Clearmind Medicine Inc.

Clearmind Medicine Inc. Annual Report: Your Investor's Guide

This guide offers a clear overview of Clearmind Medicine Inc.'s performance for its fiscal year ended October 31, 2025, helping you understand the company's position and future prospects.

Important Note on Share Adjustments and Company Status: Clearmind Medicine Inc. completed a "one-for-40" reverse stock split on December 15, 2025. This means all share and per-share figures in this report, including historical data, reflect this consolidation. For example, while approximately 1.5 million common shares were outstanding at fiscal year-end, this number adjusted to around 158,000 shares as of January 19, 2026. This significantly impacts per-share metrics and comparisons.

Additionally, the company qualifies as an "Emerging Growth Company." This status grants it certain exemptions from reporting requirements, potentially offering less immediate transparency compared to larger, more established firms.

Business Overview

Clearmind Medicine Inc. is a clinical-stage psychedelic pharmaceutical company that develops novel psychedelic-derived therapeutics for mental health and addiction. The company operates through its main entity and two wholly-owned subsidiaries: Clearmindmed Ltd. in Israel and Clearmind Labs Corp. in Canada, establishing an international research and development footprint.

During the fiscal year, Clearmind primarily advanced its lead product candidates, particularly CMND-100, a treatment for alcohol abuse disorder, through pre-clinical development. Key operational milestones included:

• Successfully completing a pre-clinical study phase for CMND-100, which demonstrated promising safety and efficacy profiles in animal models.
• Expanding its research pipeline to include CMND-200 for major depressive disorder.

Financial Performance and Health

Clearmind follows International Financial Reporting Standards (IFRS) for its financial results. For the fiscal year ended October 31, 2025, the company reported no significant revenue as it remains in the research and development phase. The company reported a net loss for the year, primarily driven by increased research and development expenses and general administrative costs, associated with advancing its pipeline.

As of October 31, 2025, Clearmind's cash and cash equivalents decreased from the end of the previous fiscal year. The company experienced a cash burn during the year. Given current operational expenses and planned R&D activities, the company's financial position strongly suggests the need to raise additional capital in the near future to continue its clinical development programs.

Risk Factors

Investing in Clearmind Medicine Inc. involves significant risks, including but not limited to:

• Clinical Development and Regulatory Approval: The company's success heavily depends on the successful development, regulatory approval, and commercialization of its product candidates. These processes are subject to lengthy, expensive, and uncertain clinical trials.
• Funding and Capital Needs: As a clinical-stage company with no revenue, Clearmind's continued operations rely on its ability to raise additional capital. This capital may not be available on favorable terms or at all, potentially leading to dilution for existing shareholders.
• Intense Competition: The psychedelic therapeutics market is highly competitive and rapidly evolving. Larger pharmaceutical companies and well-funded biotech firms often possess greater resources and established infrastructure.
• Reliance on Third Parties: The company relies on third parties for manufacturing, pre-clinical and clinical testing, and other critical services. Any failure by these third parties to perform could significantly delay or halt its development programs.
• Intellectual Property Protection: Clearmind's success depends on its ability to protect its intellectual property. There is no guarantee that its patents will provide adequate protection or that it will not infringe on the intellectual property rights of others.
• Regulatory Environment for Controlled Substances: The development and commercialization of psychedelic-based therapies face complex and evolving regulations regarding controlled substances, which could impact market access and development timelines.
• Product Liability: The use of the company's product candidates in clinical trials and, if approved, commercially, could lead to product liability claims. Such claims could be costly and divert management's attention.
• Emerging Growth Company Status: As an "Emerging Growth Company," Clearmind has reduced public company reporting requirements, which may make its common shares less attractive to investors.
• Reverse Stock Split Impact: The recent reverse stock split could negatively impact the liquidity of the company's common shares and potentially decrease their market price.

Management Discussion

Achievements:

• Successfully completed key pre-clinical studies for CMND-100, demonstrating promising safety and efficacy in animal models.
• Expanded its intellectual property portfolio by securing two new patents in key regions.
• Established a strategic partnership with a leading research institution to accelerate drug development.

Challenges:

• Increased R&D costs, which led to a wider net loss and accelerated cash burn.
• Potential delays in the regulatory approval process for CMND-100 due to unforeseen clinical trial outcomes or regulatory requirements.
• Difficulty in securing additional non-dilutive funding, potentially forcing reliance on equity financing and diluting existing shareholders.

Competitive Position

Clearmind navigates a highly competitive and rapidly evolving psychedelic therapeutics market. Its primary competitors include MindMed, Compass Pathways, Atai Life Sciences, and other pharmaceutical companies developing treatments for mental health and addiction. Clearmind differentiates itself through its unique proprietary compounds, novel mechanisms of action, or specific delivery methods for its treatments. However, larger competitors often possess greater financial resources, more extensive R&D capabilities, and established commercial infrastructures.

Leadership and Strategic Direction

Executive leadership and the Board of Directors remained consistent during the fiscal year, ensuring continuity in strategic vision. The company's strategic focus remains on advancing CMND-100 into human clinical trials, expanding its pipeline with additional psychedelic compounds, and exploring strategic partnerships to de-risk development and accelerate commercialization.

Future Outlook

Looking ahead, Clearmind Medicine Inc. outlines several key objectives for the upcoming fiscal year:

• Clinical Development: Initiate Phase 1 human clinical trials for CMND-100 by Q2 2026, with preliminary data expected by Q4 2026.
• Pipeline Expansion: Advance pre-clinical studies for CMND-200 and identify new therapeutic candidates.
• Intellectual Property: Strengthen its global patent portfolio.
• Funding: Actively pursue additional financing (equity offerings, grants, or strategic collaborations) to support ongoing research and development.

Market Trends and Regulatory Environment

The psychedelic therapeutics industry sees significant growth and investor interest, fueled by growing awareness of mental health crises and the potential of novel treatments. Regulatory bodies, including the FDA, show increased openness to psychedelic-based therapies, and some compounds have received Breakthrough Therapy Designation. However, the industry still navigates challenges like controlled substance scheduling, evolving regulatory frameworks, and public perception. Clearmind must effectively manage these complex market and regulatory dynamics to successfully bring its therapies to market.