Cybin Company Presentation

P r i v a t e & C o n f i d e n t i a l 40 Financial and Accounting Risks Substantial Numberof AuthorizedbutUnissued Resulting Issuer Shares The Resulting Issuer will have an unlimited number of Resulting Issuer Shares that may be issued by the board of the Resulting Issuer (the “Resulting Issuer Board”) without further action or approval of the shareholder of the Resulting Issuer (the “Resulting Issuer Shareholders”). While the Resulting Issuer Board will be required required to fulfill its fiduciary obligations in connection with the issuance of such Resulting Issuer Shares, the Resulting Issuer Shares may be issued in transactions with which not all of the Resulting Issuer Shareholders agree, and the issuance of such Resulting Issuer Shares will cause dilutionto the ownership interests of the Resulting Issuer Shareholders. Dilution The financial risk of the Resulting Issuer’s future activities will be borne to a significant degree by purchasers of the Resulting Issuer Shares. If the Resulting Issuer issues Resulting Issuer Shares from its treasury for financing purposes, control of the Resulting Issuer may change and purchasers may suffer additionaldilution. Negative Cash Flow from Operating Activities The Company has had negative cash flow from operating activities since inception. Significant capital investment will be required to achieve the Resulting Issuer’s existing plans. The Resulting Issuer’s net losses have had and will continue to have an adverse effect on, among other things, shareholder equity, total assets and working capital. The Company expects that the Resulting Issuer’s losses may fluctuatefrom quarter to quarter and year to year, and thatsuch fluctuations may be substantial. The Company cannot predict when it will become profitable, if at all. Accordingly, the Resulting Issuer may be required to obtainadditionalfinancing in order to meet its future cash commitments. Additional Capital Requirements As a research and development company, the Resulting Issuer expects to spend substantial funds to continue the research, development and testing of its product candidates and to prepare to commercialize products subject to applicable regulatory approval. Substantial additional financing may be required if the Resulting Issuer is to be successful in continuing to develop its business and its products. No assurances can be given that the Resulting Issuer will be able to raise the additional capital that it may require for its anticipated future development. Any additional equity financing may be dilutive to investors and debt financing, if available, may involve restrictions on financing and operating activities. There is no assurance that additional financing will be available on terms acceptable to the Resulting Issuer, if at all. If the Resulting Issuer is unable to obtain additionalfinancing as needed, it may be required to reduce the scope of its operations or anticipatedexpansion. Lack of ProductRevenue To date, the Company has not generated product revenue and cannot predict when and if it will generate product revenue. The Resulting Issuer’s ability to generate product revenue and ultimately become profitable depends upon its ability, alone or with partners, to successfully develop its product candidates, obtain regulatory approval and commercialize products, including any of its current product candidates or other product candidates that it may develop, in-license or acquire in the future. The Company does not anticipate the Resulting Issuer generating revenue from the sale of products for the foreseeable future. The Company expects its research and development expenses to increase in connection with its ongoing activities, particularly as it advances its product candidates through clinical trials. Estimates or JudgementsRelating to Critical Accounting Policies The preparation of financial statements in conformity with the International Financial Reporting Standards requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Resulting Issuer bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets, liabilities, equity, revenue and expenses that are not readily apparent from other sources. The Resulting Issuer’s operating results may be adversely affected if the assumptions change or if actual circumstances differ from those in the assumptions, which could cause its operating results to fall below the expectations of securities analysts and investors, resulting in a decline in the share price of the Resulting Issuer. Significant assumptions and estimates used in preparing the financial statements include those related to the credit quality of accounts receivable, income tax credits receivable, share based payments, impairment of non-financial assets, fair value of biological assets, as well as revenue and cost recognition. Risks Related to the Offering No Public Market for the Subscription Receipts There is no public market for the subscription receipts of the Company (the “ Subscription Receipts ”) offered pursuant to the private placement (the “ Offering ”) and the Subscription Receipts will not be listed on any stock exchange. There can be no assurance that an active and liquid market for the Resulting Issuer Shares will develop following the completion of the Offering, or if developed, that such a market will be sustained. If an active public market does not develop or is not maintained, investors may have difficulty selling their Resulting Issuer Shares. The price per Subscription Receipt was determined by negotiation among the Company, Stifel Nicolaus Canada Inc. and Eight Capital, and may not be indicative of the price per Resulting Issuer Share following the completion of the Offering. The Company cannot assure investors thatthe market price of the Resulting Issuer Shares will not materially decline below the offering price. Subscription Receipt holders do not have Voting Rights Holders of the Subscription Receipts are not shareholders and the Subscription Receipts do not carry any voting rights as shareholders whatsoever. Volatile Market Price for the Resulting Issuer Shares The market price of the Resulting Issuer Shares may be volatile. The volatility may affect the ability of holders to sell the Resulting Issuer Shares at an advantageous price or at all. Market price fluctuations in the Resulting Issuer Shares may be adversely affected by a variety of factors relating to the Resulting Issuer’s business, including fluctuations in the Resulting Issuer’s operating and financial results, such results failing to meet the expectations of securities analysts or investors and downward revisions in securities analysis’ estimates in connection therewith, sales of additional Resulting Issuer Shares, governmental regulatory action, adverse change in general market conditions or economic trends, acquisitions, dispositions or other material public announcements by the Resulting Issuer or its competitors, along with a variety of additional factors, including, without limitation, those set forth under the heading “Forward-Looking Statements”. In addition, the market price for securities on stock markets, including the Canadian Stock Exchange (the “ CSE ”), is subject to significant price and trading fluctuations. These fluctuations have resulted in volatility in the market prices of securities thatoften has been unrelated or disproportionateto changes in operating performance. These broad market fluctuationsmay materially adversely affect the market price of the Resulting Issuer. Additionally, the value of the Resulting Issuer Shares is subject to market value fluctuations based upon factors that influence the Resulting Issuer’s operations, such as legislative or regulatory developments, competition, technological change and changes in interest rates or foreign exchange rates. There can be no assurance that the market price of the Resulting Issuer Shares will not experience significant fluctuationsin the future, including fluctuations thatare unrelated to the Resulting Issuer’s performance. Satisfaction of Escrow Release Conditions There can be no assurance that the escrow release conditions will be satisfied prior to the occurrence of the escrow release deadline. Each subscriber’s subscription proceeds will be held in escrow pending the satisfaction of the escrow release conditions or the occurrence of the escrow release deadline and, accordingly, subscribers will not be able to use such funds for other investment opportunities thatoccur prior to the satisfaction of the escrow release conditions or the occurrence of the escrow release deadline nor to participatein any growth in the trading price of the Resulting Issuer Shares if the escrow release conditions are not satisfied before the occurrence of the escrow release deadline. RISK FACTORS