PsyBio Therapeutics Corp. — Capital/Financing Update 2021

Sep 1, 2021

A copy of this preliminary short form prospectus has been filed with the securities regulatory authorities in each of the provinces and territories of Canada but has not yet become final for the purposes of the sale of the securities. Information contained in this preliminary short form prospectus may not be complete and may have to be amended. The securities may not be sold until a receipt for the short form prospectus is obtained from the securities regulatory authorities.

This short form prospectus is a base shelf prospectus. This short form prospectus has been filed under legislation in each of the provinces and territories of Canada, that permits certain information about these securities to be determined after this prospectus has become final and that permits the omission from this short form prospectus of that information. The legislation requires the delivery to purchasers of a prospectus supplement containing the omitted information within a specified period of time after agreeing to purchase any of these securities.

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This short form base shelf prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. The securities offered hereby have not been, and will not be, registered under the United States Securities Act of 1933, as amended and, subject to certain exceptions, may not be offered, sold or delivered, directly or indirectly, in the United States or to U.S. persons.

Information has been incorporated by reference in this short form base shelf prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Secretary of PsyBio Therapeutics Corp. at 4400 Sample Road, Suite 138, Coconut Creek, Florida, 33073, U.S.A., telephone (513) 449-9585 and are also available electronically at www.sedar.com.

PRELIMINARY SHORT FORM BASE SHELF PROSPECTUS

New Issue

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September 1, 2021

PSYBIO THERAPEUTICS CORP. $ 100,000,000

Subordinate Voting Shares Multiple Voting Shares Warrants

Options Subscription Receipts Debt Securities

Units

This short form base shelf prospectus (the “ Prospectus ”) relates to the offering for sale of subordinate voting shares (the “ Subordinate Voting Shares ”), multiple voting shares (the “ Multiple Voting Shares ”), warrants (the “ Warrants ”), options (the “ Options ”), subscription receipts (the “ Subscription Receipts ”), debt securities (the “ Debt Securities ”) or any combination of such securities (the “ Units ”) (all of the foregoing, collectively, the “ Securities ”) of PsyBio Therapeutics Corp. (the “ Company ” or “ PsyBio ”) by the Company from time to time, during the 25-month period that this Prospectus, including any amendments hereto, remains effective, in one or more series or issuances, with a total offering price of the Securities in the aggregate, of up to $100,000,000.

The Securities may be offered in amounts and at prices to be determined based on market conditions at the time of the sale and set forth in an accompanying shelf prospectus supplement (a “ Prospectus Supplement ”). In addition, Securities may be offered and issued by the Company or a subsidiary of the Company in consideration for the acquisition of other businesses, assets or securities. The consideration for any such acquisition may consist of any of

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the Securities separately, a combination of Securities or any combination of, among other things, Securities, cash and assumption of liabilities. See “Plan of Distribution”.

Investing in the Securities of the Company involves a high degree of risk. You should carefully review the risks outlined in this Prospectus (together with any Prospectus Supplement) and in the documents incorporated by reference therein and consider such risks in connection with such investment. See “Risk Factors”.

The specific terms of the Securities with respect to a particular offering will be set out in one or more Prospectus Supplements and may include, where applicable: (i) in the case of Subordinate Voting Shares or Multiple Voting Shares, the number of Subordinate Voting Shares or Multiple Voting Shares being offered, the offering price and any other specific terms; (ii) in the case of Warrants or Options, the number of Warrants or Options offered, the offering price, the designation, number and terms of the Subordinate Voting Shares and/or Multiple Voting Shares issuable upon exercise of the Warrants or Options, any procedures that will result in the adjustment of these numbers, the exercise price, dates and periods of exercise, the currency in which the Warrants or Options are issued and any other specific terms; (iii) in the case of Subscription Receipts, the number of Subscription Receipts offered, the offering price, the procedures for the exchange of the Subscription Receipts for Subordinate Voting Shares, Multiple Voting Shares or other Securities, as the case may be, and any other specific terms; (iv) in the case of Debt Securities, the specific designation, aggregate principal amount, the currency or the currency unit for which the Debt Securities may be purchased, the maturity, interest provisions, authorized denominations, offering price, covenants, events of default, any terms for redemption, any exchange or conversion terms, whether the debt is senior, senior subordinated or subordinated, whether the debt is secured or unsecured and any other terms specific to the Debt Securities being offered; and (v) in the case of Units, the designation, number and terms of the Subordinate Voting Shares, Multiple Voting Shares, Warrants, Options, Subscription Receipts or Debt Securities comprising the Units.

The Company has two classes of issued and outstanding shares: the Subordinate Voting Shares and the Multiple Voting Shares. The Subordinate Voting Shares are “restricted securities” within the meaning of such term under applicable Canadian securities laws. Each Subordinate Voting Share is entitled to one vote per Subordinate Voting Share and each Multiple Voting Share is entitled to 1,000 votes per Multiple Voting Share on all matters upon which the holders of shares of the Company are entitled to vote, and holders of Subordinate Voting Shares and Multiple Voting Shares will vote together on all matters subject to a vote of holders of each of those classes of shares as if they were one class of shares, except to the extent that a separate vote of holders as a separate class is required by law or provided by the articles of the Company. Holders of Subordinate Voting Shares and Multiple Voting Shares are entitled to receive, as and when declared by the board of directors of the Company, dividends in cash or property of the Company. In the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or in the event of any other distribution of assets of the Company among its shareholders for the purpose of winding up its affairs, the holders of Subordinate Voting Shares and Multiple Voting Shares are, subject to the prior rights of the holders of any shares of the Company ranking in priority to the Subordinate Voting Shares and Multiple Voting Shares, entitled to participate rateably along with all other holders of Subordinate Voting Shares and Multiple Voting Shares (on an as-converted to Subordinate Voting Share basis). Each Multiple Voting Share is convertible into 1,000 Subordinate Voting Shares at any time at the option of the holders thereof and automatically in certain other circumstances. See “Description of the Securities” for further details.

All shelf information permitted under applicable securities legislation to be omitted from the Prospectus will be contained in one or more Prospectus Supplements that will be delivered to purchasers together with the Prospectus, except in cases where an exemption from such delivery requirement has been obtained. Each Prospectus Supplement will be incorporated by reference into the Prospectus for the purposes of applicable securities legislation as of the date of the Prospectus Supplement and only for the purposes of the distribution of the Securities to which the Prospectus Supplement pertains. Investors should read the Prospectus and any applicable Prospectus Supplement carefully before investing in the Securities.

This Prospectus constitutes a public offering of the Securities only in those jurisdictions where they may be lawfully offered for sale and only by persons permitted to sell the Securities in such jurisdictions. The Company may offer and sell Securities to, or through, underwriters or dealers or through agents pursuant to exemptions from registration or qualification under applicable securities laws. A Prospectus Supplement relating to each issue of Securities will set forth the names of any underwriters, dealers or agents involved in the offering and sale of the Securities and will set forth the terms of the offering of the Securities, the method of distribution of the Securities, including, to the extent applicable, the proceeds to the Company and any fees, discounts, concessions or other compensation payable to the underwriters, dealers or agents, and any other material terms of the plan of distribution. This Prospectus may qualify

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an “at-the-market-distribution” as such term is defined in National Instrument 44-102 Shelf Distributions (“ NI 44102 ”). In connection with any offering of the Securities, other than an “at-the-market distribution” unless otherwise specified in a Prospectus Supplement, the underwriters or agents may over-allot or effect transactions which stabilize or maintain the market price of the Securities offered at a higher level than that which might exist in the open market. Such transaction, if commenced, may be interrupted or discontinued at any time. No underwriter, dealer or agent involved in an “at-the-market distribution” under this Prospectus, no affiliate of such an underwriter, dealer or agent and no person or company acting jointly or in concert with such underwriter, dealer or agent will over-allot Securities in connection with such distribution or effect any other transactions that are intended to stabilize or maintain the market price of the Securities. See “Plan of Distribution”.

Unless otherwise disclosed herein or in any applicable Prospectus Supplement, the Multiple Voting Shares, Warrants, the Options, the Subscription Receipts, the Debt Securities and the Units will not be listed on any securities exchange. Unless the Securities are disclosed to be listed, there will be no market through which these Securities may be sold, and purchasers may not be able to resell these Securities purchased under this Prospectus. This may affect the pricing of such Securities in the secondary market, the transparency and availability of trading prices, the liquidity of such Securities, and the extent of issuer regulation. See “Risk Factors”.

The Subordinate Voting Shares are listed for trading on the TSX Venture Exchange (the “ TSXV ”) and the Frankfurt Stock Exchange under the trading symbol “PSYB”. On August 31, 2021, the closing price of the Subordinate Voting Shares was $0.42 per Subordinate Voting Share. The Company’s registered office is located at 700 W Georgia Street, 25[th] Floor, Vancouver, BC, V7Y 1B3, Canada and its head office is located at 4400 Sample Road, Suite 138, Coconut Creek, Florida, 33073, U.S.A.

Each of Evan Levine, Noah Davis, Ross Carmel, Bob Oliver and Michael Spigarelli, directors and officers of the Company, resides outside of Canada. Messrs. Levine, Davis, Carmel, Oliver and Spigarelli have each appointed Maxims CS Inc., Suite 1800, 181 Bay Street, Toronto, Ontario, M5J 2T9, as agent for service of process in Ontario. Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person that resides outside of Canada, even if the party has appointed an agent for service of process.

In the Prospectus, “PsyBio”, the “Company”, “we”, “us” and “our” refers, collectively, to PsyBio Therapeutics Corp. and its wholly owned subsidiaries. Unless otherwise indicated, all references to dollar amounts are to Canadian dollars.

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PsyBio’s business focuses on the research, development and commercialization of psychedelic-inspired regulated medicines. The Canadian and United States federal governments regulate drugs through the Controlled Drugs and Substances Act (Canada) (the “CDSA”) and the United States Controlled Substances Act, 21 U.S.C. §801 (the “CSA”), respectively, which place controlled substances in a schedule. Under the CDSA, psilocybin is currently a Schedule III drug. Under the CSA, psilocybin is currently a Schedule I drug.

In both Canada and the United States, the applicable federal government is responsible for regulating, among other things, the approval, import, sale and marketing of drugs, including any psychedelic substances, whether natural or novel. Health Canada and the United States Food and Drug Administration (the “U.S. FDA”) have not approved psilocybin as a drug for any indication. It is illegal to possess such substances without a prescription. PsyBio does not directly engage in any activities that would trigger the need to comply with any federal laws related to psychedelic substances. See “Summary of the Business – Regulatory Overview”.

PsyBio does not deal with psychedelic substances except in jurisdictions where such activity is not illegal and then only within laboratory and clinical trial settings conducted within approved regulatory frameworks. PsyBio intends to sponsor research and work with licensed parties to conduct any research relating to psychedelics and currently does not handle controlled or restricted substances under the CDSA or CSA. If PsyBio were to conduct this work without reliance on third parties, it would need to obtain the required licenses, approvals and authorizations from the U.S. FDA or other applicable regulatory bodies. PsyBio does not have any direct or indirect involvement with illegal selling, production or distribution of any substances in jurisdictions in which it operates. PsyBio’s operations are conducted in strict compliance with local laws where such activities are permissible and do not require any specific legal or regulatory approvals.

Given the early stage of its prescription drug product development, PsyBio can make no assurance that its research and development program will result in regulatory approval or commercially viable products. To achieve profitable operations, PsyBio, alone or with others, must successfully develop, gain regulatory approval for, and market its future products. PsyBio currently has no products that have been approved by Health Canada, the U.S. FDA, or any similar regulatory authority. To obtain regulatory approvals for its prescription drug product candidates being developed and to achieve commercial success, clinical trials must demonstrate that the prescription drug product candidate are safe for human use and that they demonstrate efficacy. See “Risk Factors”.

Certain statements in this Prospectus regarding psilocybin and its analogues have not been evaluated by Health Canada, the U.S. FDA or other similar regulatory authorities, nor has the efficacy of psilocybin and its analogues been confirmed by approved research. There is no assurance that psilocybin and its analogues can be used to diagnose, treat, cure or prevent any disease or condition and robust scientific research and clinical trials are needed. There are multiple risk factors regarding the ability to successfully commercially scale a chemically synthesized process to obtain psilocybin and other analogues. See “Risk Factors”.

PsyBio oversees and monitors compliance with applicable laws in each jurisdiction in which it operates. In addition to PsyBio’s senior executives and the employees responsible for overseeing compliance, PsyBio has local regulatory/compliance counsel engaged in every jurisdiction in which it operates. Additionally, PsyBio has received legal opinions or advice in each jurisdiction where it currently operates regarding (a) compliance with applicable regulatory frameworks and (b) potential exposure and implications arising from applicable laws in jurisdictions where PsyBio has operations or intends to operate.

For these reasons, PsyBio may be (a) subject to heightened scrutiny by regulators, stock exchanges, clearing agencies and other authorities, (b) susceptible to regulatory changes or other changes in law, and (c) subject to risks related to drug development, among other things. There are a number of risks associated with the business of PsyBio. See “Risk Factors”.

TABLE OF CONTENTS

Page

GENERAL MATTERS ............................................................................................................................................... 1 DOCUMENTS INCORPORATED BY REFERENCE .............................................................................................. 1 CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION .................................................. 3 CURRENCY PRESENTATION ................................................................................................................................. 6 SUMMARY DESCRIPTION OF THE BUSINESS ................................................................................................... 6 REGULATORY OVERVIEW .................................................................................................................................. 11 COMPLIANCE PROGRAM..................................................................................................................................... 15 USE OF PROCEEDS ................................................................................................................................................ 16 EARNINGS COVERAGE RATIO ........................................................................................................................... 16 CONSOLIDATED CAPITALIZATION OF THE COMPANY ............................................................................... 16 PRIOR SALES .......................................................................................................................................................... 17 TRADING PRICE AND VOLUME ......................................................................................................................... 19 DIVIDEND RECORD AND POLICY ...................................................................................................................... 19 DESCRIPTION OF SECURITIES ............................................................................................................................ 19 PLAN OF DISTRIBUTION ...................................................................................................................................... 29 RISK FACTORS ....................................................................................................................................................... 31 EXEMPTIVE RELIEF .............................................................................................................................................. 49 CERTAIN INCOME TAX CONSIDERATIONS ..................................................................................................... 49 AUDITORS, TRANSFER AGENT AND REGISTRAR .......................................................................................... 49 INTERESTS OF EXPERTS ...................................................................................................................................... 49 STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION ........................................................................ 50 CERTIFICATE OF PSYBIO THERAPEUTICS CORP. ........................................................................................ C-1

GENERAL MATTERS

PsyBio is a British Columbia company that is a “reporting issuer” under Canadian securities laws in the Provinces of British Columbia, Alberta, Saskatchewan and Ontario. The Subordinate Voting Shares are listed for trading on the TSXV and Frankfurt Stock Exchange under the symbol “PSYB”.

This Prospectus is a short form base shelf prospectus that has been filed with the securities commissions in each of the provinces and territories of Canada in order to qualify the offering of the Securities described in this Prospectus in accordance with National Instrument 44-102 Shelf Distributions (“ NI 44-102 ”).

Under this Prospectus, the Company may sell any combination of the Securities described in this Prospectus in one or more offerings up to a total aggregate initial offering price of $100,000,000. This Prospectus provides you with a general description of the Securities that we may offer in connection with this Prospectus. Each time we sell Securities under this Prospectus we will provide a Prospectus Supplement that will contain specific information about the terms of that specific offering. The specific terms of the Securities in respect of which this Prospectus is being delivered will be set forth in a Prospectus Supplement.

You should rely only on the information contained in or incorporated by reference into this Prospectus and in any applicable Prospectus Supplement. The Company has not authorized anyone to provide you with different information. The Company is not making any offer of these Securities in any jurisdiction where the offer is not permitted. You should not assume that the information contained in this Prospectus and any Prospectus Supplement is accurate as of any date other than the date on the front of those documents or that any information contained in any document incorporated by reference is accurate as of any date other than the date of that document.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents of the Company filed with various securities commissions or similar authorities in provinces and territories of Canada in which we are a reporting issuer are specifically incorporated by reference into, and form an integral part of, this Prospectus:

• (a) the filing statement of the Company dated February 17, 2021 prepared in connection with the Transaction (as defined herein) excluding the unaudited interim condensed financial statements for the three months ended September 30, 2020 and the accompanying management’s discussion and analysis (the “ Filing Statement ”);

• (b) the audited financial statements of the Company for the years ended June 30, 2020 and 2019, together with the notes thereto and the independent auditors’ report of RSM Canada, LLP thereon (the “ Annual Financial Statements ”);

• (c) the management’s discussion and analysis of the Company for the years ended June 30, 2020 and 2019;

• (d) the unaudited interim condensed financial statements of the Company for the six months ended June 30, 2021;

• (e) the management’s discussion and analysis of the Company for the six months ended June 30, 2021 (the “ MD&A ”);

• (f) the audited financial statements of PsyBio Therapeutics, Inc. (“ PsyBio U.S. ”) for the period from incorporation on January 21, 2020 to December 31, 2020 including the notes thereto and the

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independent auditors’ report of MNP LLP thereon contained in the Filing Statement (the “ PsyBio U.S. Annual Financial Statements ”);

• (g) the management’s discussion and analysis of PsyBio U.S. for the period from incorporation on January 21, 2020 to December 31, 2020 contained in the Filing Statement;

• (h) the audited financial statements of PsyBio Therapeutics Financing Inc. (“ Finco ”) from the period of incorporation on October 30, 2020 to November 30, 2020 together with the notes thereto and the independent auditors’ report of MNP LLP thereon contained in the Filing Statement (the “ Finco Annual Financial Statements ”);

• (i) the management information circular of the Company dated December 14, 2020, as amended and supplemented on January 8, 2021, prepared in connection with the Company’s annual and special meeting of shareholders held on January 13, 2021; and

• (j) the material change report dated February 25, 2021 regarding the completion of the Transaction (as defined below).

Any document of the type referred to in Section 11.1 of Form 44-101F1 Short Form Prospectus (excluding confidential material change reports) filed by the Company with a securities commission or similar regulatory authority in Canada after the date of this Prospectus and before the termination of the distribution are deemed to be incorporated by reference into this Prospectus.

Any statement contained in this Prospectus or in a document incorporated or deemed to be incorporated by reference herein will be deemed to be modified or superseded to the extent that a statement contained herein, in any Prospectus Supplement or in any other subsequently filed document that is also incorporated or is deemed to be incorporated by reference herein modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information contained in the document that it modifies or supersedes. The making of a modifying or superseding statement will not be deemed an admission for any purpose that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of the Prospectus.

Upon an annual information form and related annual financial statements being filed by us with, and where required, accepted by, the applicable securities regulatory authority during the currency of this Prospectus, the previous annual financial statements and all interim financial statements, material change reports and information circulars and all Prospectus Supplements filed prior to the commencement of our financial year in which an annual information form is filed shall be deemed no longer to be incorporated into this Prospectus for purposes of future offers and sales of Securities hereunder. Upon condensed consolidated interim financial statements and the accompanying management’s discussion and analysis of financial condition and results of operations being filed by us with the applicable Canadian securities commissions or similar regulatory authorities during the period that this Prospectus is effective, all condensed consolidated interim financial statements and the accompanying management’s discussion and analysis of financial condition and results of operations filed prior to such new condensed consolidated interim financial statements and management’s discussion and analysis of financial condition and results of operations shall be deemed to no longer be incorporated into this Prospectus for purposes of future offers and sales of Securities under this Prospectus. In addition, upon a new management information circular for an annual meeting of shareholders being filed by us with the applicable Canadian securities commissions or similar regulatory authorities during the period that this Prospectus is effective, the previous management information circular filed in respect of the prior annual meeting of shareholders shall no longer be deemed to be incorporated into this Prospectus for purposes of future offers and sales of Securities under this Prospectus.

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All information permitted under applicable securities legislation to be omitted from the Prospectus will be contained in one or more Prospectus Supplements that will be delivered to purchasers together with the Prospectus, except in cases where an exemption from such delivery requirements has been obtained. A Prospectus Supplement containing the specific terms of an offering of Securities will be delivered to purchasers of such Securities together with this Prospectus and will be deemed to be incorporated by reference into this Prospectus as of the date of such Prospectus Supplement, but only for the purposes of the offering of Securities covered by that Prospectus Supplement. Investors should read the Prospectus and any applicable Prospectus Supplement carefully before investing in the Company’s Securities.

Any template version of any “marketing materials” (as such term is defined in National Instrument 44-101 Short Form Prospectus Distributions ) filed after the date of a Prospectus Supplement and before the termination of the distribution of the Securities offered pursuant to such Prospectus Supplement (together with this Prospectus) is deemed to be incorporated by reference in such Prospectus Supplement.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

Certain statements contained in this Prospectus, and in certain documents incorporated by reference herein, constitute “forward-looking information” and “forward-looking statements” (collectively referred to as “ forward-looking statements ”) within the meaning of Canadian securities legislation. All statements other than statements of historical fact contained in this Prospectus and in documents incorporated by reference in this Prospectus, including, without limitation, those regarding the Company’s future financial position and results of operations, strategy, plans, objectives, goals, targets and future developments of the Company in the markets where the Company participates or is seeking to participate, and any statements preceded by, followed by or that include the words “considers”, “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative of these terms or comparable terminology, are forward-looking statements.

These statements are not historical facts but instead represent only the Company’s expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements. Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to, those discussed under “Risk Factors” in the Filing Statement and in this Prospectus and in other documents incorporated by reference in this Prospectus. Management provides forward-looking statements because it believes they provide useful information to readers when considering their investment objectives and cautions readers that the information may not be appropriate for other purposes. Consequently, all of the forward-looking statements made in this Prospectus and in documents incorporated by reference in this Prospectus are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this Prospectus and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.

The forward-looking statements in this Prospectus and in documents incorporated by reference in this Prospectus are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future, including assumptions regarding business and operating strategies, and the Company’s ability to operate on a profitable basis.

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Risks which could affect future results and could cause results to differ materially from those expressed in the forwardlooking statements contained herein include:

• Risks related to our financial position  limited operating history  significant losses incurred  no profits or significant revenues  additional funding required for commercialization

Risks related to our business

	novel coronavirus “COVID-19”
	early stage of product development
	no assurance that PsyBio will be able to develop marketable therapies
	no assurance that future studies will yield favourable results
	reliance on production and distribution of psychedelics and related products
	limited marketing and sales capabilities
	no assurance of commercial success
	reliance on third parties for preclinical and clinical development activities
	risks related to third party relationships
	limited manufacturing experience
	reliance on contract manufacturers
	commercial scale product manufacturing
	clinical testing and commercializing product candidates
	completion of clinical trials
	future clinical trials may not be successful
	product development costs may increase
	regulatory risks and uncertainties
	nature of regulatory approvals
	reliance on third-party clinical investigators and academic collaborators
	limited number of specialist third-party service providers
	difficulty enrolling patients to participate in clinical trials
	no assurance that clinical trials will be successful
	failure of later stage clinical trials
	safety and efficacy of products
	clinical trial publications
	lack of commercialization experience
	ongoing regulatory review and obligations
	failure to achieve publicly announced milestones
	market access and acceptance
	reliance on third-party therapy sites
	reliance on third party suppliers and manufacturers
	changes in methods of manufacturing
	receiving regulatory designations may not be productive
	failure to enter into or maintain profitable relationships
	unfavourable publicity or consumer perception
	social media
	biotechnology and pharmaceutical market competition
	reliance on key executives and scientists
	ability to attract employees
	employee misconduct
	business expansion and growth
	product side effects

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• product liability

• enforcing contracts

• product recalls  distribution and supply chain interruption

• costs of operating as public company

• foreign regulatory requirements

• conflicts of interest

• cybersecurity and privacy risk

• U.S. operations

• forward-looking statements may prove to be inaccurate

• failure to achieve research and development milestones

Risks related to regulatory compliance

• change in substance laws or breach in compliance

• loss of foreign private issuer status

• compliance with U.S. federal laws and regulations

• U.S. federal and state forfeiture laws

• global tax reforms

• U.S. tax classification of the Company

• enacted and future healthcare legislation

• healthcare fraud laws, false claims, and health information privacy and security laws

• extensive record-keeping, storage and security requirements

• compliance with data protection laws

• deficiencies in regulatory agencies

• availability of government healthcare reimbursements

• compliance with environmental, health and safety laws

• litigation

• Risks related to development, clinical testing and commercialization of any future therapeutic candidates  early stage of the industry

• psilocybin is a controlled substance in many jurisdictions

• U.S. DEA registration and inspection of facilities

• potential reclassification of psilocybin and psilocin in the U.S.

Risks related to intellectual property

• trade secrets

• trade names

• patent litigation

• invalid patents

• intellectual property litigation costs

• protection of intellectual property

• third-party licenses

• failure to comply with intellectual property or license agreements

• failure to extend term of patents

• intellectual property rights may fail to protect competitive advantage

• employee patent claim liability

• patent law reforms

• difficulties securing jurisdictional intellectual property rights

Financial and accounting risks

• negative cash flow from operating activities

• additional capital requirements

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• lack of product revenue

• estimates or judgments relating to critical accounting policies  exchange rate fluctuations

• Risks related to the Subordinate Voting Shares

• volatile market price for Subordinate Voting Shares

• dilution

• restriction on the ability to convert Multiple Voting Shares

• market for Subordinate Voting Shares

• significant sales of Subordinate Voting Shares

• tax issues

• discretion over the use of proceeds

• no dividends

Drug development involves long lead times, is very expensive and involves many variables of uncertainty. Anticipated timelines regarding drug development are based on reasonable assumptions informed by current knowledge and information available to the Company. Every patient treated on future studies can change those assumptions either positively (to indicate a faster timeline to new drug applications and other approvals) or negatively (to indicate a slower timeline to new drug applications and other approvals). This Prospectus and the documents incorporated by reference herein contain certain forward-looking statements regarding anticipated or possible drug development timelines. Such statements are informed by, among other things, regulatory guidelines for developing a drug with safety studies, proof of concept studies, and pivotal studies for new drug application submission and approval, and assumes the success of implementation and results of such studies on timelines indicated as possible by such guidelines, other industry examples, and the Company’s development efforts to date.

In addition to the factors set out above and those identified under the heading “Risk Factors” in the Filing Statement and in this Prospectus, other factors not currently viewed as material could cause actual results to differ materially from those described in the forward-looking statements. Although the Company has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forwardlooking statements, there may be other factors and risks that cause actions, events or results not to be anticipated, estimated or intended. Accordingly, readers should not place any undue reliance on forward-looking statements.

Many of these factors are beyond the Company’s ability to control or predict. These factors are not intended to represent a complete list of the general or specific factors that may affect the Company. The Company may note additional factors elsewhere in this Prospectus and in any documents incorporated by reference into this Prospectus. All forward-looking statements speak only as of the date made. All subsequent written and oral forward-looking statements attributable to the Company, or persons acting on the Company’s behalf, are expressly qualified in their entirety by the cautionary statements. Except as required by law, the Company undertakes no obligation to update any forward-looking statement.

CURRENCY PRESENTATION

Unless otherwise indicated, all dollar amounts in this Prospectus and any Prospectus Supplement are expressed in Canadian dollars. All references to US$ refer to United States dollars.

SUMMARY DESCRIPTION OF THE BUSINESS

This summary does not contain all the information that may be important to you in deciding whether to invest in the Securities. You should read the entire Prospectus, including the section entitled “Risk Factors” and any documents incorporated by reference herein before making such decision. Further information regarding the Company and its business is set out in the Filing Statement, which is incorporated by reference herein.

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Background

The Company was incorporated under the Business Corporations Act (Ontario) (the “ OBCA ”) on October 28, 2009. On February 2, 2011, the Company completed its initial public offering (“ IPO ”) of 3,444,230 common shares (“ Common Shares ”) at a price of $0.1667 per share for total gross proceeds of $574,050 and filed for listing as a Capital Pool Company (“ CPC ”), as defined in Policy 2.4 of the TSXV. The Common Shares commenced trading on the TSXV on February 8, 2011 under the trading symbol “LEQ”. The Company was unable to complete a Qualifying Transaction (as defined in TSXV Policy 2.4) within the time limits prescribed by the TSXV. As a result, on May 16, 2013, the Common Shares were transferred to the NEX board of the TSXV and were listed under the symbol “LEQ.H”.

The Transaction

On December 2, 2020 (as amended on February 18, 2021), the Company entered into a definitive business combination agreement (the “ Definitive Agreement ”) among 1276949 B.C. Ltd. (“ Leo BC Sub ”), Eluss, Inc. (“ Leo Delaware Sub ”), PsyBio U.S. and Finco, which outlined the terms and conditions pursuant to which the Company agreed to complete a Qualifying Transaction (the “ Transaction ”). The Definitive Agreement was negotiated at arm’s length. The Transaction was completed on February 19, 2021.

Immediately prior to closing of the Transaction, the Company: (i) continued from the OBCA to the BCBCA; (ii) reclassified its Common Shares as Subordinate Voting Shares and amended the terms of such shares, (iii) created the Multiple Voting Shares, (iv) changed its name to “PsyBio Therapeutics Corp.”, and (v) effected a consolidation of the Subordinate Voting Shares on the basis of 1.6667 old Subordinate Voting Shares into one new Subordinate Voting Share (the “ Consolidation ”). The Subordinate Voting Shares commenced trading on the TSXV on February 25, 2021 under the symbol “PSYB”;.

Pursuant to the Definitive Agreement:

• a) the Company, Leo BC Sub and Finco completed a three-cornered amalgamation under the Business Corporations Act (British Columbia) (“ BCBCA ”), pursuant to which all Finco shareholders (including former holders of the Subscription Receipts) exchanged all shares of Finco (“ Finco Shares ”) for Subordinate Voting Shares on a one-for-one basis and Finco and Leo BC Sub amalgamated with the resulting entity (“ Amalco ”) to continue as a wholly-owned subsidiary of the Company (the “ Amalgamation ”);

• b) the Company, Leo Delaware Sub and PsyBio U.S. completed a three-cornered merger under the laws of the State of Delaware, pursuant to which PsyBio and Leo Delaware Sub merged with PsyBio U.S. to continue as the surviving corporation and a wholly-owned subsidiary of the Company (the “ Merger ”); and

• c) Amalco was wound-up and dissolved, pursuant to which all of the assets of Amalco were distributed to the Company.

As a result of the Transaction, each share of PsyBio U.S. (“ PsyBio U.S. Share ”) was exchanged for 1/1000th of one Multiple Voting Share (on the basis of one PsyBio U.S. Share for every one underlying Subordinate Voting Share) of the Company and any convertible or exchangeable security or other right to purchase or acquire PsyBio U.S. Shares, to the extent not exercised or converted at the time of closing of the Transaction that was outstanding immediately before close of the Transaction, whether vested or unvested, automatically and without any required action on the part of any holder or beneficiary thereof, became convertible securities of the Company exercisable or convertible into an option, warrant, convertible or exchangeable security or other right, as applicable, to purchase or acquire a number of Subordinate Voting Shares or Multiple Voting Shares, as applicable.

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Following completion of the Transaction, and as of the date of this Prospectus, the Company carries on the business of PsyBio U.S. The Company is a US-based biotechnology company developing a new class of drugs intended for the treatment of mental health challenges and other disorders.

The following chart sets out the Company’s material subsidiary as at the date hereof, its jurisdiction of incorporation and the Company’s voting interest in such subsidiary:

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PsyBio Therapeutics Corp.
(British Columbia)
100%
PsyBio Therapeutics, Inc.
(Delaware)
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Subscription Receipt Financing

On December 4, 2020, in connection with the Transaction, PsyBio and Finco completed a financing (the “ Financing ”) of subscription receipts of Finco (the “ Subscription Receipts ”) for aggregate gross proceeds of $14,493,394 through the issuance of 41,409,698 Subscription Receipts at a price of $0.35 per Subscription Receipt (the “ Issue Price ”). The Financing was led by Eight Capital, as lead agent, and Canaccord Genuity Corp. (together, the “ Agents ”).

In connection with the Financing and pursuant to an agency agreement dated December 4, 2020 among the Agents, the Company, PsyBio U.S. and Finco (the “ Agency Agreement ”), the Agents received a cash commission of $527,229 and 1,506,368 compensation warrants (the “ Compensation Warrants ”). The Agents also received finance fees of $374,000 and 1,069,000 advisor warrants (the “ Advisor Warrants ”). On closing of the Financing, the Agents received payment of 50% of the agents’ commission, 50% of the finance fee and were issued all of the Compensation Warrants and Advisor Warrants. The remaining 50% of the agents’ commission and 50% of the finance fee were paid to the Agents immediately prior to the closing of the Transaction, upon conversion of the Subscription Receipts in accordance with their terms.

Immediately prior to closing the Transaction, each Subscription Receipt was automatically exchanged for one common share of Finco pursuant to the terms and conditions of the Subscription Receipts and the subscription receipt agreement governing the Subscription Receipts, including that all conditions precedent to the Transaction were satisfied or waived.

Each Compensation Warrant and each Advisor Warrant was exercisable to acquire one Finco Share at the Issue Price for a period of 24 months from closing of the Transaction. Following closing of the Transaction, the Compensation Warrants and Advisor Warrants became exercisable to acquire Subordinate Voting Shares of the Company in accordance with the same terms.

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General Description of the Business

PsyBio U.S. was incorporated under the laws of the State of Delaware on January 21, 2020. PsyBio U.S. was formed for the purpose of conducting a business relating to and promoting the purposes of psychedelically inspired compounds from different fungi and plants with unique psychoactive properties, under the provisions and subject to the requirements of the laws of the State of Delaware. The Company’s operations are considered to be a continuance of the business and operations of PsyBio U.S.

The Company is a US-based biotechnology company developing a new potential class of drugs intended for the treatment of mental health challenges and other disorders. PsyBio is in the process of developing its portfolio of product candidates for sale in the pharmaceutical industry and is using traditional drug development protocols that are published at fda.gov.

In collaboration with Miami University, a public university established and existing under the laws of the State of Ohio (the “ University ”), PsyBio has: (i) developed a proprietary technology platform that enables the rapid generation of its formulation for its lead compound psilocybin, biosynthetic psilocybin, and other targeted tryptamines through a biosynthetic process using genetically modified bacteria; and (ii) retained the global exclusive rights to a proprietary platform technology that biologically synthesizes psilocybin and other targeted next generation psychoactive compounds that are produced naturally in fungi and plants (the “ PsyBio IP ”). The Company is currently undergoing process development and manufacturing at commercial laboratories that have been approved by the United States Drug Enforcement Administration (“ DEA ”). By utilizing contract manufacturers, the Company is developing the chemistry, manufacturing and control (CMC) section of its IND application and expects to submit such application in approximately one year to initiate clinical studies.[1]

Management of PsyBio is motivated by a desire to find better ways to assist and empower people suffering with mental health challenges who are not helped by existing therapies. PsyBio is working towards pioneering the development of a new model of psycholytic therapy in which psychedelics are administered in conjunction with psychological support. The initial focus of the Company’s research is on the potential treatment of cancer patients with depression, a subset of broader depressive disorder, comprising patients who are inadequately served by the current treatment paradigm. Early data from academic studies using formulations of psychedelics not developed by PsyBio, have shown that psycholytic therapy can improve outcomes for patients suffering with depression, anxiety and PTSD, and substance abuse with rapid reductions in symptoms and effects lasting up to months after administration of a single dose.[2] Psilocybin is a controlled substance in many jurisdictions, including in Canada under Schedule III of the CDSA and in the Unites States under the CSA. In the United States, psilocybin and its active metabolite, psilocin, are listed by the DEA as controlled substances or scheduled substances, under the CSA (specifically as a Schedule I substance).

On May 14, 2020, PsyBio U.S. entered into a definitive license agreement (the “ License Agreement ”) and master sponsored agreement (the “ Master Sponsored Research Agreement ” and, together with the License Agreement, collectively, the “ Sponsored Research Agreements ”) with the University. The Sponsored Research Agreements contemplate research and development services for enhanced psilocybin production via metabolic engineering. On

1 Subject to receipt of all necessary approvals, including as applicable, governmental authorities and the academic and scientific organizations with which PsyBio is working. There are multiple risk factors regarding the ability to successfully commercially scale a chemically synthesized process to obtain tryptamine and other analogues. The material factors and assumptions underlying this forward-looking statement are that drug development involves long lead times, is very expensive and involves many variables of uncertainty. PsyBio has not yet held a pre-IND meeting with the U.S. FDA in preparation for the filing of an IND application. PsyBio has assumed that the U.S. FDA will grant such a Pre-IND meeting and that it will be able to complete the IND approval process; however, there is no guarantee that any such IND application will be accepted or granted by U.S. FDA.

2 Griffiths, Roland R et al. “Psilocybin produces substantial and sustained decreases in depression and anxiety in patients with lifethreatening cancer: A randomized double-blind trial.” Journal of psychopharmacology (Oxford, England) vol. 30,12 (2016): 11811197; Davis, Alan K et al. “Effects of Psilocybin-Assisted Therapy on Major Depressive Disorder: A Randomized Clinical Trial.” JAMA psychiatry , (2020).

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April 22, 2021, the Sponsored Research Agreements were amended to extend and expand the research efforts of the laboratory to include additional research efforts of the Department of Psychology and to provide an additional USD$1,500,000 in funding until May 2023 to Miami University to support all such research. The research and programs contemplated by the Sponsored Research Agreements are of mutual interest and benefit to PsyBio and the University, including that it is intended to “further the instructional and research objectives of University in a manner consistent with its status as a non-profit, tax-exempt, education institution”, and may derive benefits for both PsyBio and the University through “inventions, improvements, and/or discoveries”.

The current sponsored project involves the development of elite psilocybin or derivative tryptophan producing bacterial strains and fermentation processes that are industrially competitive with current chemical synthesis strategies and new commercial research objectives. The current project period is two years from the effective date of the Sponsored Research Agreements.[5]

The License Agreement addresses rights related to intellectual property derived from the research and development services of the University pursuant to the Master Sponsored Research Agreement. Under the terms of the License Agreement, and in accordance with University policy, the University maintains title and ownership of the intellectual property developed in the course of the services and PsyBio is granted exclusive rights to develop, make, lease, sell, have developed, have made, use and otherwise dispose of the products in the United States that embody or use the PsyBio IP. The University retains limited rights, consistent with the University’s status as a non-profit, to use the intellectual property for non-commercial research purposes.

Pursuant to the Sponsored Research Agreements, in collaboration with the University, PsyBio is in the process of developing new drugs by producing novel psychoactive molecules from genetically modified bacteria. It is expected that the PsyBio IP will enable the rapid generation of highly stable compounds cheaper, faster and greener than any other published method.[3]

The Company is conducting all of its research in drug discovery in the laboratory of Dr. J. Andrew Jones in the Department of Chemical, Paper, and Biomedical Engineering and the laboratory of Dr. Matthew McMurray in the Department of Psychology at Miami University under the Sponsored Research Agreements.

Please refer to the Filing Statement for a full description of the business. A copy of the Filing Statement may be viewed under the Company’s SEDAR profile at www.sedar.com.

Select Recent Developments

There have been no material developments in the business of the Company since June 30, 2021 (the date of the Company’s most recently issued unaudited interim consolidated financial statements and MD&A), which have not been disclosed in this Prospectus or the documents incorporated by reference herein.

3 The material factors and assumptions underlying this forward-looking statement are that drug development involves long lead times, is very expensive and involves many variables of uncertainty. Pharmaceutical grade psilocybin produced for clinical trials and research may be produced using a chemical synthesis process. This method uses starting materials such as toxic catalysts, solvents and reagents requiring numerous purification steps. The current standard processing time for chemical synthesis is between five to fifteen days with current costs ranging from approximately US$2,000 to US$20,000 per gram. Using readily available materials, PsyBio has developed a biosynthetic process that takes between approximately two and four days. The result is a product with high stability and room temperature, with current pre-purified material costs of approximately US$10 per gram. PsyBio has not yet held a pre-IND meeting with the U.S. FDA in preparation for the filing of an IND application. PsyBio has assumed that the U.S. FDA will grant such a Pre-IND meeting and that it will be able to complete the IND approval process; however, there is no guarantee that any such IND application will be accepted or granted by U.S. FDA. At this time PsyBio has not entered into commercial supply agreements and has no control over price or conditions. PsyBio’s assumption is that it will be able to enter into such agreements.

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Material Contracts

The following are the contracts that are material to the Company that were entered into during the year ended December 31, 2020 and to the date hereof that are still in effect, other than contracts entered into in the ordinary course of business:

1. Agency Agreement;

2. Sponsored Research Agreements;

3. Amended Sponsored Research Agreements;

4. Escrow agreement dated February 19, 2021 among the Company, Odyssey Trust Company and certain shareholders of the Company; and

5. Escrow agreement dated November 10, 2010, among the Company, Computershare Trust Company of Canada and certain shareholders of the Company.

REGULATORY OVERVIEW

A summary of the applicable regulatory framework for PsyBio’s business and proposed business activity are set forth below.

Business Segment	Current/Proposed Location of Operation	Summary of Applicable Regulatory Frameworks	Third-party Researchers, Suppliers, and/or Manufacturers	Agreements/Contracts Related to Operations(1)
Research, development and commercialization of psychedelic- inspired regulated medicines	United States	The United States federal governments regulate drugs through the CSA, which place controlled substances in a schedule.(2) Under the CSA, psilocybin is currently a Schedule I drug.(3) Misuse of Drugs Regulations 2001 and the Misuse of Drugs Regulations 2001	 Dr. J. Andrew Jones  Miami University	 Sponsored Research Agreements  Amended Sponsored Research Agreements

Notes:

• (1) For more information regarding contracts related to the operations of PsyBio, please see “General Description of Business”.

• (2) In the United States, the federal government is responsible for regulating, among other things, the approval, import, sale and marketing of drugs, including any psychedelic substances, whether natural or novel. The FDA have not approved psilocybin as a drug for any indication. It is illegal to possess such substances without a prescription. PsyBio does not directly engage in any activities that would trigger the need to comply with any federal laws related to psychedelic substances. See “Regulatory Environment – Overview” below.

• (3) For further information on the United States regulatory framework, see “Regulatory Overview – United States” below.

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United States

In order to develop regulated therapies, PsyBio’s business must be conducted in strict compliance with the regulations of federal, state, local and regulatory agencies in the United States, and the equivalent regulatory agencies in the other jurisdictions in which it operates. These regulatory authorities regulate, among other things, the research, manufacture, promotion and distribution of drugs in specific jurisdictions under applicable laws and regulations.

The regulatory approval process is generally lengthy and expensive, with no guarantee of a positive result. Failure to comply with applicable regulatory authorities or other requirements may result in civil or criminal penalties, recall or seizure of products, injunctive relief including partial or total suspension of production, or withdrawal of a product from the market.

The U.S. FDA and other federal, state, local and foreign regulatory agencies impose substantial requirements upon the clinical development, approval, labeling, manufacture, marketing and distribution of drug products. These agencies regulate, among other things, research and development activities and the testing, approval, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, advertising and promotion of any product candidates or commercial products. The regulatory approval process is generally lengthy and expensive, with no guarantee of a positive result. Moreover, failure to comply with applicable U.S. FDA or other requirements may result in civil or criminal penalties, recall or seizure of products, injunctive relief including partial or total suspension of production, or withdrawal of a product from the market. PsyBio is in the process of preparing an investigational new drug (“ IND ”) application, which it expects to file with the U.S. FDA in the first half of 2021.

Psilocybin, psilocin, dimethyltryptamine, and 5-Methoxy-N-N-dimethyltryptamine are strictly controlled under the CSA as Schedule I substances. Schedule I substances by definition have no currently accepted medical use in the United States, a lack of accepted safety for use under medical supervision, and a high potential for abuse. 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. Anyone wishing to conduct research on substances listed in Schedule I under the CSA must register with the United States Drug Enforcement Administration (“ U.S. DEA ”), and obtain U.S. DEA approval of the research proposal. Dr. J. Andrew Jones has received the requisite U.S. DEA approval of the research proposal being conducted at Miami University.

Various regulatory authorities regulate, among other things, the research, manufacture, promotion and distribution of drugs in the United States under the United States Federal Food, Drug, and Cosmetic Act and other statutes and implementing regulations. The process required by the U.S. FDA before prescription drug product candidates may be marketed in the United States generally involves the following:

• completion of extensive nonclinical laboratory tests, animal studies and formulation studies, all performed in accordance with the U.S. FDA’s Good Laboratory and/or Manufacturing Practice regulations;

• submission to the U.S. FDA of an IND application, which must become effective before human clinical trials may begin;

• approval by an institutional review board or independent ethics committee at each clinical trial site before each trial may be initiated;

• for some products, performance of adequate and well-controlled human clinical trials in accordance with the U.S. FDA’s regulations, including Good Clinical Practices, to establish the safety and efficacy of the product candidate for each proposed indication;

• submission to the U.S. FDA of a new drug application (“ NDA ”); and

• U.S. FDA review and approval of the NDA prior to any commercial marketing, sale or shipment of the drug.

The testing and approval process requires substantial time, effort and financial resources, and PsyBio cannot be certain that any approvals for its product candidates will be granted on a timely basis, if at all.

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Nonclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate toxicity in animals and other animal studies. The results of nonclinical tests, together with manufacturing information and analytical data, are submitted as part of an IND to the U.S. FDA. Some nonclinical testing may continue even after an IND is submitted. The IND also includes one or more protocols for the initial clinical trial or trials and an investigator’s brochure. An IND automatically becomes effective 30 days after receipt by the U.S. FDA, unless the U.S. FDA, within the 30-day time period, raises concerns or questions relating to the proposed clinical trials as outlined in the IND and places the clinical trial on a clinical hold. In such cases, the IND sponsor and the U.S. FDA must resolve any outstanding concerns or questions before any clinical trials can begin. Clinical trial holds also may be imposed at any time before or during studies due to safety concerns or non-compliance with regulatory requirements.

An independent institutional review board (“ IRB ”) at each of the clinical centers proposing to conduct the clinical trial must review and approve the plan for any clinical trial before it commences at that center. An IRB considers, among other things, whether the risks to individuals participating in the trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the consent form signed by the trial participants and must monitor the study until completed. The U.S. FDA, the IRB, or the sponsor may suspend or discontinue a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk. There also are requirements governing the reporting of ongoing clinical trials and completed clinical trials to public registries.

The U.S. FDA offers a number of regulatory mechanisms that provide expedited or Accelerated Approval procedures for selected drugs and indications which are designed to address unmet medical needs in the treatment of serious or life-threatening diseases or conditions. These include programs such as Breakthrough Therapy designations, Fast Track designations, Priority Review and Accelerated Approval, which PsyBio may need to rely upon in order to receive timely approval or to be competitive.

PsyBio may plan to seek orphan drug designation for certain indications qualified for such designation. The U.S., E.U. and other jurisdictions may grant orphan drug designation to drugs intended to treat a “rare disease or condition,” which, in the U.S., is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or 200,000 or more individuals in the United States and for which there is no reasonable expectation that the cost of developing and making a drug available in the United States for this type of disease or condition will be recovered from sales of the product. In the E.U., orphan drug designation can be granted if: the disease is life threatening or chronically debilitating and affects no more than 50 in 100,000 persons in the E.U.; without incentive it is unlikely that the drug would generate sufficient return to justify the necessary investment; and no satisfactory method of treatment for the condition exists or, if it does, the new drug will provide a significant benefit to those affected by the condition. Orphan drug designation must be requested before submitting an NDA. If a product that has an orphan drug designation subsequently receives the first regulatory approval for the indication for which it has such designation, the product is entitled to orphan exclusivity, meaning that the applicable regulatory authority may not approve any other applications to market the same drug for the same indication, except in very limited circumstances, for a period of seven years in the U.S. and 10 years in the E.U. Orphan drug designation does not prevent competitors from developing or marketing different drugs for the same indication or the same drug for different indications. After orphan drug designation is granted, the identity of the therapeutic agent and its potential orphan use are publicly disclosed. Orphan drug designation does not convey an advantage in, or shorten the duration of, the development, review and approval process. However, this designation provides an exemption from marketing and authorization (NDA) fees.

Drugs manufactured or distributed pursuant to U.S. FDA approvals are subject to continuing regulation by the U.S. FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, reporting of adverse experiences with the product, and complying with promotion and advertising requirements. The U.S. FDA may impose a number of post-approval requirements as a condition of approval of an NDA. For example, the U.S. FDA may require post-market testing, including Phase IV clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization. In addition, drug manufacturers and their subcontractors involved in the manufacture and distribution of approved drugs are required to register their establishments with the U.S. FDA and certain state agencies and are subject to periodic unannounced inspections by the U.S. FDA and certain state agencies for compliance with ongoing regulatory requirements,

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including current Good Manufacturing Practices, which impose certain procedural and documentation requirements. Failure to comply with statutory and regulatory requirements may subject a manufacturer to legal or regulatory action, such as warning letters, suspension of manufacturing, product seizures, injunctions, civil penalties or criminal prosecution. There is also a continuing, annual prescription drug product program user fee.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information, requirements for post-market studies or clinical trials to assess new safety risks, or imposition of distribution or other restrictions under a risk evaluation and mitigation strategy.

Controlled Substances

Psilocybin is strictly controlled under the federal CSA. Psilocybin is a Schedule 1 drug under the CSA, which means that it currently has no currently accepted medical use in the United States, a lack of accepted safety for use under medical supervision, and a high potential for abuse. Anyone wishing to conduct research on substances listed in Schedule 1 under the CSA must register with the U.S. DEA, and obtain U.S. DEA approval of the research proposal.

The CSA and its implementing regulations establish a “closed system” of regulations for controlled substances. The CSA imposes registration, security, recordkeeping and reporting, storage, manufacturing, distribution, importation and other requirements under the oversight of the U.S. DEA. The U.S. DEA is responsible for regulating controlled substances, and requires those individuals or entities that manufacture, import, export, distribute, research, or dispense controlled substances to comply with the regulatory requirements in order to prevent the diversion of controlled substances to illicit channels of commerce.

Facilities that manufacture, distribute, import or export any controlled substance must register annually with the U.S. DEA. The U.S. DEA registration is specific to the particular location, activity(ies) and controlled substance schedule(s).

The U.S. DEA inspects all manufacturing facilities to review security, recordkeeping, reporting and handling prior to issuing a controlled substance registration. The specific security requirements vary by the type of business activity and the schedule and quantity of controlled substances handled. The most stringent requirements apply to manufacturers of Schedule I and Schedule II substances. Required security measures commonly include background checks on employees and physical control of controlled substances through storage in approved vaults, safes and cages, and through use of alarm systems and surveillance cameras. Once registered, manufacturing facilities must maintain records documenting the manufacture, receipt and distribution of all controlled substances. Manufacturers must submit periodic reports to the U.S. DEA of the distribution of Schedule I and II controlled substances, Schedule III narcotic substances, and other designated substances. Registrants must also report any controlled substance thefts or significant losses, and must obtain authorization to destroy or dispose of controlled substances. Imports of Schedule I and II controlled substances for commercial purposes are generally restricted to substances not already available from a domestic supplier or where there is not adequate competition among domestic suppliers. In addition to an importer or exporter registration, importers and exporters must obtain a permit for every import or export of a Schedule I and II substance or Schedule III, IV and V narcotic, and submit import or export declarations for Schedule III, IV and V non-narcotics.

For drugs manufactured in the United States, the U.S. DEA establishes annually an aggregate quota for the amount of substances within Schedules I and II that may be manufactured or produced in the United States based on the U.S. DEA’s estimate of the quantity needed to meet legitimate medical, scientific, research and industrial needs. The quotas apply equally to the manufacturing of the active pharmaceutical ingredient and production of dosage forms. The U.S. DEA may adjust aggregate production quotas a few times per year, and individual manufacturing or procurement quotas from time to time during the year, although the U.S. DEA has substantial discretion in whether or not to make such adjustments for individual companies.

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Individual U.S. states also establish and maintain separate controlled substance laws and regulations, including licensing, recordkeeping, security, distribution, and dispensing requirements. State authorities, including boards of pharmacy, regulate use of controlled substances in each state. Failure to maintain compliance with applicable requirements, particularly as manifested in the loss or diversion of controlled substances, can result in enforcement action that could have a material adverse effect on PsyBio ’s business, operations and financial condition. The U.S. DEA may seek civil penalties, refuse to renew necessary registrations, or initiate proceedings to revoke those registrations. In certain circumstances, violations could lead to criminal prosecution.

Patent Cooperation Treaty

The Patent Cooperation Treaty (“ PCT ”) facilitates filing for patent recognition in multiple jurisdictions simultaneously using a single uniform patent application. 193 countries, including Canada and the United States have ratified the PCT.

Ultimately, patents are still granted in each country individually. As such, the PCT procedure consists of two phases: filing of an international application, and national evaluation under the patent laws in force in each country where a patent is sought.

Within 12 months of filing a provisional patent application at the United States Patent and Trademark Office, PsyBio may elect to file a regular utility patent application in the United States in tandem with filing a PCT application with the World Intellectual Property Office, in each case claiming priority to the provisional patent application. Within 30 months of the provisional filing date, deadlines begin for a PCT application to enter the national phase in desired jurisdictions globally, such as Canada (30 months) and Europe (31 months), in each case claiming priority to the provisional patent application.

While PsyBio is focused on programs using psychedelic-inspired compounds, PsyBio does not have any direct or indirect involvement with the illegal selling, production or distribution of any substances in the jurisdictions in which it operates. PsyBio is exploring drug development within approved laboratory clinical trial settings conducted within approved regulatory frameworks. Though highly speculative, should any prescription drug product be developed by PsyBio (which, if it does occur, would not be for several years), such drug product will not be commercialized prior to receipt of applicable regulatory approval, which will only be granted if clinical evidence of safety and efficacy for the intended use(s) is successfully developed. PsyBio may also employ non-prescription drugs, where appropriate.

COMPLIANCE PROGRAM

PsyBio oversees and monitors compliance with applicable laws in each jurisdiction in which it operates. In addition to PsyBio's senior executives, advisors, consultants and the employees responsible for overseeing compliance, PsyBio has local counsel engaged in every jurisdiction in which it operates and has received legal opinions or advice in each of these jurisdiction regarding (a) compliance with applicable regulatory frameworks, and (b) potential exposure to, and implications arising from, applicable laws in jurisdictions where PsyBio has operations or intends to operate.

PsyBio works with third parties who require regulatory licensing in order to handle scheduled drugs. PsyBio continuously updates its compliance and channel programs to maintain regulatory standards set for drug development. PsyBio also works with clinical research organizations who maintain batch records and data storage for PsyBio’s clinical programs.

Additionally, PsyBio has established a Scientific Advisory Team, a Research, Clinical and Regulatory Team and a Government Relations and Communications Team with cross-functional expertise in business, neuroscience, pharmaceuticals, mental health and psychedelics to advise management .

In collaboration with the University, PsyBio oversees and implements training on PsyBio's protocols. PsyBio will continue to work closely with external counsel and other compliance experts, and is evaluating the engagement of one or more independent third party providers to further develop, enhance and improve its compliance and risk

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management and mitigation processes and procedures in furtherance of continued compliance with the laws of the jurisdictions in which PsyBio operates .

The programs currently in place include monitoring by executives of PsyBio to ensure that all operations materially conform to and comply with required laws, regulations and operating procedures. PsyBio is currently in compliance with the laws and regulations in all jurisdictions and the related licencing framework applicable to its business activities.

PsyBio and, to its knowledge, each of its third-party researchers, suppliers and manufacturers have not received any non-compliance, citations or notices of violation which may have an impact on the Company’s licences, business activities or operations.

PsyBio conducts due diligence on third-party researchers, medical professionals, clinics, cultivators, processors and others as applicable, with whom it engages. Such due diligence includes but is not limited to the review of necessary licenses and the regulatory framework enacted in the jurisdiction of operation. Further, the Company generally obtains, under its contractual arrangements, representations and warranties from such third parties pertaining to compliance with applicable licensing requirements and the regulatory framework enacted in the jurisdiction of operation.

USE OF PROCEEDS

Unless otherwise specified in a Prospectus Supplement, the net proceeds of any offering of securities under a Prospectus Supplement will be used for general corporate purposes, including the milestones described in the MD&A, and general working capital. More detailed information regarding the use of proceeds from a sale of securities will be included in the applicable Prospectus Supplement.

All expenses relating to an offering of securities and any compensation paid to underwriters, dealers or agents, as the case may be, will be paid out of the Company's general funds, unless otherwise stated in the applicable Prospectus Supplement.

There have been no material changes in the use of proceeds and milestones of the Company since June 30, 2021 (the date of the Company’s most recently issued unaudited interim consolidated financial statements and MD&A), which have not been disclosed in this Prospectus or the documents incorporated by reference herein.

The Company has negative cash flow from operating activities and has historically incurred net losses. Although the Company anticipates it will have positive cash flow from operating activities in future periods, the Company cannot guarantee it will have cash flow positive status from operating activities in future periods. To the extent that the Company has negative operating cash flows in future periods, it may need to deploy a portion of its existing working capital to fund such negative cash flows. The Company will be required to raise additional funds through the issuance of additional equity securities, through loan financing, or other means, such as through partnerships with other companies and research and development reimbursements. There is no assurance that additional capital or other types of financing will be available if needed or that these financings will be on terms at least as favourable to the Company as those previously obtained. See “Risk Factors”.

EARNINGS COVERAGE RATIO

Earnings coverage ratios will be provided as required in the applicable Prospectus Supplement(s) with respect to the issuance of Debt Securities pursuant to this Prospectus.

CONSOLIDATED CAPITALIZATION OF THE COMPANY

The Company is authorized to issue an unlimited number of Subordinate Voting Shares and an unlimited number of Multiple Voting Shares of which, as at the date of this Prospectus, 61,789,296 Subordinate Voting Shares and

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51,569.216 Multiple Voting Shares were issued and outstanding. For a summary of the characteristics of the Subordinate Voting Shares and Multiple Voting Shares, see “Description of Securities”.

The following convertible securities of the Company are issued and outstanding as at the date of this Prospectus:

1. incentive stock options to purchase up to 10,698,257 Subordinate Voting Shares at a weighted average exercise price of $0.35;

2. warrants to purchase up to 2,575,368 Subordinate Voting Shares (comprised of 1,506,368 Compensation Warrants and 1,069,000 Advisor Warrants).

PRIOR SALES

The following table sets forth the date on, number of and prices at which the Company has issued Subordinate Voting Shares or securities that are convertible or exercisable into Subordinate Voting Shares (including securities issued by PsyBio U.S. and Finco prior to completion of the Transaction) in the 12 months preceding the date hereof:

Date of Issuance	Security	Number of Securities(1)	Issue/Exercise Price	Reason for Issuance
July 8, 2020	PsyBio U.S. Shares	2,882,250	US$0.09	Pursuant to a seed financing
July 29, 2020	PsyBio U.S. Shares	2,017,575	US$0.09	Pursuant to a seed financing
July 31, 2020	PsyBio U.S. Warrants	6,714,361	Nil	Compensation for services
December 4, 2020	Subscription Receipts	41,409,698	$0.35	Pursuant to the Financing
December 4, 2020	Compensation warrants(2)	1,506,368	$0.35	Pursuant to the Financing
December 4, 2020	Advisor warrants(2)	1,069,000	$0.35	Pursuant to the Financing
January 1, 2021	PsyBio U.S. Shares	6,714,361	US$0.10	Pursuant to the exercise of PsyBio U.S. Warrants
February 19, 2021	Finco Shares	41,409,698	Nil	Pursuant to the exchange of Subscription Receipts
February 19, 2021	Subordinate Voting Shares	41,409,698	$0.35	Pursuant to the Transaction on exchange of Finco Shares
February 19, 2021	Multiple Voting Shares	67,143,612	$0.13	Pursuant to the Transaction on exchange of PsyBio U.S. Shares
February 19, 2021	Incentive stock options(3)	8,166,141	$0.35	Pursuant to the terms of the Company’s stock option plan

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Date of Issuance	Security	Number of Securities(1)	Issue/Exercise Price	Reason for Issuance
February 24, 2021	Subordinate Voting Shares	1,748,100	$0.35	Pursuant to the Transaction
February 25, 2021	Subordinate Voting Shares	9,884,836	Nil	Pursuant to the conversion of Multiple Voting Shares
March 1, 2021	Subordinate Voting Shares	109,783	$0.55	Pursuant to the exercise of incentive stock options
March 9, 2021	Subordinate Voting Shares	3,816,098	Nil	Pursuant to the conversion of Multiple Voting Shares
March 22, 2021	Subordinate Voting Shares	172,935	Nil	Pursuant to the conversion of Multiple Voting Shares
April 4, 2021	Incentive stock options(3)	2,000,000	$0.35	Pursuant to the terms of the Company’s stock option plan
April 20, 2021	Incentive stock options(2)	500,000	$0.35	Pursuant to the terms of the Company’s stock option plan
June 15, 2021	Subordinate Voting Shares	1,556,415	Nil	Pursuant to the conversion of Multiple Voting Shares
June 21, 2021	Subordinate Voting Shares	409,752	$0.37	Pursuant to the settlement of outstanding debt
July 2, 2021	Subordinate Voting Shares	114,112	Nil	Pursuant to the conversion of Multiple Voting Shares

Notes:

(1) Number of underlying Subordinate Voting Shares on an as-converted basis.

(2) Exercisable into Subordinate Voting Shares until February 19, 2023.

(3) Exercisable into Subordinate Voting Shares for a period of three years from the date of grant.

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TRADING PRICE AND VOLUME

On February 8, 2011, the Common Shares were listed for trading on the TSXV under the symbol “LEQ”. Effective as of May 16, 2013, the Common Shares were transferred to the NEX board of the TSXV under the symbol “LEQ.H”. On October 24, 2017, trading in the Common Shares was halted, and remained halted until the completion of the Transaction. Upon the completion of the Transaction, the Subordinate Voting Shares (resulting from the reclassification of the Common Shares on a post-Consolidation basis) were listed on the TSXV under the symbol “PSYB”. The following table sets forth, for the periods indicated, the reported high and low prices and the trading volume of the Subordinate Voting Shares:

Month February 2021 (25-28) March 2021 April 2021 May 2021 June 2021 July 2021 August 2021	High($) $0.90 $0.62 $0.44 $0.36 $0.54 $0.55 $0.49	Low($) $0.51 $0.32 $0.325 $0.25 $0.34 $0.355 $0.34	Volume
			2,878,453 4,333,716 2,258,036 1,781,457 2,690,376 1,072,840 695,342

As the close of business on August 31, 2021, the last trading day prior to the date of this Prospectus, the price of the Subordinate Voting Shares as quoted by the TSXV was $0.42 per Subordinate Voting Share.

DIVIDEND RECORD AND POLICY

The Company has never declared nor paid dividends on the Subordinate Voting Shares. Currently, the Company intends to retain its future earnings, if any, to fund the development and growth of its business, and the Company does not anticipate declaring or paying any dividends on the Subordinate Voting Shares in the near future, although the Company reserves the right to pay dividends if and when it is determined to be advisable by the board of directors of the Company. As a result, shareholders will have to rely on capital appreciation, if any, to earn a return on investment in the Subordinate Voting Shares in the foreseeable future.

DESCRIPTION OF SECURITIES

The Securities may be offered under this Prospectus in amounts and at prices to be determined based on market conditions at the time of the sale and such amounts and prices will be set forth in the accompanying Prospectus Supplement. The Securities may be issued alone or in combination and for such consideration determined by our board of directors.

Subordinate Voting Shares

The Company is authorized to issue an unlimited number of Subordinate Voting Shares of which, as at August 31, 2021, 61,789,296 were issued and outstanding.

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Right to Notice and	Holders of Subordinate Voting Shares are entitled to notice of and to attend at any
Vote	meeting of the shareholders of the Company, except a meeting of which only holders of
	another particular class or series of shares of the Company will have the right to vote. At
	each such meeting, holders of Subordinate Voting Shares will be entitled to one vote in
	respect of each Subordinate Voting Share held.
Class Rights	As long as any Subordinate Voting Shares remain outstanding, the Company will not,
	without the consent of the holders of the Subordinate Voting Shares by separate special
	resolution, prejudice or interfere with any right attached to the Subordinate Voting
	Shares.
Pre-Emptive Rights	Holders of Subordinate Voting Shares are not entitled to a right of first refusal to
	subscribe for, purchase or receive any part of any issue of Subordinate Voting Shares, or
	bonds, debentures or other securities of the Company.
Dividends	Holders of Subordinate Voting Shares are entitled to receive, as and when declared by
	the directors of the Company, dividends in cash or property of the Company. No
	dividend will be declared or paid on the Subordinate Voting Shares unless the Company
	simultaneously declares or pays, as applicable, equivalent dividends (on an as-converted
	to Subordinate Voting Share basis) on the Multiple Voting Shares.
Participation	In the event of the liquidation, dissolution or winding-up of the Company, whether
	voluntary or involuntary, or in the event of any other distribution of assets of the
	Company among its shareholders for the purpose of winding up its affairs, the holders
	of Subordinate Voting Shares will, subject to the prior rights of the holders of any shares
	of the Company ranking in priority to the Subordinate Voting Shares, be entitled to
	participate rateably along with all other holders of Multiple Voting Shares (on an as-
	converted to Subordinate Voting Share basis) and Subordinate Voting Shares.
Changes	No subdivision or consolidation of the Subordinate Voting Shares shall occur unless,
	simultaneously, the Subordinate Voting Shares and Multiple Voting Shares are
	subdivided or consolidated in the same manner, so as to maintain and preserve the
	relative rights of the holders of the shares of each of the said classes.
Conversion	In the event that an offer is made to purchase Multiple Voting Shares:

(1) if there is a published market for the Multiple Voting Shares, and the offer is one which is required to be made to all or substantially all of the holders of Multiple Voting Shares in a province or territory of Canada to which the requirement applies pursuant to (i) applicable securities laws or (ii) the rules of any stock exchange on which the Multiple Voting Shares of the Company are listed, unless an identical offer concurrently is made to purchase Subordinate Voting Shares; or

(2) if the Multiple Voting Shares are not then listed, and the offer is one which would have been required to be made to all or substantially all the holders of Multiple Voting Shares in a province or territory of Canada pursuant to (i) applicable securities laws or (ii) the rules of any stock exchange had the Multiple Voting Shares been listed,

then each Subordinate Voting Share shall become convertible at the option of the holder into Multiple Voting Shares at the inverse of the Conversion Ratio (as defined below) then in effect at any time while the offer is in effect until one day after the time prescribed by applicable securities legislation for the offeror to take up and pay for such shares as are to be acquired pursuant to the offer. The conversion right may only be exercised in respect of Subordinate Voting Shares for the purpose of depositing the resulting Multiple

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Voting Shares under the offer, and for no other reason. In such event, the Company shall deposit or shall cause its transfer agent to deposit under the offer the resulting Multiple Voting Shares, on behalf of the holder. Should the Multiple Voting Shares issued upon conversion and tendered in response to the offer be withdrawn by shareholders or not taken up by the offeror, or should the offer be abandoned, withdrawn or terminated by the offeror or the offer otherwise expires without such Multiple Voting Shares being taken up and paid for, the Multiple Voting Shares resulting from the conversion shall be reconverted into Subordinate Voting Shares at the Conversion Ratio then in effect, and the Company shall send or cause the transfer agent to send to the holder a share certificate or acknowledgement representing the Subordinate Voting Shares.

Multiple Voting Shares

The Company is authorized to issue an unlimited number of Multiple Voting Shares of which, as at August 31, 2021, 51,569.216 were issued and outstanding.

• Right to Vote Holders of Multiple Voting Shares are entitled to notice of and to attend at any meeting of the shareholders of the Company, except a meeting of which only holders of another particular class or series of shares of the Company will have the right to vote. At each such meeting, holders of Multiple Voting Shares are entitled to one vote in respect of each Subordinate Voting Share into which such Multiple Voting Share could be converted as of the record date (initially 1,000 votes per Multiple Voting Share).

• Class Rights As long as any Multiple Voting Shares remain outstanding, the Company will not, without the consent of the holders of the Multiple Voting Shares by separate special resolution, prejudice or interfere with any right attached to the Multiple Voting Shares. Consent of the holders of a majority of the outstanding Multiple Voting Shares by separate ordinary resolution shall be required for any action that authorizes or creates shares of any class having preferences superior to or on a parity with the Multiple Voting Shares.

• Pre-emptive Rights Holders of Multiple Voting Shares are not entitled to a right of first refusal to subscribe for, purchase or receive any part of any issue of Subordinate Voting Shares, Multiple Voting Shares, or bonds, debentures or other securities of the Company.

• Dividends The holders of the Multiple Voting Shares are entitled to receive such dividends, out of any cash or other assets of the Company legally available therefor, pari passu (on an asconverted to Subordinated Voting Share basis, assuming conversion of all Multiple Voting Shares into Subordinate Voting Shares at the Conversion Ratio as of the record date fixed for the determination of the holders of Subordinate Voting Shares entitled to receive such dividend) as to dividends and any declaration or payment of any dividend on the Subordinate Voting Shares. No dividend will be declared or paid on the Multiple Voting Shares unless the Company simultaneously declares or pays, as applicable, equivalent dividends (on an as-converted to Subordinate Voting Share basis) on the Subordinate Voting Shares.

Participation In the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or in the event of any other distribution of assets of the Company among its shareholders for the purpose of winding up its affairs, the holders of Multiple Voting Shares will, subject to the prior rights of the holders of any shares of the Company ranking in priority to the Multiple Voting Shares, be entitled to participate rateably along with all other holders of Multiple Voting Shares (on an as-converted to Subordinate Voting Share basis) and Subordinate Voting Shares.

Changes No subdivision or consolidation of the Subordinate Voting Shares or Multiple Voting Shares shall occur unless, simultaneously, the Subordinate Voting Shares and Multiple Voting

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Shares are subdivided or consolidated in the same manner, so as to maintain and preserve the relative rights of the holders of the shares of each of the said classes.

Transfer

Conversion

The Multiple Voting Shares are not transferrable except: (i) to (A) an initial holder of Multiple Voting Shares, (B) in respect of a holder of Multiple Voting Shares that is an individual, the members of immediate family of such individual and any person controlled, directly or indirectly, by any such holder an affiliate or person controlled, directly or indirectly, and (C) in respect of a holder of Multiple Voting Shares that is not an individual, an affiliate of that holder or the Members of the Immediate Family of the individual that controls such holder (each, a “ Permitted Holder ”); and (ii) in compliance with U.S. securities laws. Subject to the conversion limitation described below, any Multiple Voting Shares sold or transferred to a person who is not a Permitted Holder shall be automatically converted to Subordinate Voting Shares, unless otherwise determined by the directors.

Each Multiple Voting Share shall have a restricted right to convert into 1,000 Subordinate Voting Shares (the “ Conversion Ratio ”), subject to adjustments for certain customary corporate changes. The ability to convert the Multiple Voting Shares is subject to a restriction that the aggregate number of Subordinate Voting Shares and Multiple Voting Shares held of record, directly or indirectly, by residents of the United States (as determined in accordance with Rules 3b-4 and 12g3-2(a) under the U.S. Exchange Act), may not exceed forty percent (40%) of the aggregate number of Subordinate Voting Shares and Multiple Voting Shares issued and outstanding after giving effect to such conversions and to a restriction on beneficial ownership of Subordinate Voting Shares exceeding certain levels (See Foreign Private Issuer Protection Limitation below). In addition, the Multiple Voting Shares will automatically convert into Subordinate Voting Shares in certain circumstances, including upon the registration of the Subordinate Voting Shares under the U.S. Securities Act.

In the event that an offer is made to purchase Subordinate Voting Shares:

(1) if there is a published market for the Subordinate Voting Shares, and the offer is one which is required to be made to all or substantially all the holders of Subordinate Voting Shares in a province or territory of Canada pursuant to (i) applicable securities legislation or (ii) the rules of a stock exchange on which the Subordinate Voting Shares are then listed, unless an identical offer concurrently is made to purchase Multiple Voting Shares; or

(2) if the Subordinate Voting Shares are not then listed, and the offer is one which would have been required to be made to all or substantially all the holders of Subordinate Voting Shares in a province or territory of Canada pursuant to (i) applicable securities legislation or (ii) the rules of a stock exchange had the Subordinate Voting Shares been listed,

then each Multiple Voting Share shall become convertible at the option of the holder into Subordinate Voting Shares at the Conversion Ratio then in effect, at any time while the offer is in effect until one day after the time prescribed by applicable securities legislation for the offeror to take up and pay for such shares as are to be acquired pursuant to the offer. The conversion right may be exercised in respect of Multiple Voting Shares for the purpose of depositing the resulting Multiple Voting Shares pursuant to the offer. Should the Subordinate Voting Shares issued upon conversion and tendered in response to the offer be withdrawn by shareholders or not taken up by the offeror, or should the offer be abandoned or withdrawn, the Subordinate Voting Shares resulting from the conversion shall be automatically reconverted, without further intervention on the part of the Company or on the part of the holder, into Multiple Voting Shares at the inverse of the Conversion Ratio then in effect.

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Foreign Private Issuer Protection Limitation

The Company will use commercially reasonable efforts to maintain its status as a “foreign private issuer” (as determined in accordance with Rule 3b-4 under the U.S. Exchange Act. Accordingly, the Company shall not effect any conversion of Multiple Voting Shares, and the holders of Multiple Voting Shares shall not have the right to convert any portion of the Multiple Voting Shares to the extent that after giving effect to all permitted issuances after such conversions of Multiple Voting Shares, the aggregate number of Subordinate Voting Shares and Multiple Voting Shares held of record, directly or indirectly, by residents of the United States (as determined in accordance with Rules 3b-4 and 12g3-2(a) under the U.S. Exchange Act (“ U.S. Residents ”)) would exceed forty percent (40%) (the “ 40% Threshold ”) of the aggregate number of Subordinate Voting Shares and Multiple Voting Shares issued and outstanding after giving effect to such conversions (the “ FPI Protective Restriction ”). The Board may by resolution increase the 40% Threshold to an amount not to exceed 50% and in the event of any such increase all references to the 40% Threshold herein, shall refer instead to the amended threshold set by such resolution.

Conversion Limitations . In order to effect the FPI Protection Restriction, each holder of Multiple Voting Shares will be subject to the 40% Threshold based on the number of Multiple Voting Shares held by such holder as of the date of the initial issuance of the Multiple Voting Shares and thereafter at the end of each of the Company's subsequent fiscal quarters (each, a “ Determination Date ”), calculated as follows:

X = (A x 0.4) - B x (C/D)

Where on the Determination Date:

X = Maximum Number of Subordinate Voting Shares Available For Issue upon Conversion of Multiple Voting Shares by a holder.

A = The Number of Subordinate Voting Shares and Multiple Voting Shares issued and outstanding on the Determination Date.

B = Aggregate number of Subordinate Voting Shares and Multiple Voting Shares held of record, directly or indirectly, by U.S. Residents on the Determination Date.

C = Aggregate number of Multiple Voting Shares held by holder on the Determination Date.

D = Aggregate number of all Multiple Voting Shares on the Determination Date.

For purposes of these limitations, the Board of Directors (or a committee thereof) shall designate an officer of the Company to determine as of each Determination Date: (A) the 40% Threshold and (B) the FPI Protective Restriction. Within thirty (30) days of the end of each Determination Date (a “ Notice of Conversion Limitation ”), the Company shall provide each holder of record a notice of the FPI Protection Restriction and the impact the FPI Protective Provision has on the ability of each holder to exercise the right to convert Multiple Voting Shares held by the holder. To the extent that requests for conversion of Multiple Voting Shares subject to the FPI Protection Restriction would result in the 40% Threshold being exceeded, the number of such Multiple Voting Shares eligible for conversion held by a particular holder shall be prorated relative to the number of Multiple Voting Shares submitted for conversion. To the extent that the FPI Protective Restriction applies, the determination of whether Multiple Voting Shares are convertible shall be in the sole discretion of the Company.

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Redemption

At the option of the Company, Subordinate Voting Shares and/or Multiple Voting Shares owned by an Unsuitable Person (as defined below) may be redeemed by the Company for the redemption price of such shares (the “ Redemption Price ”) out of funds lawfully available on the redemption date. Subordinate Voting Shares and Multiple Voting Shares will be redeemable at any time and from time to time. The Company may pay the Redemption Price by using its existing cash resources, incurring debt, issuing additional Subordinate Voting Shares and/or Multiple Voting Shares, issuing a promissory note in the name of the Unsuitable Person, or by using a combination of the foregoing sources of funding.

For purposes hereof, “ Unsuitable Person ” means:

(i) any person with a 5% or more ownership of all of the issued and outstanding shares of the Company (a “ Significant Interest ”) who a governmental authority granting the licenses for the business has determined to be unsuitable to own shares of the Company; or

(ii) any person with a Significant Interest whose ownership of shares may result in the loss, suspension or revocation (or similar action) with respect to any licenses or in the Company being unable to obtain any new licenses in the normal course, including, but not limited to, as a result of such person's failure to apply for a suitability review from or to otherwise fail to comply with the requirements of a governmental authority, as determined by the Board, in its sole discretion, after consultation with legal counsel and if a license application has been filed, after consultation with the applicable governmental authority.

In connection with the conduct of the business of the Company, the Company may require that any shareholder provide to one or more governmental authorities, if and when required, information and fingerprints for a criminal background check, individual history form(s), and other information required in connection with applications for licenses for the operation of the business of the Company.

Warrants

This section describes the general terms that will apply to any Warrants for the purchase of Subordinate Voting Shares and/or Multiple Voting Shares. To the extent required under applicable law, we will not offer Warrants for sale separately to any member of the public in Canada unless the offering of such Warrants is in connection with and forms a part of the consideration for an acquisition or merger transaction, or unless the applicable Prospectus Supplement containing the specific terms of the Warrants to be offered separately is first approved, in accordance with applicable laws, for filing by the securities commissions or similar regulatory authorities in each of the jurisdictions where the Warrants will be offered for sale.

Subject to the foregoing, we may issue Warrants independently or together with other securities, and Warrants sold with other securities may be attached to or separate from the other securities. Warrants may be issued directly by us to the purchasers thereof or under one or more warrant indentures or warrant agency agreements to be entered into by us and one or more banks or trust companies acting as warrant agent. Warrants, like other Securities that may be sold, may be listed on a securities exchange subject to exchange listing requirements and applicable legal requirements.

This summary of some of the provisions of the Warrants is not complete. The statements made in the Prospectus relating to any warrant agreement and Warrants to be issued under the Prospectus are summaries of certain anticipated provisions thereof and do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all provisions of the applicable warrant agreement. Investors should refer to the warrant indenture or warrant agency agreement relating to the specific warrants being offered for the complete terms of the Warrants. A copy of any warrant indenture or warrant agency agreement relating to an offering of Warrants will be filed by us with the applicable securities regulatory authorities in Canada following its execution.

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The particular terms of each issue of Warrants will be described in the applicable Prospectus Supplement. This description will include, where applicable:

• the designation and aggregate number of Warrants;

• the price at which the Warrants will be offered;

• the currency or currencies in which the Warrants will be offered;

• the date on which the right to exercise the Warrants will commence and the date on which the right will expire;

• if applicable, the identity of the Warrant agent;

• whether the Warrants will be listed on any securities exchange;

• any minimum or maximum subscription amount;

• the number of Subordinate Voting Shares and/or Multiple Voting Shares that may be purchased upon exercise of each Warrant and the price at which and currency or currencies in which the Subordinate Voting Shares and/or Multiple Voting Shares may be purchased upon exercise of each Warrant;

• the designation and terms of any securities with which the Warrants will be offered, if any, and the number of the Warrants that will be offered with each security;

• the date or dates, if any, on or after which the Warrants and the related securities will be transferable separately;

• whether the Warrants will be subject to redemption and, if so, the terms of such redemption provisions;

• whether the Warrants are to be issued in registered form, “book-entry only” form, non-certificated inventory system form, bearer form or in the form of temporary or permanent global securities and the basis of exchange, transfer and ownership thereof;

• any material risk factors relating to such Warrants and the Subordinate Voting Shares and/or Multiple Voting Shares to be issued upon exercise of the Warrants;

• any other rights, privileges, restrictions and conditions attaching to the Warrants and the Subordinate Voting Shares and/or Multiple Voting Shares to be issued upon exercise of the Warrants;

• material Canadian federal income tax consequences of owning and exercising the Warrants; and

• any other material terms or conditions of the Warrants and the Securities to be issued upon exercise of the Warrants.

The terms and provisions of any Warrants offered under a Prospectus Supplement may differ from the terms described above and may not be subject to or contain any or all of the terms described above.

Prior to the exercise of any Warrants, holders of Warrants will not have any of the rights of holders of the Subordinate Voting Shares or Multiple Voting Shares purchasable upon such exercise or the right to vote such underlying securities.

Options

We may issue or grant Options in connection with acquisitions, merger transactions, or to directors, officers, employees or consultants, as applicable. This section describes the general terms that may apply to such Options and does not purport to be complete.

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The particular terms and conditions applicable to each Option issue will be comprehensively described in the applicable Option Agreement and related Prospectus Supplement. This description will include, where applicable:

• the designation and aggregate number of Options;

• the price at which the Options will be offered;

• the currency or currencies in which the Options will be offered;

• the date on which the right to exercise the Options will commence and the date on which the right will expire;

• the number of Subordinate Voting Shares that may be issued upon exercise of each Option and the price and currency or currencies in which the Subordinate Voting Shares and/or Multiple Voting Shares may be purchased upon exercise of each Option;

• the date or dates, if any, on or after which the Options and the related securities will be transferable separately;

• any resale restrictions and vesting criteria related to the Options;

• any applicable accelerated vesting provisions applicable to the Options;

• any early termination provisions relating to the Options;

• any material risk factors relating to such Options and the Subordinate Voting Shares and/or Multiple Voting Shares to be issued upon exercise of the Options;

• any other rights, privileges, restrictions and conditions attaching to the Options and the Subordinate Voting Shares and/or Multiple Voting Shares to be issued upon exercise of the Options;

• material Canadian federal income tax consequences of owning and exercising the Options; and

• any other material terms or conditions of the Options and the Securities to be issued upon exercise of the Options.

Prior to the exercise of any Options, holders of Options will not have any of the voting or other rights applicable to holders of Subordinate Voting Shares or Multiple Voting Shares.

Subscription Receipts

This section describes the general terms that will apply to any Subscription Receipts that may be offered by us pursuant to the Prospectus. Subscription Receipts may be offered separately or together with Subordinate Voting Shares, Multiple Voting Shares or Warrants, as the case may be. The Subscription Receipts will be issued under a Subscription Receipt agreement.

In the event we issue Subscription Receipts, we will provide the original purchasers of Subscription Receipts a contractual right of rescission exercisable following the issuance of Subordinate Voting Shares and/or Multiple Voting Shares to such purchasers.

The applicable Prospectus Supplement will include details of the Subscription Receipt agreement covering the Subscription Receipts being offered. A copy of the Subscription Receipt agreement relating to an offering of Subscription Receipts will be filed by us with the applicable securities regulatory authorities after it has been entered into by us. The specific terms of the Subscription Receipts, and the extent to which the general terms described in this section apply to those Subscription Receipts, will be set forth in the applicable Prospectus Supplement. This description will include, where applicable:

• the number of Subscription Receipts;

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• the price at which the Subscription Receipts will be offered;

• the currency at which the Subscription Receipts will be offered and whether the price is payable in installments;

• the procedures for the exchange of the Subscription Receipts into Subordinate Voting Shares, Multiple Voting Shares, Warrants or Units;

• the number of Subordinate Voting Shares, Multiple Voting Shares, Warrants or Units that may be issued upon exercise or deemed conversion of each Subscription Receipt;

• the designation and terms of any other Securities with which the Subscription Receipts will be offered, if any, and the number of Subscription Receipts that will be offered with each Security;

• conditions to the conversion or exchange of Subscription Receipts into other Securities and the consequences of such conditions not being satisfied;

• terms applicable to the gross or net proceeds from the sale of the Subscription Receipts plus any interest earned thereon;

• the dates or periods during which the Subscription Receipts may be converted or exchanged;

• the circumstances, if any, which will cause the Subscription Receipts to be deemed to be automatically converted or exchanged;

• provisions applicable to any escrow of the gross or net proceeds from the sale of the Subscription Receipts plus any interest or income earned thereon, and for the release of such proceeds from such escrow;

• if applicable, the identity of the Subscription Receipt agent;

• whether the Subscription Receipts will be listed on any securities exchange;

• whether the Subscription Receipts will be issued with any other Securities and, if so, the amount and terms of these Securities;

• any minimum or maximum subscription amount;

• whether the Subscription Receipts are to be issued in registered form, “book-entry only” form, noncertificated inventory system form, bearer form or in the form of temporary or permanent global securities and the basis of exchange, transfer and ownership thereof;

• any material risk factors relating to such Subscription Receipts and the Securities to be issued upon conversion or exchange of the Subscription Receipts;

• any other rights, privileges, restrictions and conditions attaching to the Subscription Receipts and the Securities to be issued upon exchange of the Subscription Receipts;

• material Canadian income tax consequences of owning or converting or exchanging the Subscription Receipts; and

• any other material terms and conditions of the Subscription Receipts and the Securities to be issued upon the exchange of the Subscription Receipts.

The terms and provisions of any Subscription Receipts offered under a Prospectus Supplement may differ from the terms described above and may not be subject to or contain any or all of the terms described above.

Prior to the exchange of any Subscription Receipts, holders of such Subscription Receipts will not have any of the rights of holders of the Securities for which the Subscription Receipts may be exchanged, including the right to receive payments of dividends or the right to vote such underlying securities.

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Debt Securities

We may issue Debt Securities in one or more series under an indenture (the “ Indenture ”), to be entered into among the Company and a financial institution to which the Trust and Loan Companies Act (Canada) applies or a financial institution organized under the laws of any province of Canada and authorized to carry on business as a trustee. Each such Indenture will set out the terms of the applicable series of the Debt Securities. The statements made hereunder relating to any Indenture and the Debt Securities to be issued thereunder are summaries of certain anticipated provisions thereof and do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all provisions of the applicable Indenture. Each Indenture may provide that Debt Securities may be issued thereunder up to the aggregate principal amount which may be authorized from time to time by the Company.

The specific terms and provisions of the Debt Securities offered pursuant to an accompanying Prospectus Supplement, and the extent to which the general terms and provisions described below may apply to such Debt Securities, will be described in such Prospectus Supplement.

The applicable Prospectus Supplement for any series of Debt Securities that we offer will describe the specific terms of the Debt Securities and may include, but is not limited to, any of the following:

• the designation, aggregate principal amount and authorized denominations of such Debt Securities;

• the currency or currency units for which the Debt Securities may be purchased and the currency or currency unit in which the principal and any interest is payable (in either case, if other than Canadian dollars);

• the percentage of the principal amount at which such Debt Securities will be issued;

• the date or dates on which such Debt Securities will mature;

• the rate or rates per annum at which such Debt Securities will bear interest (if any), or the method of determination of such rates (if any);

• the dates on which any interest will be payable and the record dates for such payments;

• the trustee of the Debt Securities under the Indenture pursuant to which the Debt Securities are to be issued;

• the designation and terms of any securities with which the Debt Securities will be offered, if any, and the number of Debt Securities that will be offered with each security;

• whether the Debt Securities are subject to redemption or call and, if so, the terms of such redemption or call provisions;

• whether such Debt Securities are to be issued in registered form, bearer form or in the form of temporary or permanent global securities and the basis of exchange, transfer and ownership thereof;

• any exchange or conversion terms;

• whether the Debt Securities will be subordinated to other liabilities of the Company and, if so, to what extent;

• certain material Canadian tax consequences of owning the Debt Securities, if any; and

• any other material terms and conditions of the Debt Securities.

Debt Securities may be issued at various times with different maturity dates, may bear interest at different rates and may otherwise vary. The Debt Securities may only be convertible into or exchangeable for securities of the Company and not into securities of other parties. Unless stated otherwise in the applicable Prospectus Supplement, no holder of Debt Securities will have the right to require us to repurchase the Debt Securities and there will be no increase in the interest rate if we become involved in a highly leveraged transaction or if we have a change of control.

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Units

We may issue Units comprised of one or more of the other Securities described in the Prospectus in any combination. Each Unit will be issued so that the holder of the Unit is also the holder of each of the Securities included in the Unit. Thus, the holder of a Unit will have the rights and obligations of a holder of each included Security. The unit agreement, if any, under which a Unit is issued may provide that the Securities included in the Unit may not be held or transferred separately, at any time or at any time before a specified date.

The particular terms and provisions of Units offered by any Prospectus Supplement, and the extent to which the general terms and provisions described below may apply thereto, will be described in the Prospectus Supplement filed in respect of such Units. This description will include, where applicable:

• the number of Units offered;

• the price or prices, if any, at which the Units will be issued;

• the currency at which the Units will be offered;

• the Securities comprising the Units;

• whether the Units will be issued with any other Securities and, if so, the amount and terms of these Securities;

• any minimum or maximum subscription amount;

• whether the Units and the Securities comprising the Units are to be issued in registered form, “bookentry only” form, non-certificated inventory system form, bearer form or in the form of temporary or permanent global securities and the basis of exchange, transfer and ownership thereof;

• any material risk factors relating to such Units or the Securities comprising the Units;

• any other rights, privileges, restrictions and conditions attaching to the Units or the Securities comprising the Units; and

• any other material terms or conditions of the Units or the Securities comprising the Units, including whether and under what circumstances the Securities comprising the Units may be held or transferred separately.

The terms and provisions of any Units offered under a Prospectus Supplement may differ from the terms described above and may not be subject to or contain any or all of the terms described above.

PLAN OF DISTRIBUTION

We may offer and sell Securities through agents, or through underwriters or dealers designated by us from time to time. We may distribute the Securities from time to time in one or more transactions at fixed prices (which may be changed from time to time), at market prices prevailing at the times of sale, at varying prices determined at the time of sale, at prices related to prevailing market prices or at negotiated prices including sales in transactions that are deemed to be “at-the-market distributions” as defined in NI 44-102, including sales made directly on the TSXV or other existing trading markets for the Securities. A description of such pricing will be disclosed in the applicable Prospectus Supplement. We may offer different classes of Securities in the same offering, or we may offer different classes of Securities in separate offerings.

A Prospectus Supplement will describe the terms of each specific offering of Securities, including: (i) the terms of the Securities to which the Prospectus Supplement relates, including the type of Securities being offered; (ii) the name or names of any agents, underwriters or dealers involved in such offering of Securities; (iii) the purchase price of the Securities offered thereby and the proceeds to, and the portion of expenses borne by, the Company from the sale of such Securities; (iv) any agents’ commission, underwriting discounts and other items constituting compensation

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payable to agents, underwriters or dealers; and (v) any discounts or concessions allowed or re-allowed or paid to agents, underwriters or dealers.

If underwriters are used in an offering, the Securities offered thereby will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase Securities will be subject to the conditions precedent agreed upon by the parties and the underwriters will be obligated to purchase all Securities under that offering if any are purchased. Any public offering price and any discounts or concessions allowed or re-allowed or paid to agents, underwriters or dealers may be changed from time to time.

Underwriters, dealers and agents who participate in the distribution of the Securities may be entitled under agreements to be entered into with the Company to indemnification by the Company against certain liabilities, including liabilities under the Canadian securities legislation, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. Such underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for, the Company in the ordinary course of business.

In connection with any offering of Securities, other than an “at-the-market distribution”, the underwriters may overallot or effect transactions which stabilize or maintain the market price of the Securities offered at a level above that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time.

The Securities may also be sold through agents designated by the Company from time to time. Any agent involved in the offering and sale of the Securities in respect of which this Prospectus is delivered will be named, and any commissions payable by the Company to such agent will be set forth, in the Prospectus Supplement. Unless otherwise indicated in the Prospectus Supplement, any agent is acting on a “best efforts” basis for the period of its appointment.

We may agree to pay the underwriters or agents a commission for various services relating to the issue and sale of any Securities offered under any Prospectus Supplement. In addition, underwriters or agents may sell the securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters or agents and/or commissions from the purchasers for which they may act as agent. Agents, underwriters or dealers who participate in the distribution of the Securities may be entitled under agreements to be entered into with the Company to indemnification by the Company against certain liabilities, including liabilities under securities legislation, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof.

Each class or series of Multiple Voting Shares, Warrants, Options, Subscription Receipts, Debt Securities and Units will be a new issue of Securities with no established trading market. Unless otherwise specified in the applicable Prospectus Supplement, Multiple Voting Shares, Warrants, Options, Subscription Receipts, Debt Securities or Units will not be listed on any securities or stock exchange. Unless otherwise specified in the applicable Prospectus Supplement, there is no market through which the Multiple Voting Shares, Warrants, Options, Subscription Receipts, Debt Securities or Units may be sold, and purchasers may not be able to resell Warrants, Options, Subscription Receipts, Debt Securities or Units purchased under this Prospectus or any Prospectus Supplement. This may affect the pricing of the Multiple Voting Shares, Warrants, Options, Subscription Receipts, Debt Securities or Units in the secondary market, the transparency and availability of trading prices, the liquidity of the Securities, and the extent of issuer regulation. Subject to applicable laws, certain dealers may make a market in the Multiple Voting Shares, Warrants, Options, Subscription Receipts, Debt Securities or Units, as applicable, but will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given that any dealer will make a market in the Multiple Voting Shares, Warrants, Options, Subscription Receipts or Units or as to the liquidity of the trading market, if any, for the Multiple Voting Shares, Warrants, Options, Subscription Receipts, Debt Securities or Units.

In connection with any offering of Securities, unless otherwise specified in a Prospectus Supplement, underwriters or agents may over-allot or effect transactions which stabilize, maintain or otherwise affect the market price of Securities

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offered at levels other than those which might otherwise prevail on the open market. Such transactions may be commenced, interrupted or discontinued at any time.

RISK FACTORS

Before making an investment decision to purchase any Securities, investors should carefully consider the information described in this Prospectus and the documents incorporated or deemed incorporated by reference herein, including the applicable Prospectus Supplement. There are certain risks inherent in an investment in the Securities, including the factors described in the Filing Statement and any other risk factors described herein or in a document incorporated or deemed incorporated by reference herein, which investors should carefully consider before investing. Additional risk factors relating to a specific offering of Securities will be described in the applicable Prospectus Supplement. Some of the factors described herein, in the documents incorporated or deemed incorporated by reference herein, and/or the applicable Prospectus Supplement are interrelated and, consequently, investors should treat such risk factors as a whole. If any of the adverse effects set out in the risk factors described herein, in the Filing Statement, in any other documents incorporated or deemed incorporated by reference herein or in the applicable Prospectus Supplement occur, it could have a material adverse effect on the business, financial condition and results of operations of the Company. Additional risks and uncertainties of which the Company currently is unaware or that are unknown or that it currently deems to be immaterial could have a material adverse effect on the Company's business, financial condition and results of operations. The Company cannot assure you that it will successfully address any or all of these risks. There is no assurance that any risk management steps taken will avoid future loss due to the occurrence of the adverse effects set out in the risk factors herein, in the Filing Statement, in the other documents incorporated or deemed incorporated by reference herein or in the applicable Prospectus Supplement or other unforeseen risks.

Risks Related to Our Financial Position

Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

PsyBio has a limited operating history upon which its business and future prospects may be evaluated. PsyBio will be subject to all of the business risks and uncertainties associated with any new business enterprise, including the risk that it will not achieve its operating goals. In order for PsyBio to meet future operating and debt service requirements, it will need to be successful in its growth, marketing and sales efforts. Additionally, where PsyBio experiences increased production and future sales, its current operational infrastructure may require changes to scale its business efficiently and effectively to keep pace with demand, and achieve long-term profitability. If PsyBio’s products and services are not accepted by new customers, PsyBio’s operating results may be materially and adversely affected.

Since formation, PsyBio has invested most of its resources in developing a portfolio of psychoactive compounds targeted for the treatment of mental health challenges and other disorders, building its intellectual property portfolio, conducting business planning, raising capital and providing administrative support for these operations. PsyBio has not yet demonstrated an ability to conduct later-stage clinical trials, obtain regulatory approvals, manufacture a commercial-scale product, conduct sales and marketing activities necessary for successful product commercialization.

PsyBio may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving its business objectives. PsyBio will eventually need to transition from a company with a development focus to a company capable of supporting commercial activities. PsyBio may not be successful in such a transition.

We are a clinical-stage mental health care company and have incurred significant losses since our inception. We expect to incur losses for the foreseeable future and may never achieve or maintain profitability.

We are a clinical-stage mental health care company and we have not generated any revenue to date. We have incurred significant operating losses since our formation. Our historical losses resulted principally from costs incurred in connection with research and development activities and general and administrative costs associated with our operations. 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

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anticipated general and administrative expenses, will result in incurring further significant losses for at least the next several years. Our expected losses, among other things, may continue to cause our working capital and shareholders’ equity (deficit) to decrease. We anticipate that our expenses will increase substantially if and as we, develop our products and pursue our business strategy.

We will need substantial additional funding to complete the development and commercialization of our investigational psilocybin therapy or any future therapeutic candidates. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate certain or all of our product discovery, therapeutic development, research operations or commercialization efforts.

To date, we funded our operations through private placements of equity and convertible notes. To become and remain profitable, we will need to continue developing and eventually commercialize therapies that generate significant revenue. Until we can generate sufficient revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of equity offerings, debt financings, strategic collaborations and alliances, licensing arrangements or monetization transactions.

Our ability to raise additional funds will depend on financial, economic and market conditions and other factors, over which we may have no or limited control. If adequate funds are not available on commercially acceptable terms when needed, we may be forced to delay, reduce or terminate the development or commercialization of all or part of our research programs or our therapeutic candidates, or we may be unable to take advantage of future business opportunities. Market volatility resulting from the COVID-19 pandemic and the related U.S. and global economic impact or other factors could also adversely impact our ability to access capital as and when needed.

We cannot guarantee that future financing will be available in sufficient amounts, or on commercially reasonable terms, or at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of holders of our SVS, the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our SVS to decline. The incurrence of indebtedness could result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborators or others at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to our future therapeutics candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects. Further, any additional fundraising efforts may divert our management from its day-to-day activities, which may adversely affect our ability to develop and commercialize our investigational psilocybin therapy or any future therapeutic candidates.

In addition, heightened regulatory scrutiny could have a negative impact on our ability to raise capital. Our business activities rely on developing laws and regulations in multiple jurisdictions. It is impossible to determine the extent of the impact of any new laws, regulations or initiatives that may be proposed, or whether any proposals will become law. The regulatory uncertainty surrounding our investigational psilocybin therapy or any future therapeutic candidates may adversely affect our business and operations, including without limitation, our ability to raise additional capital.

Risks Related to our Business

Coronavirus “COVID-19”

The outbreak of the novel strain of coronavirus, specifically identified as “COVID-19”, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, including the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably

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estimate the length and severity of these developments and the impact on the financial results and condition of PsyBio and its operating subsidiaries in future periods. However, depending on the length and severity of the pandemic, COVID-19 could impact PsyBio’s operations, could cause delays relating to approval from Health Canada, the U.S. FDA and equivalent organizations in other countries, could postpone research activities, and could impair PsyBio’s ability to raise funds depending on COVID-19s effect on capital markets.

The rapid development of the COVID-19 pandemic and the measures being taken by governments and private parties to respond to it are extremely fluid. While PsyBio has continuously sought to assess the potential impact of the pandemic on its operations, any assessment is subject to extreme uncertainty as to probability, severity and duration. PsyBio has attempted to assess the impact of the pandemic by identifying risks in the following principle areas:

• Mandatory Closure. In response to the pandemic, many provinces, states and localities have implemented mandatory shut-downs of business to prevent the spread of COVID-19. In the locations where PsyBio operates or conducts research activity, these activities have been deemed an “essential service”, and thus not subject to the mandatory closures applicable to nonessential businesses. PsyBio's ability to generate revenue and meet its milestones could be materially impacted by any shut down of operations or services.

• Research and Development Disruptions . PsyBio relies on a third parties for its research and development activities. If these third parties are unable to continue operating due to mandatory closures or other effects of the pandemic, it may negatively impact PsyBio's ability to meet its milestones and may significantly delay development. At this time, PsyBio has not experienced any significant disruptions.

• Staffing Disruption . PsyBio is, for the time being, implementing among its staff where feasible “social distancing” measures recommended by local authorities. PsyBio has cancelled nonessential travel by employees, implemented remote meetings where possible, and permitted all staff who can work remotely to do so. For those whose duties require them to work on-site, measures have been implemented to reduce infection risk, such as reducing contact with patients, mandating additional cleaning and hand disinfection and providing masks and gloves to certain personnel. Nevertheless, despite such measures, PsyBio may find it difficult to ensure that its operations remain staffed due to employees falling ill with COVID-19, becoming subject to quarantine, or deciding not to come to come to work on their own volition to avoid infection.

The above risks individually or collectively may have a material impact on PsyBio's ability to generate revenue. In the event that the impact of COVID-19 worsens and negatively affects capital markets generally, there is a risk that PsyBio may not be able to secure funding for these long-term objectives.

Regulatory approvals are required prior to each clinical trial and PsyBio may fail to obtain the necessary approvals to commence or continue clinical testing.

PsyBio’s development and commercialization activities and product candidates are significantly regulated by a number of governmental entities, including Health Canada and the U.S. FDA. Regulatory approvals are required prior to each clinical trial and PsyBio may fail to obtain the necessary approvals to commence or continue clinical testing. PsyBio must comply with regulations concerning the manufacture, testing, safety, effectiveness, labeling, documentation, advertising, and sale of products and product candidates and ultimately must obtain regulatory approval before it can commercialize a product candidate. The time required to obtain approval by such regulatory authorities is unpredictable but typically takes many years following the commencement of preclinical studies and clinical trials. Any analysis of data from clinical activities PsyBio performs is subject to confirmation and interpretation by regulatory authorities, which could delay, limit or prevent regulatory approval. Even if PsyBio believes results from its clinical trials are favorable to support the marketing of its product candidates, Health Canada, the U.S. FDA or other regulatory authorities may disagree. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions.

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PsyBio has not obtained regulatory approval for any product candidate and it is possible that none of its existing product candidates or any future product candidates will ever obtain regulatory approval. PsyBio could fail to receive regulatory approval for its product candidates for many reasons.

A regulatory authority may require more information, including additional preclinical or clinical data to support approval, which may delay or prevent approval and PsyBio’s commercialization plans, or PsyBio may decide to abandon the development program. If PsyBio were to obtain approval, regulatory authorities may approve any of its product candidates for fewer or more limited indications than PsyBio request, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate. Moreover, depending on any safety issues associated with PsyBio’s product candidates that garner approval, Health Canada, the U.S. FDA or other regulatory authorities may impose a risk evaluation and mitigation strategy, thereby imposing certain restrictions on the sale and marketability of such products.

In addition, even if PsyBio were to obtain approval, regulatory or pricing authorities may approve any future product candidates for fewer or more limited indications than PsyBio request, may not approve the price PsyBio intend to charge for PsyBio’s therapies, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a therapeutic candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that therapeutic candidate.

We will rely on third-party clinical investigators and academic collaborators. PsyBio’s failure, or the failure of PsyBio’s third-party contractors and contract research organizations (“CROs”), to comply with regulations may require us to repeat clinical trials, which would delay the regulatory approval process and could also subject us to enforcement action up to and including civil and criminal penalties.

PsyBio has relied upon and plan to continue to rely upon third parties, including independent clinical investigators, academic collaborators and third-party CROs, to conduct PsyBio’s preclinical studies and clinical trials and to monitor and manage data for PsyBio’s ongoing preclinical and clinical programs. PsyBio rely on these parties for execution of PsyBio’s preclinical studies and clinical trials, and control only certain aspects of their activities. Nevertheless, PsyBio are responsible for ensuring that each of PsyBio’s studies and trials is conducted in accordance with the applicable protocol, legal and regulatory requirements and scientific standards, and PsyBio’s reliance on these third parties does not relieve PsyBio of regulatory responsibilities. PsyBio and PsyBio’s third-party contractors and CROs are required to comply with GCP requirements, which are regulations and guidelines enforced by the U.S. FDA, Health Canada and comparable foreign regulatory authorities for all of PsyBio’s therapies in clinical development. Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If we, PsyBio’s investigators, academic collaborators or any of PsyBio’s CROs fail to comply with applicable GCPs, the clinical data generated in PsyBio’s clinical trials may be deemed unreliable and the U.S. FDA, Health Canada, or other comparable regulatory authorities may require PsyBio to perform additional clinical trials before approving PsyBio’s marketing applications. PsyBio cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of PsyBio’s clinical trials comply with GCP regulations. In addition, PsyBio’s clinical trials must be conducted with product produced under cGMP regulations. PsyBio’s failure, or the failure of PsyBio’s third-party contractors and CROs, to comply with these regulations may require PsyBio to repeat clinical trials, which would delay the regulatory approval process and could also subject PsyBio to enforcement action up to and including civil and criminal penalties.

Further, these investigators, academic collaborators and CROs are not PsyBio’s employees and PsyBio will not be able to control, other than by contract, the amount of resources, including time, which they devote to PsyBio’s therapeutic candidates or any future therapeutic candidates and clinical trials. If independent investigators, academic collaborators or CROs fail to devote sufficient resources to the development of PsyBio’s therapeutic candidates or any future therapeutic candidates, or if their performance is substandard, it may delay or compromise the prospects for approval and commercialization of PsyBio’s therapeutic candidates or any future therapeutic candidates that PsyBio develop. In addition, the use of third-party service providers requires PsyBio to disclose PsyBio’s proprietary information to these parties, which could increase the risk that this information will be misappropriated. In addition, investigators, academic collaborators and CROs may have difficulty staffing, undergo changes in priorities or become

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financially distressed or form relationships with other entities, some of which may be PsyBio’s competitors, any of which materially adversely affect PsyBio’s business.

We cannot be certain that any clinical trials we undertake will be successful.

Clinical trials that PsyBio conducts may not demonstrate the efficacy and safety necessary to obtain regulatory approval to market PsyBio’s future product candidates. In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same therapeutic candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the clinical trial protocols and the rate of dropout among clinical trial participants. If the results of PsyBio’s future clinical trials are inconclusive, if PsyBio does not meet the clinical endpoints with statistical and clinically meaningful significance, or if there are safety concerns associated with therapeutic candidates, PsyBio may be delayed in obtaining marketing approval, or may never obtain marketing approval.

Even if PsyBio’s clinical trials are successfully completed, preclinical and clinical data are often susceptible to varying interpretations and analyses and PsyBio cannot guarantee that the U.S. FDA, Health Canada or comparable foreign regulatory authorities will interpret the results as PsyBio does. Accordingly, more trials could be required before PsyBio can submit a future therapeutic candidate for approval. To the extent that the results of the trials are not satisfactory to the U.S. FDA, Health Canada or comparable foreign regulatory authorities for support of a marketing application, approval of future therapeutic candidates may be significantly delayed, or PsyBio may be required to expend significant resources, which may not be available, to conduct additional trials. Moreover, results acceptable to support approval in one jurisdiction may be deemed inadequate by another regulatory authority to support regulatory approval in that other jurisdiction. Due to the inherent risk in the development of therapeutic substances, there is a significant likelihood that any future therapeutic candidates will not successfully complete development and receive approval. Many other companies that believed their therapeutic candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain regulatory approval for the marketing of their therapy. If PsyBio does not receive regulatory approvals for future therapeutic candidates, PsyBio may not be able to continue operating. Even if regulatory approval is secured for any future therapeutic candidate, the terms of such approval may limit the scope and use of a specific therapeutic candidate, which may also limit its commercial potential.

Any variation in the timing of previously announced milestones could have a material adverse effect on PsyBio’s business plan, financial condition or operating results and the trading price of the Subordinate Voting Shares.

From time to time, PsyBio may announce the timing of certain events it expects to occur, such as the anticipated timing of results from its clinical trials. These statements are forward-looking and are based on the best estimates of management at the time relating to the occurrence of such events. However, the actual timing of such events may differ from what has been publicly disclosed. The timing of events such as initiation or completion of a clinical trial, filing of an application to obtain regulatory approval, or announcement of additional clinical trials for a product candidate may ultimately vary from what is publicly disclosed.

PsyBio undertakes no obligation to update or revise any forward-looking information or statements, whether as a result of new information, future events or otherwise, except as otherwise required by-law. Any variation in the timing of previously announced milestones could have a material adverse effect on PsyBio’s business plan, financial condition or operating results and the trading price of the Subordinate Voting Shares.

PsyBio may never have a therapy that is commercially successful.

To date, PsyBio has no therapy authorized for marketing. PsyBio’s future therapeutic products requires further clinical investigation, regulatory review, significant market access and marketing efforts and substantial investment before it can produce any revenue. Furthermore, if approved, PsyBio’s therapy may not achieve an adequate level of acceptance by payors, health technology assessment bodies, healthcare professionals, patients and the medical community at large, and PsyBio may not become profitable. The level of acceptance PsyBio ultimately achieves may be affected by negative public perceptions and historic media coverage of psychedelic substances, including psilocybin. Because of this history, efforts to educate the medical community and third-party payors and health technologies assessment

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bodies on the benefits of PsyBio’s therapeutic compounds may require significant resources and may never be successful, which would prevent PsyBio from generating significant revenue or becoming profitable. Market acceptance of PsyBio’s future therapies by healthcare professionals, patients, healthcare payors and health technology assessment bodies will depend on a number of factors, many of which are beyond PsyBio’s control.

If PsyBio’s future therapeutic candidates fail to gain market access and acceptance, this will have a material adverse impact on PsyBio’s ability to generate revenue to provide a satisfactory, or any, return on PsyBio’s investments. Even if some therapies achieve market access and acceptance, the market may prove not to be large enough to allow PsyBio to generate significant revenue.

Receiving regulatory designations may not be productive.

For drugs that have been designated as breakthrough therapies, interaction and communication between the U.S. FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Drugs designated as breakthrough therapies by the U.S. FDA may also be eligible for accelerated approval.

Designation as a breakthrough therapy is within the discretion of the U.S. FDA. Accordingly, even if PsyBio believes any future therapeutic candidates meets the criteria for designation as a breakthrough therapy, the U.S. FDA may disagree and instead determine not to make such designation. In any event, the receipt of a Breakthrough Therapy designation for product candidates and any future therapeutic candidates may not result in a faster development process, review or approval compared to drugs considered for approval under non-expedited U.S. FDA review procedures and does not assure ultimate approval by the U.S. FDA. In addition, even if PsyBio’s therapies are eventually designated as a breakthrough therapy, the U.S. FDA may later decide that it, or any future therapeutic candidates that are designated by U.S. FDA as breakthrough therapies, no longer meet the conditions for qualification.

PsyBio may seek Fast Track designation for any future therapeutic candidates. If a drug is intended for the treatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for this condition, the drug sponsor may apply for Fast Track designation. The U.S. FDA has broad discretion whether or not to grant this designation, so even if PsyBio believes a particular therapeutic candidate is eligible for this designation, PsyBio cannot assure you that the U.S. FDA would decide to grant it. Even if PsyBio receives Fast Track designation for any future therapeutic candidates, PsyBio may not experience a faster development process, review or approval compared to non-expedited U.S. FDA review procedures. In addition, the U.S. FDA may withdraw Fast Track designation for any therapeutic candidate that is granted Fast Track designation if it believes that the designation is no longer supported by data from PsyBio’s clinical development program.

The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change.

PsyBio’s competitors include large, well-established pharmaceutical companies, biotechnology companies, and academic and research institutions developing therapeutics for the same indications PsyBio is targeting and competitors with existing marketed therapies. Many other companies are developing or commercializing therapies to treat the same diseases or indications for which PsyBio’s product candidates may be useful. Although there are no approved therapies that specifically target opioid addiction, some competitors use therapeutic approaches that may compete directly with PsyBio’s product candidates.

Many of PsyBio’s competitors have substantially greater financial, technical and human resources than PsyBio does and have significantly greater experience than PsyBio in conducting preclinical testing and human clinical trials of product candidates, scaling up manufacturing operations and obtaining regulatory approvals of products. Accordingly, PsyBio’s competitors may succeed in obtaining regulatory approval for products more rapidly than PsyBio does. PsyBio’s ability to compete successfully will largely depend on:

• the efficacy and safety profile of its product candidates relative to marketed products and other product candidates in development;

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• PsyBio’s ability to develop and maintain a competitive position in the product categories and technologies on which it focuses;

• the time it takes for PsyBio’s product candidates to complete clinical development and receive marketing approval;

• PsyBio’s ability to obtain required regulatory approvals;

• PsyBio’s ability to commercialize any of its product candidates that receive regulatory approval;

• PsyBio’s ability to establish, maintain and protect intellectual property rights related to its product candidates; and

• acceptance of any of PsyBio’s product candidates that receive regulatory approval by physicians and other healthcare providers and payers.

Competitors have developed and may develop technologies that could be the basis for products that challenge the discovery research capabilities of products PsyBio is developing. Some of those products may have an entirely different approach or means of accomplishing the desired therapeutic effect than PsyBio’s product candidates and may be more effective or less costly than its product candidates. The success of PsyBio’s competitors and their products and technologies relative to PsyBio’s technological capabilities and competitiveness could have a material adverse effect on the future preclinical studies and clinical trials of PsyBio’s product candidates, including its ability to obtain the necessary regulatory approvals for the conduct of such clinical trials. This may further negatively impact PsyBio’s ability to generate future product development programs using psychedelic inspired compounds.

If PsyBio is not able to compete effectively against its current and future competitors, PsyBio’s business will not grow, and its financial condition and operations will substantially suffer.

Further, there can be no assurance that potential competitors of PsyBio, which may have greater financial, cultivation, production, sales and marketing experience, and personnel and resources than PsyBio, are not currently developing, or will not in the future develop, products and strategies that are equally or more effective and/or economical as any products or strategies developed by PsyBio or which would otherwise render PsyBio’s business, products and strategies, as applicable, ineffective, or obsolete. Increased competition by larger and better financed competitors could materially and adversely affect the business, financial condition and results of operations of PsyBio.

We will incur costs associated with operating a publicly traded company and our management will need to devote time in complying with reporting requirements.

As a public company, PsyBio is subject to various securities rules and regulations, which impose various requirements on PsyBio, including the requirement to establish and maintain effective disclosure and financial controls and corporate governance practices. PsyBio’s management and other personnel need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase PsyBio’s legal and financial compliance costs and make some activities more time-consuming and costly.

Forward-looking statements may prove to be inaccurate.

Investors should not place undue reliance on forward-looking statements. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, of both general and specific nature, that could cause actual results to differ materially from those suggested by the forward-looking statements or contribute to the possibility that predictions, forecasts or projections will prove to be materially inaccurate. Additional information on the risks, assumptions and uncertainties can be found in this Prospectus under the heading “ Cautionary Note Regarding Forward-Looking Information”.

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There is no assurance that PsyBio will be able to achieve its anticipated research and development milestones.

PsyBio expects to use a significant portion of its Available Funds for research and development purposes. There is no assurance that PsyBio’s anticipated milestones will be achieved within the time periods specified, or at all. The failure to achieve these milestones could negatively impact PsyBio’s ability to raise additional funds required for operations and research and development activities, and could, in turn, impact the financial viability of PsyBio. There is also no assurance that PsyBio’s research and development activities will continue to result in commercially viable products.

Risks Related to Regulatory Compliance

Changes in substance laws or breach in compliance of substance laws could have a material adverse effect on PsyBio’s operations and financial performance.

Psilocybin and psilocin are categorized as Schedule I controlled substances under the CSA and are similarly categorized by most states and foreign governments. Even assuming that any future therapeutic candidates containing psilocybin or psilocin are approved and scheduled by regulatory authorities to allow their commercial marketing, the ingredients in such therapeutic candidates would likely continue to be Schedule I, or the state or foreign equivalent. Violations of any federal, state or foreign laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted by either the federal government or private citizens, or criminal charges and penalties, including, but not limited to, disgorgement of profits, cessation of business activities, divestiture, or prison time. This could have a material adverse effect on PsyBio, including on PsyBio’s reputation and ability to conduct business, PsyBio’s financial position, operating results and profitability. In addition, it is difficult for PsyBio to estimate the time or resources that would be needed for the investigation or defense of any such matters or PsyBio’s final resolution because, in part, the time and resources that may be needed are dependent on the nature and extent of any information requested by the applicable authorities involved, and such time or resources could be substantial. It is also illegal to aid or abet such activities or to conspire or attempt to engage in such activities. An investor’s contribution to and involvement in such activities may result in federal civil and/or criminal prosecution, including, but not limited to, forfeiture of his, her or its entire investment, fines and/or imprisonment.

Various federal, state, provincial and local laws govern PsyBio’s business in the jurisdictions in which PsyBio operates or currently plan to operate, and to which PsyBio export or currently plan to export PsyBio’s products, including laws relating to health and safety, the conduct of PsyBio’s operations, and the production, storage, sale and distribution of PsyBio’s products. Complying with these laws requires that PsyBio complies concurrently with complex federal, state, provincial and/or local laws. These laws change frequently and may be difficult to interpret and apply. To ensure PsyBio’s compliance with these laws, PsyBio will need to invest significant financial and managerial resources. It is impossible for PsyBio to predict the cost of such laws or the effect they may have on PsyBio’s future operations. A failure to comply with these laws could negatively affect PsyBio’s business and harm PsyBio’s reputation. Changes to these laws could negatively affect PsyBio’s competitive position and the markets in which PsyBio operates, and there is no assurance that various levels of government in the jurisdictions in which PsyBio operates will not pass legislation or regulation that adversely impacts PsyBio’s business.

In addition, even if PsyBio or third parties were to conduct activities in compliance with U.S. state or local laws or the laws of other countries and regions in which PsyBio conducts activities, potential enforcement proceedings could involve significant restrictions being imposed upon PsyBio or third parties, while diverting the attention of key executives. Such proceedings could have a material adverse effect on PsyBio’s business, revenue, operating results and financial condition as well as on PsyBio’s reputation and prospects, even if such proceedings conclude successfully in PsyBio’s favor. In the extreme case, such proceedings could ultimately involve the criminal prosecution of PsyBio’s key executives, the seizure of corporate assets, and consequently, PsyBio’s inability to continue business operations. Strict compliance with state and local laws with respect to psilocybin and psilocin does not absolve PsyBio of potential liability under U.S. federal law or Canadian law, nor provide a defense to any proceeding which may be brought against PsyBio. Any such proceedings brought against PsyBio may adversely affect PsyBio’s operations and financial performance.

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The loss as “foreign private issuer” status under the U.S. Securities Exchange Act would adversely affect our ability to raise capital and cause us to incur costs associated with additional reporting requirements.

PsyBio may lose its status as a foreign private issuer if, as of the last business day of its second fiscal quarter for any year, more than 50% of the Company’s outstanding voting securities (as determined under Rule 405 of the U.S. Securities Act) are directly or indirectly held of record by residents of the United States. Loss of foreign private issuer status may have adverse consequences on PsyBio’s ability to raise capital in private placements or Canadian prospectus offerings. In addition, loss of the Company’s foreign private issuer status would likely result in increased reporting requirements and increased audit, legal and administration costs. Further, should PsyBio seek to list on a securities exchange in the United States, loss of foreign private issuer status may increase the cost and time required for such a listing. These increased costs may have a material adverse effect on the business, financial condition or results of operations of the Company.

The Company could lose its status as a foreign private issuer if all or a portion of the Multiple Voting Shares directly or indirectly held of record by U.S. residents are converted into Subordinate Voting Shares. The conversion rights attached to the Multiple Voting Shares contain restrictions on conversion that are intended to avoid such a result; however there can be no guarantee that such restrictions on conversion will be effective to prevent the Company from potentially losing foreign private issuer status if a sufficient number of Multiple Voting Shares are converted into Subordinate Voting Shares and such Subordinate Voting Shares are acquired, either upon conversion or pursuant to a subsequent transaction, by U.S. residents. In addition, the Company could potentially lose its foreign private issuer status as a result of future issuances of Subordinate Voting Shares from treasury to the extent such shares are acquired by U.S. residents

Violations of any U.S. federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements.

Violations of any U.S. federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted by either the federal government or private citizens, or criminal charges, including, but not limited to, seizure of assets, disgorgement of profits, cessation of business activities or divestiture. As an entity that conducts business involving psilocybin and psilocin, PsyBio is potentially subject to federal and state forfeiture laws (criminal and civil) that permit the government to seize the proceeds of criminal activity. Civil forfeiture laws could provide an alternative for the federal government or any state (or local police force) that wants to discourage residents from conducting transactions with psilocybin- and psilocinrelated businesses but believes criminal liability is too difficult to prove beyond a reasonable doubt. Also, an individual can be required to forfeit property considered to be the proceeds of a crime even if the individual is not convicted of the crime, and the standard of proof in a civil forfeiture matter is lower than the standard in a criminal matter. Depending on the applicable law, whether federal or state, rather than having to establish liability beyond a reasonable doubt, the federal government or the state, as applicable, may be required to prove that the money or property at issue is proceeds of a crime only by either clear and convincing evidence or a mere preponderance of the evidence.

Tax reforms could harm our business.

PsyBio conducts business globally and file income tax returns in multiple jurisdictions. PsyBio’s consolidated effective income tax rate could be materially adversely affected by several factors, including: changing tax laws, regulations and treaties, or the interpretation thereof; tax policy initiatives and reforms under consideration (such as those related to the Organisation for Economic Co-Operation and Development’s, or OECD, Base Erosion and Profit Shifting, or BEPS, Project, the European Commission’s state aid investigations and other initiatives); the practices of tax authorities in jurisdictions in which PsyBio operates; the resolution of issues arising from tax audits or examinations and any related interest or penalties. Such changes may include (but are not limited to) the taxation of operating income, investment income, dividends received or (in the specific context of withholding tax) dividends paid.

PsyBio is unable to predict what tax reform may be proposed or enacted in the future or what effect such changes would have on PsyBio’s business, but such changes, to the extent they are brought into tax legislation, regulations,

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policies or practices in jurisdictions in which PsyBio operates, could increase the estimated tax liability that PsyBio has expensed to date and paid or accrued on PsyBio’s balance sheets, and otherwise affect PsyBio’s financial position, future results of operations, cash flows in a particular period and overall or effective tax rates in the future in countries where PsyBio has operations, reduce post-tax returns to PsyBio’s shareholders and increase the complexity, burden and cost of tax compliance.

Risks related to United States tax classification.

The Company, which is and will continue to be a Canadian corporation as of the date of this Prospectus, generally would be classified as a non-United States corporation under general rules of United States federal income taxation. Section 7874 of the U.S. Tax Code, however, contains rules that can cause a non-United States corporation to be taxed as a United States corporation for United States federal income tax purposes.

The Company intends to be treated as a United States corporation for United States federal income tax purposes under section 7874 of the U.S. Tax Code and is expected to be subject to United States federal income tax on its worldwide income. However, for Canadian tax purposes, the Company is expected, regardless of any application of section 7874 of the U.S. Tax Code, to be treated as a Canadian resident company (as defined in the ITA) for Canadian income tax purposes. As a result, the Company will be subject to taxation both in Canada and the United States which could have a material adverse effect on its financial condition and results of operations.

It is unlikely that the Company will pay any dividends on the Subordinate Voting Shares in the foreseeable future. However, dividends received by shareholders who are residents of Canada for purpose of the ITA will be subject to U.S. withholding tax. Any such dividends may not qualify for a reduced rate of withholding tax under the CanadaUnited States tax treaty. In addition, a foreign tax credit or a deduction in respect of foreign taxes may not be available.

Dividends received by U.S. shareholders will not be subject to U.S. withholding tax but will be subject to Canadian withholding tax. Dividends paid by the Company will be characterized as U.S. source income for purposes of the foreign tax credit rules under the U.S. Tax Code. Accordingly, U.S. shareholders generally will not be able to claim a credit for any Canadian tax withheld unless, depending on the circumstances, they have an excess foreign tax credit limitation due to other foreign source income that is subject to a low or zero rate of foreign tax.

Dividends received by shareholders that are neither Canadian nor U.S. shareholders will be subject to U.S. withholding tax and will also be subject to Canadian withholding tax. These dividends may not qualify for a reduced rate of U.S. withholding tax under any income tax treaty otherwise applicable to a shareholder of the Company, subject to examination of the relevant treaty.

Because the Subordinate Voting Shares will be treated as shares of a U.S. domestic corporation, the U.S. gift, estate and generation-skipping transfer tax rules generally apply to a non-U.S. shareholder of Subordinate Voting Shares.

Failure to comply with health and data protection laws and regulations could lead to U.S. federal and state government enforcement actions, including civil or criminal penalties, private litigation, and adverse publicity and could negatively affect PsyBio’s operating results and business.

PsyBio and any potential collaborators may be subject to U.S. federal and state data protection laws and regulations, such as laws and regulations that address privacy and data security. In the United States, numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of health-related and other personal information. In addition, PsyBio may obtain health information from third parties, including research institutions from which PsyBio obtains clinical trial data, which are subject to privacy and security requirements under HIPAA, as amended by HITECH. To the extent that PsyBio acts as a business associate to a healthcare provider engaging in electronic transactions, PsyBio may also be subject to the privacy and security provisions of HIPAA, as amended by HITECH, which restricts the use and disclosure of patient-identifiable health information, mandates the adoption of standards relating to the privacy and security of patient-identifiable health information, and requires the reporting of certain security breaches to healthcare provider customers with respect to such information. Additionally,

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many states have enacted similar laws that may impose more stringent requirements on entities like ours. Depending on the facts and circumstances, PsyBio could be subject to significant civil, criminal, and administrative penalties if PsyBio obtains, use, or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.

Additionally, in June 2018, the State of California enacted the California Consumer Privacy Act of 2018, or CCPA, which came into effect on January 1, 2020 and provides new data privacy rights for consumers (as that term is broadly defined) and new operational requirements for companies, which may increase PsyBio’s compliance costs and potential liability. The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. While there is currently an exception for protected health information that is subject to HIPAA and clinical trial regulations, as currently written, the CCPA may impact certain of PsyBio’s business activities. The CCPA could mark the beginning of a trend toward more stringent state privacy legislation in the United States, which could increase PsyBio’s potential liability and adversely affect PsyBio’s business.

Compliance with U.S. and foreign privacy and data protection laws and regulations could require PsyBio to take on more onerous obligations in PsyBio’s contracts, restrict PsyBio’s ability to collect, use and disclose data, or in some cases, impact PsyBio’s ability to operate in certain jurisdictions. Failure to comply with these laws and regulations could result in government enforcement actions (which could include civil, criminal and administrative penalties), private litigation, and/or adverse publicity and could negatively affect PsyBio’s operating results and business. Moreover, clinical trial subjects, employees and other individuals about whom PsyBio or PsyBio’s potential collaborators obtain personal information, as well as the providers who share this information with PsyBio, may limit PsyBio’s ability to collect, use and disclose the information. Claims that PsyBio has violated individuals’ privacy rights, failed to comply with data protection laws, or breached PsyBio’s contractual obligations, even if PsyBio is not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm PsyBio’s business.

Risks Related to Development, Clinical Testing and Commercialization of Any Future Therapeutic Candidates

The psychedelic drug industry is a fairly new industry and we cannot predict the impact of the ever-evolving compliance regime in respect of this industry.

PsyBio cannot predict the time required to secure all appropriate regulatory approvals for future products, or the extent of testing and documentation that may, from time to time, be required by governmental authorities. The impact of compliance regimes, any delays in obtaining, or failure to obtain regulatory approvals may significantly delay or impact the development of markets, its business and products, and sales initiatives and could have a material adverse effect on the business, financial condition and operating results of PsyBio.

The success of PsyBio’s business is dependent on the reform of controlled substances laws pertaining to psilocybin. If controlled substances laws are not favourably reformed in Canada, the United States, and other global jurisdictions, the commercial opportunity that PsyBio is pursuing may be highly limited.

Psilocybin is a controlled substance in many jurisdictions, including in Canada under Schedule III of the CDSA and in the Unites States under the CSA.

In Canada, medical and recreational use of certain psychedelic drugs is illegal under Canadian federal laws. While PsyBio is focused on programs using psychedelic inspired compounds, PsyBio does not have any direct or indirect involvement with the illegal selling, production or distribution of any substances in the jurisdictions in which it operates and does not intend to have any such involvement. However, a violation of any Canadian federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements arising from

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civil proceedings initiated by either government entities in the jurisdictions in which PsyBio operates, or private citizens or criminal charges.

In the United States, psilocybin and its active metabolite, psilocin, are listed by the U.S. DEA as controlled substances or scheduled substances, under the CSA specifically as a Schedule I substance. The U.S. DEA regulates chemical compounds as Schedule I, II, III, IV or V substances. Schedule I substances by definition have a high potential for abuse, have no currently “accepted medical use” in the United States, lack accepted safety for use under medical supervision, and may not be prescribed, marketed or sold in the United States. Pharmaceutical products approved for use in the United States may be listed as Schedule II, III, IV or V, with Schedule II substances considered to present the highest potential for abuse or dependence and Schedule V substances the lowest relative risk of abuse among such substances. 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. For example, they may not be refilled without a new prescription and may have a black box warning. Further, most, if not all, state laws in the United States classify psilocybin and psilocin as Schedule I controlled substances. For any product containing psilocybin to be available for commercial marketing in the United States, psilocybin and psilocin must be rescheduled, or the product itself must be scheduled, by the U.S. DEA to Schedule II, III, IV or V. Commercial marketing in the United States will also require scheduling-related legislative or administrative action.

Scheduling determinations by the U.S. DEA are dependent on U.S. FDA approval of a substance or a specific formulation of a substance. Therefore, while psilocybin and psilocin are Schedule I controlled substances, products approved by the U.S. FDA for medical use in the United States that contain psilocybin or psilocin should be placed in Schedules II-V, since approval by the U.S. FDA satisfies the “accepted medical use” requirement. In addition, the scheduling process may take significantly longer than the 90-day deadline set forth in the CSA, thereby delaying the launch of PsyBio’s future psilocybin based therapies in the United States. Furthermore, the U.S. FDA, U.S. DEA, or any foreign regulatory authority could require PsyBio to generate more clinical or other data than PsyBio currently anticipates to establish whether or to what extent the substance has an abuse potential, which could increase the cost and/or delay the launch of PsyBio’s future therapeutic candidates containing controlled substances.

There is no guarantee that any of PsyBio’s investigational therapeutic compounds will be approved for use by Health Canada or the U.S. FDA. The failure to obtain necessary licenses and permits for Schedule I drugs could have an adverse effect on PsyBio’s operations.

If any of PsyBio’s therapeutic investigational compounds are approved by the U.S. FDA, they will be subject to further U.S. DEA regulations relating to manufacturing, storage, distribution and physician prescription procedures, including:

The potential reclassification of psilocybin and psilocin in the United States could create additional regulatory burdens on our operations and negatively affect our results of operations.

If psilocybin and/or psilocin, other than the U.S. FDA-approved formulation, is rescheduled under the CSA as a Schedule II or lower controlled substance (i.e., Schedule III, IV or V), the ability to conduct research on psilocybin and psilocin would most likely be improved. However, rescheduling psilocybin and psilocin may materially alter enforcement policies across many federal agencies, primarily the U.S. FDA and U.S. DEA. The U.S. FDA is responsible for ensuring public health and safety through regulation of food, drugs, supplements, and cosmetics, among other products, through its enforcement authority pursuant to the Federal Food, Drug, and Cosmetic Act, or the FDCA. The U.S. FDA’s responsibilities include regulating the ingredients as well as the marketing and labeling of drugs sold in interstate commerce. Because it is currently illegal under federal law to produce and sell psilocybin and psilocin, and because there are no federally recognized medical uses, the U.S. FDA has historically deferred enforcement related to psilocybin and psilocin to the U.S. DEA. If psilocybin and psilocin were to be rescheduled to a federally controlled, yet legal, substance, the U.S. FDA would likely play a more active regulatory role. The U.S. DEA would continue to be active in regulating manufacturing, distribution and dispensing of such substances. The potential for multi-agency enforcement post-rescheduling could threaten or have a materially adverse effect on our business.

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Risks Related to Intellectual Property

Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and protect other proprietary information.

PsyBio relies on third parties to develop its products and as a result, must share trade secrets with them. PsyBio seeks to protect its proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements or other similar agreements with its collaborators, advisors, employees and consultants prior to beginning research or disclosing proprietary information, to the extent it is able to in accordance with the rights it has for its licensed intellectual property. These agreements typically restrict the ability of PsyBio’s collaborators, advisors, employees and consultants to publish data potentially relating to its trade secrets. Its academic and clinical collaborators typically have rights to publish data, provided that PsyBio is notified in advance and may delay publication for a specified time in order to secure any intellectual property rights arising from the collaboration. In other cases, publication rights are controlled exclusively by PsyBio, although in some cases PsyBio may share these rights with other parties. PsyBio may also conduct joint research and development programs which may require it to share trade secrets under the terms of research and development collaboration or similar agreements. Despite PsyBio’s efforts to protect its trade secrets, PsyBio’s competitors may discover its trade secrets, either through breach of these agreements, independent development or publication of information. A competitor’s discovery of PsyBio’s trade secrets may impair its competitive position and could have a material adverse effect on its business and financial condition.

Issued patents covering one or more of our investigational therapeutics could be found invalid or unenforceable if challenged in court.

To protect PsyBio’s competitive position, PsyBio may from time to time need to resort to litigation in order to enforce or defend any patents or other intellectual property rights owned by or licensed to PsyBio from time to time, or to determine or challenge the scope or validity of patents or other intellectual property rights of third parties. Enforcement of intellectual property rights is difficult, unpredictable and expensive, and many of PsyBio’s or PsyBio’s licensors’ or collaboration partners’ adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than PsyBio or PsyBio’s licensors or collaboration partners can. Accordingly, despite PsyBio’s or PsyBio’s licensors’ or collaboration partners’ efforts, PsyBio or PsyBio’s licensors or collaboration partners may not prevent third parties from infringing upon, misappropriating or otherwise violating intellectual property rights PsyBio own or control, particularly in countries where the laws may not protect those rights as fully as in Canada and the United States. PsyBio may fail in enforcing its rights, in which case PsyBio’s competitors and other third parties may be permitted to use PsyBio’s therapies without payment to PsyBio.

In addition, litigation involving PsyBio’s licensed patents carries the risk that one or more of PsyBio’s licensed patents will be narrowed, held invalid (in whole or in part, on a claim-by-claim basis) or held unenforceable. Such an adverse court ruling could allow third parties to commercialize PsyBio’s therapies, and then compete directly with PsyBio, without payment to PsyBio.

If PsyBio were to initiate legal proceedings against a third party to enforce a patent covering one of PsyBio’s investigational therapies, the defendant could counterclaim that PsyBio’s licensed patent is invalid or unenforceable. In patent litigation in the United States or in Canada, defendant counterclaims alleging invalidity or unenforceability are commonplace. A claim for a validity challenge may be based on failure to meet any of several statutory requirements, for example, lack of novelty, obviousness or non-enablement. A claim for unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the United States Patent and Trademark Office (“ USPTO ”) or made a misleading statement, during prosecution. Third parties may also raise challenges to the validity of PsyBio’s patent claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings, and equivalent proceedings in foreign jurisdictions (i.e., opposition proceedings). Such proceedings could result in the revocation of, cancellation of, or amendment to PsyBio’s licensed patents in such a way that they no longer cover any future therapeutic candidates. The outcome following legal assertions of invalidity and unenforceability during patent litigation or other proceedings

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is unpredictable. With respect to the validity question, for example, PsyBio cannot be certain that there is no invalidating prior art, of which PsyBio and the patent examiner were unaware during prosecution. If a defendant or third party were to prevail on a legal assertion of invalidity or unenforceability, PsyBio would lose at least part, and perhaps all, of the patent protection on one or more of any future therapeutic candidates. Such a loss of patent protection could have a material adverse impact on PsyBio’s business financial condition, results of operations, and prospects. Further, litigation could result in substantial costs and diversion of management resources, regardless of the outcome, and this could harm PsyBio’s business and financial results.

Intellectual property litigation could cause us to spend substantial resources, distract our personnel from their normal responsibilities, harming our reputation and our business operations.

Even if resolved in PsyBio’s favor, litigation or other legal proceedings relating to intellectual property claims may cause PsyBio to incur significant expenses and could distract PsyBio’s technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on PsyBio. Such litigation or proceedings could substantially increase PsyBio’s operating losses and reduce PsyBio’s resources available for development and commercialization activities. PsyBio may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of PsyBio’s competitors may be able to sustain the costs of such litigation or proceedings more effectively than PsyBio can because of their substantially greater financial resources. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of PsyBio’s confidential information could be compromised by disclosure during this type of litigation. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on PsyBio’s ability to compete in the marketplace.

Protection of intellectual property will only be possible to the extent PsyBio’s proprietary technologies are covered by valid and enforceable intellectual property rights.

PsyBio will be able to protect its licensed intellectual property from unauthorized use by third parties only to the extent that PsyBio’s proprietary technologies, key products and any future products are covered by valid and enforceable intellectual property rights of the licensor, including patents, or are effectively maintained as trade secrets by the licensor, and provided PsyBio has the ability and funds to enforce its rights, if necessary.

PsyBio’s inability to obtain third-party licenses for intellectual property may hinder or eliminate its ability to manufacture and market its products.

PsyBio licenses all intellectual property relating to its proprietary platform technology, other than its trade names. In the future, there may not be any patents in the US or in foreign countries that are available to license on acceptable terms. PsyBio’s inability to obtain such licenses may hinder or eliminate its ability to manufacture and market its products. Further, if PsyBio obtains third-party licenses but fails to pay annual maintenance fees, development and sales milestones, or it is determined that PsyBio does not use commercially reasonable efforts to commercialize licensed products, PsyBio could lose its licenses which could have a material adverse effect on its business and financial condition.

In addition, a substantial number of patents have already been issued to other biotechnology and pharmaceutical companies. To the extent that valid third-party patent rights cover PsyBio’s products or services, PsyBio, the licensor of PsyBio’s intellectual property rights, or its strategic collaborators would be required to seek licenses from the holders of these patents in order to manufacture, use or sell these products and services and payments under them would reduce PsyBio’s profits from these products and services.

Third-party intellectual property right holders, including PsyBio’s competitors, may actively bring infringement, misappropriation or violation claims against PsyBio based on existing or future intellectual property rights, regardless of their merit. PsyBio may not be able to successfully settle or otherwise resolve such infringement claims. If PsyBio is unable to successfully settle future claims on terms acceptable to PsyBio, PsyBio may be required to engage or

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continue costly, unpredictable and time-consuming litigation and may be prevented from or experience substantial delays in marketing PsyBio’s therapies.

If PsyBio are unsuccessful defending in any such claim, in addition to being forced to pay damages, PsyBio or PsyBio’s licensor or licensees may be temporarily or permanently prohibited from commercializing any of PsyBio’s investigational therapies that were held to be infringing. If possible, PsyBio might be forced to redesign PsyBio’s therapeutic candidates or any future therapeutic candidates so that PsyBio no longer infringe the intellectual property rights of third parties, or PsyBio may be required to seek a license to any such technology that PsyBio is found to infringe, which license may not be available on commercially reasonable terms or at all. Even if PsyBio or PsyBio’s licensors or collaboration partners obtain a license, it may be non-exclusive, thereby giving PsyBio’s competitors access to the same technologies licensed to PsyBio or PsyBio’s licensors or collaboration partners and it could require PsyBio to make significant licensing and royalty payments. In addition, PsyBio could be found liable for significant monetary damages, including treble damages and attorneys’ fees, if PsyBio is found to have willfully infringed a patent or other intellectual property right. Claims that PsyBio has misappropriated the confidential information or trade secrets of third parties could have a similar material adverse effect on PsyBio’s business, financial condition, results of operations, and prospects. Any of these events, even if PsyBio were ultimately to prevail, could require PsyBio to divert substantial financial and management resources that PsyBio would otherwise be able to devote to PsyBio’s business.

In addition, if the breadth or strength of protection provided by PsyBio’s or PsyBio’s licensors’ or collaboration partners’ patents and patent applications is threatened, it could dissuade companies from collaborating with PsyBio to license, develop or commercialize current or future investigational therapies. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of PsyBio’s confidential information could be compromised by disclosure during this type of litigation.

If we fail to comply with our obligations under the agreements pursuant to which we license intellectual property rights to or from third parties, or otherwise experience disruptions to our business relationships with our licensors, licensees or collaborators, we could lose the rights to intellectual property that are important to our business.

PsyBio is or may become a party to third-party agreements under which PsyBio grants or is granted rights to intellectual property that are potentially important to PsyBio’s business and PsyBio expects that it may need to enter into additional license or collaboration agreements in the future. PsyBio’s existing third-party agreements impose, and PsyBio expects that future license agreements will impose, various obligations related to, among other things, therapeutic development and payment of royalties and fees based on achieving certain milestones. In addition, under several of PsyBio’s collaboration agreements, PsyBio is prohibited from developing and commercializing therapies that would compete with the therapies licensed under such agreements. If PsyBio fails to comply with PsyBio’s obligations under these agreements, PsyBio’s licensor or collaboration partner may have the right to terminate the agreement, including any licenses included in such agreement.

The termination of any license or collaboration agreements or failure to adequately protect such license agreements or collaboration could prevent PsyBio from commercializing PsyBio’s therapeutic candidates or any future therapeutic candidates covered by the agreement or licensed intellectual property. For example, PsyBio may rely on license agreements which grant failure PsyBio rights to certain intellectual property and proprietary materials that PsyBio use in connection with the development of PsyBio’s therapies. If this agreement were to terminate, PsyBio would be unable to timely license similar intellectual property and proprietary materials from an alternate source, on commercially reasonable terms or at all, and may be required to conduct additional bridging studies on PsyBio’s therapeutic candidates or any future therapeutic candidates, which could delay or otherwise have a material adverse effect on the development and commercialization of PsyBio’s therapeutic candidates or any future therapeutic candidates.

Several of PsyBio’s existing license agreements are sublicenses from third parties which are not the original licensor of the intellectual property at issue. Under these agreements, PsyBio must rely on PsyBio’s licensor to comply with its obligations under the primary license agreements under which such third party obtained rights in the applicable intellectual property, where PsyBio may have no relationship with the original licensor of such rights. If the licensors

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fail to comply with their obligations under these upstream license agreements, the original third-party licensor may have the right to terminate the original license, which may terminate the sublicense. If this were to occur, PsyBio would no longer have rights to the applicable intellectual property and, in the case of a sublicense, if PsyBio were not able to secure PsyBio’s own direct license with the owner of the relevant rights, which it may not be able to do at a reasonable cost or on reasonable terms, it may adversely affect PsyBio’s ability to continue to develop and commercialize PsyBio’s therapeutic candidates or any future therapeutic candidates incorporating the relevant intellectual property.

In addition, PsyBio’s third-party agreements are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what PsyBio believes to be the scope of PsyBio’s rights to the relevant intellectual property or technology, or increase what PsyBio believes to be PsyBio’s financial or other obligations under the relevant agreement, either of which could have a material adverse effect on PsyBio’s business, financial condition, results of operations, and prospects. Moreover, if disputes over intellectual property that PsyBio has licensed prevent or impair PsyBio’s ability to maintain PsyBio’s current licensing arrangements on commercially acceptable terms, PsyBio may be unable to successfully develop and commercialize the affected therapeutic candidate, which could have a material adverse effect on PsyBio’s business, financial conditions, results of operations, and prospects.

Financial and Accounting Risks

Negative cash flow from operating activities have had and will continue to have an adverse effect on, among other things, shareholder equity, total assets and working capital.

PsyBio has had negative cash flow from operating activities since inception. This has resulted principally from costs incurred in connection with research and development activities and general and administrative costs associated with operations. Significant capital investment will be required to achieve PsyBio’s existing plans. PsyBio’s net losses have had and will continue to have an adverse effect on, among other things, shareholder equity, total assets and working capital. PsyBio expects that losses may fluctuate from quarter to quarter and year to year, and that such fluctuations may be substantial. PsyBio cannot predict when it will become profitable, if at all. Accordingly, PsyBio may be required to obtain additional financing in order to meet its future cash commitments.

Substantial additional financing may be required if PsyBio is to be successful in continuing to develop its business and its products.

As a research and development company, PsyBio 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 PsyBio is to be successful in continuing to develop its business and its products. No assurances can be given that PsyBio 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 PsyBio, if at all. If PsyBio is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations or anticipated expansion.

PsyBio has not generated product revenue and cannot predict when and if it will generate product revenue .

To date, PsyBio has not generated product revenue and cannot predict when and if it will generate product revenue. PsyBio’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. PsyBio does not anticipate generating revenue from the sale of products for the foreseeable future. PsyBio expects its research and development expenses to increase in connection with its ongoing activities, particularly as it advances its product candidates through clinical trials.

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Estimates or judgments relating to critical accounting policies are based on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. PsyBio’s operating results may be adversely affected if the assumptions change or if actual circumstances differ.

The preparation of the condensed consolidated interim financial statements in conformity with the International Financial Reporting Standards requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated interim financial statements and accompanying notes. PsyBio 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. PsyBio’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 PsyBio. Significant assumptions and estimates will be used in preparing the condensed consolidated interim financial statements including 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 Subordinate Voting Shares

The market price of Subordinate Voting Shares may be volatile.

The market price of Subordinate Voting Shares may be volatile. The volatility may affect the ability of holders to sell Subordinate Voting Shares at an advantageous price or at all. Market price fluctuations in Subordinate Voting Shares may be adversely affected by a variety of factors relating to PsyBio’s business, including fluctuations in PsyBio’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 Subordinate Voting Shares, governmental regulatory action, adverse change in general market conditions or economic trends, acquisitions, dispositions or other material public announcements by PsyBio or its competitors, along with a variety of additional factors, including, without limitation, those set forth under the heading “ Cautionary Note Regarding Forward-Looking Statements ”. In addition, the market price for securities on stock markets, including the TSXV is subject to significant price and trading fluctuations. These fluctuations have resulted in volatility in the market prices of securities that often has been unrelated or disproportionate to changes in operating performance, underlying asset values or prospects of such companies. These broad market fluctuations may materially adversely affect the market price of the Subordinate Voting Shares.

Additionally, the value of Subordinate Voting Shares is subject to market value fluctuations based upon factors that influence PsyBio’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 Subordinate Voting Shares will not experience significant fluctuations in the future, including fluctuations that are unrelated to PsyBio’s performance.

Shareholders may suffer dilution if additional Subordinate Voting Shares are issued for financing purposes.

The financial risk of PsyBio’s future activities will be borne to a significant degree by its shareholders. If additional Subordinate Voting Shares are issued from treasury for financing purposes, control of the Company may change and purchasers may suffer additional dilution.

The issuance by the Company of Subordinate Voting Shares or other securities convertible into Subordinate Voting Shares could result in significant dilution in the equity interest of existing shareholders and adversely affect the market price of the Subordinate Voting Shares. In addition, in the future, the Company may issue additional Subordinate Voting Shares or securities convertible into Subordinate Voting Shares, which may dilute existing shareholders. The Company’s Articles permit the issuance of an unlimited number of Subordinate Voting Shares and an unlimited number of Multiple Voting Shares, and shareholders will have no pre-emptive rights in connection with such further issuances. Also, additional Subordinate Voting Shares may be issued by the Company upon the exercise of stock

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options and upon the exercise or conversion of other securities convertible into Subordinate Voting Shares, including the Multiple Voting Shares. The issuance of these additional equity securities may have a similar dilutive effect on then existing holders of Subordinate Voting Shares.

The market price of the Subordinate Voting Shares could decline as a result of future issuances by the Company, including issuances of shares in connection with strategic alliances, or sales by its existing holders of Subordinate Voting Shares or Multiple Voting Shares, or the perception that these sales could occur. Sales by shareholders might also make it more difficult for PsyBio to sell equity securities at a time and price that it deems appropriate, which could reduce its ability to raise capital and have an adverse effect on its business.

The rights of holders of Multiple Voting Shares to convert such shares into Subordinate Voting Shares will be subject to the FPI Protective Restriction in order to maintain the status of the Company as a “foreign private issuer” (“FPI”) under United States securities laws.

As a result, holders of Multiple Voting Shares may not be able to convert such shares into Subordinate Voting Shares. The Company could lose its status as a “foreign private issuer” if all or a portion of the Multiple Voting Shares directly or indirectly held of record by U.S. Residents are converted into Subordinate Voting Shares. The FPI Protective Restriction provides that holders of Multiple Voting Shares shall not have the right to convert any portion of the Multiple Voting Shares to the extent that after giving effect to all permitted issuances after such conversions of Multiple Voting Shares, the aggregate number of Subordinate Voting Shares and Multiple Voting Shares held of record, directly or indirectly, by residents of the U.S. Residents would exceed the 40% Threshold. The Multiple Voting Shares will not be listed for trading in any market and, as such, holders of Multiple Voting Shares will not be able to trade their shares without conversion. For more information on the Multiple Voting Shares and a full description of the FPI Protective Restriction, see “Description of the Securities”.

There can be no assurance that an active trading market for Subordinate Voting Shares will develop or, if developed, that any market will be sustained.

PsyBio cannot predict the prices at which Subordinate Voting Shares will trade. Fluctuations in the market price of Subordinate Voting Shares could cause an investor to lose all or part of its investment in Subordinate Voting Shares. Factors that could cause fluctuations in the trading price of Subordinate Voting Shares include: (i) announcements of new offerings, products, services or technologies; commercial relationships, acquisitions or other events by PsyBio or its competitors; (ii) price and volume fluctuations in the overall stock market from time to time; (iii) significant volatility in the market price and trading volume of similar companies in its industry; (iv) fluctuations in the trading volume of Subordinate Voting Shares or the size of PsyBio’s public float; (v) actual or anticipated changes or fluctuations in PsyBio’s results of operations; (vi) whether PsyBio’s results of operations meet the expectations of securities analysts or investors; (vii) actual or anticipated changes in the expectations of investors or securities analysts; (viii) litigation involving PsyBio, its industry, or both; (ix) regulatory developments; (x) general economic conditions and trends; (xi) major catastrophic events; (xii) escrow releases, sales of large blocks of Subordinate Voting Shares; (xiii) departures of key employees or members of management; or (xiv) an adverse impact on PsyBio from any of the other risks cited herein.

Significant sales of Subordinate Voting Shares could adversely affect the market price of Subordinate Voting Shares and may make it more difficult for investors to sell Subordinate Voting Shares on favourable terms.

Certain Subordinate Voting Shares and Multiple Voting Shares held by certain directors, executive officers, control persons and certain other securityholders are subject to contractual lock-up restrictions and may also be subject to escrow restrictions pursuant to the policies of the TSXV. Sales of a substantial number of Subordinate Voting Shares in the public market after the expiry of lock-up or escrow restrictions, or the perception that these sales could occur, could adversely affect the market price of Subordinate Voting Shares and may make it more difficult for investors to sell Subordinate Voting Shares at a favourable time and price.

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There may be income tax consequences in relation to an investment in the Subordinate Voting Shares.

There may be income tax consequences in relation to Subordinate Voting Shares, which will vary according to circumstances of each investor. Prospective investors should seek independent advice from their own tax and legal advisers.

PsyBio will have discretion concerning the use of the net proceeds of offerings of Securities as well as the timing of their expenditures, and may apply the net proceeds of an offering in ways other than as disclosed.

As a result, an investor will be relying on the judgment of PsyBio for the application of the net proceeds of any offering of Securities. PsyBio may use the net proceeds of an offering of Securities` in ways that an investor may not consider desirable. The results and the effectiveness of the application of the net proceeds are uncertain. If the net proceeds are not applied effectively, PsyBio’s business, prospects, financial position, financial condition or results of operations may suffer.

PsyBio does not anticipate paying cash dividends on Subordinate Voting Shares in the foreseeable future.

PsyBio’s current policy is, and will be, to retain earnings to finance the development and enhancement of its products and to otherwise reinvest in PsyBio. Therefore, PsyBio does not anticipate paying cash dividends on Subordinate Voting Shares in the foreseeable future. PsyBio’s dividend policy will be reviewed from time to time by the PsyBio Board in the context of its earnings, financial condition and other relevant factors. Until the time that PsyBio does pay dividends, which it might never do, its shareholders will not be able to receive a return on their Subordinate Voting Shares unless they sell them.

EXEMPTIVE RELIEF

Pursuant to a decision of the Autorité des marchés financiers dated August 30, 2021, the Company was granted a permanent exemption from the requirement under section 40.1 of the Securities Act (Québec) to translate into French this Prospectus, as well as the documents incorporated by reference herein, and any Prospectus Supplement to be filed in relation to an “at-the-market distribution”. This exemption is granted on the condition that if the Company offers securities to Québec purchasers other than in relation to an “at-the-market distribution”, this Prospectus and the documents incorporated by reference herein and the Prospectus Supplement in respect of such offering be translated into French.

CERTAIN INCOME TAX CONSIDERATIONS

The applicable Prospectus Supplement will describe certain Canadian federal income tax consequences to investors described therein of acquiring Securities.

AUDITORS, TRANSFER AGENT AND REGISTRAR

The independent auditor of the Company is MNP LLP (“ MNP ”), Chartered Professional Accountants, Toronto, Ontario. MNP has confirmed that it is independent of the Company within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation and regulations.

The transfer agent and registrar for the Subordinate Voting Shares and the Multiple Voting Shares is Odyssey Trust Company at its principal office in Vancouver, British Columbia.

INTERESTS OF EXPERTS

Unless otherwise specified in the Prospectus Supplement relating to the Securities, certain legal matters will be passed upon on our behalf by Aird & Berlis LLP with respect to matters of Canadian law. In addition, certain legal matters in connection with an offering and sale of Securities will be passed upon for any underwriters, dealers or agents by counsel to be designated at the time of such offering and sale by such underwriters, dealers or agents with

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respect to matters of Canadian and, if applicable, United States or other foreign law. As at the date hereof, the partners and associates of Aird & Berlis LLP, as a group, own less than 1% of the outstanding securities of the Company.

Until the closing of the Transaction, the independent auditor of the Company was RSM Canada, LLP (“ RSM ”), Chartered Professional Accountants, Toronto, Ontario. RSM has prepared an independent auditor’s report dated October 28, 2020 in respect of the Annual Financial Statements, which are incorporated by reference in this Prospectus. As at the date of such report, RSM confirmed that it was independent of the Company within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation and regulations.

Until the closing of the Transaction, the independent auditor of PsyBio U.S. was MNP. MNP has prepared an independent auditor’s report dated February 17, 2021 in respect of the PsyBio U.S. Annual Financial Statements, which are incorporated by reference in this Prospectus. As at the date of such report, MNP confirmed that it was independent of PsyBio U.S. within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation and regulations.

Until the closing of the Transaction, the independent auditor of Finco was MNP. MNP has prepared an independent auditor’s report dated February 17, 2021 in respect of the Finco Annual Financial Statements, which are incorporated by reference in this Prospectus. As at the date of such report, MNP confirmed that it was independent of Finco within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation and regulations.

STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION

Securities legislation in certain of the provinces and territories of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a prospectus and any amendment. In several of the provinces and territories, the securities legislation further provides a purchaser with remedies for rescission or, in some jurisdictions, revisions of the price or damages if the prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission, revision of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for the particulars of these rights or consult with a legal adviser.

In an offering of convertible, exchangeable or exercisable Securities, investors are cautioned that the statutory right of action for damages for a misrepresentation contained in the prospectus is limited, , in certain provincial and territorial securities legislation, to the price at which the convertible, exchangeable or exercisable Securities is offered to the public under the prospectus offering. This means that, under the securities legislation of certain provinces and territories, if the purchaser pays additional amounts upon conversion, exchange or exercise of the security, those amounts may not be recoverable under the statutory right of action for damages that applies in those provinces and territories. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for the particulars of this right of action for damages or consult with a legal adviser.

In addition to statutory rights of withdrawal and rescission, original purchasers of Warrants (if offered separately from other Securities) and Subscription Receipts will have a contractual right of rescission against the Company in respect of the exercise of such warrant or subscription receipt, as the case may be.

The contractual right of rescission will entitle such original purchasers to receive, in addition to the amount paid on original purchase of the warrant or subscription receipt (or units comprised partly thereof), as the case may be, the amount paid upon exercise upon surrender of the underlying securities gained thereby, in the event that this prospectus (as supplemented or amended) contains a misrepresentation, provided that: (i) the conversion, exchange or exercise takes place within 180 days of the date of the purchase of the warrant or subscription receipt under this prospectus; and (ii) the right of rescission is exercised within 180 days of the date of purchase of the warrant or subscription receipt under this prospectus. This contractual right of rescission will be consistent with the statutory right of rescission

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described under section 131 of the Securities Act (British Columbia), and is in addition to any other right or remedy available to original purchasers under section 131 of the Securities Act (British Columbia) or otherwise at law.

Original purchasers are further advised that in certain provinces and territories the statutory right of action for damages in connection with a prospectus misrepresentation is limited to the amount paid for the security that was purchased under a prospectus, and therefore a further payment at the time of exercise may not be recoverable in a statutory action for damages. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for the particulars of these rights or consult with a legal advisor.

Purchasers of Securities distributed under an “at-the-market distribution” by the Company do not have the right to withdraw from an agreement to purchase Securities and do not have remedies of rescission or, in some jurisdictions, revisions of the price, or damages for non-delivery of the prospectus, prospectus supplement, and any amendment relating to Securities purchased by such purchaser because the prospectus, prospectus supplement, and any amendment relating to the Securities purchased by such purchaser will not be sent or delivered, as permitted under Part 9 of NI 44-102. Any remedies under securities legislation that a purchaser of Securities distributed under an “at-the-market distribution” by the Company may have against the Company or its agents for rescission or, in some jurisdictions, revisions of the price, or damages if the prospectus, prospectus supplement, and any amendment relating to securities purchased by a purchaser contain a misrepresentation will remain unaffected by the non-delivery of the prospectus referred to above. A purchaser's rights and remedies under applicable securities legislation against the dealer underwriting or acting as an agent for the issuer in an “at-the-market distribution” will not be affected by that dealer’s decision to effect the distribution directly or through a selling agent. A purchaser should refer to applicable securities legislation of the purchaser's province or territory for the particulars of these rights and should consult a legal adviser.

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CERTIFICATE OF PSYBIO THERAPEUTICS CORP.

Dated: September 1, 2021

This Prospectus, together with the documents incorporated by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this Prospectus as required by the securities legislation of each of the provinces and territories of Canada.

“Evan Levine” “Noah Davis” Evan Levine Noah Davis Chief Executive Officer Chief Financial Officer

On behalf of the Board of Directors of PsyBio Therapeutics Corp.

“Ross Carmel” “Nitin Kaushal” Ross Carmel Nitin Kaushal Director Director

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