{"url_path":"/sec/pbm/10-k/2026/item-10","section_key":"item-10","section_title":"Item 10 ADDITIONAL INFORMATION","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-06-22","source_url":"https://www.sec.gov/Archives/edgar/data/1985062/0001213900-26-070607-index.html","accession_number":"0001213900-26-070607","cik":"0001985062","ticker":"PBM","issuer_name":"PSYENCE BIOMEDICAL LTD.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1985062/0001213900-26-070607-index.html","primary_entity_key":"0001985062","primary_entity_name":"PSYENCE BIOMEDICAL LTD."},"word_count":7443,"has_tables":true,"body_markdown":"** **\n\nITEM 10. ADDITIONAL INFORMATION\n\n \n\nA. Share Capital\n\n** **\n\nNot applicable.\n\n \n\nB. Articles of Association and By-Laws\n\n* *\n\n*The following description of the material terms\nof the securities of the Company includes a summary of specified provisions of the Articles of Incorporation and amended and restated\nby-laws (“**bylaws**”) of the Company. This description is qualified by reference to the Articles of Incorporation and\nby-laws, copies of which are attached as exhibits to this Report and incorporated in this Report by reference to Item 10.B of the Company’s\nAnnual Report on Form 20-F for the fiscal year ended March 31, 2025. In this section, the terms “we,” “our” or\n“us” refer to the Company, and all capitalized terms used in this section are as defined in the Articles of Incorporation\nand bylaws, unless elsewhere defined herein.*\n\n \n\nWe are a corporation organized under the laws\nof Ontario, Canada and our affairs are governed by our Articles of Incorporation, as registered on June 29, 2023 and the Business\nCorporations Act (Ontario).\n\n \n\n71\n\n \n\n \n\nThe following is a summary of the rights of our\nCommon Shares as set forth in our Articles of Incorporation and bylaws and certain related sections of the OBCA. This summary does not\npurport to be complete and is qualified in its entirety by the full text of the Articles of Incorporation, which is filed as an exhibit\nto this Report.\n\n \n\nOur authorized share capital consists of an unlimited\nnumber of Common Shares, each without par value. As of June 17, 2026, we have 3,814,328 issued and outstanding Common Shares.\n\n \n\nThe following description of our share capital\nand provisions of our Articles of Incorporation and bylaws are summaries of material terms and provisions and are qualified by reference\nto our Articles of Incorporation and bylaws, copies of which have been filed with the SEC as exhibits to this Report. The description\nof our Common Shares reflects amendments to our Articles of Incorporation and bylaws.\n\n** **\n\nCommon Shares\n\n \n\nThe holders of our Common Shares are entitled\nto one vote for each share held at any meeting of shareholders. The holders of our Common Shares are entitled to receive dividends as\nand when declared by our Board. In the event of our liquidation, dissolution or winding-up or other distribution of our assets among our\nshareholders, the holders of our Common Shares are entitled to share pro rata in the distribution of the balance of our assets. There\nare no preemptive, redemption, purchase or conversion rights attaching to our Common Shares. There are no sinking fund provisions applicable\nto our Common Shares. Our Common Shares are issued in fully registered form.\n\n** **\n\nC. Material Contracts\n\n \n\nMaterial Contracts Relating to the\nCompany’s Operations\n\n \n\nThe information set forth in Item 4.B. “—\n*Licensing of PEX010 – Palliative Care*” and “— *Licensing of NPX-5 – Palliative Care*”\nand “—*Licensing of additional API for use in AUD and SUD*” is incorporated herein by reference.\n\n* *\n\n*Southern Star MSA*\n\n \n\nOn May 21, 2025, Psyence Australia, a wholly-owned\nsubsidiary of the Company, entered into a Master Services Agreement (the “**MSA**”) with Southern Star Research. Under\nthe MSA, whereby Southern Star Research will serve as the Company’s CRO for its Phase IIb Study. \n\n \n\nPursuant to the MSA, Southern Star Research will\nprovide comprehensive CRO services for the registrational Phase IIb Study, including:\n\n \n\n●Trial\nManagement & Oversight: Clinical monitoring, site initiation, site management and close-out activities.\n\n \n\n●Project\nManagement: Development and maintenance of a detailed project plan, coordination of cross-functional teams and regular status reporting\nto Company senior management.\n\n \n\n●Data\nManagement & Biostatistics: Design, build and maintenance of the electronic data capture (EDC) system; data cleaning, database lock\nand generation of interim and final statistical reports.\n\n \n\n●Regulatory\n& Ethics Support: Preparation of submissions to the Therapeutic Goods Administration (TGA) in Australia and local ethics committees;\nmanagement of regulatory correspondence and amendments.\n\n \n\n72\n\n \n\n \n\n●Pharmacovigilance\n& Safety Oversight: Collection, processing and reporting of adverse events, serious adverse events and safety follow-up as required\nunder applicable regulations.\n\n \n\n●Patient\nRecruitment & Retention: Assistance with site selection, patient screening strategy and patient retention programs to ensure timely\nenrollment of the target 87 participants in the double-blind, placebo-controlled study.\n\n \n\n●Transitional\nHandover: Coordination with the Company’s prior CRO (iNGENū) to facilitate a seamless transition of all clinical deliverables,\ndata, documentation and site-related activities.\n\n \n\nThe Company will pay Southern Star Research aggregate\nfees in accordance with the MSA Exhibit A to the MSA. Fees are structured as follows:\n\n \n\n●Payments:\nPayment terms consist of an upfront deposit, being a percentage of the total project costs, as well as monthly invoices in accordance\nwith services delivered per the work order.\n\n \n\n●Expense\nReimbursements: In addition to monthly invoices, Southern Star Research will be reimbursed for all reasonable out-of-pocket costs incurred\nin performing the services.\n\n \n\nThe MSA includes mutual representations and warranties\ncustomary for CRO engagements.\n\n** **\n\nMaterial Contracts Relating to the\nCompany’s Financing\n\n \n\nOn July 25, 2024, the Company entered into a Common\nShares Purchase Agreement (as amended, the “**White Lion Purchase Agreement**”) with White Lion Capital, LLC (“**White\nLion**”) establishing an equity line of credit. Pursuant to the White Lion Purchase Agreement, the Company has the right, but\nnot the obligation, to require White Lion to purchase, from time to time, up to $25,000,000 in aggregate gross purchase price of newly\nissued Common Shares, subject to certain limitations and conditions set forth in the White Lion Purchase Agreement.\n\n \n\nInitially, the Company’s right to sell shares\nto White Lion commenced on the date of the execution of White Lion Purchase Agreement and extended until the earlier of (i) White Lion\nhaving purchased Common Shares equal to $25,000,000 and (ii) two years from the date of execution of the White Lion Purchase Agreement.\n\n \n\nOn November 4, 2025, the Company and White Lion\nentered into Amendment No. 2 to the White Lion Purchase Agreement. Amendment No. 2, among other things, increases the Company’s\npotential aggregate drawdown capacity, extends the commitment period, adds a volume-weighted average price (“**VWAP**”)\npurchase mechanic after certain funding thresholds are met (including a VWAP-based purchase price and per-notice caps tied to trading\nvolume, subject to waiver), clarifies the timing of closings and funds flow, updates provisions relating to short sales, and makes other\nconforming changes. Amendment No. 2 also increased the Commitment Amount to up to one hundred million dollars ($100,000,000) of the Company’s\nCommon Stock.\n\n \n\nOn April 19, 2026, the Company\nentered into Amendment No. 3 to the White Lion Purchase Agreement. Amendment No. 3 added a new purchase mechanism to the White Lion Purchase\nAgreement pursuant to which the Company may, during the commitment period, deliver an “Intraday Purchase Notice” (as defined\ntherein) to White Lion, requiring White Lion to purchase a number of Common Shares not to exceed five percent (5%) of the VWAP.\n\n \n\nD. Exchange Controls and Other Limitations Affecting Security\nHolders\n\n \n\nLimitations on the ability to acquire and hold\nshares of the Company may be imposed by the Competition Act (Canada) (the “**Competition Act**”). This legislation permits\nthe Commissioner of Competition to review any acquisition of a significant interest in us. This legislation grants the Commissioner jurisdiction,\nfor up to three years, to challenge this type of acquisition before the Competition Tribunal if the Commissioner believes that it\nwould, or would be likely to, result in a substantial lessening or prevention of competition in any market in Canada.\n\n** **\n\n73\n\n \n\n \n\nE. Taxation\n\n \n\n**Material U.S. Federal Income Tax Considerations for U.S. Holders**\n\n \n\nThe following discussion summarizes the anticipated\nU.S. federal income tax considerations generally applicable to a U.S. Holder (as defined below) of the ownership and disposition of the\nCommon Shares. This discussion addresses only holders who acquire and hold Common Shares as “capital assets” (generally, assets\nheld for investment purposes).\n\n \n\nThis summary is based on the Internal Revenue\nCode of 1986, as amended (the “**Code**”), U.S. Treasury regulations, administrative pronouncements and rulings of the\nUnited States Internal Revenue Service (the “**IRS**”), and the US Treaty, all as in effect on the date hereof, and all\nof which may be repealed, revoked or modified (possibly with retroactive effect) so as to result in U.S. federal income tax consequences\ndifferent from those discussed below. This summary does not describe any state, local or foreign tax law considerations, or any aspect\nof U.S. federal tax law other than income taxation (e.g., alternative minimum tax, the 3.8% Medicare tax on certain net investment income,\nor estate or gift tax). Except as specifically set forth below, this summary does not discuss applicable income tax reporting requirements.\nU.S. Holders should consult their own tax advisers regarding such matters.\n\n \n\nNo ruling from the IRS has been requested, or\nwill be obtained, regarding the U.S. federal income tax consequences of the ownership or disposition of the Common Shares. This summary\nis not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the discussion\nset forth in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations,\nthe IRS and U.S. courts could disagree with one or more of the positions taken in this summary.\n\n \n\nThis summary does not purport to address all U.S.\nfederal income tax consequences that may be relevant to a U.S. Holder as a result of the ownership and disposition of the Common Shares,\nnor does it take into account the specific circumstances of any particular holder, some of which may be subject to special tax rules,\nincluding, but not limited to, tax exempt organizations, partnerships and other pass-through entities and their owners, banks or other\nfinancial institutions, insurance companies, regulated investment companies, real estate investment trusts, qualified retirement plans,\nindividual retirement accounts or other tax-deferred accounts, persons that hold the Common Shares as part of a straddle, hedging transaction,\nconversion transaction, constructive sale or other similar arrangements, persons that acquired the Common Shares in connection with the\nexercise of employee share options or otherwise as compensation for services, persons that are resident or ordinarily resident in or have\npermanent establishment in a jurisdiction outside the United States, dealers in securities or foreign currencies, traders in securities\nelecting to mark to market, U.S. persons whose functional currency (as defined in the Code) is not the U.S. dollar, U.S. expatriates,\nor persons that own directly, indirectly or by application of the constructive ownership rules of the Code 10% or more of the Company’s\nshares by voting power or by value.\n\n \n\nAs used herein, a “**U.S. Holder**”\nis a beneficial owner of the Common Shares who, for U.S. federal income tax purposes, is: (1) an individual who is a citizen or resident\nof the United States; (2) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created\nor organized in or under the laws of the United States, any state thereof, or the District of Columbia, (3) an estate whose income\nis subject to U.S. federal income tax regardless of its source, or (4) a trust (A) if a U.S. court is able to exercise primary\nsupervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions\nof the trust, or (B) that has validly elected to be treated as a U.S. person for U.S. federal income tax purposes.\n\n \n\nIf a partnership (or other entity or arrangement\ntreated as a partnership for U.S. federal income tax purposes) holds the Common Shares, the tax treatment of a partner in or owner of\nthe partnership or other entity or arrangement will generally depend upon the status of the partner or owner and the activities of the\nentity. Prospective investors who are partners in partnerships (or other entities or arrangements treated as partnerships for U.S. federal\nincome tax purposes) that are beneficial owners of the Common Shares are urged to consult their own tax advisors regarding the tax consequences\nof the ownership and disposition of the Common Shares.\n\n \n\nThis summary is of a general nature only and is\nnot intended to be tax advice to any prospective investor, and no representation with respect to the tax consequences to any particular\ninvestor is made. **Prospective investors are urged to consult their own tax advisors regarding the application of federal income\ntax laws to their particular circumstances, as well as any state, provincial, local, non-U.S. and other tax consequences of investing\nin the Common Shares and acquiring, holding or disposing of the Common Shares.**\n\n \n\n74\n\n \n\n \n\nPassive Foreign Investment Company Rules\n\n \n\nA non-U.S. corporation is considered a PFIC for\nany taxable year if either:\n\n \n\n●at\nleast 75% of its gross income for such taxable year is passive income; or\n\n \n\n●at\nleast 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable\nto assets that produce or are held for the production of passive income (the “asset test”).\n\n \n\nPassive income generally includes dividends, interest,\nrents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition\nof passive assets. We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income\nof any other corporation in which we own, directly or indirectly, at least 25% (by value) of the shares. In determining the value and\ncomposition of our assets for purposes of the PFIC asset test, the value of our assets must be determined based on the market value of\nour Common Shares from time to time, which could cause the value of our non-passive assets to be less than 50% of the value of all of\nour assets on any particular quarterly testing date for purposes of the asset test.\n\n \n\nWe must make a separate determination each year\nas to whether we are a PFIC. Depending on the amount of our cash and other assets held for the production of passive income, it is possible\nthat, for our current taxable year or for any subsequent taxable year, more than 50% of our assets may be assets held for the\nproduction of passive income. We will make this determination following the end of any particular tax year. Although the law in this\nregard is unclear, we treat our consolidated affiliated entities as being owned by us for United States federal income tax purposes, not\nonly because we exercise effective control over the operation of such entities but also because we are entitled to substantially all of\ntheir economic benefits, and, as a result, we consolidate their operating results in our consolidated financial statements. In particular,\nbecause the value of our assets for purposes of the asset test will generally be determined based on the market price of our Common Shares\nand because cash is generally considered to be an asset held for the production of passive income, our PFIC status will depend in large\npart on the market price of our Common Shares and the amount of our cash and other assets held for the production of passive income. Accordingly,\nfluctuations in the market price of the Common Shares may cause us to become a PFIC. In addition, the application of the PFIC rules is\nsubject to uncertainty in several respects. We are under no obligation to take steps to reduce the risk of our being classified as a PFIC.\nAs stated above, the determination of the value of our assets will depend upon material facts (including the market price of our Common\nShares from time to time) that may not be within our control, and no opinion of counsel has or will be provided regarding our classification\nas a PFIC. If we are a PFIC for any year during which you hold Common Shares, we will continue to be treated as a PFIC for all succeeding years\nduring which you hold Common Shares. However, if we cease to be a PFIC and you did not previously make a timely “mark-to-market”\nelection as described below, you may avoid some of the adverse effects of the PFIC regime by making a “purging election” (as\ndescribed below) with respect to the Common Shares.\n\n \n\nIf we are a PFIC for your taxable year(s) during\nwhich you hold Common Shares, you will be subject to special tax rules with respect to any “excess distribution” that\nyou receive and any gain you realize from a sale or other disposition (including a pledge) of the Common Shares, unless you make a “mark-to-market”\nelection as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions\nyou received during the shorter of the three preceding taxable years or your holding period for the Common Shares will be treated\nas an excess distribution. Under these special tax rules:\n\n \n\n●the\nexcess distribution or gain will be allocated ratably over your holding period for the Common Shares;\n\n \n\n●the\namount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year\nin which we were a PFIC, will be treated as ordinary income, and\n\n \n\n●the\namount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest\ncharge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.\n\n \n\nThe tax liability for amounts allocated to years\nprior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years,\nand gains (but not losses) realized on the sale of the Common Shares cannot be treated as capital, even if you hold the Common Shares\nas capital assets.\n\n \n\n75\n\n \n\n \n\nA U.S. Holder of “marketable\nstock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed\nabove. If you make a mark-to-market election for the first taxable year during which you hold (or are deemed to hold) Common Shares\nand for which we are determined to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of\nthe fair market value of the Common Shares as of the close of such taxable year over your adjusted basis in such Common Shares,\nwhich excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the\nadjusted basis of the Common Shares over their fair market value as of the close of the taxable year. However, such ordinary loss\nis allowable only to the extent of any net mark-to-market gains on the Common Shares included in your income for prior taxable years.\nAmounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Common\nShares, are treated as ordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of\nthe Common Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such\nCommon Shares. Your basis in the Common Shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market\nelection, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except\nthat the lower applicable capital gains rate for qualified dividend income discussed above under “— Taxation of Dividends\nand Other Distributions on our Common Shares” generally would not apply.\n\n \n\nThe mark-to-market election is available only\nfor “marketable stock”, which is stock that is traded in other than de minimis quantities on at least 15 days during\neach calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined in applicable U.S. Treasury\nregulations), including Nasdaq. U.S. holders should consult their own tax advisors regarding the availability and tax consequences of\na mark-to-market election in respect to our Common Shares under their particular circumstances.\n\n \n\nAlternatively, a U.S. Holder of stock in a PFIC\nmay make a “qualified electing fund” election with respect to such PFIC to elect out of the tax treatment discussed above.\nA U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable year\nsuch holder’s pro rata share of the corporation’s earnings and profits for the taxable year. However, the qualified electing\nfund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as\nrequired under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable\nyou to make a qualified electing fund election. If you hold Common Shares in any taxable year in which we are a PFIC, you will be\nrequired to file IRS Form 8621 in each such year and provide certain annual information regarding such Common Shares, including\nregarding distributions received on the Common Shares and any gain realized on the disposition of the Common Shares.\n\n \n\nIf you do not make a timely “mark-to-market”\nelection (as described above), and if we were a PFIC at any time during the period you hold our Common Shares, then such Common Shares\nwill continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in a future year, unless you make\na “purging election” for the year we cease to be a PFIC. A “purging election” creates a deemed sale of such\nCommon Shares at their fair market value on the last day of the last year in which we are treated as a PFIC. The gain recognized\nby the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution,\nas described above. As a result of the purging election, you will have a new basis (equal to the fair market value of the Common Shares\non the last day of the last year in which we are treated as a PFIC) and holding period (which new holding period will begin the day\nafter such last day) in your Common Shares for tax purposes.\n\n \n\nYou are urged to consult your tax advisors regarding\nthe application of the PFIC rules to your investment in our Common Shares and the elections discussed above.\n\n** **\n\nDistributions on Common Shares\n\n \n\nIn general, subject to the PFIC rules discussed\nabove, the gross amount of any distribution received by a U.S. Holder with respect to the Common Shares (including amounts withheld to\npay Canadian withholding taxes) will be included in the gross income of the U.S. Holder as a dividend to the extent attributable to the\nCompany’s current and accumulated earnings and profits, as determined under U.S. federal income tax principles. Because the Company\ndoes not expect to maintain calculations of the Company’s earnings and profits in accordance with U.S. federal income tax principles,\nU.S. Holders should expect that a distribution will generally be treated as a dividend for U.S. federal income tax purposes.\n\n \n\n76\n\n \n\n \n\nThe amount of any distributions\npaid in Canadian dollars will equal the U.S. dollar value of such distributions determined by reference to the exchange rate on the day\nthey are received by the U.S. Holder (with the value of such distributions computed before any reduction for any Canadian withholding\ntax), regardless of whether the payment is in fact converted into U.S. dollars at that time. A U.S. Holder will have a tax basis in Canadian\ndollars equal to their U.S. dollar value on the date of receipt. If the Canadian dollars received are converted into U.S. dollars on\nthe date of receipt, the U.S. Holder will generally not be required to recognize foreign currency gain or loss in respect of the distribution.\nIf the Canadian dollars received are not converted into U.S. dollars on the date of receipt, a U.S. Holder may recognize foreign currency\ngain or loss on a subsequent conversion or other disposition of the Canadian dollars. Such gain or loss generally will be treated as\nU.S. source ordinary income or loss.\n\n \n\nSubject to applicable limitations and provided\nthe Company is eligible for the benefits of the US Treaty or the Common Shares are readily tradable on a United States securities market,\ndividends paid by the Company to non-corporate US Holders, including individuals, generally will be eligible for the preferential tax\nrates applicable to long-term capital gains for dividends, provided certain holding period and other conditions are satisfied, including\nthat the Company is not classified as a PFIC in the tax year of distribution or in the preceding tax year. Any amount of distributions\ntreated as dividends generally will not be eligible for the dividends received deduction available to certain corporate U.S. Holders in\nrespect of dividends received from U.S. corporations.\n\n \n\nDistributions to a U.S. Holder with respect to\nthe Common Shares may be subject to Canadian non-resident withholding tax. Any Canadian withholding tax paid will not reduce the amount\ntreated as received by the U.S. Holder for U.S. federal income tax purposes. However, subject to limitations imposed by U.S. law, a U.S.\nHolder may be eligible to receive a foreign tax credit for the Canadian withholding tax. The rules governing the foreign tax credit\nare complex. U.S. Holders are urged to consult their own tax advisors regarding the availability of the foreign tax credit under their\nparticular circumstances, including the impact of, and any exception available to, the special income sourcing rule described in\nthis paragraph. U.S. Holders who do not elect to claim a foreign tax credit may be able to claim an ordinary income tax deduction for\nCanadian income tax withheld, but only for a taxable year in which the U.S. Holder elects to do so with respect to all non-U.S. income\ntaxes paid or accrued in such taxable year.\n\n** **\n\nSale, Exchange or Other Taxable Disposition of Common Shares\n\n \n\nSubject to the PFIC rules discussed above,\nupon a sale, exchange or other taxable disposition of the Common Shares, a U.S. Holder will generally recognize a capital gain or loss\nequal to the difference between the amount realized on such sale, exchange or other taxable disposition and the adjusted tax basis of\nsuch Common Shares. If any foreign tax is imposed on the sale, exchange or other disposition of the Common Shares, a U.S. Holder’s\namount realized will include the gross amount of the proceeds of the disposition before deduction of the tax. A U.S. Holder’s initial\ntax basis in the Common Shares generally will equal the cost of such Common Shares. Such gain or loss will be a long-term capital gain\nor loss if the Common Shares have been held for more than one year and will be short-term gain or loss if the holding period is equal\nto or less than one year. Such gain or loss generally will be considered U.S. source gain or loss for U.S. foreign tax credit purposes.\nLong-term capital gains of certain non-corporate U.S. Holders are eligible for reduced rates of taxation. For both corporate and non-corporate\nU.S. Holders, limitations apply to the deductibility of capital losses.\n\n** **\n\nInformation Reporting and Backup Withholding\n\n \n\nIn general, dividends paid to a U.S. Holder in\nrespect of the Common Shares and the proceeds received by a U.S. Holder from the sale, exchange or other disposition of the Common Shares\nwithin the United States or through certain U.S.-related financial intermediaries will be subject to U.S. information reporting rules,\nunless a U.S. Holder is a corporation or other exempt recipient and properly establishes such exemption. Backup withholding may apply\nto such payments if a U.S. Holder does not establish an exemption from backup withholding and fails to provide a correct taxpayer identification\nnumber and make any other required certifications.\n\n \n\nBackup withholding is not an additional tax. Any\namounts withheld under the backup withholding rules will be allowed as a refund or credit against U.S. federal income tax liability,\nprovided that the required information is timely furnished to the IRS.\n\n \n\nIn addition, U.S. Holders should be aware of reporting\nrequirements with respect to the holding of certain foreign financial assets, including stock of foreign issuers which is not held in\nan account maintained by certain financial institutions, if the aggregate value of all of such assets exceeds U.S.$50,000. U.S. Holders\nmust attach a complete IRS Form 8938, Statement of Specified Foreign Financial Assets, with their return for each year in which\nthey hold the Common Shares. U.S. Holders should also be aware that if the Company were a PFIC, they would generally be required to file\nIRS Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, during any\ntaxable year in which such U.S. Holder recognizes gain or receives an excess distribution or with respect to which the U.S. Holder\nhas made certain elections. U.S. Holders are urged to consult their own tax advisors regarding the application of the information reporting\nrules to the Common Shares and their particular situations.\n\n \n\n77\n\n \n\n \n\nMaterial Canadian Federal Income Tax Considerations\n\n \n\nThe following is a summary of the principal Canadian\nfederal income tax considerations generally applicable to a person (a “**Holder**”) who acquires as a beneficial owner\nour Common Shares, and who, at all relevant times, for purposes of the application of the *Income Tax Act* (Canada) and the regulations\nadopted thereunder (collectively, the “**Canada Tax Act**”): (i) deals at arm’s length with the Company; (ii) is\nnot affiliated with the Company; (iii) holds our Common Shares as capital property; and (iv) has not entered into, with respect to any\nof our Common Shares, a “derivative forward agreement” or a “dividend rental arrangement,” each as defined in\nthe Canada Tax Act. Generally, our Common Shares will be capital property to a Holder provided the Holder does not acquire or hold such\nCommon Shares in the course of carrying on a business or as part of an adventure or concern in the nature of trade.\n\n \n\nThis summary is based upon the current provisions\nof the Canada Tax Act, and an understanding of the current administrative practices published in writing by the Canada Revenue Agency\nprior to the date hereof. This summary takes into account all specific proposals to amend the Canada Tax Act publicly announced by, or\non behalf of, the Minister of Finance (Canada) prior to the date hereof (the “**Proposed Amendments**”) and assumes that\nall Proposed Amendments will be enacted in the form proposed. This summary does not otherwise take into account or anticipate any changes\nin law or administrative policy, whether by legislative, governmental or judicial decision or action, and does not take into account or\nconsider any provincial, territorial or foreign income tax considerations.\n\n** **\n\n**This summary is of a general nature only and is not exhaustive of\nall possible Canadian federal income tax considerations. It is not, is not intended to be, and should not be construed to be legal or\ntax advice to any particular Holder. Accordingly, Holders are urged to consult their own tax advisors having regard to their own particular\ncircumstances.**\n\n** **\n\nCurrency Conversion\n\n \n\nGenerally, for purposes of the Canada Tax Act,\nall amounts relating to the acquisition, holding or disposition of our Common Shares must be expressed into Canadian dollars. Amounts\ndenominated in another currency must be converted into Canadian dollars based on exchange rates as determined in accordance with the Canada\nTax Act.\n\n** **\n\nHolders Not Resident in Canada\n\n \n\nThe following portion of the summary is generally\napplicable to a Holder who, at all relevant times, for purposes of the Canada Tax Act: (i) is not, and is not deemed to be, a resident\nof Canada, and (ii) does not use or hold, and is not deemed to use or hold, our Common Shares in a business carried on in Canada (a “**Non-Resident\nHolder**”). Special rules, which are not discussed in this summary, may apply to a Non-Resident Holder that is an insurer that\ncarries on an insurance business in Canada and elsewhere.\n\n** **\n\nDividends\n\n \n\nDividends paid or credited, or deemed under the\nCanada Tax Act to be paid or credited, by the Company to a Non-Resident Holder on our Common Shares will generally be subject to Canadian\nwithholding tax under the Canada Tax Act at the rate of 25% of the gross amount of the dividend, subject to any reduction in the rate\nof withholding to which the Non-Resident Holder is entitled under any applicable income tax convention.\n\n** **\n\nDispositions\n\n \n\nA Non-Resident Holder for whom our Common Shares\nare not or are not deemed to be “taxable Canadian property” for purposes of the Canada Tax Act will generally not be subject\nto income tax under the Canada Tax Act on the disposition or deemed disposition of such shares.\n\n \n\nGenerally, provided that our Common Shares are\nlisted on a “designated stock exchange” (which includes the Nasdaq), our Common Shares will not be taxable Canadian property\nto a Non-Resident Holder at a particular time unless at any time during the 60-month period that ends at that particular time, both of\nthe following conditions were satisfied: (a) one or any combination of (i) the Non-Resident Holder, (ii) persons with whom the Non-Resident\nHolder did not deal at arm’s length (for purposes of the Canada Tax Act), and (iii) partnerships in which the Non-Resident Holder\nor a person with whom the Non-Resident Holder did not deal at arm’s length held a membership interest directly or indirectly through\none or more partnerships, owned 25% or more of the issued shares of any class or series of a class of the capital stock of the Company,\nand at that time (b) more than 50% of the fair market value of our Common Shares was derived directly or indirectly from one or any combination\nof real or immovable property situated in Canada, “Canadian resource properties” (as defined in the Canada Tax Act), “timber\nresource properties” (as defined in the Canada Tax Act) or options in respect of, interests in, or for civil law rights in, any\nsuch property, whether or not such property exists. Notwithstanding the foregoing, our Common Shares may otherwise be deemed to be taxable\nCanadian property of a Non-Resident Holder in certain circumstances. The Non-Resident Holders for whom Common Shares may constitute taxable\nCanadian property should consult their own tax advisors.\n\n \n\n78\n\n \n\n \n\nHolders Resident in Canada\n\n \n\nThe following portion of the summary is generally\napplicable to a Holder who, at all relevant times, for purposes of the Canada Tax Act, is or is deemed to be resident in Canada (a “**Canadian\nResident Holder**”). Certain Canadian Resident Holders may be entitled to make, or may have already made, the irrevocable election\npermitted by subsection 39(4) of the Canada Tax Act the effect of which may be to deem to be capital property any of our Common Shares\n(and all other “Canadian securities”, as defined in the Canada Tax Act) owned by such Resident Holder in the taxation year\nin which the election is made and in all subsequent taxation years. Resident Holders whose Common Shares might not otherwise be considered\nto be capital property should consult their own tax advisors concerning this election.\n\n \n\nThis portion of the summary is not applicable\nto a Canadian Resident Holder (i) that is a “specified financial institution”, (ii) an interest in which is, or for whom the\nSecurities would be, a “tax shelter investment”, (iii) that is a “financial institution” for purposes of the “mark-to-market”\nrules in the Canada Tax Act, (iv) that reports its “Canadian tax results” in a currency other than Canadian currency, or (v)\nthat is a corporation resident in Canada that is, becomes, or does not deal at arm’s length for purposes of the Canada Tax Act with\na corporation resident in Canada that is or becomes, as part of a transaction or event or series of transactions or events that includes\nthe acquisition of our Common Shares, controlled by a non-resident person (or a group of such persons not dealing with each other at arm’s\nlength) for purposes of the “foreign affiliate dumping” rules in section 212.3 of the Canada Tax Act.\n\n** **\n\nDividends\n\n \n\nA Canadian Resident Holder will be required to\ninclude in computing its income for a taxation year any dividends received (or deemed to have been received) on our Common Shares. In\nthe case of a Canadian Resident Holder that is an individual (other than certain trusts), such dividends will be subject to the gross-up\nand dividend tax credit rules applicable to taxable dividends received from “taxable Canadian corporations”, including the\nenhanced gross-up and dividend tax credit applicable to any dividends designated by the Company as an “eligible dividend”\nin accordance with the provisions of the Canada Tax Act. A dividend received (or deemed to have been received) by a Canadian Resident\nHolder that is a corporation will generally be deductible in computing the corporation’s taxable income. In certain circumstances,\nhowever, a taxable dividend received (or deemed to have been received) by a Canadian Resident Holder that is a corporation will be deemed\nto be either proceeds of disposition or a gain from the disposition of a capital property. Canadian Resident Holders that are corporations\nshould consult their own tax advisors having regard to their own particular circumstances.\n\n \n\nA Canadian Resident Holder that is a “private\ncorporation”, as defined in the Canada Tax Act, or any other corporation controlled, whether because of a beneficial interest in\none or more trusts or otherwise, by or for the benefit of an individual (other than a trust) or a related group of individuals (other\nthan trusts), will generally be liable to pay a refundable tax under Part IV of the Canada Tax Act on dividends received (or deemed to\nhave been received) on our Common Shares to the extent such dividends are deductible in computing the Canada Resident Holder’s taxable\nincome for the taxation year.\n\n \n\nDividends received or deemed to be received by\na Canadian Resident Holder who is an individual (other than certain trusts) may result in such Canadian Resident Holder being liable for\nalternative minimum tax under the Canada Tax Act.\n\n** **\n\nDispositions\n\n \n\nGenerally, a Canadian Resident Holder who disposes\nof, or is deemed for purposes of the Canada Tax Act to have disposed of our Common Shares will realize a capital gain (or a capital loss)\nin the taxation year of the disposition equal to the amount by which the proceeds of disposition of the Common Shares exceed (or are less\nthan) the total of (1) the adjusted cost base to the Canadian Resident Holder of the Common Shares determined immediately before the disposition,\nand (2) any reasonable costs of disposition.\n\n \n\n79\n\n \n\n \n\nSubject to the Capital Gains Proposal (as defined\nand discussed below), (i) one-half of any capital gain (a “taxable capital gain”) realized by a Canadian Resident Holder from\na disposition of our Common Shares must be included in the Canadian Resident Holder’s income for the taxation year of disposition,\nand (ii) subject to and in accordance with the provisions of the Canada Tax Act, a Canadian Resident Holder will generally be required\nto deduct one-half of any capital loss (an “allowable capital loss”) realized in the taxation year of disposition against\ntaxable capital gains realized in the same taxation year. Any unused allowable capital losses for the taxation year of disposition may\ngenerally reduce net taxable capital gains realized in any of the three prior taxation years or in any subsequent year in the circumstances\nand to the extent provided in the Canada Tax Act.\n\n \n\nA Canadian Resident Holder that is an individual\n(other than certain trusts) that realizes a capital gain on the disposition or deemed disposition of our Common Shares may be liable for\nalternative minimum tax under the Canada Tax Act. Canadian Resident Holders that realize or could realize capital gains in connection\nwith their Common Shares should consult their own tax advisors in this regard\n\n \n\nIf a Canadian Resident Holder is a corporation,\nany capital loss realized on a disposition or deemed disposition of our Common Shares may, in certain circumstances, be reduced by the\namount of any dividends which have been received or which are deemed to have been received on such Common Shares. Similar rules may apply\nwhere a Canadian Resident Holder that is a corporation is a member of a partnership or a beneficiary of a trust that owns our Common Shares\ndirectly or indirectly through a partnership or a trust. Canadian Resident Holders to whom these rules may be relevant should consult\ntheir own tax advisors.\n\n** **\n\nAdditional Refundable Tax\n\n \n\nA Canadian Resident Holder that is a “Canadian-controlled\nprivate corporation” (as defined in the Canada Tax Act) throughout the relevant taxation year or a “substantive CCPC”\n(as defined in the Canada Tax Act) at any time in the year, may be liable to pay an additional tax (refundable in certain circumstances)\non its “aggregate investment income” (as defined in the Canada Tax Act) for the year, including taxable capital gains realized\non the disposition of our Common Shares. Canadian Resident Holders that are “Canadian-controlled private corporations” or\n“substantive CCPCs” should consult their own tax advisors regarding their particular circumstances.\n\n** **\n\nEligibility for Investment\n\n \n\nProvided that our Common Shares are listed on\na “designated stock exchange” for the purposes of the Canada Tax Act (which currently includes the Nasdaq Global Market),\nour Common Shares will be, at such time, “qualified investments” under the Canada Tax Act for trusts governed by a registered\nretirement savings plan (“**RRSP**”), a registered retirement income fund (“**RRIF**”), a registered education\nsavings plan (“**RESP**”), a deferred profit sharing plan, a registered disability savings plan (“**RDSP**”),\na tax-free savings account (“**TFSA**”), or a first home savings account (“**FHSA**”), each as defined in\nthe Canada Tax Act.\n\n \n\nNotwithstanding the foregoing, if our Common Shares\nheld by a TFSA, RRSP, RRIF, RDSP, FHSA, or RESP (a “**Registered Plan**”) are “prohibited investments” for\npurposes of the Canada Tax Act, the holder of the TFSA, FHSA or RDSP, the annuitant of the RRSP or RRIF, or the subscriber of a RESP (as\nthe case may be) will be subject to a penalty tax as set out in the Canada Tax Act. Our Common Shares will generally be a “prohibited\ninvestment” if the holder of a TFSA, FHSA or RDSP, the annuitant of a RRSP or RRIF, or the subscriber of a RESP (as the case may\nbe): (i) does not deal at arm’s length with the Company for purposes of the Canada Tax Act; or (ii) has a “significant interest”\n(within the meaning of the Canada Tax Act) in the Company. In addition, our Common Shares will not be a prohibited investment if such\nCommon Shares are “excluded property”, as defined in the Canada Tax Act, for the Registered Plan. Holders who intend to hold\nour Common Shares in a Registered Plan should consult their own tax advisors in this regard.\n\n \n\n80\n\n \n\n \n\n**EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT\nITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN COMMON SHARES IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES.**\n\n \n\nF. Dividends and Paying Agents\n\n \n\nNot applicable.\n\n \n\nG. Statement by Experts\n\n \n\nNot applicable.\n\n** **\n\nH. Documents on Display\n\n \n\nWe are subject to the informational requirements\nof the Exchange Act. Accordingly, we are required to file reports and other information with the SEC, including annual reports on Form 20-F\nand reports on Form 6-K. The SEC maintains an Internet site at *www.sec.gov* that contains reports, proxy and information statements\nand other information we have filed electronically with the SEC. As a foreign private issuer, we are exempt under the Exchange Act from,\namong other things, the rules prescribing the furnishing and content of proxy statements, and our executive officers, directors and\nprincipal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange\nAct. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently\nor as promptly as U.S. companies whose securities are registered under the Exchange Act.\n\n \n\nWe also make available on our website, free of\ncharge, our annual reports and the text of our reports on Form 6-K, including any amendments to these reports, as well as certain\nother SEC filings, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. Our website address\nis *www.psyence.com*. The reference to our website is an inactive textual reference only, and information contained therein or connected\nthereto is not incorporated into this Report.\n\n \n\nI. Subsidiary Information\n\n \n\nNot applicable.\n\n \n\nJ. Annual Report to Security Holders.\n\n \n\nNot applicable."}