Jul 7, 2023

5-day change Jun. 29 Jun. 29 Today at 04:34 pm Date: June 29, 2023 2 12 46 46 GENERAL In this Annual Information Form (this "AIF"), unless otherwise noted or the context indicates otherwise, references to "Reunion", the "Company", "we", "us" and "our" refer to Reunion Neuroscience Inc. (formerly Field Trip Health Ltd.) and its subsidiaries. All financial information in this AIF is prepared in Canadian dollars and using International Financial Reporting Standards as issued by the International Accounting Standards Board. Unless otherwise noted herein, this AIF applies to the business activities and operations of the Company for the fiscal year ended March 31, 2023, as updated to June 29, 2023 unless otherwise indicated. All dollar amounts in this AIF are expressed in Canadian dollars, except as otherwise indicated. References to US$ or "U.S. dollars" are to United States dollars. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This document includes "forward-looking information" and "forward-looking statements" within the meaning of Canadian securities laws and within the meaning of the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, made by Reunion that address activities, events or developments that Reunion expects or anticipates will or may occur in the future are forward-looking statements, including statements preceded by, followed by or that include words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements may relate to future financial conditions, results of operations, plans, objectives, performance or business developments. These statements speak only as of the date they are made and are based on information currently available and on management's current expectations and assumptions concerning Reunion's future events, financial conditions, results of operations, plans, objectives, performance, business developments, objectives or milestones. Actual results and developments may differ materially from those contemplated by these statements. Forward-looking statements in this document include statements related to the business and future activities of Reunion, and developments related to, Reunion after the date of this document, including but not limited to and about: · future business strategy, competitive strengths, goals, expansion and growth of Reunion's business, operations and plans, changes in laws or regulatory requirements; · · the sufficiency of our intellectual property protections and rights; Forward-looking statements are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from that which are expressed or implied by such forward-looking statements. These risks and uncertainties include those related to: · · the risks and costs associated with being a publicly traded company, the market demand for the Common Shares; · the risk that the previously announced take-private transaction with MPM BioImpact is delayed or is not consummated, including Reunion's ability to obtain the requisite shareholder and court approvals and the satisfaction or waiver of other conditions to the completion of the arrangement agreement, and the costs associated therewith; Operational Risks: · · the effect of health epidemics including COVID19 on aspects of our business or operations, including delays in the regulatory approval process, contracting with clinical sites and engaging in clinical trials; and · difficulty in enforcing judgments and effecting service of process on directors and officers. Other risks and uncertainties not presently known to the Company or that the Company presently believe are not material could also cause actual results or events to differ materially from those expressed in the forward-looking statements contained herein. There can be no assurance that such forward-looking information and statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such information and statements. Accordingly, readers should not place undue reliance on forward-looking information and statements. The forward-looking information and statements contained herein are presented for the purposes of assisting readers in understanding Reunion's expected financial and operating performance and Reunion 's plans and objectives and may not be appropriate for other purposes. The forward-looking information and statements contained in this document represent Reunion 's views as of the date of this document and forward-looking information and statements contained in the documents incorporated by reference herein represent Reunion 's views as of the date of such documents, unless otherwise indicated in such documents. Reunion anticipates that subsequent events and developments may cause its views to change. However, while Reunion may elect to update such forward-looking information and statements at a future time, it has no current intention of doing so except to the extent required by applicable law. A more detailed discussion of risks and other factors are included under the heading "Risk Factors" in this AIF or are otherwise disclosed in the public filings made with applicable securities regulatory authorities and available under Reunion's SEDAR and EDGAR profiles. Foreign Currency Information The Company's expenses are denominated in Canadian dollars and some of its operations are in the U.S. The Company may be adversely affected by foreign currency fluctuations. A significant portion of its expenditures are in other currencies, and the Company is therefore subject to foreign currency fluctuations which may, from time to time, impact its financial position and results of operations. 4 MARKET AND INDUSTRY DATA Unless otherwise indicated, the market and industry data contained or incorporated by reference in this AIF is based upon information from independent industry publications, market research, analyst reports and surveys and other publicly available sources. Although the Company believes these sources to be generally reliable, market and industry data is subject to interpretation and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any survey. The Company has not independently verified any of the data from third party sources referred to or incorporated by reference herein, and accordingly the accuracy and completeness of such data is not guaranteed. GLOSSARY OF TERMS In addition to terms defined elsewhere in this AIF, the following terms, when used in this AIF, will have the following meanings (unless otherwise indicated): "ABCA" means the Business Corporations Act (Alberta), as from time to time amended or re-enacted, and includes any regulations made pursuant thereto. "Agency Agreement" has the meaning set out in General Development of the Business - History of the Company. "Agents" has the meaning set out in General Development of the Business - History of the Company. "AKS" has the meaning set out in Risk Factors - Failure to Comply with Applicable Federal and State Anti-Kickback Laws. "Amalgamation Agreement" means the amalgamation agreement dated August 21, 2020 between the Company, FTP and Subco. "Arrangement" has the meaning set out in Corporate Structure. "Arrangement Agreement" means the amended and restated arrangement agreement dated as of May 18, 2022 between the Company and Field Trip H&W. "Associate" has the meaning set out in Section 1(1) of the Securities Act (Ontario), RSO 1990, c. S.5. "Aurora" has the meaning set out in Directors and Executive Officers. "Board" means the board of directors of the Company. "CBCA" means the Canada Business Corporations Act, as from time to time amended or re-enacted, and includes any regulations made pursuant thereto. "CDSA" means the Controlled Drugs and Substances Act (Canada), as from time to time amended or re-enacted, and includes any regulations made pursuant thereto. "cGMP" has the meaning set out in Description of the Business - Regulatory Environment. "CIPO" means Canadian Intellectual Property Office. "Circular" means the management information circular of the Company dated May 20, 2022 regarding the Meeting as filed on SEDAR on May 24, 2022. "Clinics" means the clinics either owned and/or operated by Field Trip H&W. "Clinics Business" The business of operating the Clinics for ketamine-enhanced psychotherapy, psychedelic-enhanced psychotherapy and psychedelic-integration psychotherapy, where applicable, together with certain digital assets and intellectual property necessary to conduct such business and the Jamaica plant-based research division acquired by Field Trip H&W in connection with the Arrangement. "Clinic Operations" has the meaning set out in Corporate Structure. 5 "CMO" has the meaning set out in Description of the Business - Regulatory Environment. "Common Shares" means common shares in the capital of the Company, including, as the context requires, the new common shares of the Company issued in connection with the Arrangement. "Company" or "Reunion" means Reunion Neuroscience Inc., a company existing under the CBCA, being Newton after the completion of the Transaction, on a consolidated basis which carries on the business and operations of FTP, following the Transaction. "Company Option" means the option to purchase Common Shares granted pursuant to the Company Option Plan. "Company Incentive Plan" means the equity compensation plan of the Company, dated August 11, 2022. "Consolidation" means the consolidation of Common Shares on the basis of between 5 post-consolidation Common Shares to 1 pre-consolidation shares, completed on August 11, 2022. "Continuance" has the meaning set out in Corporate Structure - Name, Address and Incorporation. "Court" has the meaning set out in Corporate Structure - Reorganization and Take-Private Transaction. "CRL" has the meaning set out in Description of the Business - Regulatory Environment - Pharmaceutical Development and Approval Requirements - United States. "CRO" has the meaning set out in Description of the Business - Regulatory Environment. "CSA" means the Controlled Substances Act (21 U.S.C. § 811), as from time to time amended or re-enacted, and includes any regulations made pursuant thereto. "CSE" means the Canadian Securities Exchange. "DEA" means the United States Drug Enforcement Agency. "DEA License" has the meaning set out in Description of the Business - Regulatory Environment - Controlled Substances - Canada and the U.S. "Escrow Agreement" means the escrow agreement entered into in connection with the initial listing of the Common Shares on the CSE, among the Company, Odyssey and certain directors and senior officers of the Company entered into an escrow agreement, pursuant to which certain Pre-Arrangement Shares were subject to restrictions on transfer until April 6, 2022. "Expense Reimbursement" has the meaning set out in Corporate Structure - Reorganization and Take Private Transaction. "FDA" means the United States Food and Drug Administration. "FDCA" has the meaning set out in Description of the Business - Regulatory Environment - Pharmaceutical Development and Approval Requirements - United States. "Field Trip" refers to Field Trip Health Ltd., the prior name of Reunion. "Field Trip H&W" has the meaning set out in Corporate Structure. "Field Trip USA" means Field Trip Health USA Inc., a company existing under the laws of Delaware and an indirect wholly-owned subsidiary of the Company. "FT Digital" has the meaning set out in Description of the Business. "FT Discovery" has the meaning set out in General Development of the Business - History of the Company. 6 "FT Health" has the meaning set out in General Development of the Business - History of the Company. "FTHW Shares" has the meaning set out in General Development of the Business - History of the Company. "FTNP" means Field Trip Natural Products Limited, a company existing under the laws of Jamaica and a former indirect wholly-owned subsidiary of the Company. "FTP" means Field Trip Psychedelics Inc., prior to giving effect to the Transaction, a company existing under the CBCA via articles of incorporation dated April 2, 2019 as amended on October 10, 2019, January 17, 2020 and January 28, 2020, and, where applicable, each subsidiary thereof. "FTP Common Shares" means Class A shares in the capital of FTP. "FT Private Placement" has the meaning set out in General Development of the Business - History of the Company. "GCP" has the meaning set out in Description of the Business - Regulatory Environment. "GLP" has the meaning set out in Description of the Business - Regulatory Environment. "HPFB" has the meaning set out in Description of the Business - Regulatory Environment - Pharmaceutical Development and Approval Requirements - Canada. "IND" has the meaning set out in Description of the Business - Regulatory Environment. "Independent Valuator" means PI Financial Corp. "Insider" when used in relation to an Company, means: (a) a directors or senior officer of the Company, (b) a director or senior officer of a company that is an Insider or subsidiary of the Company, (c) a person that beneficially owns or controls, directly or indirectly, voting shares carrying more than 10% of the voting rights attached to all outstanding voting securities of the Company, and (d) the Company itself if it holds any of its own securities. "IRB" has the meaning set out in Description of the Business - Regulatory Environment - Pharmaceutical Development and Approval Requirements - United States. "IRA" has the meaning set out in General Development of the Business - History of the Company. "ISO" has the meaning set out in General Development of the Business - History of the Company. "Jamaica Facility" has the meaning set out in General Development of the Business - History of the Company. "Jamaica SPA" has the meaning set out in General Development of the Business - History of the Company. "January BD Offering" has the meaning set out in General Development of the Business - History of the Company. "January Compensation Warrants" has the meaning set out in General Development of the Business - History of the Company. "January Underwriters" has the meaning set out in General Development of the Business - History of the Company. "January Underwriting Agreement" has the meaning set out in General Development of the Business - History of the Company. "Listing Date" means the date of listing of the Common Shares on the CSE, being October 6, 2020. "Listing Statement" means the CSE Form 2A Listing Statement dated October 1, 2020, as filed on SEDAR on October 5, 2020. "March BD Offering" has the meaning set out in General Development of the Business - History of the Company. "March Compensation Warrants" has the meaning set out in General Development of the Business - History of the Company. 7 "March Underwriters" has the meaning set out in General Development of the Business - History of the Company. "March Underwriting Agreement" has the meaning set out in General Development of the Business - History of the Company. "Meeting" has the meaning set out in Corporate Structure - Reorganization and Take Private Transaction. "Milestone Shares" has the meaning set out in General Development of the Business - History of the Company. "Mindset" has the meaning set out in Description of the Business. "MPM" has the meaning set out in Corporate Structure - Reorganization and Take Private Transaction. "mg/kg" A milligram per kilogram of the body weight of the subject person. "NASDAQ" means the NASDAQ Global Select Market. "NDA" has the meaning set out in Description of the Business - Regulatory Environment - Pharmaceutical Development and Approval Requirements - United States. "NDS" has the meaning set out in Description of the Business - Regulatory Environment - Pharmaceutical Development and Approval Requirements - Canada. "NCA" has the meaning set out in Description of the Business - Regulatory Environment. "Newton" means Newton Energy Corporation, as a company existing, prior to the Transaction, under the ABCA via articles of amalgamation dated September 30, 2008, as amended on September 30, 2020 in connection with the Transaction. "NI 52-110" means National Instrument 52-110 - Audit Committees. "Odyssey" means Odyssey Trust Company. "Offering Price" has the meaning set out in General Development of the Business - Events Subsequent to the Year-Ended March 31, 2023 - The Arrangement. "Options" means the issued and outstanding options of Reunion exercisable for Common Shares. "OTCQX" has the meaning set out in Corporate Structure. "PCT" has the meaning set out in General Development of the Business - Events Subsequent to the Year-Ended March 31, 2022. "person" means a company, a partnership, a trust or individual. "PI" has the meaning set out in Description of the Business - Regulatory Environment "PPD" has the meaning set out in Description of the Business. "Preferred Shares" means preferred shares in the capital of the Company. "Psilocybin Research" has the meaning set out in General Development of the Business - History of the Company. "RE104" has the meaning set out in General Development of the Business - History of the Company. "RE104 Agreements" has the meaning set out in Description of the Business - Regulatory Environment - Research and Development Operations. "Research Agreement" has the meaning set out in General Development of the Business - History of the Company. "Reunion Patent" has the meaning set out in Description of the Business. 8 "RNI Canada" means Reunion Neuroscience Canada Inc., the successor to FTP and FT Discovery as a result of an amalgamation of such entities on October 4, 2022. "Second Arrangement Agreement" has the meaning set out in Corporate Structure - Reorganization and Take Private Transaction. "Second Arrangement" has the meaning set out in Corporate Structure - Reorganization and Take Private Transaction. "September Offering" has the meaning set out in General Development of the Business - History of the Company. "Shareholders" has the meaning set out in Corporate Structure - Reorganization and Take Private Transaction. "Spinout Transaction" has the meaning set out in Corporate Structure. "SR Agency Agreement" means the agency agreement dated June 29, 2022 among the Company, Field Trip H&W and the SR Agents. "SR Agents" means, collectively, Bloom Burton Securities Inc. and Stifel Nicolaus Canada Inc. "Strategic Review" has the meaning set out in General Development of the Business - History of the Company. "Subco" means Newton Energy Subco Limited, a company existing under the CBCA, as incorporated on July 24, 2020 solely for the purpose of completing the Transaction and is a wholly-owned subsidiary of Newton prior to the Transaction. "Subscription Receipt Agreement" means the subscription receipt agreement dated June 29, 2022 by and among the Subscription Receipt Agent, the Company, Field Trip H&W and the SR Agents. "Subscription Receipt Agent" means Odyssey Trust Company. "Termination Payment" has the meaning set out in Corporate Structure - Reorganization and Take Private Transaction. "Transaction" has the meaning set out in Corporate Structure - Name, Address and Incorporation. "TRD" has the meaning set out in Description of the Business. "TPD" has the meaning set out in Description of the Business - Regulatory Environment - Pharmaceutical Development and Approval Requirements - Canada. "TSX" has the Toronto Stock Exchange. "TSXV" means the TSX Venture Exchange Inc. "Units" has the meaning set out in General Development of the Business - History of the Company. "USPTO" means the United States Patent and Trademark Office. "UWI" has the meaning set out in General Development of the Business - History of the Company. "Warrant Indenture" means the warrant indenture, dated January 5, 2021, between the Company and Computershare Trust Company of Canada governing the terms and conditions of the Warrants issued under the January BD Offering. "Warrant Share" has the meaning set out in General Development of the Business - History of the Company. "Warrants" has the meaning set out in General Development of the Business - History of the Company. 9 Name, Address and Incorporation The Company was formed on September 30, 2008, pursuant to an amalgamation under the ABCA and adopted the name "Newton Energy Corporation". On September 30, 2020, in connection with the Transaction (as defined below), the Company filed articles of amendment to: (i) consolidate its outstanding Common Shares on an eight (8) old for one (1) new basis; and (ii) change its name from Newton Energy Corporation to "Field Trip Health Ltd." On October 1, 2020: (i) the Company and FTP completed a series of transactions resulting in a reorganization of FTP and the Company and pursuant to which the Company became the direct parent and sole shareholder of FTP; (ii) the Company changed its year end from December 31 to March 31; and (iii) the Company was continued under the CBCA by Certificate and Articles of Continuance ((i) - (iii) collectively referred to as the "Transaction"). The Transaction constituted a reverse takeover of the Company by FTP under applicable securities laws. FTP became a wholly-owned subsidiary of the Company and the business of FTP became the business of the Company. The Common Shares were listed on the NEX board of the TSXV until September 30, 2020, when they were delisted from the TSXV in connection with the completion of the Transaction. The Common Shares commenced trading on the CSE on October 6, 2020 under the symbol "FTRP" and were also posted for trading on the OTCQX Best Market ("OTCQX") on January 28, 2021 under the symbol "FTRPF". The Warrants commenced trading on the CSE on January 5, 2021, under the symbol "FTRP.WT". The Common Shares and Warrants were subsequently delisted from the CSE and listed on the TSX on June 7, 2021. On July 29, 2021 the Common Shares commenced trading on NASDAQ under the ticker symbol "FTRP". Concurrent with the NASDAQ listing, Field Trip's Common Shares ceased to be quoted on the OTCQX. The Company previously completed the process to ensure its shares are eligible for electronic clearing and settlement through the Depository Trust Company. On August 11, 2022, the Company completed its reorganization which resulted in the separation of its drug development and clinic divisions into two independent companies (the "Spinout Transaction"). The reorganization was completed by way of a Plan of Arrangement (the "Arrangement"). Upon closing, Reunion transferred the entirety of the Clinics Business in Canada, United States and the Netherlands, its natural products research facility and related assets in Jamaica, the associated digital assets of each and part of its corporate operations in Canada and United States (collectively, the "Clinic Operations") to Field Trip Health & Wellness Ltd. ("Field Trip H&W"). Upon completion of the Spinout Transaction, the Company changed its registered office and head office to 30 Duncan Street, Lower North Suite, Toronto, Ontario, M5V 2C3 and was renamed "Reunion Neuroscience Inc." (formerly, Field Trip Health Ltd.). The Company remains listed on Nasdaq and the TSX under the ticker symbol "REUN". On June 29, 2023, the Company changed its head office to 100 King Street West, Suite 3400, 1 First Canadian Place, Toronto, Ontario M5X 1A4. Intercorporate Relationships The following diagram describes the subsidiaries of Reunion prior to the Spinout Transaction, and as of the date hereof, including their place of incorporation and continuance or formation. All subsidiaries are wholly owned. 10 As of the date hereof On September 30, 2022, Field Trip Discovery USA Inc. was renamed to Reunion Neuroscience USA Inc. On October 4, 2022, Field Trip Psychedelics Inc. was amalgamated with Field Trip Discovery Inc., following which the amalgamated entity was renamed Reunion Neuroscience Canada Inc. Reorganization and Take-Private Transaction Subsequent to year-end, on May 31, 2023, Reunion entered into a definitive arrangement agreement (the "Second Arrangement Agreement") with MPM BioImpact ("MPM"), whereby affiliates of MPM would acquire Reunion in an all-cash transaction valued at approximately US$13.1 million by way of a statutory plan of arrangement under the Canada Business Corporations Act (the "Second Arrangement"). Pursuant to the terms and conditions of the Second Arrangement Agreement, all holders of outstanding Common Shares of Reunion (the "Shareholders") will be entitled to receive US$1.12 in cash for each Common Share held immediately prior to the effective time of the Second Arrangement. Completion of the Second Arrangement will, among other things, require the approval by at least two-thirds (66⅔ percent) of the votes cast by the Shareholders at a special meeting of Shareholders (the "Meeting"). Certain founding Shareholders, and all of the Company's officers and directors, representing in aggregate approximately 34% of the issued and outstanding Common Shares, have entered into support and voting agreements with MPM pursuant to which they have agreed to, among other things, support and vote in favour of the Second Arrangement. 11 Completion of the Second Arrangement remains subject to the satisfaction (or waiver) of a number of conditions precedent, including, but not limited to the following material conditions: · · obtaining all applicable regulatory approvals, including approval of the Ontario Superior Court of Justice (Commercial List) (the "Court") of the Second Arrangement; · the net cash held by the Company being equal to or greater than US$8,000,000 as of the close of business on the third business day immediately prior to closing of the Second Arrangement (subject to reduction under certain circumstances); and · the performance or completion in all material respects with all obligations required to be performed by the Company and MPM under the Second Arrangement Agreement. Subject to the satisfaction or waiver of the conditions precedent for completion of the Second Arrangement, the Second Arrangement is expected to close in the calendar third quarter of 2023. Upon completion of the transaction, the Common Shares will no longer be traded or listed on any public securities exchange and Reunion will be wholly-owned by affiliates of MPM. In the event of a termination of the Second Arrangement in certain circumstances, Reunion has agreed to pay to an affiliate of MPM (a) a termination payment of US$800,000 in cash (the "Termination Payment") and (b) an expense reimbursement payment for transaction expenses incurred by MPM in connection with the Second Arrangement in an amount not to exceed US$1,500,000 (the "Expense Reimbursement"). The Termination Payment and the Expense Reimbursement are credited against each other, whereby the maximum amount that Reunion must pay the affiliate of MPM for the Termination Payment and the Expense Reimbursement shall not exceed US $1,500,000 in the aggregate. The foregoing summary is qualified in its entirety by the provisions of the respective documents. Reunion has filed a material change report in respect of the Second Arrangement, and copies of the Second Arrangement Agreement, the plan of arrangement and the support and voting agreements have been filed with the applicable Canadian securities regulators and are available for review on SEDAR at www.sedar.com. For additional information regarding the Second Arrangement, please refer to the management information circular from Reunion that was filed on SEDAR and mailed to Shareholders on or about June 19, 2023. GENERAL DEVELOPMENT OF THE BUSINESS History of the Company Prior to completion of the Spin-Out Transaction, the Company operated two businesses: (i) Ketamine-Enhanced Psychotherapy, psychedelic-enhanced psychotherapy, and psychedelic-integration psychotherapy health centres in Canada and the United States, and (ii) a drug development business. On August 11, 2022, the Company completed the Spin-Out Transaction and transferred all of the assets and all liabilities of the clinics (except for certain lease guarantees described in the Company's financial statements. A summary of the history of the drug development business is below. For a summary on the history of the Clinics Business, see the following sections of the Circular available on the Company's SEDAR profile at www.sedar.com: (i) SpinCo - Name and Incorporation; (ii) SpinCo - General Description of the Business; (iii) SpinCo - Intercorporate Relationships; (iv) SpinCo - General Development of the Business; (v) SpinCo - Trends; (vi) SpinCo - Description of the Business; (vii) SpinCo - Controlled Substances; (viii) SpinCo - Compliance Program; and (ix) SpinCo - Concurrent Financing. In April 2020, Reunion launched a new research and drug development business segment, entitled Field Trip Discovery ("FT Discovery"), which is now the sole business operation of the Company. FT Discovery was an umbrella term used by the Company to divide its personnel between those involved with the former Clinic Business of the Company ("FT Health") and those involved in the pharmaceutical research and drug development operations of the Company. Reunion is developing a molecule called RE104 (formerly FT-104, "RE104"). On June 30, 2020, the company filed an initial provisional (Appl 63,045,901) to cover certain aspects to RE104. On November 3, 2020, an additional provisional patent (Appl 63,109,095) was filed with the USPTO, wherein certain provisional examples were updated with real examples and new information relating to pharmacology and pharmacokinetics of RE104. On October 29, 2020, the Company announced certain results of the development of RE104. The experiments indicated that: (i) RE104 is efficiently and completely converted to the pharmacologically active substance, 4-OH-DiPT, in in vitro plasma tests; (ii) the active molecule is a near equipotent 5HT2A receptor agonist to psilocin, the active substance from psilocybin, that can be delivered with high bioavailability; and (iii) RE104 will likely produce a reliably short-duration of psychedelic experience in the range of two to four hours, which is approximately half the duration of psilocybin. 12 On November 15, 2021, the Company announced: (i) its intention to move to Phase 1 clinical trials of RE104 in the first half of calendar 2022; (ii) the discovery of a novel molecule that, based on in vivo assay details, has the structure of classical psychedelics and has demonstrated imposed selectively for the target serotonin 2A receptors; (iii) the expansion of the scope of its development pipeline to focus on a new group of molecules, termed RE200; and (iv) that it had engaged Bloom Burton Securities Inc. as its financial advisor in connection with a strategic review of the Company (the "Strategic Review") in order to ensure that each operating unit of the Company is best positioned, optimally resourced and focused to provide maximum long-term value to stakeholders. On January 11, 2022, Reunion announced that the USPTO issued a Notice of Allowance for the Company's patent application No. 17/364,047 for claims related to RE104. Claims in the allowed patent application titled, "Tryptamine Prodrugs", cover composition of matter, use and manufacturing of a family of hemi-ester compounds of hydroxytryptamines, including RE104. On April 5, 2022, the USPTO granted Reunion a patent (US 11,292,765) for claims related to RE104 (as described above). The patent provides protection until 2041. As part of its intellectual property strategy, Reunion filed an international patent application relating to RE104 under the Patent Cooperation Treaty ("PCT"). For additional detail on RE104, please refer to "Description of the Business" below. Other Material Acquisitions: On August 20, 2019, Reunion entered into a letter of intent with the University of West Indies at Mona, Jamaica ("UWI"), to establish and operate a clinical laboratory and research facility (the "Jamaica Facility") within the UWI premises in order to conduct research and development related to the cultivation of, as well as the identification and isolation of new substances contained in, psilocybin mushrooms, botanicals and other related fungi (the "Psilocybin Research"). On April 6, 2020, Reunion entered into a definitive research agreement with UWI (the "Research Agreement"), whereby Reunion agreed to lease property from UWI on which to construct the Jamaica Facility, where it will carry out the Psilocybin Research, and engaged UWI to assist Reunion in the Psilocybin Research. Under the Research Agreement, Reunion agreed to contribute up to US$1,000,000 for initial capital for the Jamaica Facility and Psilocybin Research and a total of US$100,000 to fund student development initiatives at UWI over a 36-month period. All assets and liabilities related to the Jamaica Facility and the Research Agreement were transferred to Field Trip H&W in the Spinout Transaction. In connection with entering into the Research Agreement, On June 2, 2020, Reunion entered into a share purchase agreement with Darwin, Inc. (the "Jamaica SPA"), whereby Reunion agreed to acquire the remaining 22.22% interest in its former subsidiary FTNP that it did not already own in exchange for the issuance of 1,200,000 Common Shares, issuable on the achievement of certain milestones (the "Milestone Shares"). Upon execution of the Jamaica SPA, Reunion acquired 100% ownership of FTNP. FTNP was transferred to Field Trip H&W in connection with the Spin-Out Transaction. Equity Offerings, Private Placements, and Listing History: On August 14, 2020, Reunion completed a brokered private placement offering of 5,516,724 FTP Common Shares at a price per FTP Common Share of $2.00, for aggregate gross proceeds of $11,033,448 (the "FT Private Placement"). The FT Private Placement was completed pursuant to an agency agreement (the "Agency Agreement") among Reunion and the agents in the FT Private Placement (the "Agents"). The net proceeds of the FT Private Placement were used for funding of the drug discovery & development program, to develop the Clinics, marketing, to fund research & development at the Jamaica Facility, for technology and innovation, and for general working capital purposes. In connection with the closing of the FT Private Placement, the compensation payable to the Agents included the issuance of: (i) an aggregate of 299,753 warrants, each of was exercisable into one FTP Common Share at an exercise price of $2.00 per FTP Common Share until August 14, 2022; and (ii) an aggregate of 55,167 FTP Common Shares at a deemed price of $2.00 per FTP Common Share. On September 21, 2020, Reunion completed a follow-on financing on the same terms as the FT Private Placement (the "September Offering"). In connection with the September Offering, Reunion issued an aggregate of 816,932 FTP Common Shares at a price per FTP Common Share of $2.00 for aggregate gross proceeds of $1,633,864. 13 On January 5, 2021, the Company announced that it closed its previously announced bought deal short form prospectus offering, including the exercise in full of the underwriters' over-allotment option (the "January BD Offering"). The January BD Offering was completed pursuant to an underwriting agreement (the "January Underwriting Agreement") among Reunion and the underwriters in the January BD Offering (the "January Underwriters"). In connection with the January BD Offering, the Company issued 4,448,200 units (the "Units"), with each Unit being comprised of one Common Share and one-half of one Common Share purchase warrant (the "Warrants") at a price of $4.50 per Unit, for aggregate gross proceeds of $20,016,900. In connection with the January BD Offering, the Company issued to the January Underwriters an aggregate of 169,565 warrants (the "January Compensation Warrants"). Each January Compensation Warrant was exercisable to purchase one Common Share (a "Warrant Share") at a price of $4.50 per Warrant Share, subject to customary adjustment, for a period of twenty-four (24) months following the closing of the January BD Offering. Each Warrant entitled the holder thereof to acquire (subject to adjustment and acceleration in certain circumstances) one Common Share at an exercise price of $5.60 per Common Share until the date that is eighteen (18) months following the closing date of the January BD Offering. All such Warrants expired without being exercised. On January 28, 2021, the Company announced that the Common Shares had been approved for and commenced trading on the OTCQX under the symbol FTRPF. On March 17, 2021, the Company announced that it closed its previously announced bought deal short form prospectus offering, including the exercise in full of the underwriters' over-allotment option (the "March BD Offering"). The March BD Offering was completed pursuant to an underwriting agreement (the "March Underwriting Agreement") among Reunion and the underwriters in the March BD Offering (the "March Underwriters"). In connection with the March BD Offering, the Company issued 14,661,499 Common Shares in the capital of the Company at a price of $6.50 per Common Share, for aggregate gross proceeds of approximately $95 Million. In connection with the March BD Offering, the Company issued the March Underwriters an aggregate of 763,303 warrants (the "March Compensation Warrants"). Each March Compensation Warrant was exercisable to purchase one Common Share at a price of $6.50 per Common Share, subject to customary adjustment, until March 17, 2023. An additional 104,000 warrants to purchase Common Shares were issued to a consultant on the same terms as the March Compensation Warrants. All such March Compensation Warrants expired in accordance with their terms without being exercised. On May 27, 2021, the Company announced that it had received conditional approval to list its common shares and warrants on the TSX. On June 7, 2021, the Common Shares and Warrants were delisted from the CSE and commenced trading on the TSX under the trading symbol "FTRP" and "FTRP-WT", respectively. The Common Shares continue to trade on the OTCQX market under the symbol "FTRPF". On June 22, 2021, Reunion issued 125,000 Milestone Shares to Darwin, Inc. Under the Jamaica SPA in accordance with its previously disclosed obligations thereunder. On July 23, 2021, Reunion received conditional approval for the listing of its Common Shares on the NASDAQ. Final approval was received on July 27, 2022 and the Common Shares commenced trading on the NASDAQ on July 29, 2022. The Arrangement On August 11, 2022, Reunion completed its Spinout Transaction. The reorganization was completed by way of the Arrangement (the "Arrangement"). Upon closing, Reunion transferred the entirety of its Clinic Operations to Field Trip Health H&W, and the Consolidation was effected. Pursuant to the Arrangement, holders of common shares of the Company exchanged each common share held for one Common Share of Reunion and received 0.85983356 of a common shares of Field Trip H&W. Field Trip Health Ltd. was renamed Reunion Neuroscience Inc. and remains listed on the NASDAQ Stock Market and Toronto Stock Exchange under the ticker symbol "REUN", concurrent with the listing of Field Trip H&W. Field Trip H&W operated as a separate company with a separate management team and Board of Directors focused on the Clinic Operations. 14 In connection with the Arrangement, Field Trip H&W completed a non-brokered private placement offering of common shares ("FTHW Shares") whereby it issued an aggregate of 35,600,000 FTHW Shares at a price of $0.50 per FTHW Share, with the Company subscribing for 19,615,000 FTHW Shares for an aggregate purchase price of $9,807,500 and representing approximately 21.84% of the FTHW Shares issued and outstanding immediately following completion of the Arrangement. In addition, the Company entered into a customary investor rights agreement (the "IRA") with Field Trip H&W. The IRA contains customary stand still provisions and provided that Reunion maintains ownership of a prescribed percentage of the issued and outstanding FTHW Shares, Reunion has, among other things, (i) the right to nominate candidates for election as directors of FTHW and to appoint board observers, (ii) certain "demand" and "piggyback" registration rights in relation to its FTHW Shares. The 19,615,000 FTHW Shares held by the Company are subject to a Tier 2 Value Escrow Agreement in accordance with the policies of the TSXV. In connection with the Arrangement, Field Trip H&W completed a brokered subscription receipt offering on June 29, 2022 whereby Field Trip H&W issued a total of 4,400,000 subscription receipts for aggregate gross proceeds of $2,200,000. The subscription receipt offering was completed pursuant to the SR Agency Agreement and the Subscription Receipt Agreement, each of which the Company is a party to and each of which contain representations, warranties, covenants and termination provisions that are customary for an offering of this nature. For additional information on the Arrangement, please see the Circular, under the heading "Approval of the Arrangement" which is available on the Company's SEDAR profile at www.sedar.com. DESCRIPTION OF THE BUSINESS Reunion is a clinical-stage, pharmaceutical company with a mission to develop innovative therapeutic solutions for underserved mental health conditions. The Company's lead asset, RE104, is a patented, clinical-stage serotonergic psychedelic therapeutic designed as a single-dose, fast-acting and durable antidepressant. The Company recently completed a Phase 1 clinical study where RE104 was shown to be generally safe and well tolerated at the dose recommended for its planned Phase 2 clinical study to evaluate as a potential treatment for patients who suffer from postpartum depression. Reunion also plans to potentially evaluate RE104 in additional indications, including treatment resistant depression (TRD) and other mental health conditions. Reunion is also developing the RE200 series, which are molecules structurally similar to classical psychedelics with selective potency at the target serotonin 2A receptor (5HT2A) and designed to be devoid of 5HT2B receptor agonism. Since 5HT2B activation acts detrimentally on the cardiovascular system, the RE200 series could provide for potentially safer medications, which could eventually find use in chronic treatments, in broader patient populations and/or in a wider set of indications. Advantages of Serotonergic Psychedelics Synthetic and natural serotonergic psychedelics act to stimulate 5HT2A receptors in the brain resulting in acute and long-term effects. In a first, acute phase, which can last for minutes to hours, there is a profound alteration of normal brain signaling and processing, creating what is generally referred to as a "psychedelic experience" or an "altered state of consciousness." Under psychedelics, the brain "escapes" from its usual tightly constrained and predictable patterns of operation, with a global increase in connectivity of brain regions and brain networks. Often, this can allow patients new introspective insights about their past behavior, memories, actions, feelings and beliefs. In a second extended phase, believed to extend from hours to days after a dose, the biochemistry downstream of the 5HT2A receptor can lead to changes in neuronal structure with the strengthening of connections associated with other more positive thought patterns, changes that are grouped under the term neuroplasticity. A psychedelic experience induced by 5HT2A activation is a good and accepted biomarker for potential clinical effects. We believe psychedelic drug administration properly supported by trained healthcare providers may maximize improvements in mental health treatments, including in depression, anxiety and addiction. RE104 Our lead candidate, RE104, is a patented, clinical-stage serotonergic psychedelic therapeutic intended to provide a fast-acting and durable antidepressant effect after a single dose which induces a brief psychedelic experience. RE104 aims to reduce treatment burden and provide a safe and effective new therapeutic option for the large population of underserved patients suffering from postpartum depression and potentially other mental health indications. We have completed our Phase 1 clinical trial with RE104, a unique 4OH-DiPT (4hydroxy-N,N-diisopropyltryptamine) prodrug. The study included 48 healthy volunteers across six ascending dose cohorts with doses of 5, 10, 20, 30, 35.5, and 40 mg of RE104 (RE104 HCl 5.5, 11, 22, 33, 38 and 44 mg). In each cohort, two of the eight subjects received placebo and were later grouped to create a placebo cohort. After administration, RE104 was efficiently converted to 4-OH-DiPT, which produced dose-proportional responses in pharmacokinetics, pharmacodynamics and adverse events. 15 Generally, RE104 was shown to be safe and well tolerated, with no serious adverse events. Adverse events were generally dose-proportional and included transient effects typical of classical serotonergic psychedelics, including of nausea, sinus tachycardia (asymptomatic at a maximum recorded value of 115 beats per minute), restlessness, and headache, as well as 2 severe cases of anxiety (one each at doses of 35.5 and 40 mg) which resolved with the administration of midazolam (anxiolytic). The pharmacokinetics demonstrated a peak plasma concentration typically at 65min post administration, with average elimination half-life in the range of 2.5-3.8 h over the range of doses. Intensity of the drug experience over time was measured with the Drug Effect Questionnaire (DEQ). Peak effects were recorded at approximately 1 hour post dose, consistent with peak plasma levels, however the drug effect appeared to dissipate between 2-4 hours, slightly ahead of the plasma profile. The "quality" of the psychedelic experience was assessed using the Mystical Experience Questionnaire (MEQ30), a 30-item tool administered once at 2 hours post-dose. The MEQ30 is a validated and commonly used questionnaire that has been correlated to positive outcomes with psychedelic administration in patients as depression, anxiety and smoking cessation. Using the MEQ30, it was observed that the 5mg dose produced an effect indistinguishable from placebo, there was again a consistent dose-proportional effect from 11 to 40mg on the magnitude of response on the MEQ. At the 30mg dose level, the participants receiving a single administration of RE104 achieved a "complete mystical experience" defined as a score of at least 60 percent of the maximum value in all four domains of the questionnaire, as well as on the total score. Based on the dose response for safety, tolerability and the achievement of a complete mystical experience, the 30mg dose was selected as the optimum dose for Phase 2 studies. At this dose the drug exhibited a 3.7 hour trip duration. Plans are underway to start a Phase 2 clinical trial in postpartum depression ("PPD"). In the future, we may evaluate RE104 in TRD and/or other mental health indications. RE104 is protected under US Patent No. 11,292,765 issued on April 5, 2022 (priority June 30, 2020) Reunion Patent with claims for composition of matter, methods of manufacturing, formulations and methods of use for a genus of hemi-ester tryptamines, including RE104, which could provide protection out to June 30, 2041. RE104 is also covered under the international PCT application (PCT/CA/2021050907) filed June 30, 2021. Reunion intends to enter other major countries via the PCT application process to protect RE104 in major markets where Reunion may eventually pursue commercialization of RE104 in the future. The PCT application provides Reunion with deferred patent filing rights in 150+ countries. The Reunion Patent provides protection to RE104 in the United States until 2041 unless extended. In a letter to Reunion dated January 20, 2023, Mindset Pharma Inc. Mindset stated that the USPTO has issued a Notice of Allowance in US Patent Application No. 17/833,341 and that such application includes claims that Mindset alleges cover Reunion's RE104 compound and asserts a priority date of February 4, 2020. Reunion is investigating US Patent Application No. 17/833,341 including potential offensive strategies with respect to the Mindset patent. Reunion's RE104 compound is specifically disclosed in and protected by the Reunion U.S. Patent No. 11,292,765, which includes claims directed to the RE104 composition of matter, use and manufacturing. RE104 is a clinical-stage asset and not commercialized, and as such, under the Hatch-Waxman Act "safe harbor" provisions, Reunion is not infringing - and could not be infringing - any U.S. patent, including any U.S. patent issued to Mindset. On June 23, 2023, Mindset filed a motion to dismiss in response to the Reunion claims, seeking dismissal of the lawsuit for lack of personal jurisdiction and failure to state a claim. The case remains pending. RE200 Series Our RE200 series of drug discovery candidates are being researched for their potential to exhibit improved cardiovascular safety. Potent 5HT2A agonists with reduced psychoactivity and improved functional selectivity would be preferred candidates. These compounds could provide improved safety and convenience. Candidates in the RE200 series are all in discovery phase with preliminary results in in-vitro and in-vivo pharmacology. We plan to nominate a first lead clinical candidate from the RE200 series in 2023. Based on in vitro receptor binding assay details, we have identified at least one family of structurally- related molecules with improved selectivity for the 5HT2A receptor versus the off-target serotonin receptor 5HT2B. We filed two provisional patents with the USPTO relating to candidates which are 5HT2A agonists and 5HT2B antagonists (US Application Nos. 63/273,720 and 63/334,443). On October 31, 2022, these filings were combined into pending USPTO (App 17/977398) and PCT applications (CA2022051608) to protect the compositions, as well as potential formulations and uses of the molecules. The US application published on May 11, 2023 (US 20230144974). 16 On-going work includes investigating the structural features that define this class of NCE molecules and their properties in in vitro assays, as well as their potential use as therapeutics by performing preclinical testing. Further work is in progress to expand and strengthen our IP portfolio around other novel structures meeting selection criteria for the RE200 series, and by seeking to optimize and synthesize candidates for eventual preclinical development. REGULATORY ENVIRONMENT Reunion operates in a highly regulated industry and in multiple jurisdictions. Below is a summary of key elements of the regulatory environment in which the Company operates. Please refer to the AIF for further information related to the regulatory environment of the Clinic Operations, its discontinued operations. The Company relies on a variety of researchers, medical professionals, suppliers, manufacturers and other service providers for the conduct of its operations. The Company's research and development activities rely on the following relationships with third parties, including (1) engagement by the Company of contract research organizations ("CRO") regarding RE104 preclinical and clinical experimentation, and (2) service agreements with the Company's contract manufacturing organizations ("CMO") in respect of RE104. In addition, the Company has entered into service agreements or statements of work with CMO and CROs which we believe are appropriately negotiated with customary intellectual property and confidentiality provisions. In order to develop regulated medicines, including RE104, the Company's processes must be conducted in strict compliance with the regulations of Health Canada, the FDA/DEA and other applicable federal, state, local and regulatory agencies. RE104 is currently not classified as a federal controlled substance and therefore does not currently require federal controlled substance registrations, licenses, permits or specific approvals. Several states in the US, including West Virginia, Minnesota, North Dakota, Illinois, Nebraska, Alabama, South Dakota, Florida, Virginia, Oklahoma, and Louisiana, as well as the District of Columbia, have, however, scheduled 4-OH-DiPT as a Schedule I controlled substance. Any activities in these states must comply with the state level-controlled substance laws and regulations, including registration and licensing. The Company does not currently have operations in these states. While for the moment, no other jurisdiction has scheduled 4-OH-DiPT, the Company remains vigilant of this potential risk when selecting CMOs and CROs. In January 2022, upon the recommendation of the US Department of Health and Human Services, the DEA proposed to place five tryptamine substances on Schedule I of the Controlled Substances Act, based upon the actual or relative potential for the substances to be abused. These substances included 4-hydroxy-diisopropyltryptamine (4-OH-DiPT), the active substance contained in RE104. According to DEA, the substance has effects that are like those of other Schedule I hallucinogens and that "it is reasonable to assume that this substance has a substantial capability to cause a hazard to public health, both to the user and to the community." Following publication of its scheduling proposal, the DEA received many comments from the public, including comments submitted by Reunion. On July 22, 2022, after consideration of this proposal and the public comments, the DEA announced its withdrawal of the proposed rule and determined that it is appropriate to submit a new request to HHS for an updated scientific and medical evaluation and scheduling recommendation for these substances (Federal register 2022, 87 (143), 45076). As stated above, the Company is monitoring future developments in this area and is mindful of potential scheduling actions when selecting third party vendors and suppliers that could, in the future, require DEA registration. If RE104 or our other product candidates gain approval, they will likely need to be assessed for their potential for abuse and controlled substance scheduling. Specifically, during the review of Investigational New Drug ("IND") applications for drugs that influence the central nervous system and that need to be assessed for the extent to which the drug has a stimulant, depressant, or hallucinogenic effect, FDA will determine whether the drug requires additional nonclinical or clinical studies to address questions regarding abuse potential. Based upon these studies and upon submission of an NDA, FDA may require certain drug abuse and dependence labeling statements in the approved product label and may make recommendations to DEA regarding whether a drug warrants control under the Controlled Substance Act as well as with respect to drug scheduling. Based upon these recommendations, DEA makes a drug scheduling determination within statutorily specified timeframes. The Company will work with the FDA and DEA to obtain appropriate scheduling of RE104 and any other product candidates for use in the marketplace. If it is determined that RE104 or any other product candidate is a controlled substance, we and our manufacturers, distributors, researchers, prescribers, and dispensers will need to obtain DEA controlled substance registrations and will need to follow DEA's extensive controlled substance laws and regulations, which, depending on the ultimate schedule within which a product is placed, may require significant security, recordkeeping, tracking, and reporting measures. 17 The Company relies on third party CMOs for the manufacture of our product candidates, including RE104, and their active ingredients, and third party CROs for the conduct of preclinical and clinical testing. These third parties have been qualified by the Company, which is intended to confirm that these third parties are able to meet the applicable regulatory requirements, including current Good Manufacturing Practices ("cGMPs") that are appropriate and commensurate with our product candidates' stage of development, Good Laboratory Practices ("GLP"), and Good Clinical Practices ("GCP"), as well as regulatory authorization requirements. Our third party CMOs and CROs, in turn, are also reliant on suppliers. For instance, our CMO is reliant on suppliers for starting materials to produce RE104. The preclinical CRO is also reliant on suppliers to carry out in-vitro and in-vivo assays, such as analytical kits, biological reagents, and animal models. The Phase 1 study clinical CRO is further reliant upon and subcontracts to a Principal Investigator ("PI") and a clinical research site who host and oversee the dosing of participants in the Phase 1 study, as well as bioanalytical and laboratory service providers for screening assays for inclusion/exclusion, as well as the analysis of blood samples after dosing of RE104, in addition to several other contractors responsible for the proper conduct of the study. Depending on the materials and services, these suppliers must meet certain regulatory standards and requirements. With respect to our CMOs and CROs, we have implemented various compliance safeguards to confirm their regulatory compliance including the conduct of quality audits and regular meetings. A third-party regulatory group has also been engaged to assist in the development of the regulatory strategies and prepare the necessary regulatory documentation required at each stage of the development program. The Company is making preparations for RE104 to enter Phase 2 clinical development and, as such, ongoing activities include: (1) continual optimization and standardization of Chemistry-Manufacturing and Controls ("CMC") by our CMO partners, including additional chemical characterization, synthesis, process optimization, process scale-up stability, and development of analytical methodology to ensure and improve upon drug product quality, and (2) continual and ongoing non-clinical (same as preclinical) activities ("NCA") by certain CRO partners that measure performance (pharmacokinetics) and safety (toxicology; safety pharmacology, genotoxicity) using a variety of in-vitro and in-vivo experimental assays and tests and (3) clinical activities with our CRO partners wherein the objectives are to understand the safety, pharmacokinetics, pharmacodynamics and efficacy of RE104. Reunion is also reliant on CMOs for various chemistry and analytical activities including the preparation of initial quantities of test compounds in the RE200 series of drug candidates. The Company will rely on third parties to help assess the relevant properties of these compounds in a variety of in-vitro and in-vivo assays. We will consider the study results from these assays in determining the potential lead compounds for development from the RE200 series of drug candidates. The Company will follow a similar path as with RE104 to develop the requisite CMC and preclinical results with partners before initiating clinical studies. No material engagements have been made at this date with respect to the RE200 series of drug candidates, as it is still in the laboratory/discovery phase of research. Pharmaceutical Development and Approval Requirements - Canada Before a prescription drug product candidate may be marketed in Canada, the process required generally involves: · Chemical and Biological Research - Laboratory tests are carried out on tissue cultures and with a variety of small animals to determine the effects of the drug. If the results are promising, the manufacturer will proceed to the next step of development. · Preclinical Development - A combination of in-vitro and in-vivo studies assess the effects of the drug in varying amounts over differing periods of time. If it can be shown that the drug causes no serious or unexpected harm at the doses required to have an effect, the manufacturer will proceed to clinical trials. · Clinical Trials - Phase 1 - The first administration in humans is to test if people can tolerate the drug. If this testing is to take place in Canada, the manufacturer must prepare a clinical trial application for the Pharmaceutical Drugs Directorate (formerly the Therapeutic Products Directorate of Health Canada (the "TPD"). This includes the results of the first two steps and a proposal for testing in humans. If the information is sufficient, the Health Products and Food Branch of Health Canada (the "HPFB") grants permission to start testing the drug, generally first on healthy volunteers. · Clinical Trials - Phase 2 - Phase 2 trials are carried out on people with the target condition (patients), who are usually otherwise healthy, with no other medical condition. Trials carried out in Canada must be approved by the TPD. In Phase 2, the objectives of the trials are to continue to gather information on the safety of the drug and begin to determine its effectiveness. · Clinical Trials- Phase 3 - If the results from Phase 2 show promise, the manufacturer provides an updated clinical trial application to the TPD for Phase 3 trials. The objectives of Phase 3 include determining whether the drug can be shown to be effective, and have an acceptable side effect profile, in people who better represent the general population. Further information will also be obtained on how the drug should be used, the optimal dosage regimen and the possible side effects. · New Drug Submission - If the results from Phase 3 continue to be favorable, the drug manufacturer can submit a new drug submission ("NDS") to the TPD. A drug manufacturer can submit an NDS regardless of whether the clinical trials were carried out in Canada. The TPD reviews all the information gathered during the development of the drug and assesses the risks and benefits of the drug. If it is judged that, for a specific patient population and specific conditions of use, the benefits of the drug outweigh the known risks, the HPFB will approve the drug by issuing a notice of compliance. 18 · Scheduling - Most classical psychedelics and synthetic 5HT2A agonists, such as RE104 and molecules in the RE200 series, are psychoactive substances with the potential for abuse. If either of RE104 or the RE200 series of development candidates are approved as drugs, we will need to hold discussions with Health Canada to determine a risk management plan to protect against potential diversion and misuse by patients, as well as to schedule its removal from Category III (no known medical utility) to another category based on data acquired during development and based on the drug's adverse properties, if any, related to potential abuse and addiction. Pharmaceutical Development and Approval Requirements - United States Prescription drugs in the United States are regulated by the FDA, under the Federal Food, Drug, and Cosmetic Act ("FDCA") and its implementing regulations. Before a prescription drug product candidate may be marketed in the United States it must undergo extensive research, clinical trials, and manufacturing development, and must be approved by FDA and, as appropriate, scheduled by DEA. The testing and approval process of product candidates requires substantial time, effort, and financial resources. Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity, and novelty of the product or disease. The process required generally involves: · completion of extensive nonclinical laboratory tests, animal studies and formulation studies, all performed in accordance with the FDA's GLP regulations; · submission to the FDA of an investigational new drug application, which must become effective before human clinical trials in the US may begin; · performance of adequate and well-controlled human clinical trials in accordance with the FDA's regulations, including good clinical practices, to establish the safety and efficacy of the product candidate for each proposed indication; · submission to, and review and approval by, the FDA of a new drug application prior to any commercial marketing, sale or shipment of the drug; and · scheduling in collaboration with the DEA based on the drug's potential for abuse and dependence. Prior to commencing the first clinical trial at a United States site, drug sponsors must complete certain preclinical laboratory and animal evaluations in accordance with GLPs. The results from these studies, together with literature, manufacturing information, analytical data, and prop