Wellbeing Digital Sciences Inc. — Management Reports 2022

Mar 18, 2022

Wellbeing Digital Sciences Inc (formerly KetamineOne Capital Limited) Management Discussion and Analysis

For the period ended January 31, 2022 and 2021

Expressed in Canadian Dollars

March 17, 2022

This Management Discussion and Analysis ("MD&A") of KetamineOne Capital Limited. (the "Company" or "Ketamine One"), formerly Myconic Capital Corp. has been prepared by management as of March 17, 2022 and should be read together with the condensed interim consolidated financial statements and related notes for the six months ended January 31, 2022 and 2021 and audited annual consolidated financial statements as at July 31, 2021 which are prepared in accordance with International Financial Reporting Standards ("IFRS"). Additional information regarding the Company can be found on SEDAR at www.sedar.com. All of the following amounts are expressed in Canadian dollars unless otherwise stated.

Forward-Looking Statements

Information set forth in this MD&A may involve forward-looking statements within the meaning of Canadian securities laws. These statements relate to future events or future performance and reflect management's expectations regarding the Company's growth, results of operations, performance and business prospects and opportunities. Such forwardlooking statements reflect management's current beliefs and are based on information currently available to management. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs of future performance, statements we make regarding financing and corporate plans relating to the potential acquisitions are "forward-looking statements." Forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "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. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events, or developments to be materially different from any future results, events or developments expressed or implied by such forward looking statements. Such risks and uncertainties include, among others, the Company's requirements for additional financing, and the effect of capital market conditions and other factors on capital availability, the Company's limited operating history and lack of historical profits; competition; dependence on obtaining and maintaining regulatory approvals, including acquiring and renewing federal, provincial, state, municipal, local or other licenses; developments and changes in laws and regulations, including increased regulation of the Company's industries and the capital markets; economic and financial conditions; volatility in the capital markets; engaging in activities that could be later determined to be illegal under domestic or international laws; failure to obtain the necessary shareholder, government or regulatory approvals, including that of the NEO; failure to retain, secure and maintain key personnel and strategic partnerships including but not limited to executives, researchers, clinicians, customers and suppliers; These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements.

Although the Company has attempted to identify important risk factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other risk factors that cause actions, events or results to differ from those anticipated, estimated or intended. Additional information identifying risks and uncertainties that could affect financial results is contained under the heading "Risk Factors" and otherwise Company's filings with Canadian securities regulators, which are available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company has no obligation to update any forward-looking statement, even if new information becomes available.

Overview of Company

Wellbeing Digital Sciences Inc. (the "Company" or "Wellbeing") (formerly KetamineOne Capital Limited.), is a publicly listed company incorporated in the Province of British Columbia. On August 6, 2020, the Company changed its name from Auralite Investments Inc. to Myconic Capital Corp. and completed a consolidation of its issued and outstanding common shares on the basis of ten pre-consolidation shares for one post-share (the "Consolidation"). On January 22, 2021, the Company completed a 1:2 split of its outstanding shares (the "Split"). These financial statements have been retroactively restated for the effects of the Consolidation and the Split.

On June 1, 2021, the Company changed its name from Myconic Capital Corp. to KetamineOne Capital Limited and transitioned from an investment issuer to a single-purpose company, focused on consolidating medical clinics and becoming a North American leader in mental health treatments. On January 24, 2022, the Company then changed its name from KetamineOne Capital Limited to Wellbeing Digital Sciences Inc. Its head office is located at #810-789 West Pender Street, Vancouver, British Columbia, V6C 1H2.

The Company is a next generation wellness company focused on ketamine-assisted therapies and psychedelic medicines. Its vision is to become a North American leader in mental health. The Company operates a growing number of healthcare clinics, thereby helping patients access plant-derived medicines, psychedelics, and other forms of mental healthcare. The Company exists to make breakthrough treatments more accessible and to offer patients transformational experiences.

It's focus it to:

• Build a network of clinics with unrivalled patient experiences;
• Provide research expertise and operations to help drive the industry forward; and
• Develop wearable technologies to track specific and vital information for psychedelic therapies.

The Company is developing next generation experiences, centered around the newest breakthroughs in mental health, which include wearables, digital therapeutics, post treatment care and telemedicine.

The shares of the Company are trading on NEO Exchange under the symbol "MEDI", the OTC Markets under the symbol "KONEF" and the Frankfurt Exchange under the symbol "MY0".

During the six-month period ended January 31, 2022, the Company completed a plan of arrangement ("Arrangement") whereby it spun out its investments to Milgauss Investments Ltd ("Milgauss"). Subsequent to the spin out, the investment was distributed to the shareholders of the Company in the amount of $415,936.

Significant Transactions and Corporate Highlights

On June 7, 2021, the Company entered into an arrangement agreement ("Arrangement") with Milgauss Investments Ltd. ("Milguass") where as the Company proceeds with a corporate restructuring by way of a statutory arrangement under the BCBCA, pursuant to where by the Company acquires 1,007,729 Milguass Shares in exchange for the disposition of EVVO Labs Pte. Ltd. note receivable and investments in Akiva Systems Inc. and Gold Lion Resources Inc. and shall distribute the Consideration shares to the shareholders of the Company.

The transaction was approved by shareholders on August 23, 2021 and the Supreme Court of British Columbia on August 27, 2021 and distribution date is set October 1, 2021.

Significant Transactions and Corporate Highlights (continued)

The Arrangement was recorded as a capital transaction through equity. The carrying values of the net assets and liabilities transferred and acquired pursuant to the Arrangement consisted of the following:

Transferred Assets:
Note receivable –EVVO Labs Pte. Ltd.	$149,889
Investments on AkivaSystems Inc.	100,000
Investments on Gold Lion Resources Inc.	166,046
Distribution to shareholders	$415,936

On October 19, 2021, the Company announced that it will be conducting single arm, observational, biometric research studies in association with Biostrap USA, LLC ("Biostrap"). Biostrap offers clinically validated wearable devices and a remote monitoring platform that utilizes science-driven artificial intelligence in combination with state-of-the-art health analytics and personalized actionable insights.

On November 3, 2021, Loreto Grimaldi resigned from the Company's Board of Directors.

On November 4, 2021, the Company announced that it has entered into a telehealth and virtual health partnership to increase accessibility and service offerings to its patients (the "Telehealth Strategy"). In order to better address the needs of patients as well as incorporate the Telehealth Strategy across its portfolio of mental health clinics, contract research capabilities and its focus on digital therapeutics, the Company has launched a patient-facing website at www.ketamine.one/patients/home (the "New Website"). The New Website offers visitors the ability to find a clinic location, obtain a referral form, and learn more about ketamine, the Company's process, and treatments for various conditions, among other information.

The Company also announced the Company has partnered with iHealthOX to provide patients with a customized digital tool specifically for mental health. Initially focused on Ketamine One's Canadian clinic network, patients will have access to live coaching sessions, options for one-on-one therapy, evidence-based educational material, and 24/7 emergency support. The iHealthOX platform will be available to patients in both desktop and mobile versions, thereby extending the Company's services beyond its clinic locations. Through iHealthOX's online services, patients now have an option to be virtually assessed by a physician and a clinical health provider to determine their suitability to undergo ketamine therapy and ketamine-enhanced psychotherapy. The patient care plan also includes access to proven cognitive behavioral therapy techniques and coursework, a personal care coach who will create an individual care plan that will teach patients the skills they need to build resilience and healthy routines.

On November 16, 2021, the Company announced that its wholly owned subsidiary, IRP recently opened its Comox Valley and Ottawa clinics (the "Two Clinics"). The Two Clinics are veteran focused facilities and multidisciplinary in nature. To date, IRP has successfully performed over 10,000 unique treatments for past or present personnel of the Canadian Armed Forces and the Royal Canadian Mounted Police, as well as first responders including firefighters, law enforcement officers, paramedics and emergency medical technicians.

Additionally, the previously announced open label study of patients with post-traumatic stress disorder (the "PTSD Study") who are undergoing IRP's proprietary, 12-week physical therapy program, in affiliation with KGK, has recently received ethics approval. The next stage in preparation for the PTSD Study is to initiate a participant recruitment campaign and KGK expects to begin data collection early in 2022. A secondary benefit of the PTSD Study is that it will provide an opportunity for veterans who do not qualify for funding through Veterans Affairs Canada to participate in IRP's beneficial program.

On November 30, 2021, the Company entered into a due on demand promissory note with an arms-length lender for the principal sum of $1,500,000 with interest at the rate of ten percent (10%) per annum calculated monthly on the principal amount from time to time. Upon the completion of an initial public offering in the United States the amount due back will be $1,650,000. Interest shall accrue from the date hereof and be payable annually.

Significant Transactions and Corporate Highlights (continued)

The Company has appointed Mr. Joe Ramelli as Chief Financial Officer effective Dec. 14, 2021. Mr. Ramelli holds a bachelor of arts (honours) in business economics from the University of California, Santa Barbara, and has also attended the director education and certification program at the UCLA's Anderson School of Management. Mr. Ramelli has nearly 30 years of experience in the public markets and biotechnology, biopharmaceutical and financial services industries. He is a seasoned investor and consultant who specializes in business strategic planning and development, capital raising, talent acquisition, and corporate governance. Mr. Ramelli served as interim CFO at ValenzaBio, a privately held biopharmaceutical company, from its inception, where he established and grew all the finance functions of the company. During Mr. Ramelli's tenure at ValenzaBio, the team closed a $15-million (U.S.) seed financing round and a $70-million (U.S.) Series A subsequent round that was led by Fidelity Management & Research, LLC. Peter Nguyen resigned as CFO and Director.

On January 5, 2022, the Company announced that Corey Hilmas, MD, PhD has been appointed to the Company's Medical Advisory Board ("MAB") and will be assuming the role of Interim Chair of the MAB. Additionally, Brigadier General (Ret.) Loree K. Sutton, MD, has also been appointed to the MAB.

Additionally, Ketamine One has granted certain advisors an aggregate amount of 100,000 stock options to purchase up to 100,000 common shares of the Company, at a price of $0.30 per common share for a period of five years from the date of grant, pursuant to its stock option plan that was approved by shareholders on Feb. 21, 2021. Fifty per cent of the options vest six months from the date of grant, with the remaining fifty per cent of the options vesting 12 months after the date of the grant.

On January 10, 2022, announced that its wholly-owned contract research organization, KGK Science Inc. ("KGK" or the "CRO"), has become the first founding sponsor of the Psychedelic Science 2023 event ("Psychedelic Science 2023"). Taking place June 19-25, 2023 in Denver, Colorado with an estimated 10,000 attendees, Psychedelic Science 2023 will be the world's largest gathering of the psychedelic ecosystem. The event will be hosted by Multidisciplinary Association for Psychedelic Studies ("MAPS") and is being organized by Momentum Events.

Additionally, Ketamine One has granted 200,000 stock options (the "Options") to a director of the Company, 1,901,402 restricted share units (the "RSUs") to arm's length advisors, and 150,000 common share purchase warrants (the "Performance Warrants") to consultants to the Company. Each Option is exercisable to purchase one common share of the Company at a price of $0.27 per common share for a period of five years from the date of grant, in accordance with the Company's stock option plan.

The RSUs were issued pursuant to the Company's restricted share unit plan approved by shareholders on Feb. 21, 2021. Fifty per cent of the RSUs vest six months from the date of grant, with the remaining fifty per cent of the RSUs vesting 12 months after the date of the grant. Each Performance Warrant was issued pursuant to the achievement of certain milestones set out in their respective engagement agreements, with 100,000 Performance Warrants being exercisable to purchase one common share of the Company at $0.50 per common share, and 50,000 Performance Warrants being exercisable to purchase one common share of the Company at $0.27 per common share. All Performance Warrants vest immediately upon issuance and have a two-year term.

On January 12, 2022, the Company's common shares have been successfully up-listed (the "UpListing") from the OTC Pink Sheet Open Market to the OTCQB Venture Market (the "OTCQB") by the OTC Markets Group Inc.

On January 17, 2022, the Company entered into a one-year agreement with Victoria Wellness Mental Health Residential and Addition Treatment Centre ("VW" or the "Centre") for Ketamine One to be the Centre's exclusive ketamine treatment provider

On January 24, 2022, the Company announced that effective January 24, 2022 the Company will change its name to Wellbeing Digital Sciences Inc. ("Wellbeing") from KetamineOne Capital Limited

MANAGEMENT DISCUSSION & ANALYSIS For the Period Ended January 31, 2022 and 2021

Revenue and Cost of Sales Analysis

For the period ended	For the period ended
	January 31, 2021
$	$
3,649,909	-
(3,985,328)	-
(335,419)	-
	January 31, 2022

• The Company generates revenue from providing research services for customers who are conducting human clinical trials.
• The Company's subsidiary, KGK, was able to land several bids for contract research work during the quarter.
• Cost of goods sold consists primarily of variable costs and product costs for the clinic operations.

Results of Operations for the six-months period ended January 31, 2022

The Company had total sales of $3,649,909 during the period ended January 31, 2022 ("2022") compared to $Nil in the comparative period ended January 31, 2021 ("2021"). During 2022, the Company achieved net loss of $15,729,080 (2021 –$1,602,981). The net loss in 2022 is primarily attributed to the various operating expenses as explained below;

• General and administrative fee for 2022 was $687,118 (2021 $30,512). Increase relates to the result of increased general administrative operations on overall entity as a whole due to increased activities. During the latter half of fiscal 2022, the Company acquired various operating entities, which increased the overall operations of the Company. In the comparative, these acquisitions had not been completed.
• Consulting fee for 2022 was $1,088,872 (2021 $228,308). Increase relates to the result of management's increased efforts to identify strategic approaches to invest in the current market environment through the use of consultants.
• Amortization on intangible assets for 2022 was $356,189 (2021 $Nil). Increase relates to the result of accounting policy changes during the current year on amortization on intangible assets.
• Marketing fee for 2022 was $1,282,430 (2021 $1,072). Increase relates to the result of management's increased efforts to bring awareness to current and prospective investors in the market place.
• Share-based compensation for 2022 was $10,186,007 (2021 $Nil). During the period, the Company issued 660,000 stock options and 16,801,402 restricted stock options. In the comparative period, no stock options were issued.
• Professional fees for 2022 was $1,151,133 (2021 $55,384). Increase relates to increase in legal costs incurred for the Company's name change, share restructuring activities and engagement with third party professionals.

Results of Operations for the three-months period ended January 31, 2022 ("Q2-2022")

The Company had total sales of $1,660,158 during the period ended January 31, 2022 ("Q2-2022") compared to $Nil in the comparative period ended January 31, 2021 ("Q2-2021"). During Q2-2022, the Company achieved net loss of $6,503,311 (Q2-2021–$1,602,981). The net loss in 2022 is primarily attributed to the various operating expenses as explained below;

Results of Operations for the three-months period ended January 31, 2022 ("Q2-2022") (continued)

• General and administrative fee for Q2-2022 was $356,576 (Q2-2021 $17,327). Increase relates to the result of increased general administrative operations on overall entity as a whole due to increased activities. During the latter half of fiscal 2022, the Company acquired various operating entities, which increased the overall operations of the Company. In the comparative, these acquisitions had not been completed.
• Consulting fee for Q2-2022 was $509,089 (Q2-2021- $126,982). Increase relates to the result of management's increased efforts to identify strategic approaches to invest in the current market environment through the use of consultants.
• Marketing fee for Q2-2022 was $549,010 (Q2-2021- $1,072). Increase relates to the result of management's increased efforts to bring awareness to current and prospective investors in the market place.
• Share-based compensation for Q2-2022 was $4,029,765 (Q2-2021- $Nil). During the period, the Company issued 660,000 stock options and 16,801,402 restricted stock options. In the comparative period, no stock options were issued.
• Professional fees for Q2-2022 was $645,473 (Q2-2021- $30,818). Increase relates to increase in legal costs incurred for the Company's name change, share restructuring activities and engagement with third party professionals.

Cash flows for the period ended January 31, 2022

The Company had $604,893 cash and equivalents compared to $3,319,875 at July 31, 2021. The decrease is due to the following:

• The Company incurred cash outflows of $2,953,365 (2020 $355,467) from operating activities. See Results of Operations above for the discussion of operating activities.
• The Company incurred cash inflow of $299,841 (2020 $124,728) from investing activities. The inflow mainly consists of the following, inflow of $1,550,000 on loans, outflow of $1,000,000 on deferred consideration, outflow of $127,346 on note receivable, outflow of $50,000 on investment and outflow of $72,813 on the purchase of various equipment purchases.
• The Company received cash outflow of $67,212 (2020 inflows of $4,521,899) from financing activities. The inflow consists $210,000 from the exercise of warrants, $66,750 from the exercise of options and $343,962 payments on lease liability.

Summary of Quarterly Results

The Company's previous eight quarters have been presented in the table below.

	Q2	Q1	Q4	Q3
	2022	2022	2021	2021
Total assets	18,295,385	19,079,056	21,921,195	6,750,029
Netincome (loss)fortheperiod	$(6,503,311)	$(9,225,769)	$(29,223,951)	$(1,087,219)
Gain (loss) per share	($0.05)	($0.08)	($0.23)	$(0.01)
	Q2	Q1	Q4	Q3
	2021	2021	2020	2020
Total assets	7,883,949	4,279,882	4,919,093	4,160,544
Netincome (loss)fortheperiod	$(997,171)	$(605,810)	$752,954	$579,142
Gain (loss) per share	$(0.01)	$(0.01)	$0.02	$0.01

Summary of Quarterly Results (Continued)

The amount and timing of expenses and availability of capital resources vary substantially from quarter to quarter, depending on the level of the Company's activities and the availability of funding. During fiscal 2019, the Company saw higher losses due to an impairment charge of $1,253,000 to one of its investments as well as a loss on debt security charge of $4,740,476. During the three-month periods ended July 31, 2020, and April 30, 2020, the Company earned net income from operations due to the sale of shares of Champignon. During Q3-Q4 2020, the Company's total assets increased as the Company purchased more investments. During Q4 2021, the loss for the period mainly relates to the Company incurring various fees in relation to the acquisition of Mindscape, KGK and IPR along with impairment loss on intangible assets and goodwill. See Results of Operations above for the discussion of operating activities for more details. During Q1-Q2 2022, the loss for the period mainly relates to the Company incurring various fees in relation to the operations of the Company. See Results of Operations above for the discussion of operating activities for more details.

Liquidity and Capital Resources

As at January 31, 2022, the Company reported working capital deficit of $256,627 (July 31, 2021 – ($3,412,422)) and cash of $604,893 (July 31, 2021 - $3,319,875). Current liabilities as at January 31, 2022 consisted of accounts payables and accrued liabilities of $1,752,143 (July 31, 2021 - $1,292,715) and short-term lease liabilities of $367,935 (July 31, 2021 - $236,716).

The Company may continue to have capital requirements in excess of its currently available resources. In the event the Company's plans change, its assumptions change or prove inaccurate, or its capital resources in addition to projected cash flow, if any, prove to be insufficient to fund operations, the Company may be required to seek additional financing. There can be no assurance that the Company will have sufficient financing to meet its future capital requirements or that additional financing will be available on terms acceptable to the Company in the future.

Investments

As at January 31, 2022, $Nil investments were outstanding as the Company spun-out its investments held in Akiva, Gold Lion and EVVO pursuant to the arrangement agreement with Milguass Investment Ltd.

On April 13, 2020, the Company purchased an aggregate of 1,000,000 common shares of Akiva Systems Inc. ("Akiva") and 500,000 common share purchase warrants exercisable for an additional 500,000 Akiva Shares at a price of $0.40 for a period of 24 months from issuance for $100,000. At July 31, 2021, the fair value of the units was $100,000, which was determined by valuing the Akiva units at the most recent financing price. As part of the Arrangement, the Company spun out the Akiva investment to Milgauss.

On May 22, 2020, the Company acquired an aggregate of 2,000,000 common shares of Gold Lion Resources Inc. ("Gold Lion") and 2,000,000 common share purchase warrants exercisable for an additional 2,000,000 Gold Lion Shares at a price of $0.75 for a period of 24 months from issuance for $1,000,000. The $1,000,000 was allocated to shares and warrants based on their relative fair value. As at April 30, 2021, the fair value of the shares was $227,000 which was based on the share price at the end of trading on April 30, 2021. As at July 31, 2021, the fair value of the common share purchase warrants was estimated to be $14,755, using the Black-Scholes Option Pricing Model with the following assumptions: term of 1.06 years, expected volatility of 154%; risk -free rate of 0.29%; and expected dividends of zero. As part of the Arrangement, the Company spun out the Akiva investment to Milgauss.

Debt instruments

On February 26, 2018, the Company entered into an agreement to purchase convertible debentures with an aggregate principal amount of 2,500,000,000 Korean Wan (CAD $2,880,000) issued by Fourth Link Inc. ("Fourth Link"), a company incorporated under the laws of Korea and quoted on the KOSDAQ board of the Korea Stock Exchange. As consideration, the Company issued 16,800,000 common shares on September 7, 2018 (Note 9). The convertible debentures are unsecured, mature on February 3, 2020, bear interest at 4% per annum payable every 3 months, and may be converted into common stock of Fourth Link at any time from March 3, 2018 to maturity at a conversion price of 1,532 Korean Wan per common share. The transaction was approved by the TSX-V on September 5, 2018. The fair value of the investment on initial recognition was $4,740,476, which was based on the quoted market price of Fourth Link's shares on the closing date.

Debt instruments (continued)

As of April 30, 2021, the Company has been pursuing legal action against Fourth Link for the redemption of the debentures since Fourth Link was delisted from the KOSDAQ and the Company is unable to convert its shares. Court proceedings have been delayed due to COVID-19 and the court date is currently uncertain. Due to the uncertainty of the Company's ability to recover any value from the debentures, as at July 31, 2019, the investment was written off, resulting in a loss of $4,740,476. As at January 31, 2022 and July 31, 2021, the Company continues to pursue legal action against Fourth Link.

On November 16, 2021, the Company's subsidiary, Valley One Investments Inc, entered into a loan agreement with Seattle Ketamine Infusions, PLLC to lend an original principal of $250,000 with an annual interest of 7 percent (7%). As at January 31, 2021, the Company advanced a total of $100,000 to Seattle Ketamine Infusions, PLLC.

Off-Balance Sheet Arrangements

The Company does not utilize off-balance sheet arrangements.

Transactions with Related Parties

Najla Guthrie, CEO Adam Deffett, Former CEO Joe Ramelli, CFO Steven Inglefield, COO and Director Peter Nguyen, Former CFO and Director. James Henning, Director and member of the Audit Committee; Natasha Raey, Director and member of the Audit Committee; Brendan Purdy, Director member of the Audit Committee;

During the period ended January 31, 2022 and 2021, the Company paid the following consulting and management fees:

	2022	2021
Consulting fees paid to the former CEO of the Company	$ 108,000	$10,500
Consulting fees paid to the former CFO and former director of the Company	35,000	6,000
Consulting fees paid to a Company controlled by a director of the Company	3,000	1,500
	$ 146,000	$18,000

At January 31, 2022, $22,600 (2021 - $500) is owing to related parties for unpaid fees which are included in accounts payable and accrued liabilities. Amounts due to related parties are unsecured, non-interest bearing and due on demand.

Outlook

Ketamine One is dedicated to becoming a leader in clinical offerings of ketamine-enhanced treatments across North America.

We have acquired 15 clinics across North America, with letters of intent signed for an additional clinic. We are building the critical infrastructure needed to provide breakthrough and life-changing mental wellness treatments through existing clinics, experienced professionals and advanced technology.

Ketamine One will be utilizing first-of-its-kind wearable technologies to track key vitals before, during, and after psychedelic-assisted therapies. Our technology aims to empower patients in their wellness journey and provide clinicians with data to improve outcomes.

Building objective data around the patient experience by measuring physical signals and responses will allow us to refine and adjust our processes, while providing great opportunities to advance psychedelic therapy research.

KGK Science, a wholly owned Ketamine One subsidiary, has helped hundreds of companies with custom designed clinical trials and claim substantiation strategies over the past 23 years.

Outlook (continued)

Equipped with state-of-the-art technologies, novel research techniques, and a seasoned team of industry experts, KGK Science is a leader in premium clinical research. The company has extensive experience in pharmaceuticals, cannabis, natural health products, and more recently psychedelics.

Financial Instruments and Risks

The fair values of cash, investments and accounts payable approximate their carrying values.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3 – Inputs that are not based on observable market data.

(a) The following is an analysis of the Company's financial assets measured at fair value as at January 31, 2022:

	As at January 31, 2022
		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	604,893	$	-	$	-	$	604,893
Restricted cash		112,228		-		-		112,228
Investment		50,000						50,000
	$	767,121	$	-	$	-	$	767,121

(b) Interest rate

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk on its restricted cash as these instruments have maturities of one year or less and are therefore exposed to interest rate fluctuations on renewal. A 1% change in the market interest rates would have an impact on the Company's net income of $60.

(c) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company's objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet its liquidity requirements at any point in time. The Company achieves this by maintaining sufficient cash on hand to meet its financial obligations. Liquidity risk is assessed as high.

(d) Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company's exposure to credit risk is on its cash held in bank accounts and on its investments. This risk is managed by using major banks that are high credit quality financial institutions as determined by rating agencies. Credit risk on investments is assessed as high.

(e) Global economic conditions

General global economic conditions, including, without limitation, general levels of economic activity, fluctuations in the market prices of securities, participation by other investors in the financial markets, economic uncertainty, national and international political circumstances, natural disasters, public health crises (such as the recent global outbreak of a novel coronavirus, COVID-19) and other events outside of our control, may affect the activities of the Company and its investments.

Subsequent events

On February 2, 2022, the Company's wholly owned contract research organization is currently working on numerous psychedelic drug projects, clinical trials, path-to market consultations and new substance notifications, as the continuation of a pivotal 2021 for KGK science inc.

On February 15, 2022, the Company announced the successful facilitation of its first intravenous ketamine treatment to a patient at the Victoria Wellness Mental Health Residential and Addition Treatment Centre in Ontario through its collaboration with iHealthOX. VW is one of the first in-patient facilities to offer ketamine-assisted therapy in Canada. Wellbeing management expects the collaboration between VW, iHealthOX and itself to experience an increase in the number of patients treated via IV ketamine infusions in the near future.

On March 3, 2022, the Company announced that its wholly owned subsidiary, IRP Health Ltd. has recently had its innovative Reactivation therapy program formally approved by Veterans Affairs Canada as an interdisciplinary clinic outpatient program at three locations. IRP currently has four clinic locations across Canada and is among the first operators to meet VAC's new criteria that is aimed at providing high quality programs for veterans. The Company expects IRP's location in Ottawa, Ontario to also be approved to offer the Therapy Program by VAC imminently.

On March 7, 2022, the company announced that Najla Guthrie, the current Chief Research Officer and President of KGK Science Inc., has been appointed as Chief Executive Officer of Wellbeing effective March 31, 2022. Adam Deffett who was appointed Interim CEO in July of 2021, will transition out of the role but will continuing in his former capacity as Vice President of Capital Markets and Communications of the Company.

Ms. Guthrie has led KGK, a London, Ontario-based business, to become a leading North American contract research organization that primarily provides high-quality clinical research trials with a focus on the nutraceutical, cannabis, and emerging psychedelic industries. Najla has published over 50 articles in peer-reviewed journals and has given numerous presentations at both the national and international levels. The Company's management is grateful to have Ms. Guthrie join the leadership team and is excited to see how her contribution will create opportunities for the future.

Other Requirements

Summary of Outstanding Securities

Authorized: Unlimited number of common shares without par value.

Issued and outstanding Shares: 120,351,885 Stock options: 6,210,000 Restricted Share Units: 16,801,402 Warrants: 44,499,994

Additional Disclosure for Venture Issuers Without Significant Revenue

Additional information relating to our Company, including periodic quarterly and audited financial reports, is available on SEDAR at www.sedar.com.

Risk Factors

Certain risks and uncertainties that could cause the Company's actual results to materially differ from our current expectations include, but are not limited to:

Going Concern

As at January 31, 2022, the Company has an accumulated deficit of $53,750,845 (July 31, 2021 - $37,605,829). The Company has no source of operating cash flow and there is no assurance that sufficient funding will be available in the future. Management has the option to raise funds through a combination of equity and/or debt financing, along with a sale of investments. The success of these plans will depend upon the ability of the Company to generate cash flows from its portfolio investments.

These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary, should the Company be unable to continue as a going concern.

COVID-19 Outbreak Risks

The Company's business, operations and financial condition could be materially adversely affected by public health crises, including epidemics, pandemics and or other health crises, such as the outbreak of COVID-19. The current COVID-19 global health pandemic is significantly impacting the global economy, including commodity and financial markets. The full extent and impact of the COVID-19 pandemic is unknown and, to date, has included volatility in financial markets, volatility in commodity prices (including precious metals), significant restrictions on travel, temporary business closures, quarantines, and a general reduction in economic and consumer activity, globally, all of which raise concern about a prolonged global recession. In addition, the COVID-19 outbreak may result in operating, supply chain and project development delays which may have material adverse effects on the operations of third parties in which the Company has an interest. Such third party operations may be suspended for precautionary purposes, or due to the imposition of emergency measures or other government action to combat the spread of COVID-19. If the operation or development of one or more third party businesses in which the Company holds an interest is suspended, it may have a material adverse impact on the Company's results of operations and financial condition, or on the trading price of the Company's securities.

Additional pandemic-related risks to Company's business include without limitation, the risk of breach of material contracts, employee health, workforce productivity, limitations on travel, the availability of industry experts and personnel, unknown adverse global public health developments, and other factors beyond the Company's control, any of which may have a material and adverse effect on the Company's business, financial condition, results of operations, and securities.

As at the date of this Listing Statement, the duration of any business disruptions and related financial impact of the COVID-19 outbreak cannot be reasonably estimated. It is unknown whether and how the Issuer may be affected if the COVID-19 outbreak persists for an extended period of time.

The Market price of the Common Shares may experience significant volatility

The market price for Common Shares may be subject to general volatility. Factors such as variations in the Company's financial results, announcements by the Company, developments affecting the business and customers, general interest rate levels, the market price of the Common Shares and general market volatility could cause the market price of the Common Shares to fluctuate significantly.

In addition, future sales or the availability for sale of substantial amounts of Common Shares in the public market could adversely affect the prevailing market price of the Common Shares and could impair the Company's ability to raise capital through future sales of its securities.

Conflicts of interest may arise between the Company and its directors and management

The directors and officers of the Company will not be devoting all of their time to the affairs of the Company. The directors and officers of the Company are directors and officers of other companies, some of which will be in similar businesses as those of the Company. The directors and officers of the Company are required by law to act in the best interests of the Company. They have the same obligations to the other companies in respect of which they act as directors and officers. Discharge by the directors and officers of their obligations to the Company may result in a breach of their obligations to the other companies, and in certain circumstances this could expose the Company to liability to those companies. Similarly, discharge by the directors and officers of their obligations to the other companies could result in a breach of their obligations to act in the best interests of the Company. Such conflicting legal obligations may expose the Company to liability to others and impair its ability to achieve its business objectives.

The Company has a limited operating history and a history of net losses, and may not achieve or maintain profitability in the future

The Company intends to continue to expend significant funds to develop its business. As the Company grows, the Company expects the aggregate amount of these expenses will also continue to grow. The Company has no source of operating cash flow and there is no assurance that sufficient funding will be available in the future. Management has the option to raise funds through a combination of equity and/or debt financing, along with a sale of investments. The success of these plans will depend upon the ability of the Company to generate cash flows from its portfolio investments.

The Company's efforts to grow the business may be more costly than expected and the Company may not be able to increase its revenue enough to offset higher operating expenses. The Company may incur significant losses in the future for a number of reasons, including as a result of unforeseen expenses, difficulties, complications and delays, the other risks described in this document and in the Company's public disclosure record and other unknown events. The amount of future net losses will depend, in part, on the growth of the Company's future expenses and its ability to generate revenue. If the Company continues to incur losses in the future, the net losses and negative cash flows incurred to date, together with any such future losses, will have a material adverse effect on the Company's stockholders' equity and working capital. Even if the Company achieves profitability in the future, it may not be able to sustain profitability in subsequent periods. If the Company is unable to achieve and sustain profitability, the market price of the Common Shares may significantly decrease and the Company's ability to raise capital, expand its business or continue operations may be impaired. A decline in the Company's value may also cause investors to lose all or part of their investment.

The Company may be unable to attract or retain key personnel with sufficient experience in the mental health industry, and the Company may be unable to attract, develop and retain additional employees required for the Company's development and future success.

The Company's success is largely dependent on the performance of its board and management team. Qualified individuals are in high demand, and the Company may incur significant costs to attract and retain them. The loss of the services of any key personnel, or an inability to attract other suitably qualified persons when needed, could prevent the Company from executing on its business plan and strategy, and the Company may be unable to find adequate replacements on a timely basis, or at all. The Company does not currently maintain key-person insurance on the lives of any of the Issuer's key personnel.

The Company may not be able to secure adequate or reliable sources of funding required to operate its business

The continued development of the Company's business will require additional financing and there is no assurance that the Company will obtain the financing necessary to be able to achieve its business objectives. The Company's ability to obtain additional financing will depend on investor demand, the Company's performance and reputation, market conditions and other factors. The Company's inability to raise such capital could result in the delay or indefinite postponement of the Company's current business or in its inability to continue to carry on its business. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favorable to the Company.

In addition, from time to time, the Company may enter into transactions to acquire assets. The Company's continued growth may be financed, wholly or partially, with debt, which may increase the Company's debt levels. Any debt financing secured in the future could involve restrictive covenants relating to capital raising activities and other financial and operational matters, which may make it more difficult for the Company to obtain additional capital and to pursue business opportunities, including potential acquisitions. Debt financings may also contain provisions that, if breached, may entitle lenders or their agents to accelerate repayment of loans or realize upon security over the Company's assets, and there is no assurance that the Company would be able to repay such loans in such an event or prevent the enforcement of security granted pursuant to any such debt financing.

Fraud by a Target Company

While the Company makes every effort to verify the accuracy of information provided to it when making a decision on whether to invest or acquire a company, a target company may misrepresent information relating its financial health, operations or compliance with the terms under which the Company makes such a decision. In cases of fraud, it is unlikely that the Company will be able to realize on the benefits it anticipated when acquiring or investing in such company, which could have a Material Adverse Effect.

Lack of Control or significant influence over Companies in which the Company Invests

In certain cases, the Company invests or may invest in securities of companies that the Company does not control or influence. These investments will be subject to the risk that the company in which the investment is made may make business, financial or management decisions with which the Company does not agree or that the majority stakeholders or management of the company may take risks or otherwise act in a manner that does not serve the Company's interests. If any of the foregoing were to occur, the values of investments by the Company could decrease and the Company's financial condition and cash flow could suffer as a result.

Due Diligence

The due diligence process that the Company undertakes in connection with acquisitions may not reveal all facts that may be relevant in connection therewith. Before making acquisitions, the Company conducts due diligence that it deems reasonable and appropriate based on the facts and circumstances applicable to each transaction. When conducting due diligence, the Company may be required to evaluate important and complex business, financial, tax, accounting, environmental and legal issues. Outside consultants, legal advisors, accountants and investment banks may be involved in the due diligence process to varying degrees depending on the type of investment. Nevertheless, when conducting due diligence and making an assessment regarding an acquisition, the Company relies on the resources available to it, including information provided by the target of the acquisition and, in some circumstances, third-party investigations. The due diligence investigations that the Company carries out with respect to acquisitions may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such acquisition opportunities. Moreover, such an investigation will not necessarily result in the acquisition being successful. Any of the foregoing could have a Material Adverse Effect.

Risk Management Efforts May Not Be Effective

The Company could incur substantial losses and its business operations could be disrupted if the Company is unable to effectively identify, manage, monitor and mitigate financial risks, such as credit risk, interest rate risk, liquidity risk, and other market-related risk, as well as operational risks related to the Company's business, assets and liabilities. To the extent that the Company's models used to assess the creditworthiness of potential acquisition targets do not adequately identify potential risks, this could result in higher risk than anticipated. The Company's risk management policies, procedures and techniques, may not be sufficient to identify all of the risks that the Company is exposed to, mitigate the risks that are identified or identify concentrations of risk or additional risks to which the Company may become subject in the future.

Reliance on Data from Third Parties

The Company's ability to review and select potential acquisition targets depends on, among other things, credit, identification and other relevant information that the Company receives from third parties, including credit bureaus. If this information becomes unavailable or becomes more expensive to access, it could increase the Company's costs as it seeks alternative sources of information. If this third party data is incorrect, the Company's ability to identify potential acquisition targets may suffer and the Company's business may be harmed. Other competitors to the Company may also have access to the same or additional data on potential acquisition targets and as a result, the Company may face competition in acquiring the interests it acquires in acquisition targets.

Tax and accounting requirements may change in ways that are unforeseen to the Company and the Company may face difficulty or be unable to implement or comply with any such changes

The Company is subject to numerous tax and accounting requirements, and changes in existing accounting or taxation rules or practices, or varying interpretations of current rules or practices, could have a significant adverse effect on the Company's financial results, or the manner in which the Company conducts its business. The Company currently has international operations and plans to expand such operations in the future. These operations, and any expansion thereto, will require the Company to comply with the tax laws and regulations of multiple jurisdictions, which may vary substantially. Complying with the tax laws of these jurisdictions can be time consuming and expensive and could potentially subject the Company to penalties and fees in the future if the Company were to fail to comply.

The Company may not be able to successfully identify and execute future transactions or to successfully manage the impacts of such transactions on the Company's operations.

Material acquisitions, dispositions and other strategic transactions involve a number of risks, including: (i) the potential disruption of the Company's ongoing business; (ii) the distraction of management away from the ongoing oversight of the Company's existing business activities; (iii) incurring additional indebtedness; (iv) the anticipated benefits and cost savings of those transactions not being realized fully, or at all, or taking longer to realize than anticipated; (v) an increase in the scope and complexity of the Company's operations; and (vi) the loss or reduction of control over certain of the Company's assets.

The existence of one or more material liabilities of a company that are unknown to the Company at the time of acquisition could result in the Company incurring the liabilities under the acquisition, or not realizing the expected benefits of such acquisition. A strategic transaction may result in a significant change in the nature of the Company's business, operations and strategy, and the Company may encounter unforeseen obstacles or costs in implementing a strategic transaction or integrating any acquired business into its operations.

The Company incurs increased costs as a result of operating as a public company and the Company's management will be required to devote substantial time to compliance.

The Company is a public company and incurs significant legal, accounting and other expenses. In addition, securities laws and regulations and stock exchanges rules and polices impose various requirements on public companies, including requirements to file annual, quarterly and event-driven reports with respect to the Company's business and financial condition and operations and to establish and maintain effective disclosure and financial controls and corporate governance practices. The Company's management and other personnel have limited experience operating a public company, which may result in operational inefficiencies or errors, or a failure to improve or maintain effective internal controls over financial reporting and disclosure controls and procedures necessary to ensure timely and accurate reporting of operational and financial results. The Company's existing management team will need to devote a substantial amount of time to these matters, and may need to hire additional personnel to assist the Company with complying with these requirements. Moreover, these rules and regulations will increase the Company's legal and financial compliance costs and will make some activities more time consuming and costly.

The Company incurs increased costs as a result of operating as a public company and the Company's management will be required to devote substantial time to compliance. (continued)

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some public company required activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. The Company intends to acquire assets and comply with evolving laws, regulations and standards, and this acquisition may result in increased general and administrative expenses and divert management's time and attention from revenue generating activities to compliance activities. If the Company's efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies, regulatory authorities may initiate legal proceedings against the Company and its business may be harmed.

Being a public company and complying with applicable rules and regulations will make it more expensive for the Company to obtain director and officer liability insurance, and the Company will incur substantially higher costs to obtain coverage. These factors could also make it more difficult for the Company to attract and retain qualified executive officers and board members.

Management may not be able to successfully implement adequate internal controls over financial reporting.

Proper internal control systems and disclosure are critical to the operation of a public company. However, the Company does not expect that its internal controls will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of such controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Due to the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected in a timely manner or at all. If the Company cannot provide reliable financial reports or prevent fraud, the Company's reputation and operating results could be materially adversely affected, which could cause investors to lose confidence in the Company and its reported financial information, which in turn could result in a reduction in the value of the Common Shares.

Tax Issues

Income tax consequences in relation to the Common Shares will vary according to the circumstances of each investor. Prospective investors should seek independent advice from their own tax and legal advisors.

Dividends

The Company has not paid any dividends on its outstanding Common Shares. Any payments of dividends on the Common Shares will be dependent upon the financial requirements of the Company to finance future growth, the financial condition of the Company and other factors which the Company's Board of Directors may consider appropriate in the circumstance. It is unlikely that the Company will pay dividends in the immediate or foreseeable future

Conflicts of Interest

Certain of the directors and officers of the Company are also directors and officers of other companies involved in the mental health industry and conflicts of interest may arise between their duties as officers and directors of the Company and as officers and directors of such other companies.

Political and Economic Instability

The Company may be affected by possible political or economic instability. The risks include, but are not limited to, terrorism, military repression, extreme fluctuations in currency exchange rates and high rates of inflation. Changes in medicine and agriculture development or shifts in political attitude in certain countries may adversely affect the Company's business. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, distribution, price controls, export controls, income taxes, expropriation of property, maintenance of assets, environmental legislation, land use, land claims of local people and water use. The effect of these factors cannot be accurately predicted.

Limited Operating History

The Company has limited operating history. The Company and its business prospects must be viewed against the background of the risks, expenses and problems frequently encountered by companies in the early stages of their development, particularly companies in new and rapidly evolving markets. There is no certainty that the Company will be able to operate profitably.

Need to Manage Growth

The Company could experience rapid growth in revenues, personnel, complexity of administration and in other areas. There can be no assurance that the Company will be able to manage the impact that growth could place on the Company's administrative infrastructure, systems and controls. If the Company is unable to manage future growth effectively, the Company's business, operations and operating results and financial condition may be materially adversely affected.

Minority Shareholder Risk

Insiders of the Company own approximately <1% of the Company's outstanding Common Shares. Accordingly, insiders of the Company will likely be able to exercise effective control over all matters requiring the approval of the Common Shareholders, including the election of directors and significant corporate transactions.

Permits and Licenses

The Company believes it currently has all permits and licences that are necessary to carry on its business. It may require additional licences or permits in the future and there can be no assurance that we will be able to obtain all such additional licences and permits. In addition, there can be no assurance that any existing licences and permits will be renewable if and when required or that such existing licences and permits will not be revoked.

Regulatory Risks

The business and activities of the Company will be heavily regulated in all jurisdictions where it will carry on business. The proposed activities of the Company will be subject to various laws, regulations and guidelines by governmental authorities, including, but not limited to, the FDA. Laws and regulations, applied generally, grant government agencies and self-regulatory bodies broad administrative discretion over the activities of the Company, including the power to limit or restrict business activities as well as impose additional disclosure requirements on the Company's products and services. The Company's business objectives are contingent upon, in part, compliance with regulatory requirements enacted by these governmental authorities and obtaining all regulatory approvals, where necessary, for the provision of its services. The Company cannot predict the impact of the compliance regime that is implemented for the United States psychedelics industry. Any delays in obtaining, or failure to obtain regulatory approvals would significantly delay the development of markets and products and could have a material adverse effect on the business, results of operations and financial condition of the Company. Although the operations of the Company are currently carried out in accordance with all applicable rules and regulations, no assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could limit or curtail the Company's ability to conduct business in the jurisdictions and industries in which it currently operates or intends to operate. Amendments to current laws and regulations governing the Company's current and/or intended operations, more stringent implementation thereof or other unanticipated events could have a material adverse impact on the business, financial condition and operating results of the Company.

Changes in Laws, Regulations and Guidelines

The Company's operations will be subject to various laws, regulations, guidelines and licensing requirements in the United States, Canada and potentially other jurisdictions. Although the Company is expected to comply with all such laws, any changes to such laws, regulations, guidelines and policies due to matters beyond the control of the Company could have a material adverse effect on the Company's business, results of operations and financial condition.

General Healthcare Regulations

Healthcare service providers in the United States are subject to various government regulations and licensing requirements and, as a result, the Company's businesses operate in an environment in which government regulations and funding play a key role. The level of government funding directly reflects government policy related to healthcare spending, and decisions can be made regarding such funding that are largely beyond the business' control. Any change in governmental regulation, delisting of services, and licensing requirements relating to healthcare services, or their interpretation and application, could adversely affect the business, financial condition and results of operations of the business. In addition, the Company could incur significant costs in the course of complying with any changes in the regulatory regime. Non‐compliance with any existing or proposed laws or regulations could result in audits, civil or regulatory proceedings, fines, penalties, injunctions, recalls or seizures, any of which could adversely affect the reputation, operations, or financial performance of the Company.

Reliance on Physicians and other Healthcare Professionals

The Company relies heavily on the availability of physicians and other healthcare professionals to provide services at its facilities. If physicians and other healthcare professionals were unable or unwilling to provide these services in the future, this would cause interruptions in the Company's business until these services are replaced. As such, vacancies and disabilities relating to the Company's current medical staff may cause interruptions in the Company's business and result in lower revenues. As the Company expands its operations, it may encounter difficulty in securing the necessary professional medical and skilled support staff to support its expanding operations. There is currently a shortage of certain medical physicians in the United States and this may affect the Company's ability to hire physicians and other healthcare practitioners in adequate numbers to support its growth plans, which may adversely affect the business, financial condition and results of operations.

Confidentiality of Personal and Health Information

The Company and its employees and consultants have access, in the course of their duties, to the personal information of clients of the Company and specifically their medical histories. The Company's operations located in the United States are subject to HIPAA and other privacy regulations. HIPAA contains standards relating to the transmission, privacy and security of health information by healthcare providers and healthcare plans. The Health Information Technology for Economic and Clinical Health Act ("HITECH Act"), passed as part of the American Recovery and Reinvestment Act of 2009, represented a significant expansion of the HIPAA privacy and security laws. HIPAA generally does not preempt state law. Therefore, because many states have privacy laws that provide more stringent privacy protections than those imposed by HIPAA, the Company must address privacy issues under those state laws as well. In addition to HIPAA and the HITECH Act, the Company is also subject to federal laws and regulations governing patient records involving substance abuse treatment, as well as other federal privacy laws and regulations. There can be no assurance that the Company's existing policies, procedures and systems will be sufficient to address the privacy concerns of existing and future clients whether or not such a breach of privacy were to have occurred as a result of the Company's employees or arm's length third parties. If a client's privacy is violated, or if the Company is found to have violated any law or regulation, it could be liable for damages or for criminal fines and/or penalties.

Business Exposure to New Clinical Modalities

The use of psychedelics in the treatment of medical conditions is relatively new. The Company currently uses ketamine, off-label, in specific mental health treatment protocols. In the future, as new psychedelics are approved for use, the Company also intends to incorporate them into its practices. However, no assurance can be given that such new psychedelics will become available for use, and no assurance can be given that the Company will be successful in the long term in building its business through new clinical modalities.

Risks Associated with the Regulated Psychedelics Industry

The Company's business activities rely on newly established and/or developing laws and regulations, relating to the regulated psychedelics industry. These laws and regulations are rapidly evolving and subject to change with minimal notice. The psychedelics industry may come under the scrutiny or further scrutiny of the FDA or the NEO. 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 the Company's industry may adversely affect the business and operations of the Company, including without limitation, the costs to remain compliant with applicable laws and the impairment of its ability to raise additional capital, which could reduce, delay or eliminate any return on investment in the Company. The Company proposes to (i) develop psychedelic-assisted psychotherapy protocols, and (ii) expand its network of mental health clinics. Psychedelic-assisted therapy is a new and emerging industry with substantial existing regulations and uncertainty as to future regulations. There is no assurance the Company will be able to derive meaningful revenue from its investment in psychedelic therapy development, or to pursue that business to the extent currently proposed. In addition, there would be no assurance that the psychedelic market and industry would continue to exist and grow as anticipated or function and evolve in a manner consistent with management's expectations and assumptions. Any event or circumstance that adversely affects the psychedelic industry and market could have a material adverse effect on the Company's business, financial conditions and results of operations.

Unfavourable Publicity or Consumer Perception Towards Psychedelics

There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention or other research findings or publicity will be favourable to the psychedelics industry. Future research reports, findings, regulatory proceedings, litigation, media attention or other publicity that are perceived as less favourable than, or that question, earlier research reports, findings or publicity could have a material adverse effect on the demand for the Company's psychedelic-assisted psychotherapy business.

Supply Risk

We require commercial scale and quality manufactured pharmaceutical drugs such as ketamine to be available for clinical use. If we do not have a commercial-grade drug supply when needed, we may need to delay patient treatments, and our business operations could suffer significant harm. If we are subject to quality, cost or delivery issues with the preclinical and clinical-grade materials supplied by contract manufacturers or if we do not have commercial drug supply available when needed for clinical trials, our regulatory and commercial progress may be delayed, and we may incur increased product development costs. This may have a material adverse effect on our business, financial condition and prospects, and may delay marketing of the product.