Cybin Company Presentation

P r i v a t e & C o n f i d e n t i a l 38 Product Recalls Manufacturers, producers and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labelling disclosure. If any of the Resulting Issuer’s products are recalled due to an alleged product defect or for any other reason, the Resulting Issuer could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection with the recall. The Resulting Issuer may lose a significant amount of sales and may not be able to replace those sales at an acceptable margin or at all. In addition, a product recall may require significant management attention. Although the Company and Resulting Issuer’s suppliers have detailed procedures in place for testing its products, there can be no assurance that any quality, potency or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action or lawsuits. Additionally, if the Resulting Issuer is subject to recall, the image of the Resulting Issuer could be harmed. A recall for any of the foregoing reasons could lead to decreased demand for the Resulting Issuer’s products and could have a material adverse effect on the results of operations and financial condition of the Resulting Issuer. Additionally, product recalls may lead to increased scrutiny of the Resulting Issuer’s operations by regulatory agencies, requiring further management attention,potentialloss of applicable licenses and potentiallegal fees and other expenses. Trademark Protection Failure to register trademarks for the Resulting Issuer or its products could require the Resulting Issuer to rebrand its products resulting in a material adverse impact on its business. Distribution and SupplyChain Interruption The Company is, and the Resulting Issuer will be, susceptible to risks relating to distributor and supply chain interruptions. Distribution in Canada is largely accomplished through independent contractors, therefore, an interruption (e.g., a labour strike) for any length of time affecting such independent contractors may have a significant impact on the Resulting Issuer’s ability to sell its products. Supply chain interruptions, including a production or inventory disruption, could impact product qualityand availability.Inherent to producing products is a potentialfor shortages or surpluses in future years if demand and supply are materially different from long-term forecasts. The Resulting Issuer monitors category trends and regularly reviews maturing inventory levels. Difficulty to forecast The Resulting Issuer must rely largely on its own market research to forecast sales as detailed forecasts are not generally obtainable from other sources at this early stage of the psychedelic and nutraceutical industry. A failure in the demand for the Resulting Issuer’s psychedelic and nutraceutical industry products to materialize as a result of competition, technological change or other factors could have a material adverse effect on the business, results of operations and financial condition of the Resulting Issuer. Promoting the Brand Promoting the Resulting Issuer’s brand will be critical to creating and expanding a customer base. Promoting the brand will depend largely on the Resulting Issuer’s ability to provide psychedelic and nutraceutical products to the market. Further, the Resulting Issuer may, in the future, introduce new products or services that its customers do not like, which may negatively affect the brand and reputation.If the Resulting Issuer fails to successfully promote its brand or if it incurs excessive expenses in this effort, its business and financial results from operations could be materially adversely affected. The regulatory framework may change at anytimecreating challenges around branding restrictions for the Resulting Issuer. Product Viability If the Resulting Issuer’s psychedelic and nutraceutical products are not perceived to have the effects intended by the end user, the Resulting Issuer’s business may suffer. In general, psychedelic and nutraceutical products have minimal long-term data with respect to efficacy, unknown side effects and/or interaction with individual human biochemistry or other supplements or medications. As a result, the Resulting Issuer’s psychedelic and nutraceutical products could have certain side effects if not used as directed or if taken by an end user that has certain known or unknown medical conditions. Further, the Resulting Issuer’s business involves the growing of an agricultural product and is subject to the risks inherent in the agricultural business, such as insects, plant diseases and similar agricultural risks. Success of Quality Control Systems The quality and safety of the Resulting Issuer’s products are critical to the success of its business and operations. As such, it is imperative that the Resulting Issuer (and its service providers’) quality control systems operate effectively and successfully. Quality control systems can be negatively impacted by the design of the quality control systems, the quality of the quality of the training program and adherence by employees to qualitycontrol guidelines. Any significant failure or deterioration of such qualitycontrol systems could have a material adverse effect on the Resulting Issuer’s business and operating results. Reliance on key inputs The Resulting Issuer’s business is expected to be dependent on a number of key inputs and their related costs including raw materials and supplies. Any significant interruption or negative change in the availability or economics of the supply chain for key inputs could materially impact the business, financial condition and operating results of the Resulting Issuer. Examples of potential risks include, but are not limited to, the risk that crops may become diseased or victim to insects or other pests and contamination, or subject to extreme weather conditions such as excess rainfall, freezing temperature, or drought, all of which could result in low crop yields, decreased availability of mushrooms, and higher acquisition prices. Any inability to secure required supplies and services or to do so on appropriateterms could have a materially adverse impact on the business, financial condition and operating results of the Resulting Issuer. Liability arising from Fraudulentor Illegal Activity The Resulting Issuer is exposed to the risk that its employees, independent contractors, consultants, service providers and licensors may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional undertakings of unauthorized activities, or reckless or negligent undertakings of authorized activities, in each case on the Resulting Issuer’s behalf or in its service that violate (i) various laws and regulations, including healthcare laws and regulations, (ii) laws that require the true, complete and accurate reporting of financial information or data, (iii) the terms of the Resulting Issuer’s agreements with third parties. Such misconduct could expose the Resulting Issuer to, among other things, class actions and other litigation, increased regulatory inspections and related sanctions, and lost sales and revenue or reputationaldamage. The precautions taken by the Resulting Issuer to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting the Resulting Issuer from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. Such misconduct may result in legal action, significant fines or other sanctions and could result in loss of any regulatory license held by the Resulting Issuer at such time. The Resulting Issuer may be subject to security breaches at its facilities or in respect of electronic document or data storage, which could lead to breaches of applicable privacy laws and associated sanctions or civil or criminal penalties; events, including those beyond the control of the Resulting Issuer, may damage its operations. In addition, these events may negatively affect customers’ demand for the Resulting Issuer’s products. Such events include, but are not limited to, non-performance by third party contractors; increases in materials or labour costs; breakdown or failure of equipment; failure of quality control processes; contractor or operator errors; and major incidents and/or catastrophic events such as fires, explosions, earthquakes or storms. As a result, there is a risk that the Resulting Issuer may not have the capacity to meet customer demand or to meet future demand when it arises. Failure to comply with health and safety laws and regulations may result in additional costs for corrective measures, penalties or in restrictions on the Resulting Issuer’s manufacturing operations. Operating Risk and InsuranceCoverage The Company does not have insurance to protect its assets, operations and employees. While the Resulting Issuer may, in the future obtain insurance coverage to address all material risks to which it is exposed and is adequate and customary in its proposed state of operations, such insurance will be subject to coverage limits and exclusions and may not be available for the risks and hazards to which the Resulting Issuer is expected to be exposed. In addition, no assurance can be given that such insurance will be adequate to cover the Resulting Issuer’s liabilities or will be generally available in the future, or if available, that premiums will be commercially justifiable. If the Resulting Issuer were to incur substantial liability and such damages were not covered by insurance or were in excess of policy limits, or if the Resulting Issuer were to incur such liabilityat a time when it is not able to obtain liabilityinsurance, its business, results of operations and financial conditioncould be materially adversely affected. Costs of Operating as Public Company As a public company, the Resulting Issuer will incur significant legal, accounting and other expenses. As a public company, the Resulting Issuer will be subject to various securities rules and regulations, which impose various requirements on the Resulting Issuer, including the requirement to establish and maintain effective disclosure and financial controls and corporate governance practices. The Resulting Issuer’s management and other personnel need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase the Resulting Issuer’s legal and financial compliance costs and make some activities more time-consuming and costly. RISK FACTORS

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