What changed in Atai Beckley N.V.'s 2023 10-K compared to 2022?

Across the narrative sections we track, Atai Beckley N.V. (ATAI) added 753 paragraphs, removed 741, and edited 552 between the 2022 and 2023 10-K filings. The biggest movers are Item 1. Business (+568/−543), Item 7. Management's Discussion & Analysis (+168/−185), Item 5. Market for Registrant's Common Equity (+6/−2).

What changed in Atai Beckley N.V.'s MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 168 new/edited paragraphs and 185 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did Atai Beckley N.V.'s Legal Proceedings (Item 3) change in 2023?

Item 3 shows 3 added/edited paragraphs and 2 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this ATAI 10-K diff come from?

The source filings are Atai Beckley N.V.'s official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in Atai Beckley N.V.'s 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of Atai Beckley N.V.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+753 added−741 removedSource: 10-K (2024-03-28) vs 10-K (2023-03-24)

Top changes in Atai Beckley N.V.'s 2023 10-K

753 paragraphs added · 741 removed · 552 edited across 6 sections

Item 1. Business+568 / −543 · 419 edited
Item 7. Management's Discussion & Analysis+168 / −185 · 122 edited
Item 5. Market for Registrant's Common Equity+6 / −2 · 1 edited
Item 7A. Quantitative and Qualitative Disclosures About Market Risk+6 / −6 · 6 edited
Item 2. Properties+2 / −3 · 2 edited

Item 1. Business

Business — how the company describes what it does

419 edited+149 added−124 removed930 unchanged

2022 filing

2023 filing

Biggest changeOur remediation plan included, but was not limited to, the following measures: • Engaged consultants to assist management in designing and implementing a formal risk assessment process. • Formalized our accounting and financial reporting policies and the related procedures and designed and implemented controls over the timely recording, review, and reconciliation of financial transactions, including expense and stock-based compensation transactions. • Hired additional qualified accounting personnel and implemented accounting systems to support our policies, procedures and controls, while maintaining segregation of duties amongst accounting personnel. • Designed and implemented controls over the recording and review of technical accounting matters, application of new accounting standards, tax matters, and valuations, and engaged third parties subject to our oversight and review, as needed While management has concluded that the previously identified material weaknesses in internal control over financial reporting were remediated as of December 31, 2022, we can give no assurance that additional material weaknesses will not be identified in the future.

Biggest changeWhile management has concluded that the previously identified material weaknesses in internal control over financial reporting were remediated as of December 31, 2022, we can give no assurance that additional material weaknesses will not be identified in the future.

In over 14 million prescriptions of Stresam® between 2000 and 2012, there was a low ADR rate of ~ 21 per million treatments. There were only sporadic reports of ADRs relating to abuse, misuse or dependence.

In over 14 million prescriptions of Stresam® between 2000 and 2012, there was a low ADR rate of ~ 21 per million treatments. There 14 were only sporadic reports of ADRs relating to abuse, misuse or dependence.

Clinical trials for which an application was submitted (i) prior to January 31, 2022 under the Clinical Trials Directive, or (ii) between January 31, 2022 and January 31, 2023 and for which the sponsor has opted for the application of the EU Clinical Trials Directive remain governed by said Directive until January 31, 2025.

Clinical trials for which an application was submitted (i) prior to January 31, 2022 under the EU Clinical Trials Directive, or (ii) between January 31, 2022 and January 31, 2023 and for which the sponsor has opted for the application of the EU Clinical Trials Directive remain governed by said Directive until January 31, 2025.

For example, we may forego or delay pursuit of certain product candidates or business opportunities that later prove to have greater commercial potential than our current or future development programs and product candidates.

For example, we may forego or delay pursuit of certain product candidates or business opportunities that later may prove to have greater commercial potential than our current or future development programs and product candidates.

The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each member state, leading to a single decision per member state.

However, the United Nations, or UN, Single Convention on Narcotic Drugs of 1961 and the UN Convention on Psychotropic Substances of 1971, or the UN Conventions, codify internationally applicable control measures to ensure the availability of narcotic drugs and psychotropic substances for medical and scientific purposes. The individual EU member states are all signatories to these UN Conventions.

The UN Conventions require signatories to require all persons manufacturing, trading (including exporting and importing) or distributing controlled substances to obtain a license from the relevant authority. Each individual export or import of a controlled substance must also be subject to an authorization.

For example, because divisions from both FDA’s Center for Drug Evaluation and Research and FDA’s Center for Devices and Radiological Health must review submissions concerning product candidates that are combination products comprised of drug and devices, the regulatory review and approval process for these products may be lengthened.

For example, because divisions from both the FDA’s Center for Drug Evaluation and Research and the FDA’s Center for Devices and Radiological Health must review submissions concerning product candidates that are combination products comprised of drug and devices, the regulatory review and approval process for these products may be lengthened.

Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).

Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization. In addition, programs that we currently believe to be complementary may eventually become competitors.

Sales of a substantial number of shares of our common shares in the public market, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common shares. This could also impair our ability to raise additional capital through the sale of our equity securities.

Sales of a substantial number of our common shares in the public market, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common shares. This could also impair our ability to raise additional capital through the sale of our equity securities.

Such a lawsuit could also divert the time and attention of our management from our business, which could significantly harm our business, profitability and reputation. Additionally, due several factors, including to market conditions, if our share price falls below the minimum share price requirement as required by Nasdaq, Nasdaq may take steps to delist our securities.

Such a lawsuit could also divert the time and attention of our management from our business, which could significantly harm our business, profitability and reputation. Additionally, due to several factors, including market conditions, if our share price falls below the minimum share price requirement as required by Nasdaq, Nasdaq may take steps to delist our securities.

The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including: the efficacy and safety of the product as demonstrated in pivotal clinical trials; the potential and perceived advantages of the product compared to competitive and alternative products; the prevalence and severity of any side effects; whether the product is designated under physician treatment guidelines as a first-, second- or third-line therapy; our ability, or the ability of any future collaborators, to offer the product for sale at competitive prices; the product’s convenience and ease of dosing and administration compared to alternative treatments, including the need to have products administered in clinical settings, rather than the home, for patients who are prescribed the products; the willingness of the target patient population to try, and of physicians to prescribe, the product; limitations or warnings, including distribution or use restrictions contained in the product’s approved labeling; the strength of sales, marketing and distribution support; restrictions on how the product is distributed; the timing of market introduction of competitive products; publicity concerning these products or competing products and treatments; changes in the standard of care for the targeted indications for the product; and availability and adequacy of coverage and reimbursement from government payors, managed care plans and other third-party payors.

The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including: the efficacy and safety of the product as demonstrated in pivotal clinical trials; the potential and perceived advantages of the product compared to competitive and alternative products; the prevalence and severity of any side effects; whether the product is designated under physician treatment guidelines as a first-, second- or third-line therapy; our ability, or the ability of any future collaborators, to offer the product for sale at competitive prices; the product’s convenience and ease of dosing and administration compared to alternative treatments, including the need to have products administered in clinical settings, rather than the home, for patients who are prescribed the products; the willingness of the target patient population to try, and of physicians to prescribe, the product; limitations or warnings, including distribution or use restrictions contained in the product’s approved labeling; the strength of sales, marketing and distribution support; restrictions on how the product is distributed; the timing of market introduction of competitive products; publicity concerning these products or competing products and treatments; changes in the standard of care for the targeted indications for the product; and 49 availability and adequacy of coverage and reimbursement from government payors, managed care plans and other third-party payors.

Patient and subject enrollment is affected by factors including: 45 the size and nature of a patient population; the patient eligibility criteria defined in the applicable clinical trial protocols, which may limit the patient populations eligible for clinical trials to a greater extent than competing clinical trials for the same indication; the size of the study population required for analysis of the trial’s primary endpoints; the severity of the disorder under investigation; the proximity of patients to a trial site; the inclusion and exclusion criteria for the trial in question; the design of the trial protocol; the ability to recruit clinical trial investigators with the appropriate competencies and experience; the approval or concurrent enrollment of clinical trials involving competing product candidates currently under development or competing clinical trials for similar product candidates or targeting patient populations meeting our patient eligibility criteria; the availability and efficacy of approved medications or product candidates for the disorder or condition under investigation; clinicians’ and patients’ perceptions as to the potential advantages and side effects of the product candidate being studied in relation to other available product candidates and product candidates; the ability to obtain and maintain patient consents; and the risk that patients enrolled in clinical trials will not complete such trials, for any reason.

Patient and subject enrollment is affected by factors including: the size and nature of a patient population; the patient eligibility criteria defined in the applicable clinical trial protocols, which may limit the patient populations eligible for clinical trials to a greater extent than competing clinical trials for the same indication; the size of the study population required for analysis of the trial’s primary endpoints; the severity of the disorder under investigation; the proximity of patients to a trial site; the inclusion and exclusion criteria for the trial in question; the design of the trial protocol; the ability to recruit clinical trial investigators with the appropriate competencies and experience; the approval or concurrent enrollment of clinical trials involving competing product candidates currently under development or competing clinical trials for similar product candidates or targeting patient populations meeting our patient eligibility criteria; the availability and efficacy of approved medications or product candidates for the disorder or condition under investigation; clinicians’ and patients’ perceptions as to the potential advantages and side effects of the product candidate being studied in relation to other available product candidates and product candidates; the ability to obtain and maintain patient consents; and the risk that patients enrolled in clinical trials will not complete such trials, for any reason.

Any acquisition or strategic partnership may entail numerous risks, including: increased operating expenses and cash requirements; the assumption of indebtedness or contingent or unknown liabilities; the issuance of our equity securities which would result in dilution to our shareholders; assimilation of operations, intellectual property, products and product candidates of an acquired company, including difficulties associated with integrating new personnel and operating systems; the diversion of our management’s attention from our existing product programs and initiatives in pursuing such an acquisition or strategic partnership; retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships; risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals; our inability to generate revenue from acquired intellectual property, technology and/or products sufficient to meet our objectives or even to offset the associated transaction and maintenance costs; and 90 our incurrence of large one-time expenses and acquisition of intangible assets that could result in significant future amortization expense.

Any acquisition or strategic partnership may entail numerous risks, including: increased operating expenses and cash requirements; the assumption of indebtedness or contingent or unknown liabilities; the issuance of our equity securities which would result in dilution to our shareholders; assimilation of operations, intellectual property, products and product candidates of an acquired company, including difficulties associated with integrating new personnel and operating systems; the diversion of our management’s attention from our existing product programs and initiatives in pursuing such an acquisition or strategic partnership; retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships; risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals; our inability to generate revenue from acquired intellectual property, technology and/or products sufficient to meet our objectives or even to offset the associated transaction and maintenance costs; and our incurrence of large one-time expenses and acquisition of intangible assets that could result in significant future amortization expense.

Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments and other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse 56 anesthetists, anesthesiology assistants and certified nurse midwives), and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; federal price reporting laws, which require manufacturers to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on approved products; and analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by non- governmental third-party payors, including private insurers, or by the patients themselves; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to physicians, other healthcare providers and entities; state and local laws that require the registration of pharmaceutical sales representatives.

Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments and other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists, anesthesiology assistants and certified nurse midwives), and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; 57 federal price reporting laws, which require manufacturers to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on approved products; and analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by non- governmental third-party payors, including private insurers, or by the patients themselves; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to physicians, other healthcare providers and entities; state and local laws that require the registration of pharmaceutical sales representatives.

Furthermore, if we or others later identify undesirable side effects caused by our product candidates if approved, several potentially significant negative consequences could result, including: regulatory authorities may suspend or withdraw approvals of such product candidate, or seek an injunction against its manufacture or distribution; 47 regulatory authorities may require additional warnings on the label, including “boxed” warnings, or issue safety alerts, Deal Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; we may be required by the FDA or other regulatory authorities to implement a REMS or similar risk management measures; we may be required to change the way a product candidate is administered or conduct additional clinical trials; we may be subject to fines, injunctions or the imposition of civil or criminal penalties; we could be sued and held liable for harm caused to patients; and our reputation may suffer.

Furthermore, if we or others later identify undesirable side effects caused by our product candidates if approved, several potentially significant negative consequences could result, including: regulatory authorities may suspend or withdraw approvals of such product candidate, or seek an injunction against its manufacture or distribution; regulatory authorities may require additional warnings on the label, including “boxed” warnings, or issue safety alerts, Deal Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; we may be required by the FDA or other regulatory authorities to implement a REMS or similar risk management measures; we may be required to change the way a product candidate is administered or conduct additional clinical trials; we may be subject to fines, injunctions or the imposition of civil or criminal penalties; we could be sued and held liable for harm caused to patients; and our reputation may suffer.

The ACA, among other things, subjects biological products to potential competition by lower-cost biosimilars, addresses a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increases the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations, establishes annual fees and taxes on manufacturers of certain branded prescription drugs, and creates a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70 percent (effective as of 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.

The 59 ACA, among other things, subjects biological products to potential competition by lower-cost biosimilars, addresses a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increases the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations, establishes annual fees and taxes on manufacturers of certain branded prescription drugs, and creates a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70 percent (effective as of 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.

Collaborations are subject to numerous risks, which may include risks that: collaborators may have significant discretion in determining the efforts and resources that they will apply to collaborations; collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to their acquisition of competitive products or their internal development of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates; a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; we could grant exclusive rights to collaborators that would prevent us from collaborating with others; collaborators may not properly maintain or defend our programs’ intellectual property rights or may use our programs’ intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate such intellectual property or proprietary information or expose us or our programs to potential liability; disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our current or future product candidates or that results in costly litigation or arbitration that diverts management attention and resources; collaborations may be terminated, which may result in a need for additional capital to pursue further development or commercialization of the applicable current or future product candidates; collaborators may own or co-own intellectual property covering products that result from our collaboration with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; disputes may arise with respect to the ownership of any intellectual property developed pursuant to our collaborations; and a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.

Collaborations are subject to numerous risks, such as: collaborators may have significant discretion in determining the efforts and resources that they will apply to collaborations; 62 collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to their acquisition of competitive products or their internal development of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates; a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; we could grant exclusive rights to collaborators that would prevent us from collaborating with others; collaborators may not properly maintain or defend our programs’ intellectual property rights or may use our programs’ intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate such intellectual property or proprietary information or expose us or our programs to potential liability; disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our current or future product candidates or that results in costly litigation or arbitration that diverts management attention and resources; collaborations may be terminated, which may result in a need for additional capital to pursue further development or commercialization of the applicable current or future product candidates; collaborators may own or co-own intellectual property covering products that result from our collaboration with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; disputes may arise with respect to the ownership of any intellectual property developed pursuant to our collaborations; and a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.

Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, or complete withdrawal of the product from the market or product recalls; • fines, warning letters, or untitled letters; • clinical holds on clinical studies; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; 22 • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.

Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, or complete withdrawal of the product from the market or product recalls; • fines, warning letters, or untitled letters; • clinical holds on clinical studies; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.

Even if they are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: 63 reliance on the third-party for sourcing of raw materials, components, and such other goods as may be required for execution of its manufacturing processes and the oversight by the third-party of its suppliers; reliance on the third-party for regulatory compliance and quality assurance for the manufacturing activities each performs; the possible breach of the manufacturing agreement by the third-party; the possible misappropriation of proprietary information, including trade secrets and know-how; and the possible termination or non-renewal of the agreement by the third-party at a time that is costly or inconvenient for us.

Even if they are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: reliance on the third-party for sourcing of raw materials, components, and such other goods as may be required for execution of its manufacturing processes and the oversight by the third-party of its suppliers; reliance on the third-party for regulatory compliance and quality assurance for the manufacturing activities each performs; the possible breach of the manufacturing agreement by the third-party; the possible misappropriation of proprietary information, including trade secrets and know-how; and the possible termination or non-renewal of the agreement by the third-party at a time that is costly or inconvenient for us.

Events that may prevent successful or timely initiation or completion of clinical trials include: inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials; delays in confirming target engagement, patient selection or other relevant biomarkers (with respect to certain of our clinical trials) to be utilized in preclinical and clinical product candidate development; delays in reaching a consensus with regulatory agencies as to the design or implementation of our clinical trials; delays in reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; delays in identifying, recruiting and training suitable clinical investigators; delays in obtaining required Institutional Review Board, or IRB, or ethics committees approval at each clinical trial site; imposition of a temporary or permanent clinical hold by regulatory agencies for a number of reasons, including after review of an IND or amendment, CTA, or amendment, investigational device exemption, or IDE, or supplement, or equivalent application or amendment; as a result of a new safety finding that presents unreasonable risk to clinical trial participants; or a negative finding from an inspection of our clinical trial operations or study sites; developments in trials for other product candidates with the same targets or related modalities as our product candidates conducted by competitors that raise regulatory or safety concerns about risk to patients of the treatment, or if the FDA or any other regulatory authority finds that the investigational protocol or plan is clearly deficient to meet its stated objectives; difficulties in securing access to materials for the comparator arm of certain of our clinical trials; delays in identifying, recruiting and enrolling suitable patients to participate in clinical trials, and delays caused by patients withdrawing from clinical trials or failing to return for post-treatment follow-up; difficulties in finding a sufficient number of trial sites, or trial sites deviating from trial protocol or dropping out of a trial; difficulty collaborating with patient groups and investigators; failure by CROs, other third parties, or us to adhere to clinical trial requirements; failure to perform in accordance with the FDA’s or any other regulatory authority’s good clinical practices requirements, or GCPs, or regulatory guidelines in other countries, including deficiencies in the manufacturing process, test procedures and specifications or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from nonclinical studies or clinical trials; occurrence of adverse events, or AEs, undesirable side effects or other unexpected characteristics associated with the product candidate that are viewed to outweigh its potential benefits; changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; changes in the standard of care on which a clinical development plan was based, which may require new or additional trials; the cost of clinical trials of any product candidates that we may identify and pursue being greater than we anticipate; 41 clinical trials of any product candidates that we may identify and pursue producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon product development programs; transfer of manufacturing processes to larger-scale facilities operated by a CMO and delays or failures by our CMOs or us to make any necessary changes to such manufacturing process; and delays in manufacturing, testing, releasing, validating or importing/exporting sufficient stable quantities of product candidates that we may identify for use in clinical trials or the inability to do any of the foregoing.

Events that may prevent successful or timely initiation or completion of clinical trials include: inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials; delays in confirming target engagement, patient selection or other relevant biomarkers (with respect to certain of our clinical trials) to be utilized in preclinical and clinical product candidate development; delays in reaching a consensus with regulatory agencies as to the design or implementation of our clinical trials; delays in reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; delays in identifying, recruiting and training suitable clinical investigators; delays in obtaining required Institutional Review Board, or IRB, or ethics committees approval at each clinical trial site; imposition of a temporary or permanent clinical hold by regulatory agencies for a number of reasons, including after review of an IND or amendment, CTA, or amendment, investigational device exemption, or IDE, or supplement, or equivalent application or amendment; as a result of a new safety finding that presents unreasonable risk to clinical trial participants; or a negative finding from an inspection of our clinical trial operations or study sites; developments in trials for other product candidates with the same targets or related modalities as our product candidates conducted by competitors that raise regulatory or safety concerns about risk to patients of the treatment, or if the FDA or any other regulatory authority finds that the investigational protocol or plan is clearly deficient to meet its stated objectives; difficulties in securing access to materials for the comparator arm of certain of our clinical trials; delays in identifying, recruiting and enrolling suitable patients to participate in clinical trials, and delays caused by patients withdrawing from clinical trials or failing to return for post-treatment follow-up; difficulties in finding a sufficient number of trial sites, or trial sites deviating from trial protocol or dropping out of a trial; difficulty collaborating with patient groups and investigators; 42 failure by CROs, other third parties, or us to adhere to clinical trial requirements; failure to perform in accordance with the FDA’s or any other regulatory authority’s good clinical practice requirements, or GCPs, or regulatory guidelines in other countries, including deficiencies in the manufacturing process, test procedures and specifications or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from nonclinical studies or clinical trials; occurrence of adverse events, or AEs, undesirable side effects or other unexpected characteristics associated with the product candidate that are viewed to outweigh its potential benefits; changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; changes in the standard of care on which a clinical development plan was based, which may require new or additional trials; the cost of clinical trials of any product candidates that we may identify and pursue being greater than we anticipate; clinical trials of any product candidates that we may identify and pursue producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon product development programs; transfer of manufacturing processes to larger-scale facilities operated by a CMO and delays or failures by our CMOs or us to make any necessary changes to such manufacturing process; and delays in manufacturing, testing, releasing, validating or importing/exporting sufficient stable quantities of product candidates that we may identify for use in clinical trials or the inability to do any of the foregoing.

Many of our current or potential competitors, either alone or with their strategic partners, may have or develop in the future: greater financial, technical, and human resources than we have at every stage of the discovery, development, manufacture, and commercialization of products; more extensive experience in preclinical testing, conducting clinical trials, obtaining regulatory approvals, and in manufacturing, marketing, and selling drug products; products that have been approved or are in late stages of development; and collaborative arrangements in our target markets with leading companies and research institutions.

Many of our current or potential competitors, either alone or with their strategic partners, may have or develop in the future: 61 greater financial, technical, and human resources than we have at every stage of the discovery, development, manufacture, and commercialization of products; more extensive experience in preclinical testing, conducting clinical trials, obtaining regulatory approvals, and in manufacturing, marketing, and selling drug products; products that have been approved or are in late stages of development; and collaborative arrangements in our target markets with leading companies and research institutions.

Obtaining marketing approval is an extensive, lengthy, expensive and inherently uncertain process, and regulatory authorities may delay, limit or deny approval of our product candidates for many reasons, including but not limited to: the inability to demonstrate to the satisfaction of the FDA, the EMA or comparable foreign regulatory authorities that the applicable product candidate is safe and effective as a treatment for our targeted indications or otherwise meets the applicable regulatory standards for approval; the FDA, the EMA or comparable foreign regulatory authorities may disagree with the design, endpoints or implementation of our clinical trials; the population studied in the clinical program may not be sufficiently broad or representative to assure safety or efficacy in the full population for which we seek approval; the FDA, the EMA or comparable foreign regulatory authorities may require additional preclinical studies or clinical trials beyond those that we currently anticipate; the FDA, the EMA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; 49 the data collected from clinical trials of product candidates that we may identify and pursue may not be sufficient to support the submission of an NDA or other submission for regulatory approval in the United States or elsewhere; we may be unable to demonstrate to the FDA, the EMA or comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable; the FDA, the EMA or comparable foreign regulatory authorities may identify deficiencies in the manufacturing processes, test procedures and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and the approval policies or regulations of the FDA, or comparable foreign regulatory authorities may change in a manner that renders the clinical trial design or data insufficient for approval.

Obtaining marketing approval is an extensive, lengthy, expensive and inherently uncertain process, and regulatory authorities may delay, limit or deny approval of our product candidates for many reasons, including but not limited to: the inability to demonstrate to the satisfaction of the FDA, the EMA or comparable foreign regulatory authorities that the applicable product candidate is safe and effective as a treatment for our targeted indications or otherwise meets the applicable regulatory standards for approval; the FDA, the EMA or comparable foreign regulatory authorities may disagree with the design, endpoints or implementation of our clinical trials; 50 the population studied in the clinical program may not be sufficiently broad or representative to assure safety or efficacy in the full population for which we seek approval; the FDA, the EMA or comparable foreign regulatory authorities may require additional preclinical studies or clinical trials beyond those that we currently anticipate; the FDA, the EMA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; the data collected from clinical trials of product candidates that we may identify and pursue may not be sufficient to support the submission of an NDA or other submission for regulatory approval in the United States or elsewhere; we may be unable to demonstrate to the FDA, the EMA or comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable; the FDA, the EMA or comparable foreign regulatory authorities may identify deficiencies in the manufacturing processes, test procedures and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and the approval policies or regulations of the FDA, or comparable foreign regulatory authorities may change in a manner that renders the clinical trial design or data insufficient for approval.

Additionally, our or our collaborators’ ability to successfully initiate, enroll and conduct a clinical trial outside the United States is subject to numerous additional risks, including: difficulty in establishing or managing relationships with CROs and physicians; differing standards for the conduct of clinical trials; differing standards of care for patients with a particular disorder; an inability to locate qualified local consultants, physicians and partners; and the potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation of pharmaceutical and biotechnology products and treatments.

Additionally, our or our collaborators’ ability to successfully initiate, enroll and conduct a clinical trial outside the United States is subject to numerous additional risks, including: difficulty in establishing or managing relationships with CROs and physicians; differing standards for the conduct of clinical trials; differing standards of care for patients with a particular disorder; an inability to locate qualified local consultants, physicians and partners; and 47 the potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation of pharmaceutical and biotechnology products and treatments.

In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients. • Phase 2: The product candidate is administered to a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages, dose tolerance and dosing schedule and to identify possible adverse side effects and 19 safety risks.

For any of our drug product candidates receiving marketing authorization, the FDA or other regulatory authorities could require us to adopt a risk evaluation and mitigation strategy, or REMS, or similar risk management measures and could apply elements to assure safe use to ensure that the benefits of the product outweigh its risks, which may include, among other things, a Medication Guide outlining the risks of the product for distribution to patients and a communication plan to health care practitioners.

If anything were to happen which would cause us to be deemed to be an investment company under the Investment Company Act (such as significant changes in the value of the atai companies or a change in circumstance that results in a reclassification of our interests in the atai companies for purposes of the Investment Company Act), the requirements imposed by the Investment Company Act could make it impractical for us to continue our business as currently conducted, which would materially adversely affect our business, financial condition and results of operations.

If anything were to happen which would cause us to be deemed to be an investment company under the Investment Company Act (such as significant changes in the value of the atai companies or a change in circumstance that results in a reclassification of our interests in the atai companies for purposes of the Investment Company Act), the requirements imposed by the Investment Company Act could make it impractical for us to continue our business as currently conducted, which would materially 84 adversely affect our business, financial condition and results of operations.

Governmental payers, health maintenance organization, managed care, pharmacy benefit and other third-party payers are increasingly attempting to manage their healthcare expenditures by limiting both coverage and the level of reimbursement of new drugs and, as a result, they may not cover or provide adequate reimbursement for our product candidates, which is essential for most patients to be able to afford treatments.

Governmental payers, health maintenance organization, managed care, pharmacy benefit and other third-party payers are increasingly attempting to manage their healthcare expenditures by limiting both coverage and the level of 56 reimbursement of new drugs and, as a result, they may not cover or provide adequate reimbursement for our product candidates, which is essential for most patients to be able to afford treatments.

Perception Neuroscience also owns one issued U.S. patent, one U.S. pending patent application and seven foreign pending patent applications in Australia, Canada, China, Europe, Hong Kong, Japan and Mexico covering the method of using R-ketamine (PCN-101) for the treatment of depressive symptoms in mental disorders and substance abuse, as well as two pending PCT application directed to R-Ketamine salts and pharmaceutical compositions and one U.S. provisional patent application directed to methods of administering R-Ketamine.

Perception Neuroscience also owns one issued U.S. patent, one U.S. pending patent application, one foreign issued patent in Mexico, and seven foreign pending patent applications in Australia, Canada, China, Europe, Hong Kong, Japan and Mexico covering the method of using R-ketamine (PCN-101) for the treatment of depressive symptoms in mental disorders and substance abuse, as well as two pending PCT application directed to R-Ketamine salts and pharmaceutical compositions and one PCT application directed to methods of administering R-Ketamine.

The sponsor of a fast track-designated product candidate has opportunities for more frequent interactions with the review team during product development, and the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.

The sponsor of a fast track-designated product candidate has opportunities for more frequent interactions with the review team during product development, and once submitted, the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.

Foreign Government Regulation Our product candidates are subject to similar laws and regulations imposed by jurisdictions outside of the United States, and, in particular, the EU, governing, among other things, clinical trials, marketing authorization, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or other transfers of value to healthcare professionals.

Foreign Government Regulation Our product candidates are subject to similar laws and regulations imposed by jurisdictions outside of the United States, and, in particular, the EU, governing, among other things, clinical trials, marketing authorization, or MA, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or other transfers of value to healthcare professionals.

Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business. Additionally, if supply from one approved manufacturer is interrupted, an alternative manufacturer would need to be qualified. For drug products, an NDA or MAA variation, or equivalent foreign regulatory filing is also required, which could result in further delay.

Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business. Additionally, if supply from one approved manufacturer is interrupted, an alternative manufacturer would need to be qualified. For drug products, an NDA supplement or MAA variation, or equivalent foreign regulatory filing is also required, which could result in further delay.

Doing business internationally involves a number of risks, including, but not limited to: multiple, conflicting, and changing laws and regulations such as privacy regulations, tax laws, export and import restrictions, employment laws, regulatory requirements, and other governmental approvals, permits, and licenses; our failure to obtain and maintain regulatory approvals for the use of our products in various countries; additional potentially relevant third-party patent rights; complexities and difficulties in obtaining protection and enforcing our intellectual property; difficulties in staffing and managing foreign operations; complexities associated with managing multiple payor reimbursement regimes, government payors, or patient self-pay systems; limits in our ability to penetrate international markets; financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products, and exposure to foreign currency exchange rate fluctuations; natural disasters, political and economic instability, including wars, terrorism, and political unrest, including the ongoing military conflict between Russia and Ukraine, outbreak of disease, boycotts, curtailment of trade, and other business restrictions; economic weakness, including inflation, or political instability in particular non-U.S. economies and markets; difficulties in compliance with different, complex and changing laws, regulations and court systems of multiple jurisdictions and compliance with a wide variety of foreign laws, treaties and regulations, including taxes; certain expenses including, among others, expenses for travel, translation, and insurance; and 83 regulatory and compliance risks that relate to maintaining accurate information and control over sales and activities that may fall within the purview of the U.S.

Doing business internationally involves a number of risks, including, but not limited to: multiple, conflicting, and changing laws and regulations such as privacy regulations, tax laws, export and import restrictions, employment laws, regulatory requirements, and other governmental approvals, permits, and licenses; our failure to obtain and maintain regulatory approvals for the use of our products in various countries; additional potentially relevant third-party patent rights; complexities and difficulties in obtaining protection and enforcing our intellectual property; difficulties in staffing and managing foreign operations; complexities associated with managing multiple payor reimbursement regimes, government payors, or patient self-pay systems; limits in our ability to penetrate international markets; financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products, and exposure to foreign currency exchange rate fluctuations; natural disasters, political and economic instability, including wars, terrorism, and political unrest, including the ongoing military conflict between Russia and Ukraine, conflict in the Middle East, outbreak of disease, boycotts, curtailment of trade, and other business restrictions; economic weakness, including inflation, or political instability in particular non-U.S. economies and markets; difficulties in compliance with different, complex and changing laws, regulations and court systems of multiple jurisdictions and compliance with a wide variety of foreign laws, treaties and regulations, including taxes; certain expenses including, among others, expenses for travel, translation, and insurance; and regulatory and compliance risks that relate to maintaining accurate information and control over sales and activities that may fall within the purview of the U.S.

Orphan drug designation Under the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States or, if it affects more than 200,000 individuals in the United States, there is no reasonable expectation that the cost of developing and making a drug product available in the United States for this type of disease or condition will be recovered from sales of the product.

Orphan drug designation Under the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States or, if it affects more than 200,000 individuals in the United States, there is no reasonable expectation that the cost of developing and making a drug product available in the United States for 24 this type of disease or condition will be recovered from sales of the product.

If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of product specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant regulatory authority may 64 require remedial measures that may be costly and/or time consuming for us or a third-party to implement, and that may include the temporary or permanent suspension of a clinical study or commercial sales or the temporary or permanent closure of a facility.

If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of product specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant regulatory authority may require remedial measures that may be costly and/or time consuming for us or a third-party to implement, and that may include the temporary or permanent suspension of a clinical study or commercial sales or the temporary or permanent closure of a facility.

If the FDA does not conclude that certain of our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for such product candidates under Section 505(b)(2) are not as we expect, the approval pathway for those product candidates will likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful.

If the FDA does not conclude that certain of our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for such product candidates under Section 505(b)(2) are not as we expect, the approval 53 pathway for those product candidates will likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful.

Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are 68 commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

A non-U.S. corporation will be classified as a passive foreign investment company, or a PFIC, for any taxable year if either: 80 a) at least 75% of its gross income is “passive income” for purposes of the PFIC rules or b) at least 50% of the value of its assets (determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income.

A non-U.S. corporation will be classified as a passive foreign investment company, or a PFIC, for any taxable year if either: a) at least 75% of its gross income is “passive income” for purposes of the PFIC rules or b) at least 50% of the value of its assets (determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income.

While the Clinical Trials Directive required a separate clinical trial application, or CTA, to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent ethics committee, much like the FDA and IRB respectively, the CTR introduces a centralized process and only requires the submission of a single application for multi-center trials.

While the EU Clinical Trials Directive required a separate clinical trial application, or CTA, to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent ethics committee, much like the FDA and IRB respectively, the CTR introduces a centralized process and only requires the submission of a single application for multi-center trials.

Coupled with the expansion of social media platforms and similar devices that allow individuals access to a broad audience, these claims have had a significant negative impact on some businesses. Certain companies that have faced employment- or harassment-related lawsuits have had to terminate management or other key personnel, and have suffered reputational harm that has negatively impacted their business.

Coupled with the expansion of social media platforms and similar devices that allow individuals access to a broad audience, these claims have had a significant negative impact on some businesses. Certain companies that have faced employment or harassment-related lawsuits have had to terminate management or other key personnel, and have suffered reputational harm that has negatively impacted their businesses.

Risks Related to Our Intellectual Property If we are unable to obtain and maintain sufficient intellectual property protection for our existing product candidates or any other product candidates that we may identify, or if the scope of the intellectual property protection we currently have or obtain in the future is not sufficiently broad, our competitors could develop and commercialize product candidates similar or identical to ours, and our ability to successfully commercialize our existing product candidates and any other product candidates that we may pursue may be impaired.

Risks Related to Our Intellectual Property If we are unable to obtain and maintain sufficient intellectual property protection for our existing product candidates or any other product candidates that we may identify, or if the scope of the intellectual property protection we currently have or obtain in the future is not sufficiently broad, our competitors could develop and commercialize product candidates similar or identical to ours, and our 66 ability to successfully commercialize our existing product candidates and any other product candidates that we may pursue may be impaired.

Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries, proposed and enacted legislation intended to bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.

Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries, proposed and enacted legislation intended to bring more transparency to product 31 pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.

Moreover, such financing may result in dilution to shareholders, imposition of debt covenants and repayment obligations, or other restrictions that may affect our business. Changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

Moreover, such financing may result in dilution to shareholders, imposition of debt covenants and repayment obligations, or other restrictions that may adversely affect our business. Changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

We could also encounter delays if a clinical trial is suspended or terminated by us, by the data safety monitoring board, or DSMB, or by the FDA, or other comparable foreign regulatory authorities, or if the IRBs of the institutions in which such trials are being conducted suspend or terminate the participation of their clinical investigators and sites subject to their review.

We could also encounter delays if a clinical trial is suspended or terminated by us, by the data safety monitoring board or by the FDA, or other comparable foreign regulatory authorities, or if the IRBs of the institutions in which such trials are being conducted suspend or terminate the participation of their clinical investigators and sites subject to their review.

In addition, these opponents may seek to generate negative publicity in an effort to persuade the medical community to reject these products, if approved. Adverse publicity from misuse may adversely affect the commercial success or market penetration achievable by our product candidates. Anti-psychedelic protests have historically occurred and may occur in the future and generate media coverage.

In addition, these opponents may seek to generate negative publicity in an effort to persuade the medical community to reject these products, 45 if approved. Adverse publicity from misuse may adversely affect the commercial success or market penetration achievable by our product candidates. Anti-psychedelic protests have historically occurred and may occur in the future and generate media coverage.

If the FDA, the EMA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which would be costly and time consuming and delay aspects of our business plan, and which may result in product candidates that we may develop not receiving approval for commercialization in the applicable jurisdiction.

If the FDA, the EMA, the MHRA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which would be costly and time consuming and delay aspects of our business plan, and which may result in product candidates that we may develop not receiving approval for commercialization in the applicable jurisdiction.

However, if not properly managed and supervised, there is a risk that therapists may deviate from our training protocols, fail to follow the guidelines we have established, or abuse patients during therapeutic administration sessions. The therapists might also administer unauthorized therapies to patients using illegal drug compounds in “underground” clinics.

However, if not properly 64 managed and supervised, there is a risk that therapists may deviate from our training protocols, fail to follow the guidelines we have established, or abuse patients during therapeutic administration sessions. The therapists might also administer unauthorized therapies to patients using illegal drug compounds in “underground” clinics.

However, it should be noted that the number of patients in the US-only subset was small (9 on PCN-101 and 8 on placebo). The single 60 mg dose of PCN-101 showed an efficacy signal at each timepoint over the 2-week timeframe of the study, potentially indicating a sustained duration of effect.

However, it should be noted that the 15 number of patients in the US-only subset was small (9 on PCN-101 and 8 on placebo). The single 60 mg dose of PCN-101 showed an efficacy signal at each timepoint over the 2-week timeframe of the study, potentially indicating a sustained duration of effect.

We cannot guarantee, however, that we have executed such agreements with all applicable counterparties, such agreements will not be breached, or that these agreements will afford us adequate protection of our intellectual property and proprietary rights. See “Risk Factors—Risks Related to our Intellectual Property.” Government Regulation and Product Approval The FDA, the U.S.

We cannot guarantee, however, that we have executed such agreements with all applicable counterparties, such agreements will not be breached, or that these agreements will afford us adequate protection of our intellectual property and proprietary rights. See “Risk Factors—Risks Related to our Intellectual Property.” 20 Government Regulation and Product Approval The FDA, the U.S.

Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP requirements. 20 After the FDA evaluates an NDA and conducts any required inspections of the manufacturing facilities where the product candidate and/or its drug substance will be produced, the FDA will issue an approval letter or a Complete Response Letter.

Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP requirements. After the FDA evaluates an NDA and conducts any required inspections of the manufacturing facilities where the product candidate and/or its drug substance will be produced, the FDA will issue an approval letter or a Complete Response Letter.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, shareholder ownership interests will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of our shareholders. In addition, the possibility of such issuance may cause the market price of our common shares to decline.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, shareholder ownership interests will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of our existing shareholders. In addition, the possibility of such issuance may cause the market price of our common shares to decline.

If we do not receive regulatory approvals for our product candidates, we may not be able to continue operations, which may result in dissolution, out-licensing the technology or pursuing an alternative strategy. In addition, the FDA’s and other regulatory authorities’ policies with respect to clinical trials may change and additional government regulations may be enacted.

If we do not receive regulatory approvals for our product candidates, we may not be able to continue operations, which may result in dissolution, out-licensing the technology or pursuing an alternative strategy. 41 In addition, the FDA’s and other regulatory authorities’ policies with respect to clinical trials may change and additional government regulations may be enacted.

The U.S. Internal Revenue Service has provided limited guidance regarding the circumstances in which investors may rely on publicly available information to comply with their reporting and taxpaying obligations with respect to foreign-controlled CFCs. U.S. investors in our common shares should consult their advisors regarding the potential application of these rules to their investment in the common shares.

The U.S. Internal Revenue Service has provided limited guidance regarding the circumstances in which investors may rely on publicly available information to comply with their reporting and taxpaying obligations with 85 respect to foreign-controlled CFCs. U.S. investors in our common shares should consult their advisors regarding the potential application of these rules to their investment in the common shares.

Evolving global tax legislation could increase our overall tax burden. Global tax legislative changes could negatively impact our business. The Organization for Economic Cooperation and Development (“OECD”), with the support of the Group of Twenty (“G20”), initiated the base erosion and profit shifting (“BEPS”) project in 2013 in 81 response to concerns that changes were needed to international tax laws.

Evolving global tax legislation could increase our overall tax burden. Global tax legislative changes could negatively impact our business. The Organization for Economic Cooperation and Development (“OECD”), with the support of the Group of Twenty (“G20”), initiated the base erosion and profit shifting (“BEPS”) project in 2013 in response to concerns that changes were needed to international tax laws.

Our future funding requirements, both short-term and long-term, will depend on many factors, including, but not limited to: the time and cost necessary to complete ongoing and planned clinical trials; the outcome, timing and cost of meeting regulatory requirements established by the FDA, and other comparable foreign regulatory authorities; the progress, timing, scope and costs of our preclinical studies, clinical trials and other related activities for our ongoing and planned clinical trials, and potential future clinical trials, including progress and related milestones, the failure by third parties to meet deadlines for the completion of such trials, research, or testing, changes to trial sites, and other circumstances; the costs of obtaining clinical and commercial supplies of raw materials and drug products for our product candidates, as applicable, and any other product candidates we may identify and develop; our ability to successfully identify and negotiate acceptable terms for third-party supply and contract manufacturing agreements with contract manufacturing organizations, or CMOs; the costs of commercialization activities for any of our product candidates that receive marketing approval, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities, or entering into strategic collaborations with third parties to leverage or access these capabilities; the amount and timing of sales and other revenues from our product candidates, if approved, including the sales price and the availability of coverage and adequate third-party reimbursement; the cash requirements in purchasing additional equity from certain of our atai companies upon the achievement of specified development milestone events; the cash requirements of developing our programs and our ability and willingness to finance their continued development; the cash requirements of any future acquisitions or discovery of product candidates; 34 the time and cost necessary to respond to technological and market developments, including other products that may compete with one or more of our product candidates; the costs of acquiring, licensing or investing in intellectual property rights, products, product candidates and businesses; the costs of maintaining, expanding and protecting our intellectual property portfolio; our ability to attract, hire and retain qualified personnel as we expand research and development and our operational and commercial infrastructure; and the costs of operating as a public company in the United States and maintaining a listing on the Nasdaq Stock Market LLC (“Nasdaq”).

Our future funding requirements, both short-term and long-term, will depend on many factors, including, but not limited to: the time and cost necessary to complete ongoing and planned clinical trials; the outcome, timing and cost of meeting regulatory requirements established by the FDA, and other comparable foreign regulatory authorities; the progress, timing, scope and costs of our preclinical studies, clinical trials and other related activities for our ongoing and planned clinical trials, and potential future clinical trials, including progress and related milestones, the failure by third parties to meet deadlines for the completion of such trials, research, or testing, changes to trial sites, and other circumstances; the costs of obtaining clinical and commercial supplies of raw materials and drug products for our product candidates, as applicable, and any other product candidates we may identify and develop; our ability to successfully identify and negotiate acceptable terms for third-party supply and contract manufacturing agreements with contract manufacturing organizations, or CMOs; the costs of commercialization activities for any of our product candidates that receive marketing approval, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities, or entering into strategic collaborations with third parties to leverage or access these capabilities; the amount and timing of sales and other revenues from our product candidates, if approved, including the sales price and the availability of coverage and adequate third-party reimbursement; the cash requirements in purchasing additional equity from certain of our atai companies upon the achievement of specified development milestone events; the cash requirements of developing our programs and our ability and willingness to finance their continued development; 36 the cash requirements of any future acquisitions or discovery of product candidates, including minority equity investments in third parties; the time and cost necessary to respond to technological and market developments, including other products that may compete with one or more of our product candidates; the costs of acquiring, licensing or investing in intellectual property rights, products, product candidates and businesses; the costs of maintaining, expanding and protecting our intellectual property portfolio; our ability to attract, hire and retain qualified personnel as we expand research and development and our operational and commercial infrastructure; and the costs of operating as a public company in the United States and maintaining a listing on the Nasdaq Stock Market LLC (“Nasdaq”).

If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of our product candidates, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire.

If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of our product candidates, any molecules formed during 69 the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire.

We are required to report certain adverse reactions and production problems, if any, to the FDA, and other comparable foreign regulatory authorities. Any new legislation addressing drug or medical safety issues could result in delays in product development or commercialization or increased costs to assure compliance. The FDA and other agencies, including the U.S.

We are required to report certain adverse reactions and production problems, if any, to the FDA, and other comparable foreign regulatory authorities. Any new legislation 54 addressing drug or medical safety issues could result in delays in product development or commercialization or increased costs to assure compliance. The FDA and other agencies, including the U.S.

Moreover, any such litigation or the threat thereof may adversely affect our reputation, our ability to form strategic alliances or sublicense our rights to collaborators, engage with scientific advisors or hire employees or consultants, each of which would have an adverse effect on our business, results of operations and financial condition.

Moreover, any such litigation or the threat thereof may adversely affect our reputation, 73 our ability to form strategic alliances or sublicense our rights to collaborators, engage with scientific advisors or hire employees or consultants, each of which would have an adverse effect on our business, results of operations and financial condition.

If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

If a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

The assessment procedure of the CTA has been harmonized as well, including a joint assessment by all member states concerned, and a separate 24 assessment by each member state with respect to specific requirements related to its own territory, including ethics rules. Each member state’s decision is communicated to the sponsor via the centralized EU portal.

The assessment procedure of the CTA has been harmonized as well, including a joint assessment by all member states concerned, and a separate assessment by each member state with respect to specific requirements related to its own territory, including ethics rules. Each member state’s decision is communicated to the sponsor via the centralized EU portal.

Most product candidates that begin clinical trials are never approved by regulatory authorities for 39 commercialization. We have limited experience in designing clinical trials and may be unable to design and execute a clinical trial to support marketing approval. In addition, clinical trial design for some of our product candidates can be complex given their characteristics.

Most product candidates that begin clinical trials are never approved by regulatory authorities for commercialization. We have limited experience in designing clinical trials and may be unable to design and execute a clinical trial to support marketing approval. In addition, clinical trial design for some of our product candidates can be complex given their characteristics.

Schedule I and II drugs are subject to the strictest controls under the CSA, including manufacturing and procurement quotas, security requirements and criteria for importation. In addition, dispensing of Schedule II drugs is further restricted. Commercial marketing in the United States will also require scheduling-related legislative or administrative action.

Schedule I and II drugs are subject to the strictest controls 43 under the CSA, including manufacturing and procurement quotas, security requirements and criteria for importation. In addition, dispensing of Schedule II drugs is further restricted. Commercial marketing in the United States will also require scheduling-related legislative or administrative action.

Consequently, any delay or refusal by the DEA in establishing our, or our contract manufacturers’, procurement and/or production quota for controlled substances could delay or stop our clinical trials or product launches, which could have a material adverse effect on our business, financial position and results of operations. 43 Distribution in the United States .

Any increased scrutiny could delay or increase the costs of obtaining regulatory approval for our product candidates or any future product candidates. 44 Even if we complete the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time consuming and uncertain and may prevent us from obtaining approvals for the potential commercialization of our product candidates.

Any increased scrutiny could delay or increase the costs of obtaining regulatory approval for our product candidates or any future product candidates. Even if we complete the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time consuming and uncertain and may prevent us from obtaining approvals for the potential commercialization of our product candidates.

If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common shares. Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties.

If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common shares. 72 Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties.

Our team is the key to our success, and we believe it is essential to invest in building an engaged, diverse, supported, and incentivized workforce who can help us achieve our vision of a healing mental health disorders so that everyone, everywhere can live a more fulfilled life.

Our team is the key to our success, and we believe it is essential to invest in building an engaged, diverse, 32 supported, and incentivized workforce who can help us achieve our vision of healing mental health disorders so that everyone, everywhere can live a more fulfilled life.

Any termination of collaborations we enter into in the future, or any delay in entering into collaborations related to our product candidates, could delay the development and commercialization of our product candidates and reduce their competitiveness if they reach the market, which could have a material adverse effect on our business, financial condition and results of operations.

Any termination of collaborations we enter into in the future, or any delay in entering into collaborations related to our product 63 candidates, could delay the development and commercialization of our product candidates and reduce their competitiveness if they reach the market, which could have a material adverse effect on our business, financial condition and results of operations.

Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such 65 inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain.

Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain.

Our failure to implement and maintain effective internal control over financial reporting could result in errors in our financial statements that could result in loss of investor confidence in the accuracy and completeness of our financial reports and a decline in our share price, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities.

Our failure to implement and maintain effective internal control over financial reporting could result in errors in our financial statements that could result 89 in loss of investor confidence in the accuracy and completeness of our financial reports and a decline in our share price, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities.

Our intellectual property portfolio for each of the programs in our pipeline are summarized in the table below and described further for certain programs. In addition, we have, and may continue to, enter into collaboration and licensing arrangements for research 15 and development, manufacturing, and commercialization activities with counterparties for the development and commercialization of its product candidates.

Our intellectual property portfolio for each of the programs in our pipeline are summarized in the table below and described further for certain programs. In addition, we have, and may continue to, enter into collaboration and licensing arrangements for research and development, manufacturing, and commercialization activities with counterparties for the development and commercialization of its product candidates.

Any product we may develop and the activities associated with their development and potential commercialization, including their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA, and other comparable foreign regulatory authorities.

Any product candidates we may develop and the activities associated with their development and potential commercialization, including their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA, and other comparable foreign regulatory authorities.

Even if a product qualifies for one or more of these programs, the FDA 21 may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. We may explore some of these opportunities for our product candidates as appropriate.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. We may explore some of these opportunities for our product candidates as appropriate.

The registration is specific to the particular location, activity and controlled substance schedule. For example, separate registrations are needed for import and manufacturing, and each registration will specify which schedules of controlled substances are authorized. 23 The DEA typically inspects a facility to review its security measures prior to issuing a registration.

The registration is specific to the particular location, activity and controlled substance schedule. For example, separate registrations are needed for import and manufacturing, and each registration will specify which schedules of controlled substances are authorized. The DEA typically inspects a facility to review its security measures prior to issuing a registration.

If we are found to have promoted such off-label uses, we may become subject to significant liability. The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined several companies from engaging in off-label promotion.

If we are found to have promoted such off-label uses, we may become subject to significant liability. The federal government has levied large civil and criminal fines against companies for 55 alleged improper promotion of off-label use and has enjoined several companies from engaging in off-label promotion.

Such reforms could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we may obtain regulatory approval and may affect our overall financial condition and ability to develop product candidates. We cannot predict the initiatives that may be adopted in the future.

Such reforms could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we may obtain regulatory approval and may 60 affect our overall financial condition and ability to develop product candidates. We cannot predict the initiatives that may be adopted in the future.

We anticipate relying upon strategic collaborations for marketing and commercializing our existing product candidates, if approved, and we may sell product offerings through strategic partnerships with 61 pharmaceutical and biotechnology companies. The success of our current and any future collaboration arrangements may depend heavily on the efforts and activities of our collaborators.

We anticipate relying upon strategic collaborations for marketing and commercializing our existing product candidates, if approved, and we may sell product offerings through strategic partnerships with pharmaceutical and biotechnology companies. The success of our current and any future collaboration arrangements may depend heavily on the efforts and activities of our collaborators.

The government can exercise its march-in rights if it determines that action is necessary because we fail to achieve practical application of the government-funded technology, because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations, or to give preference to U.S. industry.

The government can exercise its march-in rights if it determines that action is 67 necessary because we fail to achieve practical application of the government-funded technology, because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations, or to give preference to U.S. industry.

In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse effect on our business, financial condition, results of operations, and prospects. 72 We may not be able to protect our intellectual property rights throughout the world.

In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse effect on our business, financial condition, results of operations, and prospects. We may not be able to protect our intellectual property rights throughout the world.

Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval for and commercialize our product candidates.

Furthermore, replacing executive officers and other key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval for and commercialize our product candidates.

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Item 2. Properties

Properties — owned and leased real estate

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2023 filing

Biggest changeIf required, we believe that suitable additional or alternative space would be available in the future on commercially reasonable terms.

Biggest changeWe believe that these facilities will be adequate for our near-term needs and that we will be able to renew these leases. If required, we believe that suitable additional or alternative space would be available in the future on commercially reasonable terms.

Item 2. Pr operties. Our principal executive office is located at Wallstraße 16, 10179, Berlin, Germany where we lease approximately 7,400 square feet of office space. The lease commenced in February 2023 and we will make payments over a five year term.

Removed

We also lease office space in other locations including London, the United Kingdom; New York, New York; and San Diego, California. We believe that these facilities will be adequate for our near-term needs and that we will be able to renew these leases.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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2023 filing

Biggest changeRegardless of the outcome, litigation can have an adverse effect on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safety Disclo sures. Not applicable 92 PART II

Biggest changeRegardless of the outcome, litigation can have an adverse effect on us because of defense and settlement costs, diversion of management resources and other factors.

Although the results of litigation and claims cannot be predicted with certainty, we do not believe we are party to any claim or litigation the 91 outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse impact on our financial position, results of operations or cash flows.

Although the results of litigation and claims cannot be predicted with certainty, we do not believe we are party to any claim or litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse impact on our financial position, results of operations or cash flows.

Added

Information pertaining to legal proceedings 93 is provided in Note 16, Commitments and Contingencies – Legal Proceedings , to our audited consolidated financial statements in included elsewhere in this Form 10-K and is incorporated herein by reference. Item 4. Mine Safety Disclo sures. Not applicable 94 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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2022 filing

2023 filing

Biggest changeHolders of Record As of March 15, 2023, there were 105 holders of record of our common shares. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common shares whose shares are held in the names of various security brokers, dealers and registered clearing agencies.

Biggest changeHolders of Record As of March 1, 2024, there were 91 holders of record of our common shares. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common shares whose shares are held in the names of various security brokers, dealers and registered clearing agencies.

Removed

Recent Sales of Unregistered Securities Except as disclosed in our Quarterly Report on Form 10-Q for the quarter June 30, 2022 filed with the SEC on August 15, 2022, there were no sales of unregistered equity securities during the year ended December 31, 2022. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [ Reserved] 93

Added

Recent Sales of Unregistered Securities As previously disclosed, in November 2018 and October 2020, ATAI Life Sciences AG issued an aggregate principal amount of €1.0 million of convertible notes in a notional amount of €1.00 each (the “2018 Notes”), each such 2018 Note convertible into one common share of ATAI Life Sciences AG at a conversion price of €17.00 per common share (an “ATAI AG Conversion Share”).

Added

In connection with the 2018 Notes, on 21 July 2023, we entered into a Notes Conversion Agreement (the “Agreement”) with ATAI Life Sciences AG and a noteholder. Pursuant to the Agreement, the noteholder intended to convert 995 of its 2018 Notes into ATAI AG Conversion Shares in exchange for an aggregate payment of €16,915.

Added

In addition, pursuant to the Agreement, concurrent with the conversion of the 2018 Notes into ATAI AG Conversion Shares, the ATAI AG Conversion Shares were exchanged on October 25, 2023 for 15,920 common shares, par value €0.10 per share, of the Company through a transfer and sale arrangement.

Added

No underwriter or underwriting discount was involved in the issuance of the common shares of the Company. The Agreement and the common shares of the Company issued in connection with the above transactions were offered and sold in transactions that were exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

Added

Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [ Reserved] 95

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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2023 filing

Biggest changeChanges in the amount of net loss attributable to redeemable noncontrolling interests and noncontrolling interests are directly impacted by changes in the net loss of our VIEs and our ownership percentage changes. 100 Results of Operations Comparison of the Years Ended December 31, 2022 and 2021 Year Ended December 31, 2022 2021 $ Change % Change (in thousands, except percentages) License revenue $ 233 $ 20,376 (20,143 ) -98.9 % Operating expenses: Research and development 74,313 47,956 26,357 55.0 % Acquisition of in-process research and development 357 15,480 (15,123 ) -97.7 % General and administrative 70,350 92,745 (22,395 ) -24.1 % Total operating expenses 145,020 156,181 (11,161 ) -7.1 % Loss from operations (144,787 ) (135,805 ) (8,982 ) 6.6 % Other income (expense), net: Interest income 548 205 343 167.3 % Change in fair value of contingent consideration liability - related parties 1,475 173 1,302 752.6 % Change in fair value of derivative liability — 41 (41 ) -100.0 % Change in fair value of warrant liability 336 (87 ) 423 -486.2 % Change in fair value of securities carried at fair value 272 — 272 100.0 % Unrealized loss on other investments held at fair value — (12,346 ) 12,346 -100.0 % Loss on conversion of convertible promissory notes — (513 ) 513 -100.0 % Gain on consolidation of a variable interest entity — 3,543 (3,543 ) -100.0 % Gain on deconsolidation of a variable interest entity 1,484 — 1,484 100.0 % Foreign exchange gain, net 6,902 8,481 (1,579 ) -18.6 % Other expense, net (1,412 ) (293 ) (1,119 ) 381.9 % Total other income (expense), net 9,605 (796 ) 10,401 -1306.7 % Loss before income taxes (135,182 ) (136,601 ) 1,419 -1.0 % Benefit from (provision for) income taxes (6,229 ) 3,989 (10,218 ) -256.2 % Gain on dilution of equity method investment — 16,923 (16,923 ) -100.0 % Losses from investments in equity method investees, net of tax (16,006 ) (58,555 ) 42,549 -72.7 % Net loss $ (157,417 ) $ (174,244 ) 16,827 -9.7 % Net loss attributable to redeemable noncontrolling interests and noncontrolling interests (5,032 ) (6,436 ) 1,404 -21.8 % Net loss attributable to ATAI Life Sciences N.V. stockholders $ (152,385 ) $ (167,808 ) $ 15,423 -9.2 % License Revenue License revenue was $0.2 million for the year ended December 31, 2022, which related to certain research and development expenses under the Otsuka Agreement.

Biggest changeResults of Operations Comparison of the Years Ended December 31, 2023 and 2022 Year Ended December 31, 2023 2022 $ Change % Change (in thousands, except percentages) License revenue $ 314 $ 233 $ 81 34.8 % Operating expenses: Research and development 62,203 74,313 (12,110 ) (16.3 %) Acquisition of in-process research and development — 357 (357 ) (100.0 %) General and administrative 63,582 70,350 (6,768 ) (9.6 %) Total operating expenses 125,785 145,020 (19,235 ) (13.3 %) Loss from operations (125,471 ) (144,787 ) 19,316 (13.3 %) Other income, net: Interest income 1,847 — 548 1,299 237.0 % Interest expense (2,656 ) — (923 ) (1,733 ) 187.6 % Benefit from research and development tax credit 2,445 — — 2,445 0.0 % Change in fair value of assets and liabilities, net 86,583 — 2,083 84,500 4056.6 % Impairment of other investments (1,011 ) — — (1,011 ) 0.0 % Gain on deconsolidation of a variable interest entity, net 60 — 1,484 (1,424 ) (96.0 %) Foreign exchange gain (loss), net (894 ) — 6,902 (7,796 ) (112.9 %) Other expense, net (189 ) — (489 ) 300 (61.3 %) Total other income, net 86,185 9,605 76,580 797.3 % Loss before income taxes (39,286 ) (135,182 ) 95,896 (70.9 %) Provision for income taxes (1,016 ) — (6,229 ) 5,213 (83.7 %) Losses from investments in equity method investees, net of tax (3,593 ) — (16,006 ) 12,413 (77.6 %) Net loss $ (43,895 ) $ (157,417 ) $ 113,522 (72.1 %) Net loss attributable to noncontrolling interests (3,671 ) (5,032 ) 1,361 (27.0 %) Net loss attributable to ATAI Life Sciences N.V. stockholders $ (40,224 ) $ (152,385 ) $ 112,161 (73.6 %) License revenue License revenue was $0.3 million and $0.2 million for the years ended December 31, 2023, and 2022, respectively, which related to reimbursement of research and development expenses under the Otsuka Agreement.

Net Cash Used in Investing Activities Net cash used in investing activities was $86.8 million for the year ended December 31, 2022, primarily driven by $309.1 million of cash paid for securities carried at fair value, $3.0 million of loans remitted to related parties, additional investments of $0.6 million in our other investments, $0.8 million of purchases of property and equipment, and $0.3 million of capitalized internal-use software development costs, partially offset by $226.8 million of proceeds from sale and maturities of securities at fair value.

Net cash used in investing activities was $86.8 million for the year ended December 31, 2022, primarily driven by $309.1 million of cash paid for securities carried at fair value, $3.0 million of loans remitted to related parties, additional investments of $0.6 million in our other investments, $0.8 million of purchases of property and equipment, and $0.3 million of capitalized internal-use software development costs, partially offset by $226.8 million of proceeds from sale and maturities of securities at fair value.

The Loan Agreement contains customary closing and commitment fees, prepayment fees and provisions, events of default and representations, warranties and affirmative and negative covenants, including a financial covenant requiring us to maintain certain levels of cash in accounts subject to a control agreement in favor of the Agent (the “Qualified Cash”) at all times commencing from the Closing Date, which includes a cap on the amount of cash that can be held by, among others, certain of our foreign subsidiaries in Australia and the United Kingdom.

Furthermore, the SPA provided that from time to time, Kures shall issue to Columbia additional shares of 110 Kures’ common stock, at a per share price equal to the then fair market value of each such share, which price shall be deemed to have been paid in partial consideration for the execution, delivery and performance by Columbia of the License Agreement, such that the common stock held by Columbia shall equal to 5.0% of the common stock on a fully diluted basis, at all times up to and through the achievement of certain funding threshold.

Furthermore, the SPA provided that from time to time, Kures shall issue to Columbia additional shares of Kures’ common stock, at a per share price equal to the then fair market value of each such share, which price shall be deemed to have been paid in partial consideration for the execution, delivery and performance by Columbia of the License Agreement, such that the common stock held by Columbia shall equal to 5.0% of the common stock on a fully diluted basis, at all times up to and through the achievement of certain funding threshold.

Concurrent with the conversion of the 2018 Convertible Notes into ATAI Life Sciences AG shares, the shares of ATAI Life Sciences AG that were issued to the noteholders were exchanged for 5,478,176 shares of ATAI Life Sciences N.V. through a transfer and sale arrangement such that ATAI Life Sciences AG continued to remain a wholly owned subsidiary of ATAI Life Sciences N.V and the transaction was accounted for as an equity transaction that resulted in no gain or loss recognition.

Concurrent with the conversion of the 2018 Convertible Notes into common shares of ATAI Life Sciences AG, the common shares of ATAI Life Sciences AG that were issued to the noteholders were exchanged for 5,478,176 shares of ATAI Life Sciences N.V. through a transfer and sale arrangement such that ATAI Life Sciences AG continued to remain a wholly owned subsidiary of ATAI Life Sciences N.V and the transaction was accounted for as an equity transaction that resulted in no gain or loss recognition.

However, actual costs and timing of preclinical studies and clinical trials are highly uncertain, subject to risks, and may change depending upon a number of factors, including our clinical development plan. We make estimates of our accrued expenses as of each balance sheet date in our consolidated financial statements based on facts and circumstances known at that time.

However, actual costs and timing of preclinical studies and clinical trials are highly uncertain, subject to risks, and may change depending upon a number of factors, including our clinical development plan. 113 We make estimates of our accrued expenses as of each balance sheet date in our consolidated financial statements based on facts and circumstances known at that time.

Given the absence of a public trading market prior to 113 the completion our initial public offering, and in accordance with the American Institute of Certified Public Accountants’ Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, we exercised reasonable judgment and considered numerous objective and subjective factors to determine our best estimate of the fair value of our common shares.

Given the absence of a public trading market prior to the completion our initial public offering, and in accordance with the American Institute of Certified Public Accountants’ Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, we exercised reasonable judgment and considered numerous objective and subjective factors to determine our best estimate of the fair value of our common shares.

Allergan License Agreement In February 2020, Recognify entered into a license agreement with Allergan Sales, LLC, or Allergan, which grants Recognify an exclusive sublicensable and worldwide license under certain patent rights and know-how controlled by Allergan to develop, manufacture and commercialize certain products for use in all fields including the treatment of certain diseases and conditions of the central nervous system.

Allergan License Agreement 111 In February 2020, Recognify entered into a license agreement with Allergan Sales, LLC, or Allergan, which grants Recognify an exclusive sublicensable and worldwide license under certain patent rights and know-how controlled by Allergan to develop, manufacture and commercialize certain products for use in all fields including the treatment of certain diseases and conditions of the central nervous system.

Our operating losses stem primarily from the development of our mental health research programs. Furthermore, we expect to incur additional 94 costs associated with operating as a public company, including audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, and investor relations costs.

Our operating losses stem primarily from the development of our mental health research programs. Furthermore, we expect to incur additional costs associated with operating as a public company, including audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, and investor relations costs.

This is due to the numerous risks and uncertainties associated with developing products, including the uncertainty of whether (i) any clinical trials will be conducted or progress as planned or completed on schedule, if at all, (ii) we obtain regulatory approval for our product candidates and (iii) we successfully commercialize product candidates.

This is due to the numerous risks and uncertainties associated with developing products, including the uncertainty of whether (i) any clinical trials will 99 be conducted or progress as planned or completed on schedule, if at all, (ii) we obtain regulatory approval for our product candidates and (iii) we successfully commercialize product candidates.

We have elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that (i) we are no longer an emerging growth company or (ii) we affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

In addition, the financial covenant under the Loan Agreement requires that beginning on the later of (i) July 1, 2023 and (ii) the date on which the aggregate outstanding amount borrowed under the 2022 Term Loan Facility is equal to or greater than $40.0 million, we shall maintain Qualified Cash in an amount no less than the sum of (1) 33% of the outstanding amount under the 2022 Term Loan Facility, and (2) the amount of the Borrowers’ and Subsidiary Guarantors’ accounts payable that have not been paid within 180 days from the invoice date of the relevant account payable, subject to certain exceptions; provided, that the financial covenant shall not apply on any day that our market capitalization is at least $600.0 million measured on a consecutive 10-business day period immediately prior to such date of measurement and tested on a daily basis.

In addition, the financial covenant under the Loan Agreement requires that beginning on the later of (i) July 1, 2023 and (ii) the date on which the aggregate outstanding amount borrowed under the 2022 Term Loan Facility is equal to or greater than $40.0 million, we shall maintain Qualified Cash in an amount no less than the sum of (1) 33% of the outstanding amount under the Loan Agreement, and (2) the amount of the Borrowers’ and Subsidiary Guarantors’ accounts payable that have not been paid within 180 days from the invoice date of the relevant account payable, subject to certain exceptions; provided, that the financial covenant shall not apply on any day that our market capitalization is at least $550.0 million measured on a consecutive 10-business day period immediately prior to such date of measurement and tested on a daily basis.

As a result, in July 2022 through reduction of capital allocation and operational resources, we decided to decelerate some of our drug discovery programs and Revixia Life Sciences. In November 2022, we finalized and entered into agreements through which we disposed of our equity interests in (and residual Preferred Stock Purchase Agreement funding obligations to) Neuronasal.

We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis.

We base our estimates on historical experience, known trends and events and various other factors that we believe are 112 reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis.

In the future, we intend to continue to conduct research and development, preclinical testing, clinical trials, regulatory compliance, market access, commercialization and business development activities that, together with anticipated general and administrative expenses, will result in incurring further significant losses for at least the next several years.

In the future, we intend to continue to conduct research and development, preclinical testing, clinical trials, regulatory compliance, market access, commercialization and business development activities that, together with 96 anticipated general and administrative expenses, will result in incurring further significant losses for at least the next several years.

In addition, we are required to make a final payment fee (the “End of Term Charge”) upon the earlier of (i) the Maturity Date, (ii) the date that we prepay, in full or in part, the principal balance of the 2022 Term Loan Facility, or (iii) the date that the outstanding balance of the 109 2022 Term Loan Facility becomes due and payable.

The agreements may have units of account within 111 the scope of Accounting Standards Codification (“ASC”) 606 where the counterparties meet the definition of a customer as well as units of account within the scope of ASC 808 where both parties are determined to be active participants exposed to significant risk and rewards.

The agreements may have units of account within the scope of Accounting Standards Codification (“ASC”) 606 where the counterparties meet the definition of a customer as well as units of account within the scope of ASC 808 where both parties are determined to be active participants exposed to significant risk and rewards.

Our future capital requirements will depend on many factors, including: • the time and cost necessary to complete ongoing and planned clinical trials; • the outcome, timing and cost of meeting regulatory requirements established by the FDA, the EMA and other comparable foreign regulatory authorities; • the progress, timing, scope and costs of our preclinical studies, clinical trials and other related activities for our ongoing and planned clinical trials, and potential future clinical trials; • the costs of commercialization activities for any of our product candidates that receive marketing approval, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities, or entering into strategic collaborations with third parties to leverage or access these capabilities; • the amount and timing of sales and other revenues from our product candidates, if approved, including the sales price and the availability of coverage and adequate third party reimbursement; • the cash requirements for purchasing additional equity from certain of our portfolio companies upon the achievement of specified development milestone events; • the cash requirements for developing our programs and our ability and willingness to finance their continued development; • the cash requirements for any future acquisitions or discovery of product candidates; and • the time and cost necessary to respond to technological and market developments, including other products that may compete with one or more of our product candidates.

Our future capital requirements will depend on many factors, including: • the time and cost necessary to complete ongoing and planned clinical trials; 107 • the outcome, timing and cost of meeting regulatory requirements established by the FDA, the EMA and other comparable foreign regulatory authorities; • the progress, timing, scope and costs of our preclinical studies, clinical trials and other related activities for our ongoing and planned clinical trials, and potential future clinical trials; • the costs of commercialization activities for any of our product candidates that receive marketing approval, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities, or entering into strategic collaborations with third parties to leverage or access these capabilities; • the amount and timing of sales and other revenues from our product candidates, if approved, including the sales price and the availability of coverage and adequate third party reimbursement; • the cash requirements for purchasing additional equity from certain atai companies upon the achievement of specified development milestone events; • the cash requirements for developing our programs and our ability and willingness to finance their continued development; • the cash requirements for any future acquisitions or discovery of product candidates; and • the time and cost necessary to respond to technological and market developments, including other products that may compete with one or more of our product candidates.

We estimate the grant date fair value, and the resulting share-based compensation expense, for stock options that only have service vesting requirements or performance-based vesting requirements without market conditions using the Black-Scholes option-pricing model.

We estimate the grant date fair value, and the resulting stock-based compensation expense, for stock options that only have service vesting requirements or performance-based vesting requirements without market conditions using the Black-Scholes option-pricing model.

Net losses in consolidated VIEs are attributed to redeemable noncontrolling interests and noncontrolling interests considering the liquidation preferences of the different classes of equity held by the shareholders in the VIE and their respective interests in the net assets of the consolidated VIE in the event of liquidation, and their pro rata ownership.

Net losses in consolidated VIEs are attributed to noncontrolling interests considering the liquidation preferences of the different classes of equity held by the shareholders in the VIE and their respective interests in the net assets of the consolidated VIE in the event of liquidation, and their pro rata ownership.

Contractual Obligations and Commitments We have entered into other contracts in the normal course of business with certain CROs, CMOs and other third parties for preclinical research studies and testing, clinical trials and manufacturing services. These contracts do not contain any minimum purchase commitments and are cancelable by us upon written notice.

We have entered into other contracts in the normal course of business with certain CROs, CMOs and other third parties for preclinical research studies and testing, clinical trials and manufacturing services. These contracts do not contain any minimum purchase commitments and are cancelable by us upon written notice.

The non-cash charges primarily consisted of $42.4 million of stock-based compensation, $16.0 million of losses from our equity method investments, $5.1 million of deferred tax provision expense, $0.9 million impairment of loan receivable and $0.4 million of IPR&D considered to have no future alternative use, partially offset by $5.0 million of unrealized foreign exchange gains, $1.5 million gain on deconsolidation of a variable interest entity and $1.5 million gain from the change in fair value of contingent consideration liabilities.

The noncash charges primarily consisted of $42.4 million of stock-based compensation, $16.0 million of losses from our equity method investments, $5.1 million of deferred tax provision expense, $0.9 million impairment of loan receivable and $0.4 million of IPR&D considered to have no future alternative use, partially offset by $5.0 million of unrealized foreign exchange gains, $1.5 million gain on deconsolidation of a variable interest entity and $1.5 million gain from the change in fair value of contingent consideration liabilities.

As part of the valuation of share-based compensation under the Black-Scholes option-pricing model, it is necessary for us to estimate the fair value of our common shares. Prior to our IPO, we were required to periodically estimate the fair value of our common shares when issuing options and in computing our estimated share-based compensation expense.

As part of the valuation of stock-based compensation under the Black-Scholes option-pricing model, it is necessary for us to estimate the fair value of our common shares. Prior to our IPO, we were required to periodically estimate the fair value of our common shares when issuing options and in computing our estimated stock-based compensation expense.

Given our early-stage development and lack of prior earnings history, we have a full valuation allowance primarily related to German and international tax loss carryforwards and temporary timing differences related to share-based compensation that we consider-more-likely-than-not not to be realized.

Given our early-stage development and lack of prior earnings history, we have a full valuation allowance primarily related to German and international tax loss carryforwards and temporary timing differences related to stock-based compensation that we consider-more-likely-than-not not to be realized.

The grant date fair value of the share-based awards with service vesting requirements is generally recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards. Determining the appropriate amount to expense for performance-based awards based on the achievement of stated goals requires judgment.

The grant date fair value of the stock-based awards with service vesting requirements is generally recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards. Determining the appropriate amount to expense for performance-based awards based on the achievement of stated goals requires judgment.

Other Income (Expense), Net Interest Income Interest income consists of interest earned on cash balances held in interest-bearing accounts and interest earned on notes receivable.

Other income, net Interest income Interest income consists of interest earned on cash balances held in interest-bearing accounts and interest earned on notes receivable.

For additional information regarding our license agreements described below, see Note 16 to our consolidated financial statements included elsewhere in this Annual Report. For additional information regarding our contingent commitments and future put rights or options associated with our investments, see Note 3 to our consolidated financial statements included elsewhere in this Annual Report.

For additional information regarding our license agreements described below, see Note 16 to our consolidated financial statements included elsewhere in this Annual Report. For additional information regarding our contingent commitments and future put rights or options associated with our investments, see Note 4 to our consolidated financial statements included elsewhere in this Annual Report.

The Allergan License Agreement will remain in effect until terminated by the parties according to their rights. During the year ended December 31, 2022, we had made no material payments pursuant to the Allergan License agreement.

The Allergan License Agreement will remain in effect until terminated by the parties according to their rights. During the year ended December 31, 2023, we had made no material payments pursuant to the Allergan License agreement.

In April 2022, Kures issued shares of Series A-2 Preferred Stock to certain investors upon the achievement of Series A-2 milestone events. Accordingly, we issued certain anti-dilution common stock to Columbia worth $0.3 million. We expensed the cost incurred for acquiring license as research & development expense at inception.

In April 2022, Kures issued shares of Series A-2 Preferred Stock to certain investors upon the achievement of Series A-2 milestone events. Accordingly, we issued certain anti-dilution common stock to Columbia worth $0.3 million. We expensed the cost incurred for acquiring the license as acquisition of in-process research and development expense at inception.

The outstanding principal balance of the 2022 Term Loan Facility bears interest at a floating interest rate per annum equal to the greater of either (i) the prime rate as reported in the Wall Street Journal plus 4.55% and (ii) 8.55%. Accrued interest is payable monthly following the funding of each term loan advance.

The outstanding principal balance of the Loan Agreement bears interest at a floating interest rate per annum equal to the greater of either (i) the prime rate as reported in the Wall Street Journal plus 4.55% and (ii) 8.55%. Accrued interest is payable monthly following the funding of each term loan advance.

The 2022 Term Loan Facility will mature on August 1, 2026 (the “Maturity Date”), which may be extended until February 1, 2027 if we achieve certain performance milestones, raise at least $175.0 million of unrestricted new net cash proceeds from certain permitted sources after the Closing Date and prior to June 30, 2024, and satisfy certain other specified conditions.

The 2022 Term Loan Facility will mature on August 1, 2026 (the “Maturity Date”), which may be extended until February 1, 2027 if we achieve certain performance milestones, raise at least $175.0 million of unrestricted new net cash proceeds from certain permitted sources after the Closing Date and prior to December 15, 2024, and satisfy certain other specified conditions.

The CHIBA License will remain in effect until terminated by the parties according to their rights. During the year ended December 31, 2022 we made no material payments pursuant to the CHIBA License.

The CHIBA License will remain in effect until terminated by the parties according to their rights. During the year ended December 31, 2023 we made no material payments pursuant to the CHIBA License.

Benefit From (Provision For) Income Taxes For our consolidated entities, deferred income taxes are provided for the effects of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax purposes.

Provision for income taxes For our consolidated entities, deferred income taxes are provided for the effects of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax purposes.

Losses from Investments in Equity Method Investees, Net of Tax Losses from investments in equity method investees, net of tax consists of our share of equity method investees losses on the basis of our equity ownership percentage, IPR&D charges resulting from basis differences related to our equity method investments.

Losses from investments in equity method investees, net of tax 101 Losses from investments in equity method investees, net of tax consists of our share of equity method investees losses on the basis of our equity ownership percentage and IPR&D charges resulting from basis differences related to our equity method investments.

Share-Based Compensation We recognize compensation costs related to share-based awards granted to employees, directors, and consultants based on the estimated fair value of the awards on the date of grant.

Stock-Based Compensation We recognize compensation costs related to stock-based awards granted to employees, directors, and consultants based on the estimated fair value of the awards on the date of grant.

Convertible Promissory Notes In November 2018, we issued an aggregate principal amount of $0.2 million of convertible notes (“2018 Convertible Notes”). The 2018 Convertible Notes are non-interest-bearing and have a maturity date of September 30, 2025, unless previously redeemed, converted, purchased or cancelled. In October 2020, we issued an additional principal amount of $1.0 million of the 2018 Convertible Notes.

Indebtedness Convertible Notes In November 2018, we issued an aggregate principal amount of $0.2 million of 2018 Convertible Notes. In October 2020, we issued an additional principal amount of $1.0 million of 2018 Convertible Notes. The 2018 Convertible Notes are non-interest-bearing and have a maturity date of September 30, 2025, unless previously redeemed, converted, purchased or cancelled.

In assessing the realizability of deferred tax assets, we consider the scheduled reversal of deferred tax liabilities (including the effect in available carryback and carryforward periods), future projected taxable income, including the character and jurisdiction of such income, and tax-planning strategies in making this assessment.

We consider the scheduled reversal of deferred tax liabilities (including the effect in available carryback and carryforward periods), future projected taxable income, including the character and jurisdiction of such income, and tax-planning strategies in making this assessment.

If so, we 112 conclude that the acquired set is a business. During the years ended December 31, 2022 and 2021, we did not have any acquisitions that were accounted for as business combinations.

If so, we conclude that the acquired set is a business. During the years ended December 31, 2023 and 2022, we did not have any acquisitions that were accounted for as business combinations.

As collateral for the obligations under the 2022 Term Loan Facility, we have granted to the Agent for the benefit of the Lenders a senior security interest in substantially all of our, ATAI AG and each Subsidiary Guarantor’s property (including a pledge of equity interests of certain subsidiaries and VIEs), exclusive of intellectual property, with certain limited exceptions set forth in the Loan Agreement.

As collateral for the obligations under the 2022 Term Loan Facility, we have granted to the Agent for the benefit of the Lenders a senior security interest in substantially all of our cash and investment accounts and each Subsidiary Guarantor’s property (including a pledge of equity interests of certain subsidiaries and VIEs), exclusive of intellectual property, with certain limited exceptions set forth in the Loan Agreement.

The remaining $115 million becomes available in tranches through March 31, 2025, subject to the satisfaction of certain conditions.

The remaining $135 million becomes available in tranches through March 31, 2025, subject to the satisfaction of certain conditions.

As of December 31, 2022, we were in compliance with all applicable covenants under the Loan Agreement.

As of December 31, 2023 we were in compliance with all applicable covenants under the Loan Agreement.

Prior to the IPO, we received gross cash proceeds of $361.5 million from sales of our common shares and convertible notes. We have incurred significant operating losses since our inception. Our net loss attributable to ATAI Life Sciences N.V. stockholders was $152.4 million and $167.8 million for the years ended December 31, 2022 and 2021, respectively.

Prior to the IPO, we received gross cash proceeds of $361.5 million from sales of our common shares and convertible notes. We have incurred significant operating losses since our inception. Our net loss attributable to ATAI Life Sciences N.V. stockholders was $40.2 million and $152.4 million for the years ended December 31, 2023 and 2022, respectively.

The deferred income tax expense relates to certain deferred tax assets being offset by a valuation allowance in the year ended December 31, 2022 primarily with regard to temporary timing difference arising in connection with share-based compensation expense.

The deferred income tax expense relates to certain deferred tax assets being offset by a valuation allowance in the year ended December 31, 2023 primarily with regard to temporary timing difference arising in connection with stock-based compensation expense.

While our significant accounting policies are described in greater detail in Note 2, “Summary of Significant Accounting Policies” in our consolidated financial statements appearing under Part II, Item 8, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

While our significant accounting policies are described in greater detail in Note 2, “Basis of Presentation, Consolidation and Summary of Significant Accounting Policies” in our consolidated financial statements appearing under Part II, Item 8, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Operating Expenses Research and Development Expenses Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts and the development of our product candidates, which include: • employee-related expenses, including salaries, related benefits and stock-based compensation, for employees engaged in research and development functions; • expenses incurred in connection with the preclinical and clinical development of our product candidates, including our agreements with third parties, such as consultants and CROs; • expenses incurred under agreements with consultants who supplement our internal capabilities; • the cost of lab supplies and acquiring, developing and manufacturing preclinical study materials and clinical trial materials; • costs related to compliance with regulatory requirements; • facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other operating costs; and • payments made in connection with third-party licensing agreements.

Operating expenses Research and development expenses Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts and the development of our product candidates, which include: • employee-related expenses, including salaries, related benefits and stock-based compensation, for employees engaged in research and development functions; • expenses incurred in connection with the preclinical and clinical development of our product candidates, including our agreements with third parties, such as consultants and contract research organizations ("CROs"); • expenses incurred under agreements with consultants who supplement our internal capabilities; • the cost of lab supplies and acquiring, developing and manufacturing preclinical study materials and clinical trial materials; • costs related to compliance with regulatory requirements; and • payments made in connection with third-party licensing agreements.

Change in Fair Value of Warrant Liability Changes in fair value of warrant liability consists of subsequent remeasurement of our warrant liability relating to issued and outstanding warrants to purchase shares of Neuronasal's common stock acquired in connection with the acquisition of Neuronasal in May 2021. We deconsolidated Neuronasal in November 2022.

Change in fair value of warrant liability Change in fair value of warrant liability consists of subsequent remeasurements of our warrant liability relating to issued and outstanding warrants to purchase shares of Neuronasal, Inc. ("Neuronasal") common stock acquired in connection with the acquisition of Neuronasal in May 2021. We deconsolidated Neuronasal in November 2022.

Benefit From (Provision For) Income Taxes We incurred current income tax expense of $1.1 million and a deferred income tax expense of $5.1 million for the year ended December 31, 2022. We incurred current income tax expense of $1.1 million and a deferred income tax benefit of $5.1 million for the year ended December 31, 2021.

Provision for income taxes We incurred current income tax expense of $1.0 million and a deferred income tax expense of $0.0 million for the year ended December 31, 2023. We incurred current income tax expense of $1.1 million and a deferred income tax benefit of $5.1 million for the year ended December 31, 2022.

Sources of Liquidity Initial Public Offering In June 2021, we completed our IPO and issued and sold 17,250,000 of our common shares at a price to the public of $15.00 per share, which included the exercise in full by the underwriters of their option to purchase 2,250,000 additional common shares.

We maintain cash balances with financial institutions in excess of insured limits. Sources of Liquidity Initial Public Offering In June 2021, we completed our IPO and issued and sold 17,250,000 common shares at a price to the public of $15.00 per share, which included the exercise in full by the underwriters of their option to purchase 2,250,000 additional common shares.

Liquidity and Capital Resources Overview For the years ended December 31, 2022 and 2021, we had net losses attributable to ATAI Life Sciences N.V. shareholders of $152.4 million and $167.8 million, respectively. As of December 31, 2022 and 2021, our accumulated deficit was $510.2 million and $357.8 million, respectively.

Liquidity and Capital Resources Overview For the years ended December 31, 2023 and 2022, we had net losses attributable to ATAI Life Sciences N.V. shareholders of $40.2 million and $152.4 million, respectively. As of December 31, 2023 and 2022, our accumulated deficit was $550.9 million and $510.2 million, respectively.

We regularly assess the need to record a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Accordingly, we maintain a full valuation allowance against net deferred tax assets for all entities as of December 31, 2023.

We received aggregate net proceeds of $231.6 million, after underwriting discounts and commissions of $18.1 million and offering costs of $9.0 million. As of December 31, 2022, we had cash and cash equivalents of $190.6 million and short-term securities of $82.5 million.

We received aggregate net proceeds of $231.6 million, after underwriting discounts and commissions of $18.1 million and offering costs of $9.0 million. As of December 31, 2023, we had cash and cash equivalents of $45.0 million and short-term securities of $109.2 million.

The investors paid €17.00 per share for the aggregate amount of €4.6 million or $4.6 million in order to convert their convertible promissory notes into ATAI Life Sciences AG common shares, which was in accordance with the original terms of the 2018 Convertible Note Agreements.

These investors each paid €17.00 per share for an aggregate amount of €10.4 million ($12.2 million) in order to convert their respective 2018 Convertible Notes into ATAI Life Sciences AG common shares. which was in accordance with the original terms of the 2018 Convertible Note Agreements.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

We then record losses from investments in equity method investees, net of tax, for our proportionate share of the underlying company’s net results until the investment balance is adjusted to zero.

If we have not elected the fair value option, we then record gains (losses) from investments in equity method investees, net of tax, for our proportionate share of the underlying company’s net results until the investment balance is adjusted to zero.

Invyxis will pay Dalriada up to $12.8 million in service fees for research and support services. In addition, Invyxis will pay Dalriada development milestone payments and low single digit royalty payments based on net product sales. We have the right, but not the obligation, to settle future royalty payments based on net product sales with the our common shares.

In addition, Invyxis will pay Dalriada development milestone payments and low single digit royalty payments based on net product sales. We have the right, but not the obligation, to settle future royalty payments based on net product sales with the our common shares.

Since, the additional anti-dilution shares were issued as partial consideration towards the same license arrangement, the cost of such additional shares was also expensed as research & development expense during the year ended December 31, 2022. During the year ended December 31, 2022 we recognized $0.4 million of IPR&D expense in connection with the SPA and the License Agreement.

Since, the additional anti-dilution shares were issued as partial consideration towards the same license arrangement, the cost of such additional shares of $0.4 million was also expensed as acquisition of in-process research and development expense during the year ended December 31, 2022. During the year ended December 31, 2023, we made no material payments in connection with the Columbia agreement.

In addition, the total costs of mental health disorders are significant and expected to increase substantially. Between 2009 and 2019, spending on mental health care in the United States increased by more than 50%, reaching $225 billion, and a Lancet Commission report estimates the global economic cost will reach $16 trillion by 2030.

Between 2009 and 2019, spending on mental health care in the United States increased by more than 50%, reaching $225 billion, and a Lancet Commission report estimates the global economic cost will reach $16 trillion by 2030.

Unrecognized tax benefits arise when the estimated benefit recorded in the financial statements differs from the amounts taken or expected to be taken in a tax return because of the considerations described above. As of December 31, 2022 and December 31, 2021, we had no unrecognized tax benefits.

General and Administrative Expenses General and administrative expenses were $70.4 million for the year ended December 31, 2022 compared to $92.7 million for the year ended December 31, 2021.

General and administrative expenses General and administrative expenses were $63.6 million for the year ended December 31, 2023 compared to $70.4 million for the year ended December 31, 2022.

Under the terms of the Loan Agreement, $15 million was drawn at closing, with an additional $20 million available to be drawn at our option by May 1, 2023, and thereafter, an additional $25 million available to be drawn at our option by December 15, 2023.

Under the amended terms of the Loan Agreement, $15 million was drawn at closing, with an additional $10 million available to be drawn at our option by November 15, 2024, and, thereafter, an additional $15 million available to be drawn at our option by December 15, 2024.

We are also evaluating potential divestiture of our equity interests in certain programs and also exploring other opportunities, including but not limited to seeking strategic partnership options, for example, with PCN-101 and KUR-101.

We are evaluating potential divestiture of our equity interests in certain other programs and also exploring other opportunities, including but not limited to seeking strategic partnership options, for example, with Recognify Life Sciences, Inc., Perception Neuroscience Holdings, Inc., and Kures, Inc.

Enabling Technologies and Drug Discovery Platforms The $6.3 million increase in our enabling technologies and drug discovery platforms primarily relates to increased direct costs of $3.4 million in our Invyxis program, $1.7 million in our TryptageniX program, $0.9 million in our EntheogeniX program and $0.4 million in our InnarisBio program.

Enabling Technologies and Drug Discovery Platforms The $4.1 million decrease in our enabling technologies and drug discovery platforms primarily relates to decreased direct costs of $1.4 million in our Invyxis program, $1.2 million in our TryptageniX program, $0.9 million in our InnarisBio program, $0.3 million in our PsyProtix program, and $0.3 million in our Introspect program.

The impact of foreign currency exchange rates on our results of operations fluctuates period over period based on our foreign currency exposures resulting from changes in applicable exchange rates associated with our foreign denominated assets and liabilities. Other expense, net Other expense, net consists principally of interest expense and an impairment of a loan receivable.

As of December 31, 2022 and 2021, our accumulated deficit was $510.2 million and $357.8 million, respectively.

As of December 31, 2023 and 2022, our accumulated deficit was $550.9 million and $510.2 million, respectively.

We also included our own historical volatility in the determination of expected volatility. Risk-free interest rate —The risk-free rate assumption is based on the implied yield with an equivalent expected term at the grant date.

The comparable companies were chosen based on their similar size, stage in the life cycle or area of specialty. We also included our own historical volatility in the determination of expected volatility. Risk-free interest rate —The risk-free rate assumption is based on the implied yield with an equivalent expected term at the grant date.

The decrease of $1.6 million was primarily a result of the impact of fluctuations in the foreign currency exchange rate between the Euro and the U.S. dollar on our foreign denominated balances. Other Expense, Net 104 Other expense, net for the year ended December 31, 2022 was $1.4 million, compared to $0.3 million for the year ended December 31, 2021.

Foreign exchange gain (loss), net Foreign exchange loss was $0.9 million for the year ended December 31, 2023 compared to a $6.9 million gain for the year ended December 31, 2022 relating to the impact of fluctuations in the foreign currency exchange rate between the Euro and the U.S. dollar on our foreign denominated balances.

Change in Fair Value of Contingent Consideration Liability—Related Parties The milestone and royalty payments in relation to the acquisition of Perception Neuroscience, InnarisBio and TryptageniX were recorded at the acquisition date or at the exercise date related to the call option, and is subsequently remeasured to fair value quarterly.

Change in fair value of contingent consideration liability—related partie s The milestone and royalty payments in relation to the acquisition of Perception and InnarisBio were recorded at the acquisition date, and are subsequently remeasured to fair value.

DemeRx IB: DMX-1002 (ibogaine) for OUD The $0.1 million decrease in direct costs for the DMX-1002 program was primarily due to a decrease of $0.7 million of preclinical development costs, partially offset by an increase of $0.4 million of clinical development costs, $0.1 million of manufacturing costs, and $0.1 million of personnel related costs for the conduct of our ongoing Phase 1/2 trial to evaluate its safety, tolerability, pharmacokinetics, and efficacy in recreational drug users and healthy volunteers.

IBX-210 & DMX-1002: Ibogaine for Opioid Use Disorder The $1.9 million decrease in direct costs for our DMX-1002 program was primarily due to a decrease of $1.7 million of clinical development costs, a decrease of $0.1 million of manufacturing costs, and a decrease of $0.1 million of personnel and other related costs for the conduct of our Phase 1/2 trial to evaluate its safety, tolerability, PK, and efficacy in recreational drug users and healthy volunteers.

We expect to continue to incur losses and operating cash outflows for the foreseeable future until we are able to commercialize any of our product candidates. Our primary sources of liquidity are our cash and cash equivalents and short-term securities, as further described below. We maintain cash balances with financial institutions in excess of insured limits.

We expect to continue to incur losses and operating cash outflows for the foreseeable future until we are able to commercialize any of our product candidates. Our primary sources of liquidity are our cash and cash equivalents, short-term securities, 106 convertible promissory notes, investments, and 2022 Term Loan Facility, as further described below.

We expensed the remaining deposit as the services are performed as a component of research and development expense in the consolidated statements of operations. During the year ended December 31, 2022, we recorded $2.8 million as research and development expense. We did not record a material amount of research & development expense for the year ended December 31, 2021.

We will expense the remaining deposit as the services are performed as a component of research and development expense in the consolidated statements of operations. During the years ended December 31, 2023 and 2022, we recorded $2.0 million and $2.8 million, respectively as research and development expense.

Ownership interests in entities over which we have significant influence, but not a controlling financial interest, are accounted for as cost and equity method investments. Ownership interests in consolidated entities that are held by entities other than us are reported as redeemable convertible noncontrolling interests and noncontrolling interests in our consolidated balance sheets.

Ownership interests in entities over which we have significant influence, but not a controlling financial interest, are accounted for as cost and equity method investments.

Each note has a face value of €1 and is convertible into one ordinary share of ATAI Life Sciences AG upon the payment of €17.00. In 2021, several noteholders elected to convert their 2018 Convertible Notes into shares of ATAI Life Sciences N.V.

Each note has a face value of €1 and is convertible into one ordinary share of ATAI Life Sciences AG upon the payment of €17.00. The noteholders have agreed that, subsequent to converting the notes into ATAI Life Sciences AG share, they will exchange the ATAI Life Sciences AG share for ATAI Life Science N.V. shares.

Certain internal research and development expenses consisting of employee and contractor-related costs are not allocated to specific product candidate programs because these costs are deployed across multiple product candidate programs under research and development expense. 97 Research and development activities are central to our business model.

Our direct research and development expenses by program also include fees incurred under third-party license agreements. Certain internal research and development expenses consisting of employee and contractor-related costs are not allocated to specific product candidate programs because these costs are deployed across multiple product candidate programs under research and development expense.

EmpathBio: EMP-01 (MDMA derivative) for PTSD The $2.8 million increase in direct costs for EMP-01 was primarily due to an increase of $2.4 million preclinical activities as well as a $0.4 million increase of clinical development costs relating to the initiation our Phase 1 single ascending dose trial to assess the safety and tolerability of orally administered EMP-01.

EMP-01: 3,4-methylenedioxy-methamphetamine (MDMA) derivative for Post Traumatic Stress Disorder The $1.7 million decrease in direct costs for our EMP-01 program was primarily due to a decrease of $2.5 million preclinical development costs and a $0.7 million decrease of manufacturing costs, partially offset by an increase of $1.5 million in clinical development costs relating to our Phase 1 single ascending dose trial to assess the safety and tolerability of orally administered EMP-01.

These investors each paid €17.00 per share for an aggregate amount of €5.8 million ($6.9 million) in order to convert their respective 2018 Convertible Notes into ATAI Life Sciences AG common shares. In May and July 2022, certain investors elected to convert some of their 2018 Convertible Notes into shares of ATAI Life Sciences N.V.

From 2021 through December 31, 2023, certain noteholders elected to convert their 2018 Convertible Notes into shares of ATAI Life Sciences N.V. These investors each paid €17.00 per share for an aggregate amount of €10.4 million ($12.2 million) in order to convert their respective 2018 Convertible Notes into ATAI Life Sciences AG common shares.

Gain on Deconsolidation of a Variable Interest Entity Gain on deconsolidation of a variable interest entity was $1.5 million for the year ended December 31, 2022 as a result of the deconsolidation of Neuronasal.

Gain on deconsolidation of a variable interest entity Gain on deconsolidation of a variable interest entity was $0.1 million for the year ended December 31, 2023 as a result of the gain upon deconsolidation of Trypotagenix of $0.4 million, partially offset by the loss upon deconsolidation of Psyber, Inc. of $0.3 million, compared to a gain of $1.5 million for the year ended December 31, 2022 as a result of the deconsolidation of Neuronasal.

If we are unable to obtain this funding when needed and on acceptable terms, we could be forced to delay, limit or terminate our product development efforts. 106 Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity financings, debt financings, collaborations with other companies and other strategic transactions.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity financings, debt financings, collaborations with other companies and other strategic transactions.

Cash Flows The following table summarizes our cash flows for years ended December 31, 2022 and 2021: December 31, 2022 2021 (in thousands) Net cash used in operating activities $ (104,467 ) $ (63,246 ) Net cash used in investing activities (86,848 ) (81,276 ) Net cash provided by financing activities 20,785 409,862 Effect of foreign exchange rate changes on cash (1,123 ) (320 ) Net increase (decrease) in cash $ (171,653 ) $ 265,020 Net Cash Used in Operating Activities Net cash used in operating activities was $104.5 million for the year ended December 31, 2022, which consisted of a net loss of $157.4 million, adjusted by non-cash charges of $56.3 million and net cash outflows from the change in operating assets and liabilities of $3.3 million.

Cash Flows The following table summarizes our cash flows for years ended December 31, 2023 and 2022: December 31, 2023 2022 (in thousands) Net cash used in operating activities $ (84,118 ) $ (104,467 ) Net cash used in investing activities (53,295 ) (86,848 ) Net cash provided by financing activities (8,355 ) 20,785 Effect of foreign exchange rate changes on cash 189 (1,123 ) Net increase (decrease) in cash $ (145,579 ) $ (171,653 ) Net Cash Used in Operating Activities Net cash used in operating activities was $84.1 million for the year ended December 31, 2023, which consisted of a net loss attributable to stockholders of $43.9 million, adjusted by noncash benefit of $47.7 million and net cash inflows from the change in operating assets and liabilities of $7.5 million.

Gain on Deconsolidation of a Variable Interest Entity Gain on deconsolidation of a VIE of $1.5 million was the result of removing Neuronasal assets and liabilities from our consolidated balance sheet following our change of control in Neuronasal in November 2022.

Gain on deconsolidation of a variable interest entity Gain on deconsolidation of a variable interest entity is the result of removing assets and liabilities from our consolidated balance sheet following a loss of control or divestment of a variable interest entity.

These subjective assumptions are estimated as follows: Expected term —We have generally elected to use the “simplified method” for estimating the expected term of options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years). 114 Expected volatility —As we have limited trading history for our common shares, the expected volatility was estimated based on the average volatility for comparable publicly traded biotechnology companies over a period equal to the expected term of the stock option grants.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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2022 filing

2023 filing

Biggest changeAs of December 31, 2022, we had $0.4 million in convertible promissory notes – related parties, net, which was comprised of non-interest-bearing borrowings under the 2018 Convertible Notes.

Biggest changeAs of December 31, 2023, we had $0.4 million in convertible promissory notes, which was comprised of non-interest-bearing borrowings under the 2018 Convertible Notes.

Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as a separate component on the condensed consolidated statements of comprehensive loss. Equity transactions are translated using historical exchange rates. Expenses are translated using the average exchange rate during the previous month.

Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as a separate component on the consolidated statements of comprehensive loss. Equity transactions are translated using historical exchange rates. Expenses are translated using the average exchange rate during the previous month.

Gains or losses due to transactions in foreign currencies are included in interest and other income, net in our condensed consolidated statements of operations. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy.

Gains or losses due to transactions in foreign currencies are included in interest and other income, net in our consolidated statements of operations. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy.

A hypothetical 10% change in the relative value of the U.S. dollar to other currencies during any of the periods presented would not have had a material effect on our consolidated financial statements, but could result in significant unrealized foreign exchange gains or losses for any given period. 115

As of December 31, 2022, the carrying amount of our short and long-term notes receivables was an aggregate amount of $7.2 million.

As of December 31, 2023, the carrying amount of our short and long-term notes receivables was an aggregate amount of $11.8 million.

As of December 31, 2022, we had cash and cash equivalents of $190.6 million and short-term securities of $82.5 million. We generally hold our cash in interest-bearing demand deposit accounts and short-term securities.

As of December 31, 2023, we had cash and cash equivalents of $45.0 million and short-term securities of $109.2 million. We generally hold our cash in interest-bearing demand deposit accounts and short-term securities.

Other ATAI 10-K year-over-year comparisons

ATAI 10-K 2023 vs 2024