence of $ nil and $ 208,737, respectively.

 F- 12

 Property,
Equipment and ROU Assets, Net

 Computer
equipment, lab equipment and furnishings are recorded at cost, less accumulated depreciation and accumulated impairment losses. The initial
cost of computer equipment, lab equipment and furnishings comprise their purchase price. The computer equipment, lab equipment and furnishings
are reviewed at least once per year for impairment. Equipment and furniture are depreciated using the straight-line method based on their
estimated useful lives as follows:

 Computer equipment — 5 years

 Lab equipment — 6 - 10 years

 Computer
equipment and lab equipment, acquired or disposed of during the year, are depreciated proportionately for the period they are in use.

 The
right-of-use assets are initially measured based on the initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date, less any lease incentives received. The assets are amortized to the earlier of the end of the useful
life of the right-of-use asset or the lease term using the straight-line method as this most closely reflects the expected pattern of
consumption of the future economic benefits. The lease term includes periods covered by an option to extend if the Company is reasonably
certain to exercise that option. In addition, the right-of-use assets are periodically reduced by impairment losses, if any, and adjusted
for certain re-measurements of the lease liability (see Note 2 Lease (i)).

 Intangible
Assets, Net

 Intangible
assets are comprised of acquired intellectual property, which consists of certain patents and technical know-how. The intellectual property
is recorded at cost and is amortized on a straight-line basis over an estimated useful life of 18 years net of any accumulated
impairment losses. There is no impairment loss during the years ended June 30, 2025 and 2024.

 Impairment
of Long-Lived Assets

 The
Company assesses the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the
asset to future undiscounted net cash flows expected to be generated by the asset or assets. If carrying value exceeds the sum of undiscounted
cash flows, the Company then determines the fair value of the underlying asset. Any impairment to be recognized is measured as the amount
by which the carrying amount of the asset group exceeds the estimated fair value of the asset group. Assets classified as held for sale
are reported at the lower of the carrying amount or fair value, less costs to sell.

 Fair
Value Measurements

 Financial
Assets

 Financial
assets are initially recognized at fair value, plus transaction costs that are directly attributable to their acquisition or issue and
subsequently carried at amortized cost, using the effective interest rate method, less any impairment losses. No financial assets are
or elected to be carried at fair value through profit or loss or where changes in fair value are recognized in the consolidated statements
of operations and comprehensive loss in other comprehensive loss.

 F- 13

investments are subsequently recorded at cost plus accrued interest, which approximates fair value due to short-term nature. Accounts
receivable are reported at outstanding amounts, net of credit losses.

 Financial
Liabilities

 To
determine the fair value of financial instruments, the Company uses the fair value hierarchy for inputs used to measure fair value of
financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three
levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority).

 Level 1 –

 Unadjusted quoted prices
 in active markets for identical instruments.

 Level 2 –

 Inputs other than quoted
 prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include
 quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in
 markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates,
 yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other
 means (market corroborated inputs).

 Level 3 –

 Inputs are unobservable
 and reflect the Company's assumptions as to what market participants would use in pricing the asset or liability. The Company
 develops these inputs based on the best information available. Assets and liabilities are classified based on the lowest level of
 input that is significant to the fair value measurements. Changes in the observability of valuation inputs may result in a reclassification
 of levels for certain securities within the fair value hierarchy.

 The
carrying value of cash and cash equivalents, short-term investments, accounts receivable, and accounts payable and accrued liabilities,
approximate their carrying values as at June 30, 2025 and 2024 due to their immediate or short-term maturities.

Taxes

 Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date. At June 30, 2025, and June 30, 2024, the Company had a full valuation
allowance against its deferred tax assets.

 Per
FASB ASC 740-10, disclosure is not required of an uncertain tax position unless it is considered probable that a claim will be asserted
and there is a more-likely-than-not possibility that the outcome will be unfavorable. Using this guidance, as of June 30, 2025, and 2024,
the Company has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. The Company's
2025, 2024, 2023, and 2022 United States and Canadian tax returns remain subject to examination by their respective taxing authorities.
None of the Company's tax returns are currently under examination.

 Revenue
Recognition

 The
Company recognizes revenue when the Company satisfies the performance obligations under the terms of a contract and control of its products
and services is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers
in exchange for those products and services. ASC 606, Revenue from Contracts with Customers defines a five-step process
to recognize revenue that requires judgment and estimates, including identifying the contract with the customer, identifying the performance
obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the
contract, and recognizing revenue when or as the performance obligation is satisfied.

 F- 14

 Revenue
consists of manufacturing and distribution sales of bulk rare cannabinoids, which are recognized at a point in time. The Company recognizes
revenue when control over the products has been transferred to the customer and the Company has a present right to payment. Sales and
other taxes that are required to be remitted to regulatory authorities are recorded as liabilities and excluded from sales. Limited rights
of return for claims of damaged or non-compliant products, exist with the Company's customers.

 The
Company has elected the practical expedient that allows it to recognize the incremental costs of obtaining a contract as an expense,
when incurred, if the amortization period of the asset that the Company otherwise would have recognized is one year or less.

 Revenues
within the scope of ASC 606 do not include material amounts of variable consideration. Customer payments are generally due in advance
of when control is transferred to the customer. Some of our larger customers are eligible for payment terms up to 'net 30 days'.

 Cost
of Sales

 Cost
of sales consists primarily of the purchase price of goods and cost of services rendered, freight costs, warehousing costs, and purchasing
costs. Cost of sales also includes production and labor costs for the Company's manufacturing business.

 Shipping
and Handling

 The
Company records freight billed to customers within Net sales. Shipping and handling costs associated with inbound freight and goods shipped
to customers are recorded in cost of sales. Other shipping and handling costs, such as for quality assurance, are recorded in operating
expenses.

 Earnings
(Loss) Per Share

 Basic
earnings (loss) per common share ("EPS") is computed by dividing the net income or loss applicable to common shares of the
Company by the weighted average number of common shares outstanding for the relevant period. As of June 30, 2025 and 2024, the Company
has 1,952,363 and 34,700 respectively, pre-funded warrants included in the basic earnings (loss) per share. Diluted earnings (loss)
per common share ("Diluted EPS") is computed by dividing the net income or loss applicable to common shares by the sum of
the weighted average number of common shares issued and outstanding and all additional common shares that would have been outstanding,
if potentially dilutive instruments were converted. If the conversion of outstanding stock options and warrants into common share is
anti-dilutive, then diluted EPS is not presented separately from EPS.

 The
following table sets forth the number of potential shares of common stock that have been excluded from diluted net loss per share because
their effect was anti-dilutive:

 Year
 ended June 30,

 2025

 2024

 Options

 61,410

 33,722

 Warrants

 2,588,847

 509,580

 2,650,257

 543,302

Payments

 The
Company follows the requirements of FASB ASC 718-10-10, Share-Based Payments with regards to stock-based compensation issued to employees
and non-employees. The Company has agreements and arrangements that call for stock to be awarded to the employees and consultants at
various times as compensation and periodic bonuses. The expense for this stock-based compensation is equal to the fair value of the stock
price on the day the stock was awarded multiplied by the number of shares awarded. The Company has a relatively low forfeiture rate of
stock-based compensation and forfeitures are recognized as they occur.

 F- 15

 The
valuation methodology used to determine the fair value of the options issued during the period is the Black-Scholes option-pricing model.
The Black-Scholes model requires the use of a number of assumptions including the volatility of the stock price, the average risk-free
interest rate, and the weighted average expected life of the options. Risk-free interest rates are calculated based on continuously compounded
risk-free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash
dividends on its Common Stock and does not intend to pay dividends on its Common Stock in the foreseeable future. The expected forfeiture
rate is estimated based on management's best assessment.

 Estimated
volatility is a measure of the amount by which InMed's stock price is expected to fluctuate each year during the expected life
of the award. The Company's calculation of estimated volatility is based on historical stock prices over a period equal to the
expected life of the awards.

and Development Costs

 The
Company conducts research and development programs and incurs costs related to these activities, including research and development personnel
compensation, services provided by contract research organizations and lab supplies. Research and development costs are expensed in the
periods in which they are incurred.

 Patents
and Intellectual Property Costs

 The
costs of filing for patents and of prosecuting and maintaining intellectual property rights are expensed as incurred due to the uncertainty
surrounding the drug development process and the uncertainty of future benefits. Patents and intellectual property acquired from third
parties for approved products or where there are alternative future uses are capitalized and amortized over the remaining life of the
patent.

 Segment
reporting

 The
Company's operations consist of two operating and reportable segments, the InMed Pharma segment and the BayMedica Commercial segment.

 The
InMed Pharma segment is largely organized around the research and development of small molecule pharmaceuticals drug candidates
and the BayMedica Commercial segment is largely organized around manufacturing technologies to produce and commercialize bulk rare cannabinoids
for sale as ingredients in the health and wellness industry (See Note 11).

 Leases

 At
inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the contract conveys the right
to control the use of an identified asset for a period of time in exchange for consideration.

 The
lease liability is initially measured as the present value of future lease payments excluding payments made at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental
borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. The lease liability is measured at amortized
cost using the effective interest method. It is re-measured when there is a change in future lease payments arising from a change in
an index or rate, if there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee,
or if the Company changes its assessment of whether it will exercise a purchase, extension, or termination option. When the lease liability
is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit
or loss if the carrying amount of the right-of-use asset has been reduced to nil.

 The
Company has lease arrangements that include both lease and non-lease components. The Company accounts for each separate lease component
and its associated non-lease components as a single lease component for all of its asset classes.

 F- 16

 The
Company has elected to apply the practical expedient to exclude initial direct costs such as annual operating costs from the measurement
of the right-of-use asset at the date of initial application. The Company has elected to apply the practical expedient not to recognize
right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less. The lease payments
associated with these leases is recognized as an expense on a straight-line basis over the lease term.

 Recent
Accounting Pronouncements

 The
Company has reviewed recent accounting pronouncements and concluded that they are either not applicable to the Company or that there
was no material impact or no material impact is expected in these consolidated financial statements as a result of future adoption.

 In
November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income - Expense Disaggregation Disclosures,
which requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The amendments
in this update improve financial reporting by requiring that public business entities disclose additional information about specific
expense categories in the notes to financial statements at interim and annual reporting periods. This ASU should be applied on a prospective
basis, with retrospective application permitted. The amendments in this update are effective for fiscal years beginning after December
15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently
evaluating the future effect the adoption of this ASU will have on our consolidated financial statements and related disclosures.

 In
December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure
of specific categories meeting a quantitative threshold within the income tax rate reconciliation, as well as disaggregation of income
taxes paid by jurisdiction. This ASU, which can be applied either prospectively or retrospectively, is effective for annual periods beginning
after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this ASU and expects to include
updated income tax disclosures in its fiscal year 2026.

 In
November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280): Improvements
to Reportable Segment Disclosures, which enhances reportable segment disclosure requirements primarily through expanded disclosures
around significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim
periods within fiscal years beginning after December 15, 2024. The amendments should be applied retrospectively to all prior periods
presented in the financial statements. The Company has adopted this accounting pronouncement.

 3.

 INVENTORIES

consisted of the following:

 June
 30,
 2025

 June
 30,
 2024

 $

 $

 Raw materials

 258,300

 372,695

 Work in process

 26,695

 30,817

 Finished goods

 676,178

 840,812

 961,173

 1,244,324

 In
determining any valuation allowances, the Company reviews inventory for obsolete, redundant, and slow-moving goods. During the year
ended June 30, 2025 and 2024, the write-down of inventories to net realizable value was $0 and $ 9,614 respectively. Contributing factors
to the decrease in net realizable value included lower demand and downward pricing pressure for certain products. As of June 30, 2025
and 2024, the Company has $0 and $ 103,434 respectively as a valuation allowance to reduce weighted average cost to new basis.

 4.

 PROPERTY, EQUIPMENT
 AND ROU ASSETS, NET

 Property,
equipment and ROU assets consisted of the following:

 June
 30,
 2025

 June
 30,
 2024

 $

 $

 Right-of-Use Assets (leases)

 1,901,468

 2,135,811

 Equipment

 429,091

 429,090

 Furnishing

 -

 40,409

 Property and equipment

 2,330,559

 2,605,310

 Less:
 accumulated depreciation and amortization

 ( 1,338,360
)

 ( 1,355,311
)

 Property, equipment and
 ROU assets, net

 992,199

 1,249,999

 F- 17

 Depreciation
expense on computer equipment, lab equipment and furnishing for the year ended June 30, 2025 and 2024, was $ 50,204 and $ 47,742 respectively
and was recorded in general and administrative expenses. Amortization expense related to the right-of-use assets for the year ended June
30, 2025 and 2024, was $ 321,885 and $ 384,918 respectively and was recorded in general and administrative expenses.

 5.

 INTANGIBLE ASSETS

 The
following table summarizes the Company's intangible assets:

 June
 30,
 2025

 June
 30,
 2024

 $

 $

 Intellectual property

 1,736,420

 1,736,420

 Patents

 1,191,000

 1,191,000

 Intangible assets

 2,927,420

 2,927,420

 Less:
 accumulated amortization

 ( 1,306,858
)

 ( 1,144,222
)

 Intangible assets, net

 1,620,562

 1,783,198

 Acquired
intellectual property is recorded at cost and is amortized on a straight-line basis over 18 years. Acquired patents consist of patents
related to the development of cannabinoid analogs. This intangible asset is being amortized over an estimated useful life of 18 years.
As at June 30, 2025, the definite-lived intangible assets had a weighted average estimated remaining useful life of approximately 11
years.

 Amortization
expense on intangible assets for the year ended June 30, 2025 and 2024 was $ 162,636 and $ 171,858 respectively. The Company expects amortization
expense to be incurred over the next five years as follows:

 Twelve months
 ending June 30,

 $

 2026

 2027

 2028

 2029

 2030

 Thereafter

 806,832

 Total

 1,620,562

 6.

 ACCOUNTS PAYABLE AND
 ACCRUED LIABILITIES

payable and accrued liabilities consist of the following:

 June
 30,
 2025

 June
 30,
 2024

 $

 $

 Trade payables

 370,142

 626,190

 Accrued research and development expenses

 73,143

 242,066

 Inventory related accruals

 41,004

 Employee compensation, benefits and related
 accruals

 490,405

 488,278

 Accrued general and
 administrative expenses

 469,858

 256,473

 Accounts payable and accrued
 liabilities

 1,404,283

 1,654,011

 F- 18

 7.

 SHARE CAPITAL AND RESERVES

 Authorized

 As
of June 30, 2025, the Company's authorized share structure consisted of an unlimited number of: (i) Common Shares; and (ii) preferred
shares without par value (the "Preferred Shares"). No Preferred Shares were issued and outstanding as of June 30, 2025 and
2024.

 The
Company may, from time to time, issue Preferred Shares and may, at the time of issuance, determine the rights, preferences and limitations
pertaining to these shares. Holders of preferred shares may be entitled to receive a preference payment in the event of any liquidation,
dissolution or winding up of the Company before any payment is made to the holders of Common Shares.

 Private
Offering

 On
June 25, 2025, the Company entered into a securities purchase agreement (the "Purchase Agreement") with the selling shareholder,
for the sale and issuance of an aggregate of 1,952,363 common shares (or pre-funded warrants in lieu thereof) at a purchase
price of $ 2.561 per share (or pre-funded warrant in lieu thereof). In addition, the Company agreed to issue the selling shareholder
short-term preferred investment options to purchase up to an aggregate of 1,952,363 common shares at an exercise price of $ 2.436 per
share. The foregoing transaction is referred to herein as the Private Placement. On June 26, 2025, the parties consummated the Private
Placement. The terms of the Purchase Agreement provided the selling shareholder the option of purchasing the pre-funded warrants in lieu
of common shares in such manner as to result in the same aggregate purchase price being paid by the Selling Shareholder to the Company.
The Company received gross proceeds of approximately $ 5.0 million and paid approximately $ 0.5 million in transaction costs.

 The
pre-funded warrants have an exercise price of $ 0.0001 per pre-funded warrant and can be exercised at any time from the date and time
of issuance until the pre-funded warrants are exercised in full. The terms of the pre-funded warrants preclude a holder thereof from
exercising such holder's pre-funded warrants, and us from giving effect to such exercise, if after giving effect to the issuance
of common shares upon such exercise, the holder (together with the holder's affiliates and any other persons acting as a group
together with the holder or any of the holder's affiliates) would beneficially own in excess of 9.99 % of the number of common shares
outstanding immediately after giving effect to the issuance of common shares upon such exercise. The pre-funded warrants had a relative fair
value of $ 2.9 million at the time of issuance. There were no pre-funded warrants exercised from this Private Placement as of June
30, 2025.

 The
preferred investment options issued to the selling shareholder in the Private Placement have an exercise price of $ 2.436 per share, became
exercisable immediately upon issuance and will expire eighteen months from the effective date of the Resale Registration Statement of
August 1, 2025. The preferred investment options had a relative fair value of $ 2.0 million at the time of their issuance. There
were no preferred investment options exercised from this Private Placement as of June 30, 2025.

 Concurrently
with the Purchase Agreement, the Company and the selling shareholder entered into an Amendment Letter, dated June 24, 2025, or the Existing
Investment Option Amendment, to amend 199,115 preferred investment options issued to the selling shareholder on October 24, 2023, or
the Existing Investment Options (see below), with an exercise price of $16.60, pursuant to which the Existing Investment Options were
amended to be exercisable for 199,115 common shares at a reduced exercise price of $2.436 per share in consideration for the selling
shareholder's participation in the Private Placement and the payment by the selling shareholder to the Company cash consideration
of $ 0.125 per Existing Investment Option for total cash payment to the Company of $ 25,000. The expiration date remains April 26, 2029.
The inducement contemplated by the Existing Investment Option Amendment is considered a warrant modification due to the changing of the
terms of the warrants. The modification had a fair value of $ 0.1 million as of the date of the Inducement, using a Black-Scholes model,
and is recognized as an equity issuance cost in accordance with ASC 718-20-35-3. There were no 2025 Existing Preferred Investment Options
exercised as of June 30, 2025.

 Standby
Equity Purchase Agreement (the "SEPA")

 On
December 13, 2024, the Company entered into a Standby Equity Purchase Agreement (the "SEPA") with YA II PN, LTD (the "Investor")
to sell up to $ 10 million in the aggregate of the Company's Common Shares at any time during the 36-month period following the
effective date of the SEPA (the "Effective Date"). The total number of Common Shares under the terms of the SEPA is limited
to a number equivalent to 19.99 % of the outstanding Common Shares as of the Effective Date unless certain pricing conditions are met,
which could have the effect of limiting the total proceeds made available to the Company under the SEPA. In addition, the issuance of
our Common Shares under the SEPA is subject to further limitations, including that the Common Shares beneficially owned by the Investor
and its affiliates will not exceed 9.99 % in the aggregate of our Common Shares issued and outstanding. The Common Shares issued and sold
to the Investor will be priced at 97 % of the Market Price (as defined in the SEPA) during a specified three-day pricing period.) The
Company reserves the right to set a minimum acceptable price for the Common Share issuances made under the SEPA. During the year ended
June 30, 2025, the Company issued 1,208,336 Common Shares for gross proceeds of approximately $ 6.2 million. This amount has been offset
by commitment fees and other SEPA related fees of $ 0.4 million, since at the inception of the arrangement, the fees exceeded the fair
value of the asset recognized. The SEPA was precluded from equity treatment in accordance with ASC 815-40-25 as the SEPA was not deemed
fixed according to the accounting standard.

 F- 19

 Under
the terms of the SEPA, the Company paid the Investor a one-time structuring fee in the amount of $ 25,000 and the Company is also obligated
to pay a commitment fee in an amount equal to 2.50 % of the commitment amount (or $ 0.3 million), 25 % of which was paid in December 2024.
The remaining 75 % of the commitment fee shall be paid in three equal quarterly installments beginning on the three-month anniversary
of the Effective Date, with each such installment to be paid at the Company's option either in cash or by the issuance to the Investor
of such number of Common Shares that is equal to such portion of the deferred fee divided by the lowest daily VWAP of the Common Shares
during the consecutive trading days immediately prior to the date of such installment at the Effective Date.

 On
June 13, 2025, the Company and the Investor entered into a certain amendment to Standby Equity Purchase Agreement, or the SEPA Amendment.
Pursuant to the SEPA Amendment, we may, from time to time, suspend, in our sole discretion, the use of the registration statement related
to the common shares under the SEPA by providing written notice to the Investor in the event that we determine in good faith that such
suspension is necessary: (A) to delay the disclosure of material nonpublic information concerning us, the disclosure of which at the
time is not, in our good faith opinion, in our best interest; or (B) to amend or supplement the registration statement or prospectus
so that the registration statement or prospectus shall not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading, or a Black Out Period. During any such Black Out Period, the Investor has agreed not to sell any common shares pursuant
to the registration statement, but it may sell common shares pursuant to an exemption from the registration requirements under U.S. securities
laws subject to compliance with all applicable laws. Further, pursuant to the SEPA Amendment, we agreed to not impose any Black Out Period
that is more restrictive (including, without limitation, as to duration) than the comparable restrictions that we may impose on transfers
of our equity securities by our directors and senior executive officers. In addition, we shall not deliver any advance notice during
any Black Out Period. If the public announcement of such material, nonpublic information is made during a Black Out Period, the Black
Out Period shall terminate immediately after such announcement, and we shall be obligated to immediately notify the Investor of the termination
of the Black Out Period.

At-the-Market Offering Agreement ('ATM Amendment')

 On
June 27, 2024, the Company entered into an amendment (the "ATM Amendment") to its At-the-Market Offering Agreement, dated
April 7, 2022 (the "Original ATM Agreement" and together with the ATM Amendment, the "Amended ATM Agreement"),
pursuant to which the Company may offer and sell Common Shares, from time to time, in "at the market" offerings through the
Agent. The ATM Amendment amends the Original ATM Agreement to reflect, among other provisions, updates to certain sales settlement provisions
and reimbursement terms, and to supplement the representations being made by the Company to the Agent. During the year ended June 30,
2025, the Company issued 313,242 Common Shares for gross proceeds of approximately $ 1.9 million. This amount has been offset by financing
fees of approximately $ 0.3 million. The Company's Registration Statement on Form S-3 which was previously filed with the SEC in
connection with the transactions contemplated by the Amended ATM Agreement expired on February 10, 2025.

 On
October 24, 2023, the Company entered into a securities purchase agreement (the "2023 Securities Purchase Agreement") with
two accredited institutional investors (the "Accredited Institutional Investors") for the sale (the "2023 Private Placement")
of 150,602 pre-funded warrants of the Company's common shares at a purchase price of $ 16.60 per share. The pre-funded
warrants have an exercise price of $ 0.0001 and do not have an expiration date. The pre-funded warrants had a fair value of $ 1.2
million at the time of issuance. In addition, the Company agreed, as part of the 2023 Private Placement, to issue to the purchasers
unregistered preferred investment options to purchase up to an aggregate of 199,114 common shares. These preferred investment
options have an exercise price of $ 16.60 and have a term of 5.5 years from issuance. The preferred investment options
had a fair value of $ 1.3 million at the time of their issuance (see 2025 Inducement Offer Letter above).

 Concurrently
with the Company's entry into the 2023 Securities Purchase Agreement, the Company also entered into an inducement offer letter
agreement (the "Inducement Offer Letter") with the holders of existing preferred investment options (the "Existing
Holders") to purchase up to an aggregate of 163,636 common shares issued to the Existing Holders on November 21, 2022.
Pursuant to the Inducement Offer Letter, the Existing Holders agreed to exercise for cash their existing preferred investment options
to purchase an aggregate of 163,636 common shares (at a reduced exercise price of $ 16.60 per share) in consideration of
the Company's agreement to issue new unregistered preferred investment options to purchase up to an aggregate of 327,273 shares
of the Company's common shares at an exercise price of $ 16.60 per share). Due to ownership limitations, the Accredited Institutional
Investors had 89,827 common shares held in abeyance as of the closing of the 2023 Private Placement. The abeyance shares had
a fair value of $1.5 million and the common shares issued had a fair value of $ 1.2 million on their respective issuance date.
As of June 30, 2025, the Accredited Institutional Investors had drawn down 89,827 abeyance shares.

 F- 20

 The
inducement contemplated by the Inducement Offer Letter (the "Inducement") is considered a warrant modification due to the
changing of the terms of the warrants. The modification had a fair value of $ 3.5 million as of the date of the Inducement, using
a Black-Scholes model and is recognized as an equity issuance cost in accordance with ASC 718-20-35-3.

 On
October 26, 2023, the parties consummated the 2023 Private Placement and the other transactions contemplated by the 2023 Securities Purchase
Agreement. In connection with such transactions, the Company (i) received gross proceeds of approximately $ 5.2 million and paid
approximately $ 0.6 million in cash fees and (ii) issued 20,425 warrants to our placement agent. These warrants have an exercise
price of $ 20.750 and a term of 5.5 years. The placement agent warrants had a fair value of $ 326,000 as of the date
of their issuance, using a Black-Scholes model and were recorded as an equity issuance cost.

 Common
Share Warrants

 The
assumptions used in the Black-Scholes model to value the new warrants issued during the years ended June 30, 2025 and 2024, are
set forth in the table immediately below.

 June
 30,
 2025

 $
 2.44 - 3.20

 3.68
 %

 %

 1.5

 $
 %

 June
 30,

 2024

 $
 16.60 – 20.80

 4.82
 %

 109 – 111
 %

 5.0 – 5.5

 $
 %

 The
assumptions used in the Black-Scholes model to value the modification of warrants issued during the year ended June 30, 2025 and
2024, are set forth in the table immediately below.

 June
 30,

 2025

 $
 2.44 - 16.60

 3.68
 %

 %

 3.83

 $
 -
 %

 June
 30,

 2024

 $
 16.60 – 60.80

 0.56 – 4.82
 %

 109 – 614
 %

 0 – 6.8

 $
 %

 F- 21

 A
summary of the Company's warrant activity and related information for the periods covered were as follows:

 Number
 of
 Shares
 Under
 Warrants

 Weighted

 Average
 Exercise
 Price

 Balance as at July 1, 2023

 175,802

 $
 107.40

 Granted

 648,904

 12.80

 Exercised

 ( 279,538
)

 9.80

 Expired/Cancelled

 ( 888
)

 370.00

 Balance as at June 30, 2024

 544,280

 21.20

 Warrants Granted

 4,031,630

 1.28

 Exercised

 ( 34,700
)

 -

 Expired/Cancelled

 -

 -

 Warrants Outstanding at June 30, 2025

 4,541,210

 $
 3.90

 Warrants Exercisable at June 30, 2025

 4,541,210

 $
 3.90

 As
of June 30, 2025 and 2024, the warrants exercisable and outstanding have an intrinsic value of $ 8,102,467 and $ 184,539 respectively with
a weighted average remaining life of 2 years and 4 years respectively.

 8.

 SHARE-BASED PAYMENTS

 a)

 Option
 Plan Details

 On
March 24, 2017, and as amended on November 20, 2020, the Company's shareholders approved: (i) the adoption of a new stock option
plan (the "Plan") pursuant to which the Company's Board of Directors may, from time to time, in its discretion and
in accordance with applicable regulatory requirements, grant to directors, officers, employees and consultants of the Company, non-transferable
options to purchase Common Shares, provided that the number of Common Shares reserved for issuance will not exceed twenty
 percent ( 20 %) of the issued and outstanding Common Shares at the date the options are granted (on a non-diluted
and rolling basis); and (ii) the application of the Plan to all outstanding stock options of the Company that were granted prior to March
24, 2017 under the terms of the Company's previous stock option plan. On December 18, 2024 and December 19, 2023, the Company's
Board of Directors approved the reservation of an additional 60,000 and 35,000 Common Shares under the Plan, respectively.

 As
of June 30, 2025 and June 30, 2024, there were 41,278 and 8,966 stock options immediately available for future allocation pursuant
to applicable regulatory requirements. The maximum number of options issuable under the terms of the Plan equates to 20 % of the
then issued and outstanding shares. The option price under each option shall not be less than the closing price on the day prior to the
date of grant. All options vest upon terms as set by the Board of Directors, either over time, up to 36 months, or upon the achievement
of certain corporate milestones.

 On
December 20, 2024, the Company granted 28,700 stock options to its employees and external directors. The options have an exercise price
of $ 4.14 with a term of five years. The options vest in equal installments monthly over three years.

 On
February 20, 2024, the Company issued 2,500 options to its employees pursuant to the Plan. The options have an exercise price
of $ 7.40 with a term of five years. The options vest in equal installments monthly over three years.

 On
December 23, 2023, the Company issued 25,111 options to its employees and consultants pursuant to the Plan. The options have
an exercise price of $ 7.40 with a term of 5 years. The options vest in equal installments monthly over three years.

 On
December 23, 2023, the Company additionally issued 1,420 options to members of the Company's Board of Directors pursuant
to the Plan. The options have an exercise price of $ 7.40 with a term of five years. The options vest on the earlier of (i)
December 23, 2024 or (ii) immediately prior to the next Annual General Meeting.

 F- 22

 On
December 16, 2023, the Company additionally issued 168 options to members of the Company's Board of Directors pursuant
to the Plan. The options have an exercise price of $ 26.40 with a term of five years. The options vest on the earlier of (i)
December 16, 2023 or (ii) immediately prior to the next Annual General Meeting.

 The
assumptions used in the Black-Scholes model during the years ended June 30, 2025 and 2024, are set forth in the table immediately below:

 2025

 $
 4.14

 4.28
 %

 %

 3.6

 $
 %

 June
 30,

 2024

 7.40

 3.95 - 4.30
 %

 116 - 203
 %

 3.5 - 3.6

 $
 %

 The
following is a summary of changes in outstanding options from July 1, 2023 to June 30, 2025:

 Number

 Weighted

 Average
 Exercise
 Price

 Balance as at July 1, 2023

 5,132

 $
 625.60

 Granted

 29,020

 7.40

 Expired/Forfeited

 ( 430
)

 3,286.80

 Balance as at June 30, 2024

 33,722

 $
 56.69

 Granted

 28,700

 4.14

 Expired/Forfeited

 ( 1,012
)

 70.43

 Balance as at June
 30, 2025

 61,410

 32.53

 June 30, 2024:

 Vested and exercisable

 5,646

 $
 298.00

 Unvested

 28,076

 $
 8.00

 June 30, 2025:

 Vested and exercisable

 23,844

 $
 75.35

 Unvested

 37,566

 $
 5.34

 Total
expenses arising from share-based payment transactions recognized during the years ended June 30, 2025 and 2024 were $ 119,307 and $ 137,714,
respectively, of which $ 71,280 and $ 80,513, respectively, was allocated to general and administrative expenses, $ 46,637 and $ 56,408,
respectively, was allocated to research and development expenses, and $ 1,391 and $ 793, respectively, was allocated to Cost of Goods
sold.

 Unrecognized
compensation cost at June 30, 2025 related to unvested options was $ 72,549 which will be recognized over a weighted-average vesting
period of approximately 1.22 years.

 F- 23

 9.

 LEASE OBLIGATIONS

 The
Company is committed to minimum lease payments as follows:

 Maturity
 Analysis

 June
 30,
 2025

 $

 Year

 475,087

 Year

 313,230

 Year

 -

 Year

 -

 Year

 -

 More
 than five years

 -

 Total
undiscounted lease liabilities

 788,317

 Less:
 imputed interest

 ( 47,055
)

 Present
 value of lease liabilities

 741,262

 Less:
 Current portion of lease liabilities

 ( 435,507
)

 Non-current
 portion of lease liabilities

 305,755

 On
July 29, 2024, the Company entered into a lease agreement for new office space in Vancouver, British Columbia. This office occupies approximately
 2,243 square feet with a monthly basic rental rate and operating charges of an estimated C$ 12,296 for the two-year term of the agreement.
The Company used an incremental borrowing rate of 7 % and recognized an ROU asset and corresponding operating lease liability of
$ 205,201.

 On
October 5, 2023, BayMedica amended its lease located in South San Francisco, California, in order to extend its lease to May 14, 2027.
The Company is obligated to pay $ 1,295,759 over the three-year period unless terminated before the end of the period. The Company used
an incremental borrowing rate of 6.15 % and recognized a ROU asset and corresponding operating lease liability of $ 953,935. The Company
can terminate the lease with three months' written notice and a payment of $ 187,938.

 10.

 INCOME TAXES

 The
following is a reconciliation of income taxes calculated at the combined Canadian federal and provincial income statutory corporate tax
rate of 27.0 % to the tax expense:

 2025

 2024

 $

 $

 US net income (loss) before taxes

 423,063

 ( 1,756,965
)

 Canada net income (loss)
 before taxes

 ( 8,585,196
)

 ( 5,911,485
)

 Net income (loss) before
 taxes

)

 ( 7,668,450
)

 Income tax expense (recovery) at the statutory
 rate

 ( 2,229,159
)

 ( 1,966,981
)

 Increase (reduction) in income taxes resulting
 from:

 Change in valuation allowance

 4,167,827

 1,625,998

 State taxes

 76,974

 ( 21,942
)

 Permanent differences

 34,335

 39,252

 True up to the return

 2,982

 ( 303,595
)

 State Rate Change

 8,086

 2,949

 Foreign exchange differences

 ( 1,589,832
)

 618,907

 Share issuance cost capitalized
 in equity

 ( 492,446
)

 ( 123,415
)

 Other

 21,233

 135,927

 Income tax expense

 -

 7,100

 As of June 30, 2025, the Company has non-capital loss carry-forwards
of approximately $ 89.2 million (June 30, 2024 - $ 72.7 million) available to offset future taxable income in Canada. These non-capital
loss carryforwards begin to expire in 2026. As of June 30, 2025, the Company has US Federal net operating losses of $ 5.4 million and state
net operating losses of $ 2.7 million. As of June 30, 2024, the Company has US Federal net operating losses of $ 7.5 million and state net
operating losses of $ 3.7 million. The US Federal NOLs have an indefinite carryforward period, and the state NOLs begin to expire in 2042.

 F- 24

 Deferred
tax assets and liabilities are as follows:

 2025

 2024

 $

 $

 Non-capital losses

 25,463,223

 21,501,476

 Financing costs

 733,014

 861,867

 Accrued expenses

 61,845

 12,831

 Intangible assets, net

 496,440

 146,193

 Tax credits

 221,406

 241,270

 Lease liability

 108,525

 164,288

 27,084,453

 22,927,925

 Intangible assets, net

 ( 57,977
)

 -

 Property and equipment, net

 ( 98,627
)

 ( 116,231
)

 Lease obligations

 ( 106,029
)

 ( 157,701
)

 ( 262,633
)

 ( 273,932
)

 Net deferred tax asset

 26,821,820

 22,653,993

 Valuation allowance

 ( 26,821,820
)

 ( 22,653,993
)

 -

 -

 A
full valuation allowance has been applied against the net deferred tax assets because it is more likely than not that future taxable
income will not be available against which the Company can utilize the benefits therefrom.

 The
Company recognizes tax benefits from an uncertain tax position only if it is more likely than not that the tax position will be sustained
on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated
financial statements from any such position would be measured based on the largest benefit that has a greater than fifty percent
likelihood of being realized upon ultimate settlement. It is the Company's policy to recognize interest and penalties accrued on
any uncertain tax benefits as a component of income tax expense.

 The
Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and Canada. The Company's U.S.
Federal and State tax returns for the years 2021 through 2024 remain subject to examination by their respective taxing authorities.

 The
Company is subject to taxation at the federal, state, and local levels in the United States and Canada.

 11.

 SEGMENT INFORMATION

 The
Company reports segment information based on the management approach, which designates the internal reporting used by the Chief Operating
Decision Maker ("CODM"), the Company's Chief Executive Officer and the senior management team, for making decisions
and assessing performance as the source of the Company's reportable segments. The CODM allocates resources and assesses the performance
of each operating segment based on potential licensing opportunities, historical and potential future product sales, operating expenses,
and operating income (loss) before interest and taxes. The Company has determined its reportable segments to be 'InMed Pharma'
and 'BayMedica Commercial' based on the information used by the CODM. Other than cash, cash equivalents and short-term investments
("Unrestricted cash") balances, the CODM does not regularly review asset information by reportable segment and, therefore,
the Company does not report asset information by reportable segment.

 The
InMed Pharma segment is largely organized around the research and development of small molecule pharmaceuticals drug candidates and the
BayMedica Commercial segment is largely organized around manufacturing technologies to produce and commercialize bulk rare cannabinoids
for sale as ingredients in the health and wellness industry. Total assets held in the 'InMed Pharma' segment as of June 30,
2025 and 2024 were $ 13.7 million and $ 9.2 million, respectively. Total assets as of June 30, 2025 and 2024, held in the BayMedica Commercial
segment were $ 1.9 million and $ 2.6 million, respectively.

 F- 25

 The
following table presents information about the Company's reportable segments for the years ended June 30, 2025 and 2024:

 Year
 Ended June 30,

 2025

 2024

 InMed

 Total

 InMed

 Total

 $

 $

 $

 $

 $

 $

 Sales

 -

 4,942,633

 4,942,633

 -

 4,597,730

 4,597,730

 Cost of sales

 -

 ( 3,236,047
)

 ( 3,236,047
)

 -

 ( 3,496,817
)

 ( 3,496,817
)

 Operating
 expenses

 ( 8,474,641
)

 ( 1,178,411
)

 ( 9,653,052
)

 ( 8,400,411
)

 ( 896,853
)

 ( 9,297,264
)

 Other
 income (expense)

 155,882

 -

 155,882

 532,782

 ( 4,881
)

 527,901

 Expense

 ( 371,549
)

 -

 ( 371,549
)

 -

 -

 -

 (Loss)
 income before income taxes

 ( 8,690,308
)

 528,175

)

 ( 7,867,629
)

 199,179

 ( 7,668,450
)

 Unrestricted
 cash

 10,684,376

 391,495

 11,075,871

 5,669,113

 902,497

 6,571,610

 12.

 COMMITMENTS AND CONTINGENCIES

to the terms of agreements with various contract research organizations, as of June 30, 2025, the Company is committed for contract research
services and materials at a cost of approximately $ 0.2 million, expected to occur in the twelve months following period.

to the terms of agreements with various vendors, as of June 30, 2024, the Company is committed for contract materials and equipment at
a cost of approximately $ 0.1 million, expected to occur in the twelve months following June 30, 2025.

to the terms of a certain Technology Assignment Agreement, dated as of May 31, 2017 (the "Technology Agreement"), between
the Company and the University of British Columbia ("UBC"), the Company is committed to pay royalties to UBC on certain licensing
and royalty revenues received by the Company for biosynthesis of certain drug products that are covered by the Technology Agreement.
To date, no payments have been required to be made.

to the terms of a certain Collaborative Research Agreement, dated as of December 13, 2018, between the Company and UBC, pursuant
to which the Company owns all rights, title and interests in and to any intellectual property, in addition to funding research at UBC,
the Company is committed to make a one-time payment upon filing of any PCT patent application arising from the research. To date, one
such payment has been made to UBC.

to the terms of a certain Contribution Agreement, dated as of November 1, 2018, between the Company and National Research Council Canada,
as represented by its Industrial Research Assistance Program ("NRC-IRAP"), under certain circumstances contributions received,
including the disposition of the underlying intellectual property developed in part with NRC-IRAP contributions, may become repayable.
As of June 30, 2024, there have been no triggering events to cause a repayment.

investments include guaranteed investment certificates, with one year terms, of $ 43,384 and $ 43,064 as of June 30, 2025 and 2024 respectively,
that are pledged as security for a corporate credit card.

 In
addition to the foregoing, the Company has entered into certain agreements in the ordinary course of operations that may include indemnification
provisions, which are common in such agreements. In some cases, the maximum amount of potential future indemnification is unlimited;
however, the Company currently holds commercial general liability insurance. This insurance may limit the Company's overall liability
and may enable the Company to recover a portion of any future amounts paid. Historically, the Company has not made any indemnification
payments under such agreements, and it believes that the fair value of these indemnification obligations is minimal. Accordingly, the
Company has not recognized any liabilities relating to these obligations for any period presented.

 F- 26

entered into a technology license agreement ("Agreement") with a third party (the "Licensor") on February 15,
2021. Under the Agreement, BayMedica agreed to license a proprietary process in the United States where it has a pending U.S. patent
application in exchange for certain annual royalty payments contingent on the net sales of products made using the licensed process.
The royalty payments were to be made for the period beginning on the first commercial sale of the licensed product and ending on the
later of the expiration of the Licensor's patent rights or ten years after the first commercial sale of such licensed product.

 On
April 29, 2025, BayMedica received a letter from the Licensor of its intention to commence arbitration proceedings pursuant to the Agreement
together with a Notice of Arbitration (the "Patent License Matter"). The Patent License Matter will be subject to final,
binding and non-appealable arbitration under the Arbitration Act, 1991 (Ontario) and determined pursuant to Ontario law.

 In
its Notice of Arbitration, the Licensor takes the position that the annual royalty payments are not simply required to maintain an exclusive
license with respect to the proprietary process, but rather function as guaranteed annual minimum payments that BayMedica must make for
the duration of the Agreement regardless of net sales. On the basis of this theory, and this theory alone, the Licensor seeks relief
against BayMedica including (a) approximately US $ 3.4 M in annual payments for 2022 through 2024 and (b) a declaration that BayMedica
is liable to pay certain annual minimum payments of approximately $ 2.3 M for the remainder of the term of the Agreement. BayMedica disputes
the amount owing and to be paid over the duration of the agreement. BayMedica vehemently contests the Licensor's interpretation
of the Agreement and its position in the Patent License Matter, and intends to take all necessary steps to vigorously defend the Patent
License Matter.

 While
we are not able to predict the outcome of the Patent License Matter with any certainty, an unfavorable outcome to BayMedica would have
a material adverse impact on the Company's business and financial condition and on BayMedica's ability to continue operations.

 13.

 RELATED PARTY TRANSACTIONS

 On
February 11, 2022, the Board of Directors appointed Janet Grove as a director of the Company, a position she held until February 10,
2025, at which time the Company's Board of Directors (the "Board"), upon the outcome of the Nominating & Governance
Committee's determination and recommendation, elected to accept her resignation from the Board. Ms. Grove is a Partner of Norton
Rose Fulbright Canada LLP ("NRFC"). During the period from July 1, 2024 to February 10, 2025, NRFC and Norton Rose Fulbright
US LLP ("NRFUS" and together with NRFC, "NRF") rendered legal services in the amount of $ 316,977 to the Company.
During the twelve months ended June 30, 2024, NRF rendered legal services in the amount of $ 226,793, to the Company. These transactions
were in the normal course of operations and were measured at the exchange amount which represented the amount of consideration established
and agreed to by NRF. No legal services rendered by NRF were provided by Ms. Grove directly.

 14.

 SUBSEQUENT EVENTS

 The
Company has evaluated subsequent events through the date of the filing of this Annual Report on Form 10-K and determined that there have
been no events that have occurred that would require adjustments to our disclosures in the consolidated financial statements except for
the matters described below.

 The
One Big Beautiful Bill Act ('OBBBA'), passed by the House of Representatives in May 2025 and signed into law on July 4, 2025
by President Trump, marks a pivotal shift in tax treatment for research and development (R&D) expenses. Effective for tax years beginning
after December 31, 2024, the bill reverses the Tax Cuts and Jobs Act's requirement to capitalize and amortize domestic R&D
costs over five years, restoring full immediate expensing. Businesses can also deduct unamortized expenses from prior years in
2025. The Company is currently evaluating the impact of the OBBBA.

 Subsequent
to June 30, 2025, 382,000 Pre-Funded Warrants have been exercised under the 2025 Securities Purchase Agreement.

 F- 27

 ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 Please refer to "Item
4.01 - Changes in Registrant's Certifying Accountant" in our Current Report on Form 8-K, filed with the SEC on June 13, 2025.

 ITEM
9A. CONTROLS AND PROCEDURES

 Evaluation
of Disclosure Controls and Procedures

 Our
management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of
our disclosure controls and procedures as of June 30, 2025. The term "disclosure controls and procedures," as defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that
information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports
that it files or submits under the Exchange Act is accumulated and communicated to its management, including its principal executive
and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that
any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives
and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based
on the evaluation of our disclosure controls and procedures as of June 30, 2025, our principal executive officer and principal financial
officer concluded that, as of such date, our disclosure controls and procedures were effective.

 Management's
Report on Internal Control over Financial Reporting

 Our
management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over
financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, as a process designed
by, or under the supervision of, the Company's principal executive and principal financial officers and effected by the company's
board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes
those policies and procedures that:

 Pertain to the maintenance
 of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

 Provide reasonable assurance
 that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
 principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors
 of the Company; and

 Provide reasonable assurance
 regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could
 have a material effect on the financial statements.

 Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those
systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 Our
management assessed the effectiveness of our internal control over financial reporting as of June 30, 2025. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated
Framework (2013). Based on this evaluation, management has concluded our internal control over financial reporting as of June 30, 2025
was effective.

in Internal Control over Financial Reporting

 There
were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d)
and 15d-15(d) of the Exchange Act that occurred during the year ended June 30, 2025 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

 ITEM
9B. OTHER INFORMATION

the three months ended June 30, 2025, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement"
or "non-Rule 10b5-1 trading arrangement," as each term is defined in item 408(a) of Regulation S-K.

 ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENTS INSPECTIONS

 Not
applicable

 PART
III

 The
information required by Part III is omitted from this report because we will file a definitive proxy statement (the "2024 Proxy
Statement") for our 2025 Annual Meeting of Stockholders within 120 days after the end of our 2025 fiscal year pursuant to Regulation
14A of the Exchange Act. If the 2025 Proxy Statement is not filed within 120 days after the end of the fiscal year covered by this Annual
Report, the omitted information will be included in an amendment to this Annual Report filed not later than the end of such 120-day period.

 ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 The
response to this item is incorporated by reference from the discussion responsive thereto under the captions "Management and Corporate
Governance," "Section 16(a) Beneficial Ownership Reporting Compliance," and "Code of Business Conduct and Ethics"
in the Company's Proxy Statement for the 2025 Annual Meeting of Stockholders.

 ITEM
11. EXECUTIVE COMPENSATION

 The
response to this item is incorporated by reference from the discussion responsive thereto under the caption "Executive Officer
and Director Compensation" in the Company's Proxy Statement for the 2025 Annual Meeting of Stockholders.

 We
have adopted a clawback policy in which we may seek the recovery or forfeiture of incentive compensation paid by us, including cash,
equity or equity-based compensation, in the event we restate our financial statements under certain circumstances. The clawback policy
applies to our Section 16 officers, any employee who was eligible to receive incentive compensation and whose conduct contributed to
the need for a restatement, and any other former Section 16 officer or other employee who contributed to the need for such restatement.
A copy of the clawback policy has been filed as Exhibit 97.1 to this Annual Report.

 ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The
response to this item is incorporated by reference from the discussion responsive thereto under the captions "Security Ownership
of Certain Beneficial Owners and Management," and "Equity Compensation Plan Information" in the Company's Proxy
Statement for the 2025 Annual Meeting of Stockholders.

 ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 The
response to this item is incorporated by reference from the discussion responsive thereto under the captions "Certain Relationships
and Related Person Transactions" and "Management and Corporate Governance" in the Company's Proxy Statement for
the 2024 Annual Meeting of Stockholders.

 ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 Our
independent registered public accounting firm is CBIZ CPAs P.C. PCAOB Auditor ID 199. The information required by this item will be included
in our definitive proxy statement with respect to our 2025 Annual Meeting of Shareholders to be filed with the SEC and is incorporated
herein by reference.

 PART
IV

 ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 The
following documents are being filed as part of this report:

 (1)

 The
 following financial statements of the Company and the report of CBIZ CPAs P.C. The reports of the
 independent public accounting firms are included in Part II, Item 8:

 Reports of Independent Registered Public Accounting Firm

 Reports of Independent Registered Public Accounting Firm

 Balance Sheets

 Statements of Operations and Comprehensive Loss

 Statements of Shareholders' Equity

 Statements of Cash Flows

 Notes
 to Consolidated Financial Statements

 (2)

 All financial statement
 supporting schedules are omitted because the information is inapplicable or presented in the Notes to Consolidated Financial Statements.

 (3)

 A list of exhibits filed
 with this report or incorporated herein by reference is found in the Exhibit Index immediately following the signature page of this
 Annual Report.

 EXHIBIT

 NUMBER

 DESCRIPTION

 2.1

 and Restated Agreement and Plan of Reorganization, dated as of October 13, 2021, by and among InMed Pharmaceuticals Inc., InMed LLC,
 BayMedica, Inc., BM REP, LLC, as the stockholder representative, and certain stockholders thereto (incorporated by reference to Exhibit
 2.1 to the Company's Current Report on Form 8-K filed with the SEC on October 13, 2021).

 3.1

 and Restated Articles of InMed Pharmaceuticals Inc. (incorporated by reference to Exhibit 3.1 to the Company's Registration
 Statement on Form S-1 filed with the SEC on June 19, 2020).

 4.1

 Form
 of Specific Common Share Certificate (incorporated by reference to Exhibit 4.3 to the Company's Registration Statement on Form
 S-1 filed with the SEC on July 13, 2021).

 4.2

 Form
 of Common Shares Purchase Warrant (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed
 with the SEC on November 12, 2020).

 4.3

 Form
 of Preferred Investment Option (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed
 with the SEC on June 6, 2022).

 4.4

 Warrant
 Amendment Agreement (incorporated by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K filed with the SEC
 on June 6, 2022).

 4.5

 Form
 of Placement Agent Preferred Investment Option (incorporated by reference to Exhibit 4.3 to the Company's Current Report on
 Form 8-K filed with the SEC on September 14, 2022).

 4.6

 Form
 of Placement Agent Preferred Investment Option (incorporated by reference to Exhibit 4.3 to the Company's Current Report on
 Form 8-K filed with the SEC on November 22, 2022).

 4.7

 Form
 of Preferred Investment Option (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed
 with the SEC on October 30, 2023).

 4.8

 Form
 of Placement Agent Preferred Investment Option (incorporated by reference to Exhibit 4.3 to the Company's Current Report on
 Form 8-K filed with the SEC on October 30, 2023).

 4.19

 Description
 of Securities of InMed Pharmaceuticals Inc. (incorporated by reference to Exhibit 4.13 to the Company's Annual Report on Form
 10-K filed with the SEC on September 30, 2024).

 10.1

 InMed
 Pharmaceuticals Inc. 2017 Amended and Restated Stock Option Plan, as amended (incorporated by reference to Exhibit 4.2 to the Company's
 Current Report on Form S-8 filed with the SEC on March 5, 2021).

 10.2

 Form
 of Stock Option Agreement pursuant to the InMed Pharmaceuticals Inc. 2017 Amended and Restated Stock Option Plan (incorporated by
 reference to Exhibit 4.3 to the Company's Current Report on Form S-8 filed with the SEC on March 5, 2021).

 10.3

 and Restated Executive Employment Agreement, dated March 1, 2021, between Eric A. Adams and InMed Pharmaceuticals Inc. (incorporated
 by reference to Exhibit 10.3 to the Company's Registration Statement on Form S-1 filed with the SEC on July 13, 2021).

 10.4

 Amendment
 dated July 11, 2022 to Eric Adams' Employment Agreement dated 1 March 2021 (incorporated by reference to Exhibit 10.1 to the
 Company's Current Report on Form 8-K filed with the SEC on July 18, 2022).

 10.5

 and Restated Executive Employment Agreement, dated March 1, 2021, between Eric Hsu and InMed Pharmaceuticals Inc. (incorporated by
 reference to Exhibit 10.4 to the Company's Registration Statement on Form S-1 filed with the SEC on July 13, 2021).

 10.6

 Employment
 Agreement dated July 15, 2022, between InMed Pharmaceuticals Inc. and Michael Woudenberg (incorporated by reference to Exhibit 10.1
 to the Company's Current Report on Form 8-K filed with the SEC on July 20, 2022)

 10.7

 Form
 of InMed Pharmaceuticals Inc. Indemnification Agreement entered into with each member of the board of directors and Executive Officers
 (incorporated by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K filed with the SEC on September 24,
 2021)

 10.8

 Amendment
 No. 1, dated June 27, 2024, to the At the Market Offering Agreement dated April 7, 2022 by and between InMed Pharmaceuticals Inc.,
 and H.C. Wainwright & Co., LLC (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form
 8-K filed with the SEC on June 28, 2024).

 10.9

 Scientific Advisory Board
 Consulting Agreement, dated as of September 4, 2024, between the Company and Barry Greenberg, Ph. D. (incorporated by reference to
 Exhibit 10.20 to the Company's Annual Report on Form 10-K filed with the SEC on September 30, 2024).

 10.10

 Form
 of Inducement Letter, dated October 24, 2023 (incorporated by reference to Exhibit 10.3 to the Company's Current Report on
 Form 8-K filed with the SEC on October 30, 2023).

 10.11

 Form
 of Securities Purchase Agreement, dated October 24, 2023 (incorporated by reference to Exhibit 10.1 to the Company's Current
 Report on Form 8-K filed with the SEC on October 30, 2023).

 10.12

 Standy
 Equity Purchase Agreement, dated December 13, 2024, by and between InMed Pharmaceuticals Inc. and YA II PN, LTD (incorporated by
 reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on December 18, 2024).

 10.13

 Amendment to Standy Equity
 Purchase Agreement, dated June 13, 2025, by and between InMed Pharmaceuticals Inc. and YA II PN, LTD (incorporated by reference to
 Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on June 13, 2025).

 10.14

 Form of Securities Purchase Agreement, dated June 24, 2025 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on June 30, 2025).

 10.15

 Form
 of Existing Investment Options Amendment (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form
 8-K filed with the SEC on June 30, 2025).

 19.1*

 InMed Pharmaceuticals Inc.
 Insider Trading Policy

 21.1

 Subsidiaries
 of the Company (incorporated by reference to Exhibit 21.1 to the Company's Annual Report on Form 10-K filed with the SEC on
 September 30, 2024).

 23.1*

 Consent of CBIZ CPAs P.C.

 23.2*

 Consent of Marcum LLP.

 31.1*

 Certification of Principal
 Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities and Exchange Act of 1934, as amended, pursuant
 to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2*

 Certification
 of Principal Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities and Exchange Act of 1934, as amended,
 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1*

 Certification
 of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
 2002.

 32.2*

 Certification
 of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
 2002.

 97.1

 Compensation Clawback Policy
 (incorporated by reference to Exhibit 97.1 to the Company's Annual Report on Form 10-K filed with the SEC on September 30,
 2024).

 101.INS*

 101.SCH*

 Schema Document.

 101.CAL*

 Calculation Linkbase Document.

 101.DEF*

 Definition Linkbase Document.

 101.LAB*

 Label Linkbase Document.

 101.PRE*

 Presentation Linkbase Document.

 104*

 Cover Page Interactive

 ITEM
16. 10-K SUMMARY

 Not
applicable.

 SIGNATURES

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

 INMED PHARMACEUTICALS
 INC.

 (Registrant)

 September 22, 2025

 By:

 /s/
 Netta Jagpal

 Netta Jagpal

 Chief Financial Officer

to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/
 Eric A. Adams

 President,
 Chief Executive Officer and Director

 Eric
 A. Adams

 (Principal
 Executive Officer)

 /s/
 Netta Jagpal

 Chief Financial Officer

 Netta
 Jagpal

 (Principal Financial Officer and Principal Accounting Officer)

 /s/
 Andrew Hull

 Director

 Andrew
 Hull

 (Chairman
 to the Board of Directors)

 /s/
 Bryan Baldasare

 Director

 Bryan
 Baldasare

 /s/
 Nicole Lemerond

 Director

 Nicole Lemerond

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