As filed with the Securities and Exchange Commission on September 28, 2023

Registration No. 333-264707

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 9

to

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

FIRST PERSON LTD.

(Exact name of registrant as specified in its charter)

1840, 444 – 5^th Ave., SW

Calgary, AB, T2P 2T8
(587) 577-9261

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Jan Campbell
Corporate Secretary
1840, 444 – 5^th Ave., SW

Calgary, AB, T2P 2T8
(403) 225-3003

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With copies to:

Approximate date of commencement of proposed sale to the public: As soon as practicable after the registration statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it solicit an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

FIRST PERSON LTD.

2,900,000 Common Shares being offered by the Company

2,330,364 Common Shares being offered by the Selling Shareholders

Primary Offering

This is an initial public offering of our common shares, no par value (our “Common Shares”). We are offering 2,900,000 Common Shares (the “Primary Offering”). Prior to the Primary Offering, there has been no public market for our Common Shares. We anticipate that the Primary Offering price will be between $4.00 and $5.00 per Common Share. We have applied to list our Common Shares on The Nasdaq Capital Market under the symbol “FP”. Completion of the Primary Offering is contingent on the approval of our listing application for trading of our Common Shares on The Nasdaq Capital Market. No assurance can be given that our application will be approved and that our Common Shares will ever be listed on The Nasdaq Capital Market. If our listing application is not approved by The Nasdaq Capital Market, we will not consummate the offering and will terminate the Primary Offering.

Resale Offering

The selling shareholders identified in this prospectus are offering an additional 2,330,364 Common Shares, which we refer to as the “selling shareholder shares.” We will not receive any proceeds from the sale of selling shareholder shares. However, upon any exercise, other than a net exercise, of warrants or stock options held by the selling shareholders, we will receive cash proceeds per share equal to the exercise price of such warrants or stock options. The selling shareholder shares will not be purchased by the underwriter or otherwise included in the underwritten offering of our Common Shares in the Primary Offering. The selling shareholders may sell or otherwise dispose of their shares from time to time in a number of different ways and at varying prices, but the sale of any selling shareholder shares will not occur until after the closing of the Primary Offering and will be contingent on the approval of our listing application for trading of our Common Shares on The Nasdaq Capital Market and the closing of the Primary Offering. See “Selling Shareholders — Plan of Distribution” on page 87 of this prospectus for additional information. We will pay all expenses (other than discounts, concessions, commissions, and similar selling expenses, if any) relating to the registration of the selling shareholder shares with the Securities and Exchange Commission (the “SEC”).

We are an “emerging growth company” as defined under U.S. securities laws and, as such, we have elected to comply with certain reduced reporting requirements for this prospectus and may elect to do so in future filings.

Investing in our Common Shares is highly speculative and involves a high degree of risk. See “Risk Factors” beginning on page 11 of this prospectus for a discussion of information that should be considered in connection with an investment in our Common Shares.

We have granted the underwriter an option for a period of forty-five days to purchase up to an additional 435,000 Common Shares (15 percent of the Common Shares sold in the Primary Offering) from us at the Primary Offering price, less the underwriting discounts and commissions.

Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

Delivery of the Common Shares will be made on or about      , 2023, subject to customary closing conditions.

Sole Book-Running Manager

EF HUTTON

division of Benchmark Investments, LLC

The date of this prospectus is      , 2023.

TABLE OF CONTENTS

Neither we nor the selling shareholders nor the underwriter have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. Neither we nor the selling shareholders take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the selling shareholders are offering to sell, and seeking offers to buy, Common Shares only under circumstances and in jurisdictions where it is lawful to do so. Neither we, the selling shareholders nor the underwriter are making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is current only as of its date. You should also read this prospectus together with the additional information described under “Where You Can Find Additional Information” on page 124 of this prospectus.

The distribution of this prospectus and the issuance of the Common Shares in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the issuance of the Common Shares and the distribution of this prospectus outside the United States. This prospectus does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, the Common Shares offered by this prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.

In this prospectus, currency amounts are stated in U.S. dollars (“$”), unless specified otherwise. All references to CAD$ are to Canadian dollars.

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity, and market share, is based on information from our own management estimates and research, as well as from industry and general publications and research, surveys, and studies conducted by third parties. Management estimates are derived from publicly available information, our knowledge of our industry, and assumptions based on such information and knowledge, which we believe to be reasonable. Assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors” beginning on page 11 of this prospectus. These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Cautionary Note Regarding Forward-Looking Statements” on page 41 of this prospectus.

This prospectus contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or ^TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

RISK FACTORS

Investing in our Common Shares involves a high degree of risk. You should carefully consider the following information about these risks, together with the other information appearing elsewhere in this prospectus, including our consolidated financial statements, the notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 48 of this prospectus, before deciding to invest in the Common Shares offered by this prospectus. The occurrence of any of the following risks could have a material and adverse effect on our business, reputation, financial condition, results of operations, and future growth prospects, as well as our ability to accomplish our strategic objectives. As a result, the trading price of our Common Shares could decline and you could lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations and the trading price of our Common Shares. Certain statements contained in this section constitute forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements” on page 41 of this prospectus.

We might have material contingent liability arising out of a possible violation of Section 5 of the Securities Act in connection with certain statements and disclosures made in an online article appearing on Bloomberg on July 21, 2022; a television interview broadcast by NewsNation on October 17, 2022; and fifteen podcasts released between July 13, 2021 and February 2, 2023, nine of which were temporarily linked to the Company website. The podcasts were conducted by “The Story of a Brand”; “That Gives Me Anxiety”; “JJ Flizanes” (published on Ms. Flizane’s podcasts: “Nutrition & Alternative Medicine”, “Fit 2 Love”, and “Spirit Purpose & Energy”); “Mycopreneur”; “Koncrete”; “Justin Caviar”; “Humble and Hungry”; “Elevate Your Brand”; “Bliss Project”; “Ashley On”; “Riderflex”; “Let’s Talk Plant Medicine”; “Spiritual Boss Babe”; “Vital Science”; and “Finding Genius”.

Information about the Company and statements made by Chris L. Claussen, one of our directors and our Chief Innovation Officer, Joseph Claussen, our Director of Business Development, Cory J. Rosenberg, our Chairman, Chief Executive Officer, and President, and Dom D’Agostino, our scientific advisor, during fifteen podcast interviews were uploaded to YouTube and links to nine of such Podcasts were temporarily posted to our new Company website. The Podcasts that were temporarily linked to the Company website were created between March 29, 2022 and February 2, 2023. In addition, information about the Company and statements made by the Claussens were published in an online article appearing on Bloomberg on July 21, 2022 and a television interview broadcast by NewsNation on October 17, 2022, neither of which were linked to our website. The statements made by the Claussens, Cory J. Rosenberg, and Dom D’Agostino in the Interviews were predominately focused on their personal experiences and how they were inspired to become involved in the Company’s business. The Company was not involved in any way in the preparation of the statements made by the Claussens, Cory J. Rosenberg, or Dom D’Agostino, and all links to the Podcasts have since been deleted from the Company website and all of the Podcasts have been removed from YouTube.

The Podcasts were conducted by “The Story of a Brand”; “That Gives Me Anxiety”; “JJ Flizanes” (published on Ms. Flizane’s podcasts: “Nutrition & Alternative Medicine”, “Fit 2 Love”, and “Spirit Purpose & Energy”); “Mycopreneur”; “Koncrete”; “Justin Caviar”; “Humble and Hungry”; “Elevate Your Brand”; “Bliss Project”; “Ashley On”; “Riderflex”; “Let’s Talk Plant Medicine”; “Spiritual Boss Babe”; “Vital Science”; and “Finding Genius”. None of the entities or persons who conducted or published the Interviews are affiliated with the Company or any other offering participant. No payment was made nor was any consideration given to the hosts or anyone else involved in the production of the Interviews by or on behalf of the Company or any other offering participant in connection with the Interviews.

You should not consider the statements in the Interviews, as set forth in Exhibit 99.1 to the registration statement of which this prospectus forms a part, in making your investment decision. You should make an investment decision only after carefully evaluating all of the information contained in this prospectus, including the Company’s responses to the statements in the Interviews, as set forth in Exhibit 99.1 to the registration statement of which this prospectus forms a part.

Certain claims regarding our products and business made by the Claussens, Cory J. Rosenberg, or Dom D’Agostino in the Interviews are inaccurate, unsubstantiated, and contradict the claims made in the registration statement of which this prospectus is a part. As a result of the foregoing, the Interviews could be determined not to be in compliance for a registered securities offering under Section 5 of the Securities Act. If the statements or disclosures in the Interviews are determined by a court to be a violation by us of Section 5 of the Securities Act, we could have a material contingent liability. Any liability would depend upon the number of Common Shares purchased in this offering. If a claim were brought by any investors in this offering and a court were to conclude that we violated Section 5 of the Securities Act, then those investors might have rescission rights and we (and the selling shareholders) could be required to repurchase the shares sold to them, at the original purchase price, plus statutory interest from the date of purchase, for claims brought during a period of one year from the date of their purchase of our Common Shares. We could also incur considerable expense in contesting any such claims. Further, if the Interviews are deemed to be a violation of Section 5 of the Securities Act, the SEC and/or relevant state regulators could impose monetary fines or other sanctions under relevant federal and state securities laws. Such payments, expenses, and fines, if required, could significantly reduce the amount of working capital we have available for our operations and business plan, delay or prevent us from completing our plan of operations, or force us to raise additional funding sooner than expected, which funding may not be available on favorable terms, if at all. Additionally, the trading price of our Common Shares might decline in value in the event we are deemed to have liability, are required to make payments, or face sanctions in connection with the potential claim described above.

We might have material contingent liability arising out of a possible violation of Section 5 of the Securities Act in connection with certain statements and disclosures made in an article published online on September 20, 2022.

Information about the Company and statements made by Chris L. Claussen, one of our directors and our Chief Innovation Officer, and Joseph Claussen, our Director of Business Development, were published in an online publication by reMind Media on September 20, 2022. The statements attributed to Chris L. Claussen and Joseph Claussen in the Article were made during an interview by reMind Media focused on how Chris L. Claussen’s and Joseph Claussen’s personal experiences inspired them to become involved in our business. The Company was not involved in any way in the interview or the preparation of the statements made by Chris L. Claussen or Joseph Claussen. The Article was prepared by reMind Media, which is not affiliated with the Company. No payment was made nor was any consideration given to reMind Media by or on behalf of the Company or any other offering participant in connection with the publication of the Article. Upon becoming aware of the Article and the inclusion of certain statements relating to the Company and the Offering, we requested the Article be deleted from reMind Media’s website. As of September 22, 2022, the Article was no longer available on reMind Media’s website or any of its other publications. On September 26, 2022, we filed an issuer free writing prospectus with the SEC pursuant to Rule 433(f) under the Securities Act. The Free Writing Prospectus includes the full text of the Article.

The Article contained the following inaccurate or unsubstantiated statements:

Any statements or disclosures in the Article that did not comply with, or that exceeded the scope permissible under, Rule 134 under the Securities Act, may not be entitled to the safe-harbor provided by Rule 134. As a result, the Article could be determined not to be in compliance for a registered securities offering under Section 5 of the Securities Act. If the statements or disclosures in the Article are determined by a court to be a violation by us of Section 5 of the Securities Act, we could have a material contingent liability. Any liability would depend upon the number of Common Shares purchased in this offering. If a claim were brought by any investors and a court were to conclude that we violated Section 5 of the Securities Act, then those investors might have rescission rights and we (and the selling shareholders) could be required to repurchase the shares sold to them, at the original purchase price, plus statutory interest from the date of purchase, for claims brought during a period of one year from the date of their purchase of our Common Shares. We could also incur considerable expense in contesting any such claims. Further, if the Article is deemed to be a violation of Section 5 of the Securities Act, the SEC and/or relevant state regulators could impose monetary fines or other sanctions under relevant federal and state securities laws. Such payments, expenses, and fines, if required, could significantly reduce the amount of working capital we have available for our operations and business plan, delay or prevent us from completing our plan of operations, or force us to raise additional funding sooner than expected, which funding may not be available on favorable terms, if at all. Additionally, the trading price of our Common Shares might decline in value in the event we are deemed to have liability, are required to make payments, or face sanctions in connection with the potential claim described above.

Risks Related to Our Limited Operating History, Financial Position and Capital Needs

We have a limited operating history and a history of net losses, and we may not achieve or maintain profitability in the future.

We have a very limited history of operations and are considered an early stage company. We were formed in January 2021. Although this prospectus includes audited financial statements for the period from January 21, 2021 (inception) through December 31, 2021, and for the year ended December 31, 2022, and unaudited financial statements for the six months ended June 30, 2023, we commenced our commercial operations in March 2022. As such, there is very limited financial information about us and such information has been supplemented with other relevant information disclosed in this prospectus so as to enable an investor to make an informed investment decision. We are subject to many risks common to such enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial, and other resources, and lack of revenues, as well as significant competition from existing and emerging competitors, many of which are established and have access to capital. In addition, as a new business, we may encounter unforeseen expenses, difficulties, complications, delays, and other known and unknown factors. We will need to transition from an early stage company to a company capable of supporting larger scale commercial activities. If we are not successful in such a transition, our business, results, and financial condition will be harmed.

Although we expect to become profitable, there is no guarantee that will happen, and we may never become profitable. We currently have a negative operating cash flow and may continue to have that for the foreseeable future. To the extent that we have negative operating cash flow in future periods, we will need to allocate a portion of our cash (including proceeds from this offering) to fund such negative cash flow. For the period from January 21, 2021 (inception) through June 30, 2023, our net loss was $10,456,225. Our net losses may worsen and our ability to generate increased revenues and potential to become profitable will depend largely on our ability to manufacture and market our products. There can be no assurance that any such events will occur or that we will ever become profitable. Even if we do achieve profitability, we cannot predict the level of such profitability. If we sustain losses over an extended period of time, we may be unable to continue our business.

We will need additional financing to continue to sustain operations at this time.

Our operating cash flow is insufficient to fund all of our operational needs and we will require additional financing to continue our operations. There can be no assurance that such financing will be available on favorable terms or at all. Failure to obtain additional financing could result in delay or indefinite postponement of the deployment of our products. Additional financing may dilute the ownership interest of our shareholders at the time of the financing, and may dilute the value of their investment in our Common Shares. After taking into account the proceeds of this offering, we anticipate that our current cash reserves will last in excess of twelve months under our present operating expectations.

We may face difficulties obtaining additional financing, and additional financing may result in further dilution.

We anticipate expending substantial funds to carry out the development, introduction, distribution, and manufacture of our products. We may require additional funds for these purposes through one or more public or private financing transactions. No assurance can be given that such additional funds will be available on acceptable terms or at all. Additionally, U.S. banks often refuse to provide banking services to businesses involved in the psilocybin industry because of the present state of the laws and regulations governing financial institutions in the United States, which discourage the provision of banking services to companies involved in the research or production of controlled substances. Consequently, in comparison to companies in other industries, we may face increased difficulties in obtaining financing from U.S. banks due to the nature of our business. If such funds are unavailable or are only available at a prohibitive cost, we may have to significantly curtail our product development program or seek funds through financing alternatives, including equity financing. Any additional equity financing may result in dilution to existing shareholders.

There is substantial doubt about our ability to continue as a going concern.

We have a history of net losses and are primarily dependent upon financing transactions to obtain additional funds for product development and operating expenses. The report of our independent registered public accounting firm on our consolidated financial statements for the year ended December 31, 2022, included an explanatory paragraph expressing management’s assessment and conclusion that there is substantial doubt about our ability to continue as a going concern, citing our significant working capital deficiency and our significant losses. Our ability to continue as a going concern will be determined by our ability to generate sufficient cash flow to sustain our operations and/or raise additional capital in the form of debt or equity financing. Delays in obtaining the capital, onerous terms for the capital, or a failure to raise additional capital could have a material negative impact on our business or plans of operations. We believe that the inclusion of a going concern explanatory paragraph in the report of our registered public accounting firm may make it more difficult for us to secure additional financing or enter into strategic relationships with distributors on terms acceptable to us, if at all, and likely will materially and adversely affect the terms of any financing that we might obtain. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We face general risks common to early stage companies, including ongoing requirements for additional capital.

Our Common Shares must be considered highly speculative due to the nature of our business, the early stage of our deployment, current financial position, and ongoing capital. An investment in our Common Shares should only be considered by those persons who can afford a total loss of investment, and is not suited to those investors who may need to dispose of their investment in a timely fashion. Investors should consult with their own professional advisors to assess the legal, financial, and other aspects of an investment in our Common Shares.

We may be exposed to financial risk related to the fluctuation of foreign exchange rates and the degrees of volatility of those rates.

We may be adversely affected by foreign currency fluctuations. Our functional currency is the Canadian dollar, but the functional currency of our operating company in the United States is the U.S. dollar. To date, we have been primarily funded through issuances of equity that have been denominated in Canadian dollars. However, a significant portion of our expenditures are paid in U.S. dollars, and we are, therefore, subject to foreign currency fluctuations that may, from time to time, impact our financial position and results of operations.

We will incur significant costs during the transition to a public company, and face ongoing costs of maintaining a public listing.

We expect this offering will have a significant transformative effect on us. We expect to incur significant additional legal, accounting, reporting, and other expenses as a result of being a public company. We will also incur new costs related to being a public company that we have not incurred previously, including, but not limited to, costs and expenses for managing directors’ and supervisory directors’ fees, increased directors and officers insurance, investor relations, and various other costs of a public company.

We also anticipate that we will incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, laws, regulations, and requirements relating to becoming a reporting issuer in Alberta, Canada, as well as rules implemented by the SEC and the Nasdaq Stock Market, LLC (“Nasdaq”). We expect these rules and regulations to increase our legal and financial compliance costs and make some management and corporate governance activities more time consuming and costly. These rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. This could have an adverse impact on our ability to retain, recruit, and bring on a qualified independent supervisory board. We expect that the additional costs we will incur as a public company, including costs associated with corporate governance requirements, will be considerable relative to our costs as a private company.

The transition to a public company may disrupt and have a negative effect on our regular operations.

The additional demands associated with being a public company may disrupt regular operations of our business by diverting the attention of some of our senior management team away from revenue producing activities to management and administrative oversight, adversely affecting our ability to attract and complete business opportunities and increasing the difficulty in both retaining professionals and managing and growing our businesses. Any of these effects could harm our business, financial condition, and results.

Our management team’s financial projections are based on assumptions and estimates that may be inaccurate.

Our actual financial position and results of operations may differ materially from management’s expectations. We may experience changes in our operating plans and certain delays with respect to our operating plans. As a result, our revenue, net income, and cash flow may differ materially from our projected revenue, net income, and cash flow. The process for estimating our revenue, net income, and cash flow requires the use of judgment in determining the appropriate assumptions and estimates. These estimates and assumptions may be revised as additional information becomes available and as additional analyses are performed. In addition, the assumptions used in planning may not prove to be accurate, and other factors may affect our financial condition or results of operations.

Risk Related to Our Products and Business

We face significant ongoing costs and obligations related to developing our business and products, and these costs may increase in the future, which may result in significant losses.

We expect to incur significant ongoing costs and obligations related to developing our business and products, which could have a material adverse impact on our results of operations, financial condition, and cash flows. In addition, future changes in regulations, more vigorous enforcement thereof, or other unanticipated events could require extensive changes to our operations, increased compliance costs, or give rise to material liabilities, which could have a material adverse effect on our business, results of operations and financial condition. Our efforts to grow our business may be more costly than we expect, and we may not be able to increase our revenue enough to offset our higher operating expenses. We may incur significant losses in the future for a number of reasons, including the other risks described in this prospectus, and unforeseen expenses, difficulties, complications and delays, and other unknown events. If we are unable to achieve and sustain profitability, the market price of our Common Shares may significantly decrease.

We have incurred substantial expenses related to the development and initial operations of our business and we may never become profitable, earn revenues, or pay dividends.

There is no assurance that we will be profitable or pay dividends. We have incurred, and anticipate that we will continue to incur, substantial expenses relating to the development and initial operations of our business. The payment and amount of any future dividends will depend upon, among other things, our results of operations, cash flow, financial condition, and operating and capital requirements. There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to the amount of any such dividends.

As our operating expenses increase, we may not be able to generate revenue growth or sustain any revenue growth that we achieve.

There can be no assurance that we can generate revenue growth, or that any revenue growth that is achieved can be sustained. Revenue growth that we may achieve may not be indicative of future operating results. In addition, we may further increase operating expenses in order to fund higher levels of research and development, increase sales and marketing efforts and increase administrative resources in anticipation of future growth. To the extent that increases in such expenses precede or are not subsequently followed by increased revenues, our business, operating results, and financial condition will be materially adversely affected.

The functional-mushroom and psilocybin industries are new in the United States, and the industries and markets may not continue to exist or develop as anticipated or we may ultimately be unable to succeed as anticipated in these industries and markets.

We operate our business in a new industry and market. There is no assurance we will be able to derive meaningful revenue from our investment in functional or psychedelic mushrooms, or that we will pursue that business to the extent currently proposed or at all. In addition to being subject to general business risks, we must continue to build brand awareness in this industry and market through significant investments in our strategy, production capacity, quality assurance, and compliance with regulations. In addition, there is no assurance that the industry and market will continue to exist and grow as currently estimated or function and evolve in the manner consistent with management’s expectations and assumptions. Any event or circumstance that adversely affects our industry and market could have a material adverse effect on our business, financial conditions, and results of operations.

Psilocybin is highly regulated at the federal and state level, and authorizations for the production of psilocybin are still in the early stages and we may not receive the required approvals.

Psilocybin is a Schedule I controlled substance under the CSA. Even in U.S. states or territories that have decriminalized psilocybin to some extent, unless specific authority is obtained from the DEA, the propagation, possession, and sale of psilocybin all remain violations of U.S. federal law punishable by imprisonment, substantial fines, and forfeiture. To obtain federal authority to grow or manufacture psilocybin for federally sanctioned research and other limited purposes, one must receive a permit from the DEA and meet certain requirements imposed by the DEA. The registration process to manufacture controlled substances is codified under 21 U.S.C. § 823. It requires that the U.S. Attorney General determine whether registrations are in the public interest; to do so, the U.S. Attorney General is directed to consider multiple factors, including “compliance with applicable State and local law.”

Research involving controlled substances in the State of Washington requires participating individuals to register with both the DEA and the WDOH. Applicants must obtain a controlled substance researcher registration from the WDOH prior to registering with the DEA. Chris L. Claussen, our Chief Innovation Officer, submitted a controlled substance researcher application with the WDOH in order for FP, Inc. to conduct psilocybin research, with such application listing FP, Inc.’s Olympia, Washington facility as the research lab location. The application was submitted on July 12, 2021, and remains under review. If the WDOH registration is granted, then FP, Inc. intends to utilize such registration to apply for licensure with the DEA to make our facility in Olympia, Washington a licensed psilocybin facility.

Unless there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we are able to obtain all of the requisite approvals, including approvals to produce, or conduct research involving, psychedelic mushrooms in the United States, then all of our activities involving psychedelic mushrooms and psilocybin will occur in Jamaica through TruMed, or through agreements with independent research labs in accordance with applicable laws. If there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we receive the necessary approvals from the WDOH and the DEA in order to legally produce and research psilocybin in the State of Washington in the United States, then we intend to expand domestic U.S. production to include psychedelic mushrooms and conduct research and development, focusing on analyzing certain psychedelic mushroom species and extraction and production methods that standardize the potency of naturally-occurring psilocybin in mushrooms for use in approved clinical trials by drug development companies. Our intended research and development activities in the United States would be parallel to TruMed’s intended activities in Jamaica, but we believe carrying out such activities in the United States would improve our ability to enter the psychedelic mushroom supply chain for the psychedelics research and development market in the United States.

We may not commence psilocybin propagation operations in the United States until we receive the requisite approvals from the WDOH and the DEA, and there is no guarantee that we will receive such approvals. If we are successful in obtaining such approvals, we will be subject to strict regulations from both the State of Washington and the DEA relating to security, recordkeeping, reporting, and inventory controls to prevent drug loss and diversion. The licenses from the WDOH and the DEA, if successfully obtained, will only be provided on an annual basis and we may not be successful in renewing such licenses each subsequent year. The failure to obtain the necessary approvals to conduct psilocybin research at our Olympia, Washington facility (or the renewal of such approvals if obtained) would prevent us from expanding domestic U.S. production to include psychedelic mushrooms (or would require us to cease such production), which could limit our ability to enter the psychedelic mushroom supply chain for the psychedelics research and development market in the United States if there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V).

The dynamic nature of the laws and regulations affecting the psilocybin market, including the federal authorization of psilocybin, or the state-regulated psilocybin industry, could adversely affect our proposed operations in the United States, and we cannot predict the impact that future regulations may have on us.

Local, state, and federal psilocybin laws and regulations have been evolving rapidly and are subject to varied interpretations, which could require us to incur substantial costs associated with compliance or negatively impact, and accordingly cause us to alter, our business plan, which could require further costs and negatively impact our business and future results of operations. We can know neither the nature of any future laws, regulations, interpretations, or applications nor how additional governmental regulations or administrative policies and procedures, when and if promulgated, could impact our business. For example, if psilocybin is no longer illegal under federal law, and depending on future laws or guidance on psilocybin for research, we may experience a significant increase in competition. Accordingly, any change in these laws or regulations, changes in their interpretation, or newly enacted laws or regulations or any failure by us to comply with these laws or regulations could require changes to certain of our business practices, negatively impact our operations, cash flow, or financial condition, impose additional costs on us, or otherwise adversely affect our business.

A denial of, or significant delay in obtaining, or any interruption of required government authorizations to produce psilocybin for federally sanctioned purposes would likely have a significant negative impact on the Company’s business plans.

While psilocybin is not an illegal drug under the Jamaica Drug Act and we intend to conduct research and development involving psychedelic mushrooms in Jamaica through TruMed, a portion of our business plan in the United States depends on rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and us receiving the necessary state and federal authorizations to research and produce psilocybin for federally sanctioned purposes. There is no guaranty that there will be rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) or, in the event there is rescheduling, what types of activities will be permitted under the new legal regime. Our Company may not commence psilocybin propagation operations in the United States until both the WDOH and the U.S. federal government, in particular the DEA, have signed off that the Company has met its obligations under state law and is compliance with all applicable DEA regulations. There is no guarantee that we will receive the necessary approvals from either the WDOH or the DEA.

For drugs manufactured in the United States, the 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 DEA’s estimate of the quantity needed to meet legitimate medical, scientific, research, and industrial needs. The DEA also issues individual production quotas for Schedule I Controlled Substance registrants. These quotas may only be adjusted once per year, at the DEA’s sole discretion. The DEA’s quotas may limit our ability to achieve revenue goals, even if we are able to obtain DEA Controlled Substance Research and/or Manufacturing registrations. The failure to obtain the necessary approvals to conduct psilocybin research at our Olympia, Washington facility (or the renewal of such approvals if obtained) would prevent us from expanding domestic U.S. production to include psychedelic mushrooms (or would require us to cease such production), which could limit our ability to enter the psychedelic mushroom supply chain for the psychedelics research and development market in the United States if there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V), and could have a significant negative impact on our business plans in the United States.

Operating in a highly regulated business requires significant resources.

We intend to operate a highly regulated, vertically integrated business involving psilocybin. Research involving controlled substances in the State of Washington requires participating individuals to register with both the DEA and the WDOH. Applicants must obtain a controlled substance researcher registration from the WDOH prior to registering with the DEA. Chris L. Claussen, our Chief Innovation Officer, submitted a controlled substance researcher application with the WDOH in order for FP, Inc. to conduct psilocybin research, with such application listing FP, Inc.’s Olympia, Washington facility as the research lab location. The application was submitted on July 12, 2021, and remains under review. If the WDOH registration is granted, then FP, Inc. intends to utilize such registration to apply for licensure with the DEA to make our facility in Olympia, Washington a licensed psilocybin facility. If there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we receive the necessary approvals from the WDOH and the DEA in order to legally produce and research psilocybin in the State of Washington in the United States, then we intend to expand domestic U.S. production to include psychedelic mushrooms and conduct research and development, focusing on analyzing certain psychedelic mushroom species and extraction and production methods that standardize the potency of naturally-occurring psilocybin in mushrooms for use in approved clinical trials by drug development companies. We expect that pursuing the necessary approvals and ensuring compliance with the laws, regulations, and guidelines, and changes thereto, that impact our intended business plans involving psilocybin will require a significant amount of our management’s time and external resources.

Additionally, even if psilocybin were to become legal under U.S. federal law, companies operating in the psilocybin industry would have to comply with all applicable state and local laws, which may vary greatly between jurisdictions, increasing costs for companies that operate in multiple jurisdictions. Therefore, in the event we receive the necessary approvals from the WDOH and the DEA in order to legally produce and research psilocybin in the State of Washington in the United States and enter the psychedelic mushroom supply chain for the psychedelics research and development market in the United States, we may still be subject to a variety of laws, regulations, and guidelines related to such activities. Complying with multiple regulatory regimes will require additional resources and may negatively impact our ability to expand into certain U.S. jurisdictions.

We compete for market share with other companies, some of which have longer operating histories and may have more financial resources and manufacturing and marketing experience than we have.

We face competition in the markets in which we operate. Some of our competitors have longer operating histories and may have more financial resources and manufacturing and marketing experience than we have. Some of our competitors may also be better positioned to develop superior product features and technological innovations and may be able to better adapt to market trends. Our ability to compete depends on, among other things, high product quality, short lead-time, timely delivery, competitive pricing, range of product offerings, and superior customer service and support. Increased competition may require us to reduce prices or increase costs and may have a material adverse effect on our financial condition and results of operations. Any decrease in the quality of our products or level of service to customers or any occurrence of a price war among our competitors and us may adversely affect the business and results of operations.

We may expend substantial time and financial resources on potential acquisitions of other companies and such acquisitions may not be completed or successful.

Our success will depend, in part, on our ability to grow our business in response to the demands of consumers and other constituents within the functional mushroom industry as well as competitive pressures. In some circumstances, we may decide to grow our business through the acquisition of complementary businesses rather than through internal development. The identification of suitable acquisition candidates can be difficult, time-consuming, and costly and we may not be able to successfully complete identified acquisitions. In addition, we may not realize the expected benefits from completed acquisitions. Our failure to address risks encountered in connection with any future acquisitions or investments could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities and harm our business generally. Future acquisitions could also result in the incurrence of debt, contingent liabilities, amortization expenses, or the impairment of goodwill, any of which could harm our financial condition.

The psychedelics industry is in a nascent stage so there is a lack of information about the business models of comparable companies and the potential market size.

We plan to conduct psychedelic mushroom product research and development in Jamaica through TruMed. Psilocybin is not an illegal drug under the Jamaica Drug Act. Therefore, the cultivation of, and research involving, psychedelic mushrooms is not in contravention of the laws of Jamaica and does not require any permit or authorization from the regulatory authorities in Jamaica. If there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we obtain the requisite approvals from all applicable state and federal governmental authorities, including the WDOH and the DEA, then we intend to build out our naturally-derived psychedelic mushroom supply chain in the United States in full compliance with state and federal laws. Because the legal psychedelics industry is in a nascent stage, there is a lack of information about comparable companies available for potential investors to review in deciding about whether to invest in our Common Shares, and few, if any, established companies whose business model we can follow or upon whose success we can build. Accordingly, investors will have to rely on their own estimates in deciding about whether to invest in our Common Shares. There can be no assurance that our estimates are accurate or that the market size is sufficiently large for our business to grow as projected, which may negatively impact our financial results.

Our ability to cultivate and/or acquire mushrooms for our products is subject to risks inherent in agricultural operations.

Our products are derived from mushrooms. Accordingly, we must grow or acquire enough mushrooms so that our products can be produced to meet the demand of our customers. Even with the procedures and protections we have put in place, a poor harvest could result in loss of sales and damage our business and results of operations. Agricultural products are vulnerable to climate change, crop disease, natural disaster, and pests, which may vary in severity and effect, depending on the stage of production at the time of infection or infestation, the type of treatment applied, and climatic conditions. Unfavorable growing conditions caused by these factors can reduce both crop size and crop quality and, in extreme cases, entire harvests may be lost, which would negatively impact our business and results of operations. Additionally, there could be difficulties with the first crop or harvest in any new facility.

There are many factors that could impact our ability to attract and retain customers, including that we may not be able to develop as many nutraceutical products or functional mushrooms of the consistency or quality that we expect, which could have a negative adverse effect on our business plan and profitability.

Our success depends on our ability to attract and retain customers, but we face, or will face, competition in obtaining customers for our nutraceutical products or functional mushrooms. There are many factors that could impact our ability to attract and retain customers, including our ability to compete based on price, produce high quality or consistent crops, continually produce desirable and effective products that are superior to others in the market, and implement our customer acquisition plan, as well as maintain continued growth in the aggregate number of potential customers. Competition for customers may result in increasing our costs while also lowering the market prices for our products and reducing our profitability. If we are not successful in attracting and retaining customers, we may fail to be competitive or achieve profitability or sustain profitability over time.

As a result of changing customer preferences, products may attain financial success for a limited period of time, or none at all. Even if we are successful in introducing new products, a failure to gain consumer acceptance or to update products with compelling attributes could cause a decline in our products’ popularity that could reduce revenues and harm our business, operating results, and financial condition. Failure to introduce new products or product types and to achieve and sustain market acceptance could result in our being unable to meet consumer preferences and generate revenue, which would have a material adverse effect on our profitability and financial results from operations.

We currently have a limited number of contemplated products, and have limited financial and management resources, and, as a result, we may forego or delay our development of planned or other products. Our resource allocation decisions may cause us to fail to capitalize on profitable market opportunities. If we are unsuccessful in developing the contemplated or additional products, our business may be harmed.

Our business relies on the production and distribution of mushroom-related products, and such products may not maintain or grow their market acceptance.

Our business is focused on the production and distribution of mushrooms and related products. If such products do not maintain or grow their market acceptance, it will be difficult for us to achieve profitability. Our revenues are expected to derive almost exclusively from sales of mushroom-based products, and we expect that our mushroom-based products will account for substantially all of our revenue for the foreseeable future. If the mushroom market declines or mushrooms fail to achieve substantially greater market acceptance than they currently enjoy, we may not be able to grow our revenues sufficiently for us to achieve consistent profitability. Even if our products conform to international safety and quality standards, sales could be adversely affected if consumers in target markets lose confidence in the safety, efficacy, and quality of mushrooms. Adverse publicity about mushroom-based products that we sell may discourage consumers from buying products distributed by us.

We may not be successful in developing and commercializing our products, or may not be able to do so at acceptable costs.

If we cannot successfully develop, manufacture, sell, and distribute our products, or if we experience difficulties in the development process, such as capacity constraints, quality control problems, or other disruptions, we may not be able to develop market-ready commercial products at acceptable costs, which would adversely affect our ability to effectively enter the market. A failure by us to achieve a low-cost structure through economies of scale or improvements in cultivation and manufacturing processes would have a material adverse effect on our commercialization plans and our business, prospects, results of operations, and financial condition. If there is a shift in consumer demand, we must meet such demand through new and innovative products or else our business may fail.

A significant failure or deterioration in our quality control systems could have a material adverse effect on our business and operating results.

The quality and safety of our products are critical to the success of our business and operations. As such, it is imperative that our (and our service providers’) quality control systems operate effectively and successfully. Quality control systems can be negatively impacted by the design of the quality control systems, the quality training programs and adherence by employees to quality control guidelines. Although we strive to ensure that all of our service providers have implemented and adhere to high-quality control systems, any significant failure or deterioration of such quality control systems could have a material adverse effect on our business and operating results.

We may experience breaches of security at our facilities or loss as a result of the theft of our products.

If there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we obtain the requisite approvals from all applicable state and federal governmental authorities, including the WDOH and the DEA, then we intend to build out our naturally-derived psychedelic mushroom supply chain in the United States in full compliance with state and federal laws. Given the nature of psilocybin and its lack of legal availability outside of government approved channels, and despite the fact that we would be required to meet or exceed applicable security requirements if we build out our naturally-derived psychedelic mushroom supply chain in the United States, there remains a risk of security breach as well as theft. A security breach at one of our facilities could result in a significant loss of available products, expose us to additional liability under applicable regulations, and to potentially costly litigation or increased expenses relating to the resolution and future prevention of these breaches and may deter potential customers from choosing our products, any of which could have a material adverse effect on our business, financial condition, and results of operations.

We are subject to liability arising from any fraudulent or illegal activity by our employees, contractors, and consultants.

We are exposed to the risk that our employees, independent contractors, and consultants may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional, reckless, or negligent conduct or disclosure of unauthorized activities to us that violate (i) government regulations, (ii) manufacturing standards, (iii) federal, state, or local healthcare fraud and abuse laws and regulations, or (iv) laws that require the true, complete, and accurate reporting of financial information or data. It is not always possible for us to identify and deter misconduct by our employees and other third parties, and the precautions taken by us to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any actions are brought against us, including by former employees, independent contractors, and consultants, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal, and administrative penalties, damages, monetary fines, contractual damages, reputational harm, diminished profits and future earnings, and the curtailment of our operations, any of which would have an adverse effect on our business, financial condition, and results from operations.

Our products are produced by third parties at their own manufacturing facilities; a significant disruption at such facilities or to any key production equipment could adversely affect our ability to meet consumer and wholesale demand.

While we grow and harvest functional mushrooms at our facility in Olympia, Washington, all of our products are produced by third parties at their own manufacturing facilities. A significant disruption at such facilities or to any key production equipment, even on a short-term basis, could impair the productions and shipment of products, which could have a material adverse effect on our business, financial position, and results of operations. The manufacturing operations of these third parties are vulnerable to interruption and damage from natural and other types of disasters, including earthquake, fire, floods, volcanic events, draughts, environmental accidents, winter storms, power loss, disease outbreaks or pandemics such as the recent COVID-19 pandemic, communications failures, and similar events. If any disaster were to occur at the facilities of these third parties, our ability to operate our business would be seriously impaired.

Regulations and evolving legislation governing issues involving climate change and sustainability could result in increased operating costs, which could have a material adverse effect on our business, and the potential physical impacts of climate change on our operations are highly uncertain.

A number of international, federal, state, or local governments or governmental bodies have introduced or are contemplating regulatory changes in response to the potential impact of climate change. For example, the U.S. Environmental Protection Agency (“EPA”) issued a notice of finding and determination that emissions of carbon dioxide, methane, and other greenhouse gases (“GHGs”) present an endangerment to human health and the environment, which allowed the EPA to begin regulating emissions of GHGs under existing provisions of the Clean Air Act. Legislation and increased regulation regarding climate change could impose significant costs on us and our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring, permitting, reporting, and other costs to comply with such regulations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas and countries not subject to such limitations. Given the political significance, regulatory or compliance obligations, and uncertainty around the impact of climate change and how it should be addressed, we cannot predict how legislation and regulation will affect our financial condition, operating performance, and ability to compete. The potential physical impacts of climate change on our operations are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate. These impacts may adversely impact the cost, production, and financial performance of our operations.

We may encounter disruptions or delays in the expansion and construction of our facilities, which may impair our ability to grow and produce our own mushroom products for distribution.

Our production capacity is growing, and currently consists of 15,000 sq. ft., including three fully constructed functional mushroom greenhouses, totaling 12,000 sq. ft., with plans to acquire or lease additional growing space. Chris L. Claussen, our Chief Innovation Officer, submitted a controlled substance researcher application with the WDOH in order for FP, Inc. to conduct psilocybin research legally under state and federal law, with such application listing FP, Inc.’s Olympia, Washington facility as the research lab location. The application was submitted on July 12, 2021, and remains under review. If the WDOH registration is approved, then we intend to apply for a DEA license to make our facility in Olympia, Washington a licensed psilocybin facility. In addition, we intend to expand operations into a larger facility to increase our functional mushroom production capacity in the future. Commercial construction and expansion of operations involves a number of risks and uncertainties, certain of which are outside our control. Any disruption or delay in the construction of facilities, expansion of operations, or in obtaining either a WDOH or DEA license to legally grow psilocybin mushrooms in the United States may impair or impede our ability to grow functional or psychedelic mushrooms and manufacture products for distribution.

We are subject to several risks in connection with the construction of our facilities, including the availability and performance of engineers and contractors, suppliers, and consultants, the availability of funding, and the receipt of required governmental approvals, licenses, and permits, and the projected timeline for construction, which could change due to delays. Any delay in the performance of any one or more of the contractors, suppliers, consultants, or other persons on whom we are dependent in connection with our construction activities, a delay in or failure to receive the required governmental approvals, licenses, and permits in a timely manner or on reasonable terms, or a delay in or failure in connection with the completion and successful operation of the operational elements in connection with construction could delay or prevent the construction of the additional phases of the facilities as planned. There can be no assurance that current or future construction plans implemented by us will be successfully completed on time, within budget and without design defect, that the necessary personnel and equipment will be available in a timely manner or on reasonable terms to complete construction projects successfully, that we will be able to obtain all necessary governmental approvals, licenses, and permits, or that the completion of the construction, the start-up costs, and the ongoing operating costs will not be significantly higher than anticipated by us. Any of the foregoing factors could adversely impact our operations and financial condition.

We are subject to risks associated with leasing and occupying real property and the inability to extend, renew, or continue to lease real property in key locations could harm our business, profitability, and results of operations.

The lease for our facility in Olympia, Washington is set to expire in 2025, subject to a two-year renewal option (see “Properties” on page 69 of this prospectus). Accordingly, we are subject to the risks associated with leasing, occupying, and making tenant improvements to real property, including, among others, changes in availability of, and contractual terms for, leasable manufacturing space, as well as potential liability for environmental conditions or various other claims. If demand increases, we may also need to expand into other facilities in order to increase our production capabilities. When our lease expires or when we need to expand into other facilities, we may be unable to negotiate leases or renewals, either on commercially acceptable terms or at all, which could impact our ability to manufacture our products or deliver them to the market, which in turn could harm our business, profitability, and results of operations.

We may be vulnerable to rising energy costs.

Psilocybin and functional mushroom growing operations consume considerable energy, which makes us vulnerable to rising energy costs and/or the availability of stable energy sources. Accordingly, rising or volatile energy costs or the inability to access stable energy sources may have a material adverse effect on our business, financial condition, and results of operations.

Environmental risks may adversely affect our business.

Cultivation and production activities may be subject to licensing requirements relating to environment regulation. Environmental legislation is evolving in such a manner that may result in stricter standards and enforcement, larger fines and liability, and potentially increased capital expenditures and operating costs. The application of environmental laws to our business may cause us to increase the costs of our cultivation, production, or scientific activities. Unanticipated licensing delays can result in significant delays and cost overruns in our business and could affect our financial condition and results of operations. There can be no assurance that these delays will not occur.

We rely on a third-party co-packer for certain product components and other third parties for the packaging material for our products, and there is no guarantee that the relationships with the co-packers or packaging companies will continue or that the co-packer or packaging companies will deliver goods on a timely basis.

We rely on a third-party co-packer to provide microbeads utilized in our products, and other third-party companies for the packaging materials for our products. While we have identified other potential suppliers who can supply similar microbeads, we do not currently own and do not plan to develop in-house manufacturing capabilities for these microbeads, and will be reliant on third-party suppliers for microbeads now and going forward. We also do not manufacture our packaging materials for our products and are reliant on third-party packaging companies for these materials. While other packaging companies exist which could provide these packaging materials for our products, locating and changing suppliers could result in product delivery delays to potential customers, which could materially harm our business and results of operations. This co-packer and these packaging companies are third parties over which we have little or no control, and with which we do not have any long-term agreements. The failure of the co-packer to continue to provide the microbeads or to deliver products on a timely basis, or the failure of the third-party packaging companies to provide packaging materials, or the termination of our relationship with any of these parties could have a material adverse effect on our business, financial condition, and operating results.

We are dependent on third parties to supply materials used in our products and packaging, and any interruption or failure by these suppliers or other disruptions to our supply chain may have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Our ability to make, move, and sell our products is critical to our success. Damage or disruption to our supply chain, including third-party manufacturing, assembly, or transportation capabilities, due to weather, including any potential effects of climate change, natural disaster, fire or explosion, terrorism, pandemics (such as the recent COVID-19 pandemic), strikes, government action, or other reasons beyond our control or the control of our suppliers and business partners, could impair our ability to manufacture or sell our products. Further, we rely on third parties to supply materials used in our products and packaging. Any interruption or failure by our suppliers or other partners to meet their obligations on schedule or in accordance with our expectations, which, in each case, could be the result of one or many factors outside of our control, could delay or prevent the manufacture or commercialization of our products, disrupt our operations, or cause reputational harm to our company, any or all of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. The global supply chain issues caused by the recent COVID-19 pandemic impacted our ability to obtain packaging materials for our products, and we were forced to delay the launch of our consumer packaged goods because of a delay in our initial orders for packaging samples from suppliers in China. Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events when they occur, could adversely affect our business or financial results.

The ongoing labor shortage, or an increase in its severity, may result in delays in receiving materials from our third-party suppliers or an increase in the cost of sourcing materials and producing products.

We rely on third-party suppliers for materials used in our products and packaging. Our third-party suppliers may face difficulties in meeting their obligations on schedule or in accordance with our expectations if they are unable to find sufficient workers as a result of the ongoing labor shortage, caused in part by the recent COVID-19 pandemic, or an increase in the severity of such labor shortage, which could adversely affect our business or financial results. In addition, we rely in part on our ability to find, hire, and retain capable personnel who can successfully operate our facility in Olympia, Washington, and who can understand, explain, market, and sell our products. The ongoing labor shortage, or an increase in its severity, could result in increased costs related to finding, hiring, and retaining capable personnel, which could adversely affect our business or financial results.

Our financial success will depend on our ability to successfully predict changes in consumer preferences and develop successful new products and marketing strategies in response.

Our ability to earn revenues is substantially dependent on the success of our products, which depends upon, among other matters, pronounced and rapidly changing public tastes, and other factors which are difficult to predict and over which we have little, if any, control. Consumer trends change based on many factors, including but not limited to, nutritional values, consumer preferences, and general economic conditions. Additionally, there is a growing movement among some consumers to buy local products in an attempt to reduce the carbon footprint associated with transporting products from longer distances, and this could result in a decrease in the demand for our nutraceuticals or future mushroom-based products. A shift in consumer demand away from our nutraceuticals or proposed products or our failure to expand our current market position will harm our business and results of operations.

We will be dependent on the popularity and consumer acceptance of our brand.

There is no assurance that we will be able to achieve brand awareness in any of our target regions. In addition, we must develop successful marketing, promotional, and sales programs in order to sell our products. If we are not able to develop successful marketing, promotional, and sales programs, then such failure will have a material adverse effect on our business, financial condition, and operating results.

We may face unfavorable publicity or consumer perception.

We may depend significantly on consumer perception regarding the safety and quality of our products. Consumer perception of products can be significantly influenced by adverse publicity in the form of published scientific research, media attention, social media, or other publicity, whether or not accurate, that associates consumption of our products or any other similar products with illness or other adverse effects, or questions the benefits of our or similar products or that claims that any such products are ineffective. A new product may initially be received favorably, resulting in high sales of that product, but that sales level may not be sustainable as consumer preferences change. Future scientific research or publicity could be unfavorable to our industry or any of our particular products and may not be consistent with earlier favorable research or publicity. Unfavorable research or publicity could have a material adverse effect on our ability to generate sales.

We are highly dependent upon consumer perception of mushrooms and mushroom-based products. The public may associate our fully legal functional mushroom and nutraceutical products with illegal psychedelic mushrooms, which are prohibited substances in the United States, except under research and related exceptions pursuant to DEA and state registrations in place. Our revenues may be negatively impacted due to the fact the market does not fully accept mushrooms as a food or nutritional product.

If the reputation of our brand erodes significantly, it could have a material impact on our results of operations.

In certain circumstances, our reputation could be damaged as a result of the actual or perceived occurrence of any number of events, including negative publicity, whether true or not. Widespread adoption of social media and other web-based tools to generate, publish, and discuss user-generated content and to connect with other users has made it increasingly easy for individuals and groups to communicate and share opinions and views regarding us, our products and our activities, whether true or not. Although we believe that we operate in a manner that is respectful to all stakeholders and take care in protecting our image and reputation, we do not ultimately have direct control over how we are perceived by others. Reputation loss may result in decreased investor confidence, increased challenges in developing and maintaining community relations, and impede our ability to advance our projects, thereby having a material adverse impact on financial performance, financial condition, cash flows, and growth prospects.

We may not be successful in developing a marketing and sales force for the commercialization of our products, or we may incur substantial expenses to do so.

In order to commercialize and market our products, we must either acquire or develop an internal marketing and sales force with technical expertise and with supporting distribution capabilities, or arrange for third parties to perform these services. The acquisition or development of a sales and distribution infrastructure would require substantial resources, which may divert the attention of our management and key personnel, and defer our product development and deployment efforts. To the extent that we enter into marketing and sales arrangements with other companies, our revenues will depend on the efforts of others. These efforts may not be successful. If we fail to develop substantial sales, marketing, and distribution channels, or to enter into arrangements with third parties for those purposes, we will experience delays in product sales and incur increased costs.

We may be unable to adequately protect our brand and our other intellectual property rights.

Our ability to compete effectively will depend, in part, on our ability to maintain the proprietary nature of our brand and product, and processes and methodologies used to create our products. We have adopted procedures to protect our intellectual property and maintain the secrecy of our confidential business information and trade secrets. However, there can be no assurance that such procedures will afford complete protection of such intellectual property, confidential business information, and trade secrets. There can be no assurance that our competitors will not independently develop technologies that are substantially equivalent or superior to our technology. We have trademark applications for our key names and phrases, and two pending patents for innovations related to our products. We have only filed provisional patent applications, which help protect inventions for a twelve-month period while a formal patent application is being filed. The patent process can take up to twenty-four months or longer to complete and can be challenged during the process. At this time, we cannot state whether the patent applications will be approved, refused, and/or ultimately registered. In addition, our trademark, patent, and other intellectual property rights and related registrations may be challenged in the future and could be cancelled or narrowed.

Failure to protect our trademark rights could prevent us in the future from challenging third parties who use names and logos similar to our trademarks, which may in turn cause consumer confusion or negatively affect consumers’ perception of our brand and products. Our patent applications may not contain claims sufficiently broad to protect us against third parties with similar technologies or products or provide us with any competitive advantage. In addition, if we do not keep our trade secrets confidential, others may produce products with our recipes or formulations. Intellectual property disputes and proceedings may be protracted with no certainty of success, and an adverse outcome could subject us to liabilities, force us to cease use of certain trademarks or other intellectual property, or force us to enter into licenses with others. Any one of these occurrences may have a material adverse effect on our business, results of operations, and financial condition.

If we are unable to protect the confidentiality of our trade secrets, the value of our proprietary processes could be materially adversely affected and our business would be harmed.

We consider proprietary trade secrets, confidential know-how, and unpatented know-how to be important to our business. We may rely on trade secrets and confidential know-how to protect our technology, especially where patent protection is believed by us to be of limited value. However, trade secrets and confidential know-how are difficult to protect. We seek to protect our confidential proprietary information, in part, by entering into confidentiality agreements with parties who have access to them, including our employees. However, we cannot be certain that such agreements have been entered into with all relevant parties that may have or have had access to our trade secrets.

We may not be able to enforce our intellectual property rights throughout the world.

The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. This could make it difficult for us to stop the infringement or misappropriation of our intellectual property rights. The loss of the First Person brand or logo or other registered or common law trade names or a diminution in the perceived quality of products or services associated with our Company would harm our business. Our efforts to protect our intellectual property rights in such countries may be inadequate. In addition, changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection for our technology and the enforcement of our intellectual property rights.

Third parties may assert that we, our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information or misappropriated trade secrets.

Although we try to ensure that our employees, consultants, and independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants, or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of a former employer or other third parties. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Our internal computer systems may fail or suffer security breaches, which could result in a significant disruption of our product development programs and our ability to operate our business effectively.

Our internal computer systems may fail or suffer damage due to computer viruses, unauthorized access, natural disasters, terrorism, war, or telecommunication and electrical failures. Cyber-attacks are increasing in their frequency, sophistication, and intensity, and have become increasingly difficult to detect. Cyber-attacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering, and other means to affect service reliability and threaten the confidentiality, integrity, and availability of information. Cyber-attacks also could include phishing attempts or e-mail fraud to cause payments or information to be transmitted to an unintended recipient.

While we have not experienced any significant system failure, accident, or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions. Additionally, any such event that leads to unauthorized access, use, or disclosure of personal information, including personal information regarding our employees, could harm our reputation, cause us not to comply with federal and/or state breach notification laws and foreign law equivalents, and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information. Security breaches and other inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above. All such events could have a material adverse effect on our business, financial condition, and results of operations.

Our ability to produce and sell our products is dependent on compliance with regulatory and other requirements.

The processing, manufacturing, packaging, labeling, advertising, and distribution of our planned products is subject to regulation by one or more governmental authorities, and various agencies of the federal, state, and localities in which our products are sold. These governmental authorities may attempt to regulate any of our products that fall within their jurisdiction. Our functional mushrooms that we supply to other businesses will be subject to regulation by the USDA and the FDA. Our nutraceutical products will be subject to regulation by the USDA, the FDA, and the FTC. Our intended production of, and research and development involving, psilocybin in the United States will require prior approval from the WDOH and the DEA. We are also required to comply with the regulations and policies promulgated by the EPA and corresponding state agencies.

Such governmental authorities may determine that a particular product or product ingredient presents an unacceptable health risk and may determine that a particular statement of nutritional support that we want to use is an unacceptable claim. Such a determination would prevent us from marketing particular products or using certain statements of nutritional support on our products. We also may be unable to disseminate third-party literature that supports our products if the third-party literature fails to satisfy certain requirements.

In addition, governmental authorities could require us to remove a particular product from the market. Any recall or removal would result in additional costs to us, including lost revenues from any products that we are required to remove from the market, any of which could be material. Any such product recalls or removals could lead to liability, substantial costs, and reduced growth prospects, all of which could be material.

If we are not able to comply with all environmental, health, and safety regulations applicable to our operations and industry, we may be held liable for any breaches of those regulations.

Our operations are subject to a variety of environmental, health, and safety laws and regulations in each of the jurisdictions in which we operate. These laws and regulations govern, among other things, air emissions, wastewater discharges, the handling and disposal of hazardous substances and wastes, soil and groundwater contamination, and employee health and safety. We are also subject to laws and regulations governing the handling and disposal of noncompliant products and waste, the handling of regulated material that is included in our products and the disposal of products at the end of their useful life. These laws and regulations have increasingly become more stringent, and we may incur additional expenses to ensure compliance with existing or new requirements in the future. Any failure by us to comply with environmental, health, and safety requirements could result in the limitation or suspension of our operations. We also could incur monetary fines, civil or criminal sanctions, third-party claims or cleanup, or other costs as a result of violations of or liabilities under such requirements. In addition, compliance with environmental, health, and safety requirements could restrict our ability to expand our facilities or require us to acquire costly pollution control equipment or incur other significant expenses.

Our reputation could suffer from real or perceived issues involving the labeling or marketing of our products.

Products that we sell carry claims as to their origin, ingredients or health benefits, including, by way of example, the use of the term “natural”, “functional”, or “healthy”, or similar synonyms or implied statements relating to such benefits. Although each of the FDA and the USDA has issued statements regarding the appropriate use of the word “natural,” there is no single, U.S.-government-regulated definition of the term “natural” for use in the food industry, which is true for many other adjectives common in the better-for-you and functionally-focused food industry. The resulting uncertainty has led to consumer confusion, distrust, and legal challenges. Plaintiffs have commenced legal actions against several food companies that market “natural” products, asserting false, misleading and deceptive advertising and labeling claims, including claims related to genetically modified ingredients. In limited circumstances, the FDA has taken regulatory action against products labeled “natural” but that nonetheless contain synthetic ingredients or components. Should we become subject to similar claims, consumers may avoid purchasing products from us or seek alternatives, even if the basis for the claim is unfounded. Adverse publicity about these matters may discourage consumers from buying our products. The cost of defending against any such claims could be significant. Any loss of confidence on the part of consumers in the truthfulness of our labeling or ingredient claims would be difficult and costly to overcome and may significantly reduce our brand value. Any of these events could adversely affect our reputation and brand and decrease our sales, which would have a material adverse effect on our business, financial condition, and results of operations.

The laws, regulations, and guidelines generally applicable to our business or products, or to research involving psilocybin, in the United States may change in ways that impact our ability to continue our business as currently conducted or proposed to be conducted.

From time to time, U.S. federal, state, or local legislative and governmental authorities may impose additional or more stringent laws or regulations that could apply to us, our business, and products, repeal laws or regulations that we consider favorable to us, or impose more stringent interpretations of current laws or regulations. We are not able to predict the nature of such future laws, regulations, repeals, or interpretations or to predict the effect that additional governmental regulation, when and if it occurs, would have on our business in the future. Those developments could prohibit the sale and marketing of ingredients and products or require reformulation of products to meet new standards, recalls, or discontinuance of products (including products that we sell). Further, we may be subject to requirements for reformulation, labeling, additional record-keeping requirements, increased documentation of the properties of certain products, additional or different labeling, additional scientific substantiation, quality control requirements, adverse event reporting, or other requirements. Any developments of this nature could increase our costs significantly and could have a material adverse effect on our business, financial condition, and results of operations.

Psilocybin is currently classified as a Schedule I controlled substance under the CSA. If psilocybin and/or psilocin, other than the 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 involving psilocybin and psilocin would most likely be improved. However, rescheduling psilocybin and psilocin may materially alter enforcement policies across many federal agencies, primarily the FDA and DEA. The 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 FDCA. The 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 FDA has historically deferred enforcement related to psilocybin and psilocin to the DEA. If psilocybin and psilocin were to be rescheduled to a federally controlled, yet legal, substance, the FDA would likely play a more active regulatory role. The DEA would continue to be active in regulating manufacturing, distribution, and dispensing of such substances. There is no guarantee that our future intended psilocybin cultivation and research would be able to meet any new FDA regulations or interpretations of the law, which could inhibit our business prospects even in the case that the federal government were to legalize psilocybin. The potential for multi-agency enforcement post-rescheduling could threaten or have a materially adverse effect on our business.

The failure to comply with any of the above applicable regulations, 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.

We may encounter difficulties in accessing banking and other financial services due to our involvement in the psilocybin industry.

We plan to conduct psychedelic mushroom product research and development in Jamaica through TruMed. In addition, if there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we receive the necessary approvals from the WDOH and the DEA in order to legally produce and research psilocybin in the State of Washington in the United States, then we intend to expand domestic U.S. production to include psychedelic mushrooms and conduct research and development. Due to the present state of the laws and regulations governing financial institutions in the United States, banks often refuse to provide banking services to businesses involved in the psilocybin industry. Consequently, businesses involved in the psilocybin industry often have difficulty accessing the U.S. banking system and traditional financing sources. While we currently have a bank account with a U.S. bank, the inability to open bank accounts with certain institutions may make it difficult to operate our business and could make our cash holdings more vulnerable. In addition to the foregoing, banks may refuse to process debit card payments and credit card companies may refuse to process credit card payments due to our planned involvement in the psilocybin industry through TruMed and, if there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we receive the necessary approvals from the WDOH and the DEA, in the United States. If we are unable or limited in our ability to open or maintain bank accounts, obtain other banking services, or accept credit card and debit card payments, it may be difficult for us to operate and conduct our business as planned.

A health or safety issue resulting in litigation against us could harm our business.

Health and safety issues related to our products may arise that could lead to litigation or other action against us or to regulation of certain of our product components. We may be required to modify our recipes or packaging and may not be able to do so. In extreme circumstances, we could be required to pay damages that may reduce our profitability and adversely affect our financial condition. Even if these concerns prove to be baseless, the resulting negative publicity could affect our ability to market certain of our products and, in turn, could harm our business and results from operations.

Contamination of our products intended for human consumption could result in a product recall or harm our reputation.

The sale of products for human consumption involves inherent risks. We could decide to, or be required to, recall products due to suspected or confirmed contamination or product tampering. A product recall could lead to litigation and adversely affect our product sales, financial condition, and results of operation as well as our general reputation in the industry.

Our products may be subject to product recalls, withdrawals, or seizures.

Manufacturers, producers, and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety, and inadequate or inaccurate labelling disclosure. If any of our products are recalled due to an alleged product defect or for any other reason, we could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection with the recall. We may lose a significant amount of sales and may not be able to replace those sales at an acceptable level or at all. In addition, a product recall may require significant management attention.

Although we have detailed procedures in place for testing our products, there can be no assurance that any quality, potency or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action or lawsuits. Additionally, if we are subject to recall, our public image could be harmed. A recall for any of the foregoing reasons could lead to decreased demand for our products and could have a material adverse effect on our results of operations and financial condition. Additionally, product recalls may lead to increased scrutiny of our operations by regulatory agencies, requiring further management attention, potential loss of applicable permits or licenses, and potential legal fees and other expenses, which could materially and adversely affect our business, financial condition and results of operations.

Because psilocybin is a controlled substance, our products, equipment, and revenues could be subject to civil or criminal asset forfeiture if we fail to comply with the laws and regulations applicable to psilocybin.

Any assets owned by participants in the psilocybin industry used in the course of conducting such business, or that are the proceeds of such business, could be subject to seizure by law enforcement and subsequent civil asset forfeiture because of the illegality of the psilocybin industry under U.S. federal law. Even if the owner of the property is never charged with a crime, the property in question could still be seized and subjected to an administrative proceeding by which, with minimal due process, it could be forfeited.

We face inherent and significant risks related to product liability and similar claims.

We may be subject to various product liability claims, including, among others, that our products caused injury or illness, include inadequate instructions for use or include inadequate warnings concerning possible side effects or interactions with other substances. A product liability claim or regulatory action against us could result in increased costs, could adversely affect our reputation with our clients and consumers generally, and could have a material adverse effect on our business, financial condition and results of operations. There can be no assurances that we will be able to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities. Such insurance is expensive and may not be available in the future on acceptable terms, or at all. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of our potential products.

We may be required to pay for losses or injuries purportedly or actually caused by our products. Although we have not yet been subject to any product liability claims, we may be subject to such claims in the future, and that liability may exceed the funds available to us.

We are currently involved in, and may be in the future be involved in, litigation which could result in substantial costs and be a distraction to management and other employees.

We are currently involved in, and may in the future be involved in, litigation relating to claims arising out of our operations in the normal course of business. On June 26, 2023, the TruMed Sellers (Pratik Ruparell and Gaston Wagstaff) filed a statement of claim against First Person Ltd. and TruMed Limited in the Court of King’s Bench of Alberta. See “Business – Legal Proceedings” on page 71 of this prospectus for additional information. TruMed does not have any employees or currently active business operations and the statement of claim has not had any material impact on TruMed’s business, including TruMed’s research and development operations in Jamaica. Based on our initial internal review, we believe the claims lack merit and we intend to vigorously defend same. However, the outcomes of legal proceedings and claims are inherently unpredictable and subject to significant judgment to determine the likelihood and amount of loss related to such matters. In the event we are not successful in defending against or settling the statement of claim filed by the TruMed Sellers, or other disputes or litigation that we may be involved in from time to time, then we may be required to pay damages, or other fees as a court may order, which could have a material adverse effect on the results of our operations or financial position. Even if we are successful in defending against or settling the statement of claim filed by the TruMed Sellers, and other disputes or litigation that we may be involved in from time to time, litigation could result in substantial costs and be a distraction to management and other employees.

We are highly dependent on our management team, and the loss of any key member of this team may prevent us from implementing our business plan in a timely manner, or at all.

Our success is largely dependent on the performance of our directors and officers. There is no assurance we can maintain the services of our directors, officers, or other qualified personnel required to operate our business. In addition, our ability to retain key personnel may be challenged as a result of potential COVID-19 outbreaks or quarantines. The loss of one more of these persons could seriously harm our business and may prevent us from implementing our business plan in a timely manner, or at all.

Conflicts of interest may arise between us and our directors and officers as a result of other business activities undertaken by such individuals.

Except as otherwise restricted in an applicable noncompetition agreement, certain of our directors and officers may become associated with other companies in the same or related industries, which may give rise to conflicts of interest. Directors who have a material interest in any person who is a party to a material contract or a proposed material contract with us or our related parties are required, subject to certain exceptions, to disclose that interest and generally abstain from voting on any resolution to approve the contract. In addition, our directors and officers are required to act honestly and in good faith with a view toward our best interests.

We must attract and maintain key personnel or our business could suffer material harm.

The loss of certain key non-executive employees could have a material adverse effect on our business and results of operations. In addition, an inability to hire, or the increased costs of new personnel, including members of executive management, could have a material adverse effect on our business and operating results. The expansion of marketing and sales of our products will require us to find, hire, and retain additional capable personnel who can understand, explain, market and sell our products. There is intense competition for capable personnel in all of these areas and we may not be successful in attracting, training, integrating, motivating, or retaining new personnel, vendors, or subcontractors for these required functions. New employees often require significant training and, in many cases, take significant time before they achieve full productivity. As a result, we may incur significant costs to attract and retain contractors, including significant expenditures related to salaries and benefits and compensation expenses related to equity awards, and may lose new employees to our competitors or other companies before we realize the benefit of the resources we expend in recruiting and training them.

We may be unable to manage our growth effectively, which could make it difficult to execute our business strategy.

In order to manage growth and change in strategy effectively, we must: (i) maintain adequate systems to meet future customer demands; (ii) expand sales and marketing, distribution capabilities, and administrative functions; (iii) expand the skills and capabilities of our current management team; and (iv) attract and retain qualified employees. While we intend to focus on managing costs and expenses over the long term, we expect to expend substantial resources to support our growth and may have additional unexpected costs. We may not be able to expand quickly enough to exploit potential market opportunities. If we are unable to manage our growth effectively, we may be unable to execute our business plan, which could have a material adverse effect on our business results of operations.

Adverse U.S. or international economic conditions, including periods of inflation, could negatively affect our business, financial condition, and results of operations.

Consumer spending on nutraceutical products is influenced by general economic conditions and the availability of discretionary income. Adverse U.S. or international economic conditions or periods of inflation or high energy prices may contribute to higher unemployment levels, decreased consumer spending, reduced credit availability, and declining consumer confidence and demand, each of which poses a risk to our business. A decrease in consumer spending or in retailer and consumer confidence and demand for our products could have a significant negative impact on our net sales and profitability, including our operating margins. These economic conditions could cause potential customers or suppliers to experience cash flow or credit problems and impair their financial condition, which could disrupt our business and adversely affect product orders, payment patterns, and default rates and increase our bad debt expense.

The recent COVID-19 pandemic or future pandemics could have a material adverse impact on our business, results of operations, and financial condition.

The recent outbreak of COVID-19, and the subsequent emergence of variant strains of the virus, resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which included the implementation of travel bans, self-imposed quarantine periods, and social distancing, caused material disruption to businesses globally resulting in an economic slowdown. Global equity markets experienced significant volatility and weakness. Governments and central banks reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The efficacy of the government and central bank interventions is unknown at this time. It is not possible to reliably estimate the length and severity of these developments and the impact on our financial results and condition in future periods. However, the lasting effects of the recent COVID-19 pandemic, or government responses to future pandemics, could: interrupt our operations; increase operating expenses; cause delayed performance of contractual obligations; cause packaging restrictions on shipping; impair our ability to raise funds, depending on the recent COVID-19 pandemic’s effect on capital markets; adversely affect our supply partners, contractors, customers, and/or transportation carriers; and cause changes in our regulatory framework, which may increase competition for the mushrooms and packaging we use or affect our ability to deliver our products to customers—each of which could materially and adversely affect our business and financial condition.

The measures taken by the governments of countries to contain the spread of COVID-19, or measures that governments may take in responses to future pandemics, could disrupt our plan of distribution and use of available funds and the timelines, business objectives, or disclosed milestones related thereto, and thus, adversely impact our business, financial condition, results of operations, and prospects. In addition, there can be no assurance that we will not lose members of our workforce or consultants or see our workforce person-hours reduced, or incur increased medical costs as a result of these health risks. It is difficult to predict the impact that any pandemic, including any extension of the COVID-19 pandemic, may have on our business in the future, or the price of and demand for our products. It is possible that the measures taken in response to the recent COVID-19 pandemic, or any future pandemic, could have a material adverse effect on our business, financial condition, results of operations, and prospects, as well as the market for our Common Shares and/or our ability to obtain financing.

Current uncertainty in global economic conditions, including, the Russia-Ukraine conflict and inflation, could adversely affect our revenue and business.

Global inflation increased during 2022, and inflationary pressures have been exacerbated by the Russia-Ukraine conflict and other geopolitical tensions, as well as the related international response. The pressures include increases in the price for goods and services and increased global supply chain disruptions, which have resulted in, and may continue to result in, shortages in materials and services and related uncertainties. Such shortages have resulted in, and may continue to result in, cost increases for labor, fuel, materials, and services, and could continue to cause costs to increase, and also result in the scarcity of certain materials. We cannot predict any future trends in the rate of inflation or other negative economic factors or associated increases in our operating costs and how that may impact our business. To the extent we are unable to recover higher operating costs resulting from inflation or otherwise mitigate the impact of such costs on our business, our revenues and gross profit could decrease, and our financial condition and results of operations could be adversely affected. Interest rate increases may raise our cost of goods sold and negatively impact our ability to obtain debt financing, which in turn may negatively impact our ability to acquire new machinery and equipment. To date, increased borrowing costs have not impacted our ability to make timely payments on existing debt obligations, but interest rate increases may ultimately have such impact. Supply chain disruptions could represent a challenge for us, which may have a material adverse effect on our operations.

Risks Related to Our Common Shares

Additional issuances of Common Shares or issuances of securities convertible into or exercisable for Common Shares may result in further dilution.

In order to finance future operations, we may raise additional funds through the issuance of Common Shares or other securities convertible into or exercisable for Common Shares. We cannot predict the size of future issuances of Common Shares or other securities convertible into or exercisable for Common Shares or the effect, if any, that future issuances will have on the market price of the Common Shares. Any transaction involving the issue of previously unissued Common Shares, or securities convertible into or exercisable for Common Shares, would result in dilution, which may be substantial, to existing holders of Common Shares.

The market price for our Common Shares may be volatile, which may affect the price at which you could sell our Common Shares.

Securities of small-cap companies have experienced substantial volatility in the past, often based on factors unrelated to the companies’ financial performance or prospects. These factors include macroeconomic developments in North America and globally and market perceptions of the attractiveness of particular industries. Factors unrelated to our performance that may affect the price of our Common Shares include, but are not limited to:

The market price of our Common Shares at any given time may not accurately reflect our long-term value due to the impacts of events involving one or more of these risks. In addition, securities class action litigation often has been brought against companies following periods of volatility in the market price of their securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources. The market price of our Common Shares is affected by many other variables that are not directly related to our success and are, therefore, not within our control. These include other developments that affect the breadth of the public market for our Common Shares and the attractiveness of alternative investments. The effect of these and other factors on the market price of our Common Shares is expected to make our Common Share price volatile in the future, which may result in losses to investors.

The offering price of the Primary Offering and the resale offering could differ.

The offering price of our Common Shares in the Primary Offering has been determined by negotiations between us and the underwriter. The selling shareholders may sell the selling shareholder shares at prevailing market prices or privately negotiated prices after close of the Primary Offering and listing of the Common Shares on The Nasdaq Capital Market. Therefore, the offering prices of the Primary Offering and resale offering could differ. As a result, purchasers in the resale offering could pay more or less than the offering price in the Primary Offering.

Sales of substantial amounts of our Common Shares by our existing shareholders in the public market place may have an adverse effect on the market price of our Common Shares.

Sales of a large number of our Common Shares in the public markets, or the potential for such sales, could decrease the trading price of our Common Shares and could impair our ability to raise capital through future sales of our Common Shares. Upon completion of this offering, we will have 10,152,033 Common Shares outstanding, based on 7,252,033 Common Shares outstanding as of June 30, 2023, assuming all outstanding Series 1 Shares are converted into 900,679 Common Shares immediately prior to the closing of the Primary Offering. Any holder of Series 1 Shares may, at any time, elect to convert all or any portion of the outstanding Series 1 Shares held by such holder into Common Shares. The Series 1 Shares will automatically convert into Common Shares on the date that is 12 months after the closing of the Primary Offering. The number of Common Shares issuable upon conversion of the Series 1 Shares is calculated as of the date of this prospectus as follows: (i) with respect to the 3,098,971 Series 1 Shares issued on January 3, 2023, January 9, 2023, February 6, 2023, and March 31, 2023, (a) the aggregate number of Series 1 Shares outstanding, divided by (b) $3.60, which is 80 percent of the midpoint of the price range set forth on the cover of this prospectus; and (ii) with respect to the 239,129 Series 1 Shares issued on September 7, 2023, (a) the aggregate number of Series 1 Shares outstanding, multiplied by (b) 0.6, divided by (c) $3.60, which is 80 percent of the midpoint of the price range set forth on the cover of this prospectus. The actual number of Common Shares issuable upon conversion of the outstanding Series 1 Shares may increase or decrease on a future date based on when the closing of the Primary Offering occurs and the actual offering price per Common Share. See “Description of Share Capital – Preferred Shares” on page 93 of this prospectus for more information regarding the conversion of the Series 1 Shares. Of the 10,152,033 Common Shares that will be outstanding upon completion of this offering, all the Common Shares sold in this offering by us, plus any Common Shares sold upon exercise of the underwriter’s over-allotment option to purchase additional Common Shares, and the selling shareholder shares that are being registered in the registration statement of which this prospectus is a part, will be freely tradable without restriction in the public market immediately following this offering. Based on the number of Common Shares outstanding as of the date of this prospectus, an additional 3,871,400 Common Shares will be eligible for sale in the public market after the expiration of the lock-up agreements pertaining to this offering or the restrictions on the resale of certain restricted securities held by our existing shareholders, as the case may be. If our existing shareholders sell substantial amounts of our Common Shares in the public market, or if the public perceives that such sales could occur, this could have an adverse impact on the market price of our Common Shares, even if there is no relationship between such sales and the performance of our business.

The resale of Common Shares by the selling shareholders may cause the market price of our Common Shares to decline.

An aggregate of 2,330,364 Common Shares are being registered for resale by the selling shareholders in the resale offering pursuant to this prospectus. The resale of Common Shares by the selling shareholders in the resale offering could result in resales of Common Shares by our current shareholders concerned about the potential dilution of their holdings. In addition, the resale of a large number of Common Shares by the selling shareholders could have the effect of depressing the market price for our Common Shares.

We do not intend to pay dividends on our Common Shares and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our Common Shares.

We intend to retain earnings, if any, to finance the growth and development of our business and do not intend to pay cash dividends on our Common Shares in the foreseeable future, if ever. The payment of future cash dividends, if any, will be reviewed periodically by the Board of Directors and will depend upon, among other things, conditions then existing including earnings, financial condition and capital requirements, restrictions in financing agreements, business opportunities and conditions, and other factors.

If persons engage in short sales of our Common Shares, including sales of Common Shares to be issued upon exercise of outstanding securities, the price of our Common Shares may decline.

Selling short is a technique used by a shareholder to take advantage of an anticipated decline in the price of a security. In addition, holders of options, warrants, and other convertible securities will sometimes sell short knowing they can, in effect, cover through the exercise or conversion of options, warrants, and other convertible securities, thus locking in a profit. A significant number of short sales or a large volume of other sales within a relatively short period of time can create downward pressure on the market price of a security. Further sales of Common Shares issued upon exercise or conversion of options, warrants, and other convertible securities could cause even greater declines in the price of our Common Shares due to the number of additional shares available in the market upon such exercise/conversion, which could encourage short sales that could further undermine the value of our Common Shares. You could, therefore, experience a decline in the value of your investment as a result of short sales of our Common Shares.

A “short squeeze” due to a sudden increase in demand for our Common Shares could lead to extreme price volatility in our Common Shares.

Investors may purchase our Common Shares to hedge existing exposure or to speculate on the price of our Common Shares. Speculation of the price of our Common Shares may lead to long and short exposures. To the extent aggregate short exposure exceeds the number of our Common Shares available for purchase on the open market, investors with short exposure may have to pay a premium to repurchase Common Shares for delivery to lenders of our Common Shares. Those repurchases may in turn, dramatically increase the price of our Common Shares until additional Common Shares are available for trading or borrowing. This is often referred to as a “short squeeze.” In the future, a proportion of our Common Shares may be traded by short sellers which may increase the likelihood that our Common Shares will be the target of a short squeeze. A short squeeze could lead to volatile price movements in shares of our Common Shares that are unrelated or disproportionate to our operating performance and, once investors purchase the Common Shares necessary to cover their short positions, the price of our Common Shares may rapidly decline. Investors that purchase Common Shares during a short squeeze may lose a significant portion of their investment.

Our Common Shares, once listed on The Nasdaq Capital Market, may be subject to potential delisting if we do not continue to comply with the listing requirements of The Nasdaq Capital Market.

We have applied to list our Common Shares on The Nasdaq Capital Market, under the symbol “FP”. An approval of our listing application by The Nasdaq Capital Market will be subject to, among other things, our fulfilling of all of the initial listing requirements of The Nasdaq Capital Market. There is no guarantee that our Common Shares will be approved for listing on The Nasdaq Capital Market or any other securities exchange. In addition, The Nasdaq Capital Market maintains rules and standards for continued listing, including, without limitation, minimum market capitalization requirements. Failure to maintain our listing (i.e., being de-listed from Nasdaq Capital Market), would make it more difficult for shareholders to sell our Common Shares and more difficult to obtain accurate price quotations for our Common Shares. Any potential or actual de-listing may have significant adverse effects on the price of our Common Shares, our ability to issue additional securities for financing or other purposes, or otherwise to arrange for any financing.

There is a limited trading market for our Common Shares and shareholders may find it difficult to sell our Common Shares.

Currently, our Common Shares are not listed on any exchange or quoted on any of the over the counter markets. As a result, investors may find it difficult to sell, or to obtain accurate quotations as to the price of, our Common Shares prior to successful listing with The Nasdaq Capital Market. Even if our Common Shares are listed on The Nasdaq Capital Market, our Common Shares being offered pursuant to this prospectus may be subject to the “penny stock” rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors. The SEC regulations generally define a penny stock to be an equity security that has a market price of less than $5.00 per share, subject to certain exceptions. If we do not obtain or retain a listing on The Nasdaq Capital Market and if the price of our Common Shares is less than $5.00, our Common Shares will be deemed a penny stock. Unless an exception is available, those regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally institutions and high net worth individuals). In addition, the broker-dealer must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. Moreover, broker-dealers who recommend such securities to persons other than established customers and accredited investors must make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to transactions prior to sale. Regulations on penny stocks could limit the ability of broker-dealers to sell our Common Shares and thus the ability of purchasers of our Common Shares to sell their securities in the secondary market.

We cannot predict the extent to which investor interest in us and our Common Shares will lead to the development or continuance of an active trading market or how liquid that trading market for our Common Shares might become. If an active trading market for our Common Shares does not develop or is not sustained, it may be difficult for investors to sell our Common Shares, particularly large quantities thereof, at a price that is attractive or at all. As a result, an investment in our Common Shares may be illiquid and investors may not be able to liquidate their investment readily or at all when they desire to sell.

There is limited liquidity in our Common Shares, which may adversely affect your ability to sell your Common Shares.

The market price of our Common Shares may fluctuate significantly in response to a number of factors, some of which are beyond our control. These factors include, but are not limited to:

In recent years, the stock market in general has experienced extreme price and volume fluctuations. Continued market fluctuations could result in extreme volatility in the price of our Common Shares, which could cause a decline in the value of our Common Shares. Price volatility may be accentuated if trading volume of our Common Shares is low. Any or all of these above factors could adversely affect your ability to sell your Common Shares or to sell at a price that you determine to be fair or favorable.

We are a “smaller reporting company” and “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies and emerging growth companies will make our Common Shares less attractive to investors.

We are a “smaller reporting company,” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including “emerging growth companies” such as, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Our status as a “smaller reporting company” is determined on an annual basis. We cannot predict if investors will find our Common Shares less attractive or our Company less comparable to certain other public companies because we will rely on these exemptions. For example, if we do not adopt a new or revised accounting standard, our future financial results may not be as comparable to the financial results of certain other companies in our industry that adopted such standards.

Additionally, in connection with this offering, we are concurrently filing a long form prospectus in Alberta, Canada, in order to become a reporting issuer under applicable securities laws in Alberta, Canada. As a result, we will, thereafter, be required to follow Canadian laws and regulations that are applicable to public Canadian companies, including proxy rules. If some investors find our Common Shares less attractive as a result of the reduced disclosure requirements or the applicable Canadian laws and regulations, there may be a less active trading market for our Common Shares and our stock price may be more volatile.

If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud.

Under Section 404 of the Sarbanes-Oxley Act, a newly public company is not required to comply with either the management or the auditor reporting requirements related to internal control over financial reporting until its second annual report, if applicable.

Further, we intend to qualify as an “emerging growth company” as defined in the JOBS Act. An emerging growth company may take advantage of reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

We may take advantage of these provisions until the last day of the fiscal year ending during which fifth anniversary of this listing occurs, or such earlier time that we are no longer an emerging growth company and, if we do, the information that we provide shareholders may be different than you might receive from other public companies in which you hold equity. We would cease to be an emerging growth company upon the earliest of: (i) the last day of the first fiscal year in which our annual gross revenue is $1.235 billion or more; (ii) the last day of the fiscal year during which the fifth anniversary of this listing occurs; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

In addition, if we no longer qualify as an emerging growth company, as an accelerated filer, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations and lead to a decline in the trading price of our stock.

Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

In connection with the preparation of our consolidated financial statements for the period from January 21, 2021 (inception) through December 31, 2021, we identified the following material weaknesses in our internal controls:

In order to mitigate these material weaknesses, we have expanded our Board of Directors to include three independent directors (see “Management” beginning on page 72 of this prospectus) and have established an independent Audit Committee (see “Corporate Governance” beginning on page 75 of this prospectus).

You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited because we are incorporated under Canadian law and certain of our executive officers and directors reside outside the United States.

We are incorporated under the laws of Alberta, Canada, and our principal executive office is located in Canada. In addition, certain of the directors and officers of the Company are residents of Canada or other jurisdictions outside of the United States, and all or a substantial portion of the assets of those directors and officers are or may be located outside the United States. As a result, it may be difficult or not possible for investors in the United States to effect service of process within the United States upon us, our officers, or our directors, or to enforce against us, our officers, or our directors judgments of U.S. courts based upon civil liability under the U.S. federal securities laws or the securities laws of any state within the United States. There is doubt as to the enforceability in Canada against us, our officers, or our directors in original actions or in actions for enforcement of judgments of U.S. courts of liabilities based solely upon the U.S. federal securities laws or the securities laws of any state within the United States.

Our amended and restated articles of incorporation and amended and restated bylaws contain provisions that could delay, discourage, or prevent a takeover attempt even if a takeover attempt might be beneficial to our shareholders, and such provisions may adversely affect the market price of our Common Shares.

Provisions contained in our amended and restated articles of incorporation and amended and restated bylaws could make it more difficult for a third party to acquire us. Our amended and restated articles of incorporation and amended and restated bylaws also impose various procedural and other requirements, which could make it more difficult for shareholders to effect certain corporate actions. For example, our amended and restated articles of incorporation authorizes our Board of Directors to determine the rights, preferences, privileges, and restrictions of unissued series of preferred shares without any vote or action by our shareholders. Thus, our Board of Directors can authorize and issue preferred shares with voting or conversion rights that could adversely affect the voting or other rights of holders of our Common Shares. These rights may have the effect of delaying or deterring a change of control of our company. Additionally, for example, our amended and restated bylaws include advance notice requirements for nominations for election to our Board of Directors and for proposing matters that can be acted upon at shareholder meetings.

In addition, our company is subject to the laws of Alberta, Canada, which laws contain certain provisions that could make it more difficult for a third party to acquire us, including that (i) our Board of Directors is expressly authorized to adopt, or to alter or repeal, our amended and restated bylaws, subject to a shareholder ratification requirement by ordinary resolution at the next meeting of shareholders, and (ii) the ability to remove our directors and the ability of our shareholders to call special meetings of shareholders are subject to certain limitations.

See “Description of Share Capital—Anti-Takeover Effects of Provisions of Our Amended and Restated Articles of Incorporation, Our Amended and Restated Bylaws, and Alberta Law” beginning on page 94 of this prospectus. These provisions could limit the price that certain investors might be willing to pay in the future for our Common Shares.

Our amended and restated bylaws provide that any derivative actions, actions relating to breach of fiduciary duties, and other matters relating to our internal affairs will be required to be litigated in Alberta, Canada, which could limit investors’ ability to obtain a favorable judicial forum for disputes with us.

Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of King’s Bench of the Province of Alberta, Canada, and appellate Courts therefrom (or, failing such Court, any other court having jurisdiction, and the appellate Courts therefrom), will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action or proceeding asserting a breach of fiduciary duty owed by any of our directors, officers, or other employees to us, (iii) any action or proceeding asserting a claim arising pursuant to any provision of the Business Corporations Act (Alberta) (the “ABCA”) or our amended and restated articles of incorporation or our amended and restated bylaws, or (iv) any action or proceeding asserting a claim otherwise related to our “affairs” (as defined in the ABCA). Our forum selection bylaw also provides that our securityholders are deemed to have consented to personal jurisdiction in the Province of Alberta and to service of process on their counsel in any foreign action initiated in violation of our bylaw relating to the foregoing matters. Therefore, it may not be possible for securityholders to litigate any action relating to the foregoing matters outside of the Province of Alberta. This may result in increased costs to investors to bring a claim against us, and may discourage claims or limit investors’ ability to bring a claim in a judicial forum that they find favorable. However, our amended and restated bylaws provide that, unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, and that the exclusive forum provision shall not apply to actions brought to enforce any liability or duty created by the Exchange Act.

Our forum selection bylaw seeks to reduce litigation costs and increase outcome predictability by requiring derivative actions and other matters relating to our affairs to be litigated in a designated forum. While forum selection clauses in corporate charters and bylaws are becoming more commonplace for public companies in the United States and have been upheld by courts in certain states, they are untested in Canada. It is possible that the validity of our forum selection bylaw could be challenged and that a court could rule that such bylaw is inapplicable or unenforceable.

If a court were to find our forum selection bylaw inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions and we may not obtain the benefits of limiting jurisdiction to the courts selected.

General economic conditions may negatively impact our operations.

Economic downturns may negatively affect our operations. These conditions may be widespread or isolated to one or more geographic regions in which we operate. Higher wages, related labor costs, printing costs, leasing costs, energy, insurance, and fuel costs, and the increasing cost trends in those markets may decrease our margins. In addition, decreases in discretionary spending during economic downturns could impact our businesses, and thereby negatively impact our operations.

We could be subject to taxation in both Canada and the United States, which could have a material adverse effect on our financial condition and results of operations.

We are a Canadian corporation, and as a result generally would be classified as a non-U.S. corporation under the general rules of U.S. federal income taxation. Section 7874 of the Internal Revenue Code of 1986, as amended (the “Code”), however, contains rules that can cause a non-U.S. corporation to be taxed as a U.S. corporation for U.S. federal income tax purposes. Under Section 7874 of the Code, a corporation created or organized outside of the United States will nevertheless be treated as a U.S. corporation for U.S. federal income tax purposes, which is referred to as an inversion, if certain conditions are met.

If, pursuant to Section 7874 of the Code, we are classified as a U.S. corporation for U.S. federal income tax purposes, then we would be subject to U.S. federal income tax on our worldwide income. Regardless of any application of Section 7874 of the Code, however, we expect to be treated as a Canadian resident company for purposes of the Income Tax Act (Canada), as amended. If, as a result of the application of Section 7874 of the Code, we are subject to taxation both in Canada and the United States, then such treatment could have a material adverse effect on our financial condition and results of operations.

If we are a passive foreign investment company following this offering, there could be adverse U.S. federal income tax consequences to U.S. Holders.

Based on the Company’s current and projected income, assets, activities and market capitalization, we do not expect that the Company will be classified as a passive foreign investment company (“PFIC”) for our taxable year ending December 31, 2023, and we do not expect to become one in the future. However, if we are a PFIC for our taxable year ending December 31, 2023, or any subsequent taxable years, we intend to annually furnish U.S. holders, upon request, a “PFIC Annual Information Statement,” with the information required to allow U.S. holders to make a “qualified electing fund” election, or “QEF Election” for U.S. federal income tax purposes. No assurances regarding our PFIC status can be provided for any past, current, or future taxable years. The determination of whether we are a PFIC is a fact-intensive determination made on an annual basis and the applicable law is subject to varying interpretation. In particular, the characterization of our assets as active or passive may depend in part on our current and intended future business plans, which are subject to change. In addition, for our current and future taxable years, the total value of our assets for PFIC testing purposes may be determined in part by reference to the market price of our securities from time to time, which may fluctuate considerably. Under the income test, our status as a PFIC depends on the composition of our income which will depend on the transactions we enter into in the future and our corporate structure. The composition of our income and assets is also affected by how, and how quickly, we spend the cash we raise in any offering, including this offering.

If we are a PFIC, U.S. holders of our securities will be subject to adverse U.S. federal income tax consequences, such as ineligibility for any preferential tax rates for individuals on capital gains or on actual or deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements under U.S. federal income tax laws and regulations. For further discussion of the PFIC rules and the adverse U.S. federal income tax consequences in the event we are classified as a PFIC, see “Material U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Rules” beginning on page 112 of this prospectus.

If we or any of our non-U.S. subsidiaries are classified as a controlled foreign corporation, there could be materially adverse U.S. federal income tax consequences to certain U.S. Holders of our securities.

Each “Ten Percent Shareholder” (as defined below) in a non-U.S. corporation that is classified as a controlled foreign corporation (“CFC”) for U.S. federal income tax purposes generally is required to include in income for U.S. federal tax purposes such Ten Percent Shareholder’s pro rata share of the CFC’s “Subpart F income,” global intangible low taxed income, and investment of earnings in U.S. property, even if the CFC has made no distributions to its shareholders. Subpart F income generally includes dividends, interest, rents, royalties, gains from the sale of securities and income from certain transactions with related parties. In addition, a Ten Percent Shareholder that realizes gain from the sale or exchange of shares in a CFC may be required to classify a portion of such gain as dividend income rather than capital gain. An individual that is a Ten Percent Shareholder with respect to a CFC generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a Ten Percent Shareholder that is a U.S. corporation. Failure to comply with these reporting obligations may subject a Ten Percent Shareholder to significant monetary penalties and may prevent the statute of limitations with respect to such Ten Percent Shareholder’s U.S. federal income tax return for the year for which reporting was due from starting.

A non-U.S. corporation generally will be classified as a CFC for U.S. federal income tax purposes if Ten Percent Shareholders own, directly or indirectly, more than 50 percent of either the total combined voting power of all classes of stock of such corporation entitled to vote or of the total value of the stock of such corporation. A “Ten Percent Shareholder” is a U.S. person (as defined by the Code) who owns or is considered to own 10 percent or more of the total combined voting power of all classes of stock entitled to vote or 10 percent or more of the total value of all classes of stock of such corporation.

We believe that we were not a CFC in the 2022 taxable year, and we do not expect to become a CFC in the 2023 taxable year or in a subsequent taxable year. However, the determination of CFC status is complex and includes attribution rules, the application of which is not entirely certain. In addition, recent changes to the attribution rules relating to the determination of CFC status may make it difficult to determine our CFC status for any taxable year. In addition, those changes to the attribution rules may result in ownership of the stock of our non-U.S. subsidiary being attributed to our U.S. subsidiary, which could result in our non-U.S. subsidiary being treated as a CFC and certain U.S. holders of our securities being treated as Ten Percent Shareholders of such non-U.S. subsidiary CFC. In addition, it is possible that, following this offering, a shareholder treated as a U.S. person for U.S. federal income tax purposes will acquire, directly or indirectly, enough of our securities to be treated as a Ten Percent Shareholder. We cannot provide any assurances that we will assist holders of our securities in determining whether we or any of our non-U.S. subsidiaries are treated as a CFC or whether any holder of our securities is treated as a Ten Percent Shareholder with respect to any such CFC or furnish to any Ten Percent Shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations.

U.S. holders should consult their tax advisors with respect to the potential adverse U.S. tax consequences of becoming a Ten Percent Shareholder in a CFC, including the possibility and consequences of becoming a Ten Percent Shareholder in our non-U.S. subsidiary that may be treated as a CFC due to the changes to the attribution rules. If we are classified as both a CFC and a PFIC, we generally will not be treated as a PFIC with respect to those U.S. holders that meet the definition of a Ten Percent Shareholder during the period in which we are a CFC.

Risks Related to this Offering

The requirements of being a reporting public company may strain our resources, divert management’s attention, and affect our ability to attract and retain additional executive management and qualified board members.

As a reporting public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the Dodd-Frank Act, laws, regulations, and requirements relating to becoming a reporting issuer in Alberta, Canada, and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, making some activities more difficult, time-consuming or costly. This will put increased demand on our systems and resources, particularly after we are no longer a “smaller reporting company.” The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations. As a “smaller reporting company” and “emerging growth company,” as stated above, we receive certain reporting exemptions under the Sarbanes-Oxley Act.

Changing laws, regulations, and standards relating to corporate governance and public disclosure create uncertainty for public companies, which increases legal and financial compliance costs and time expenditures for internal personnel. These laws, regulations, and standards are subject to interpretation, which in many cases due to their lack of specificity, their application in practice may evolve over time as regulators and governing bodies provide new guidance. These changes may result in continued uncertainty regarding compliance matters and may necessitate higher costs due to ongoing revisions to filings, disclosures, and governance practices. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate regulatory or legal proceedings against us and our business may be adversely affected.

As a public company under these rules and regulations, we expect that it may make it more expensive for us to hire external auditors to perform requisite outside audited financial statements, as well as obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our Board of Directors, particularly to serve on our Audit Committee and Compensation Committee, and could also make it more difficult to attract qualified executive officers.

As a result of disclosure of information in this prospectus and in filings required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and results of operations could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and results of operations.

Investors in this offering will experience immediate and substantial dilution in net tangible book value.

The Primary Offering price per Common Share is substantially higher than the pro forma net tangible book value per share of our outstanding Common Shares. As a result, investors in this offering will incur immediate dilution of $3.62 per Common Share, based on the assumed Primary Offering price of $4.50 per Common Share, representing the difference between our pro forma as adjusted net tangible book value per Common Share after this offering and the Primary Offering price per Common Share. Investors in this offering will pay a price per Common Share that substantially exceeds the book value of our assets after subtracting our liabilities. See “Dilution” on page 45 of this prospectus for a more complete description of how the value of your investment will be diluted upon the completion of this offering. After this offering, we will also have outstanding options and warrants to purchase our Common Shares with exercise prices lower than the Primary Offering price. To the extent these outstanding options or warrants are exercised, there will be further dilution to investors in this offering.

We will have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the purposes described in “Use of Proceeds” beginning on page 42 of this prospectus, and you will not have the opportunity as part of your investment decision to assess whether the net proceeds will be used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. Our management might not apply our net proceeds in ways that ultimately increase the value of your investment. We currently intend to use the net proceeds of this offering primarily for general corporate purposes, growing our initial line of consumer products, expanding research and development, establishing operations in Jamaica, and expansion of growing and production capabilities in Olympia, Washington. See “Use of Proceeds” on page 42 of this prospectus for additional information.

Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering, or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual use of the net proceeds will vary depending on numerous factors, including the commercial success of our systems, as well as the amount of cash used in our operations. As a result, our management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds of this offering.

The failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities. These investments may not yield a favorable return to our shareholders. If we do not invest or apply the net proceeds from this offering in ways that enhance shareholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.

Our principal stockholders and management own a significant percentage of our capital stock and will be able to exert significant control over matters subject to shareholder approval.

Immediately following the completion of this offering, our executive officers, directors, and their affiliates will beneficially hold, in the aggregate, approximately 1.74 million of our outstanding Common Shares, or approximately 18.70 percent of our outstanding Common Shares. These stockholders would be able to significantly influence elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our Common Shares that you may feel are in your best interest as one of our shareholders.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our Common Shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our company. If no securities or industry analysts commence coverage of our company, the trading price for our Common Shares would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who covers us downgrades our Common Shares or publishes inaccurate or unfavorable research about our business, our Common Share price may decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our Common Shares could decrease, which might cause our Common Share price and trading volume to decline.

Future changes to tax laws could materially adversely affect us and reduce net returns to our shareholders.

Our tax treatment is subject to changes in tax laws, regulations, and treaties, or the interpretation thereof, tax policy initiatives and reforms under consideration and the practices of tax authorities in jurisdictions in which we operate, as well as tax policy initiatives and reforms related to the Organisation for Economic Co-Operation and Development’s Base Erosion and Profit Shifting Project, and other initiatives. 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. We are unable to predict what tax reform may be proposed or enacted in the future or what effect such changes would have on our business, but such changes, to the extent they are brought into tax legislation, regulations, policies, or practices, could affect our financial position and overall or effective tax rates in the future in countries where we have operations, reduce post-tax returns to our shareholders, and increase the complexity, burden, and cost of tax compliance.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, timing and likelihood of success, plans and objectives of management for future operations, and future results of current and anticipated products are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this prospectus are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this prospectus and are subject to a number of risks, uncertainties, and assumptions described under “Risk Factors” beginning on page 11 of this prospectus and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 48 of this prospectus, and elsewhere in this prospectus. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for us to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances, or otherwise. All of the forward-looking statements made in this prospectus are qualified by these cautionary statements.

USE OF PROCEEDS

Based upon an assumed Primary Offering price of $4.50 per Common Share, which is the midpoint of the price range set forth on the cover of this prospectus, we estimate that we will receive net proceeds from this offering, after deducting the underwriting discounts and commissions and the estimated offering expenses payable by us, of approximately $10.54 million assuming the underwriter does not exercise the over-allotment option (or $12.33 million if the underwriter exercises the over-allotment option in full). We will not receive any of the proceeds from the sale of selling shareholder shares. However, upon any exercise, other than a net exercise, of warrants or stock options held by the selling shareholders, we will receive cash proceeds per share equal to the exercise price of such warrants or stock options.

Each $0.50 increase (decrease) in the assumed Primary Offering price of $4.50 per Common Share, which is the midpoint of the price range set forth on the cover of this prospectus, would increase (decrease) the net proceeds we receive from this offering by approximately $1.33 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions. Similarly, each increase (decrease) of 100,000 Common Shares offered by us would increase (decrease) the net proceeds we receive from this offering by approximately $0.41 million, assuming the assumed Primary Offering price remains the same, and after deducting estimated underwriting discounts and commissions.

We plan to use the net proceeds we receive from this offering primarily for the following purposes:

On March 1, 2022, FP, Inc. launched a direct-to-consumers product line of nutraceutical cognitive supplements made of functional mushrooms and other adaptogenic botanicals. There are three initial product offerings, as follows: (i) Sunbeam^TM, (ii) Golden Hour^TM, and (iii) Moonlight^TM. See “Business— Development of Nutraceutical Consumer Products” beginning on page 56 of this prospectus for additional information. We intend to use approximately $2.75 million of the net proceeds in connection with the growth of these consumer products. Of the $2.75 million, we plan to use approximately $1.25 million for inventory and approximately $1.5 million for marketing.

On February 15, 2022, we acquired all of the issued and outstanding shares of common stock of TruMed pursuant to the terms of the Share Purchase Agreement. See “Business—Overview” beginning on page 54 of this prospectus for additional information. TruMed is a pre-revenue company in the development stage with substantially no operations. We intend to use approximately $500,000 of the net proceeds of this offering to expand innovation and research and development and establish TruMed’s operations in Jamaica. Of the $500,000, we plan to use approximately $200,000 for capital assets and leasehold improvements, including the purchase or lease of containers for growing functional and psychedelic mushrooms and building-out a grow facility in Jamaica. We plan to use the remaining approximately $300,000 for general working capital, including approximately $50,000 for marketing, and approximately $100,000 for research and development, including research in Jamaica involving psychedelic mushrooms. The Share Purchase Agreement provides that $550,000 of the purchase price for the acquisition of TruMed will only be paid if TruMed achieves certain milestones within the first twenty-four months following the closing of the acquisition. See “Business—Overview” beginning on page 54 of this prospectus for additional information. In the event the first milestone is met after the effective date of the registration statement of which this prospectus forms a part, then $125,000 of the $300,000 of proceeds allocated for general working capital, marketing, and research and development will be used to make the corresponding Milestone Payment.

Our Olympia, Washington facility currently consists of 15,000 sq. ft. of production space, including three fully constructed functional mushroom greenhouses, totaling 12,000 sq. ft., with plans to acquire or lease additional growing space. We intend to use approximately $750,000 of the net proceeds of this offering for the expansion of our production capabilities in the ingredients division in Olympia, Washington, focusing on expanding our processing capabilities for fresh and dried functional mushrooms. This expansion effort will increase our production efficiency and processing capacity. We do not intend to use any of the proceeds we receive from this offering for the construction of our planned WDOH- and DEA-compliant culture laboratory and controlled production and research facility for psychedelic mushrooms.

During the year ended December 31, 2022, Cory J. Rosenberg, our Chairman, Chief Executive Officer, and President, incurred digital advertising expenditures on our behalf, subject to expense reporting and reimbursement. As of December 31, 2022, there was $643,407 due to Mr. Rosenberg, of which $340,640 remained outstanding and due to Mr. Rosenberg as of September 28, 2023. See “Certain Relationships and Related Party Transactions” on page 85 of this prospectus for more information regarding the amounts due to Mr. Rosenberg. We will pay such amounts out of the net proceeds from this offering.

As of September 28, 2023, we have convertible secured promissory notes in the aggregate principal amount of $3,338,109 outstanding, including a convertible secured promissory note in the principal amount of $271,739 issued to Cory J. Rosenberg, our Chairman, Chief Executive Officer, and President, on January 3, 2023, a convertible secured promissory note in the principal amount of $108,696 issued to Mr. Rosenberg on September 7, 2023, and a convertible secured promissory note in the principal amount of $100,000 issued to Darcy A. Campbell, our Chief Financial Officer on January 9, 2023. See “Certain Relationships and Related Party Transactions” on page 85 of this prospectus for more information regarding the convertible secured promissory notes issued to Mr. Rosenberg and Mr. Campbell. The principal amount of each convertible secured promissory note may be prepaid at any time at our sole election without penalty. Interest on the principal amount outstanding and remaining from time to time on each convertible secured promissory note accrues at the rate of 8 percent per annum. Interest is payable in cash on a quarterly basis on the last day of each quarter, which commenced with the first quarter ending March 31, 2023. Interest is calculated on the basis of a 360-day year consisting of twelve, 30-day months. Each holder of a convertible secured promissory note may elect, in such holder’s sole discretion, to have the interest payable on the principal amount to be paid-in-kind. In the event of such election, the interest is calculated at a rate of 10 percent per annum, and such interest is added to the outstanding principal amount on the applicable interest payment date. Any such paid-in-kind interest is added to and increases the principal amount for all purposes under the convertible secured promissory note. Each convertible secured promissory note, including the outstanding principal amount together with all applicable accrued and unpaid interest thereunder, is convertible, in whole or in part, into Common Shares at the option of the holder of such convertible secured promissory note (subject to certain limitations set forth in the convertible secured promissory note) at a conversion price equal to $6.00 per Common Share (subject to certain adjustments set forth in the convertible secured promissory note). Each convertible secured promissory note is payable in accordance with the following schedule: (i) if a Qualifying Transaction occurs 30 days or more before the date that is one year after the date of such convertible secured promissory note, then (a) 50 percent of the principal amount is payable on the thirtieth calendar day after the date of the first Qualifying Transaction occurring after the date of such convertible secured promissory note; and (b) the remaining 50 percent of the principal amount is payable on the earlier to occur of (1) the ninetieth calendar day after the date of the first Qualifying Transaction occurring after the date of such convertible secured promissory note, or (2) the date that is one year after the date of such convertible secured promissory note, and (ii) if a Qualifying Transaction does not occur, or occurs less than 30 days, before the date that is one year after the date of such convertible secured promissory note, then 100 percent of the principal amount is payable on the date that is one year after the date of such convertible secured promissory note. All of the convertible secured promissory notes were issued between January 3, 2023, and September 7, 2023. The Primary Offering is expected to qualify as a Qualifying Transaction under the terms of the convertible secured promissory notes. Therefore, to the extent the holders of the convertible secured promissory notes, including the convertible secured promissory notes held by Mr. Rosenberg and Mr. Campbell, do not elect to convert the outstanding principal and accrued and unpaid interest into Common Shares such amounts will become payable in accordance with the schedule set forth above and we will pay such amounts out of the net proceeds from this offering that are allocated for general corporate purposes, further research and development and product innovation, marketing spend and brand development, capital expenditures, and working capital.

The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. However, the nature, amounts, and timing of our actual expenditures may vary significantly depending on numerous factors. As a result, our management has and will retain broad discretion over the allocation of the net proceeds from this offering. We may find it necessary or advisable to use the net proceeds from this offering for other purposes, and we will have broad discretion in the application of net proceeds from this offering. To the extent that the net proceeds we receive from this offering are not immediately used for the above purposes, we intend to invest our net proceeds in short-term, interest-bearing bank deposits, or debt instruments.

We are an early stage company with a history of net losses. We currently have negative operating cash flow and may continue to have that for the foreseeable future. To the extent that we have negative operating cash flow in future periods, we will need to allocate a portion of our cash to fund such negative operating cash flow. As such, certain of the net proceeds of this offering may be used to fund such negative cash flow from operating activities in future periods. See “Risk Factors—We have a limited operating history and a history of net losses, and we may not achieve or maintain profitability in the future” on page 14 of this prospectus.

DIVIDEND POLICY

We have never paid dividends on our Common Shares, and currently do not intend to pay any cash dividends on our Common Shares in the foreseeable future. Our current policy is to retain all of our earnings to finance future growth. Any future declaration of dividends will be subject to the discretion of our Board of Directors.

In addition, we may incur additional debt financing in the future, the terms of which will likely prohibit us from paying cash dividends or distributions on our Common Shares. Even if we are permitted to pay cash dividends in the future, we currently anticipate that we will retain all future earnings, if any, to fund the operation and expansion of our business, and for general corporate purposes.

CAPITALIZATION

Set forth below is our cash and capitalization as of June 30, 2023:

Any holder of Series 1 Shares may, at any time, elect to convert all or any portion of the outstanding Series 1 Shares held by such holder into Common Shares. The Series 1 Shares will automatically convert into Common Shares on the date that is 12 months after the closing of the Primary Offering. The number of Common Shares issuable upon conversion of the Series 1 Shares is calculated as of the date of this prospectus as follows: (i) with respect to the 3,098,971 Series 1 Shares issued on January 3, 2023, January 9, 2023, February 6, 2023, and March 31, 2023, (a) the aggregate number of Series 1 Shares outstanding, divided by (b) $3.60, which is 80 percent of the midpoint of the price range set forth on the cover of this prospectus; and (ii) with respect to the 239,129 Series 1 Shares issued on September 7, 2023, (a) the aggregate number of Series 1 Shares outstanding, multiplied by (b) 0.6, divided by (c) $3.60, which is 80 percent of the midpoint of the price range set forth on the cover of this prospectus. The actual number of Common Shares issuable upon conversion of the outstanding Series 1 Shares may increase or decrease on a future date based on when the closing of the Primary Offering occurs and the actual offering price per Common Share. See “Description of Share Capital – Preferred Shares” on page 93 of this prospectus for more information regarding the conversion of the Series 1 Shares.

You should read the information in the below table together with our consolidated financial statements and related notes included elsewhere in this prospectus, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 48 of this prospectus.

DILUTION

If you invest in our Common Shares in this offering, your interest will be diluted to the extent of the difference between the Primary Offering price per Common Share and the as adjusted net tangible book value per Common Share immediately after this offering.

Our historical net tangible book value as of June 30, 2023, was $(2,955,325), or $(0.47) per Common Share. Our historical net tangible book value is the amount of our total tangible assets less our liabilities. Historical net tangible book value per Common Share is our historical net tangible book value divided by the number of outstanding Common Shares as of June 30, 2023.

Our pro forma net tangible book value as of June 30, 2023, was $(2,884,925), or $(0.40) per Common Share. Pro forma net tangible book value per Common Share represents pro forma net tangible book value divided by the total number of Common Shares outstanding after giving effect to (i) the receipt of cash proceeds in the amount of $199,774 on July 19, 2023, pursuant to a merchant loan agreement entered into with Cloudfund LLC; (ii) the receipt of cash proceeds in the amount of $260,000 on July 21, 2023, pursuant to a merchant loan agreement entered into with WebBank, on behalf of Shopify Inc.; (iii) the receipt of cash proceeds in the amount of $225,000 on August 31, 2023, pursuant to a merchant loan agreement entered into with Curve Capital LLC; (iv) the issuance of convertible secured promissory notes in the aggregate principal amount of $239,130 and 239,129 Series 1 Shares to accredited investors for gross proceeds of approximately $220,000 on September 7, 2023; (v) the receipt of cash proceeds of $150,550 on September 19, 2023, pursuant to a refinancing of a cash advance agreement with Click Capital Group LLC, (vi) the receipt of cash proceeds of $150,550 on September 19, 2023, pursuant to a refinancing of a future receivables sale and purchase agreement with Fundonatic, and (vii) the conversion of all outstanding Series 1 Shares into 900,679 Common Shares. Any holder of Series 1 Shares may, at any time, elect to convert all or any portion of the outstanding Series 1 Shares held by such holder into Common Shares. The Series 1 Shares will automatically convert into Common Shares on the date that is 12 months after the closing of the Primary Offering. The number of Common Shares issuable upon conversion of the Series 1 Shares is calculated as of the date of this prospectus as follows: (i) with respect to the 3,098,971 Series 1 Shares issued on January 3, 2023, January 9, 2023, February 6, 2023, and March 31, 2023, (a) the aggregate number of Series 1 Shares outstanding, divided by (b) $3.60, which is 80 percent of the midpoint of the price range set forth on the cover of this prospectus; and (ii) with respect to the 239,129 Series 1 Shares issued on September 7, 2023, (a) the aggregate number of Series 1 Shares outstanding, multiplied by (b) 0.6, divided by (c) $3.60, which is 80 percent of the midpoint of the price range set forth on the cover of this prospectus. The actual number of Common Shares issuable upon conversion of the outstanding Series 1 Shares may increase or decrease on a future date based on when the closing of the Primary Offering occurs and the actual offering price per Common Share. See “Description of Share Capital – Preferred Shares” on page 93 of this prospectus for more information regarding the conversion of the Series 1 Shares.

After giving further effect to the sale of the Common Shares in this offering at the assumed Primary Offering price of $4.50 per Common Share, and after deducting underwriting discounts and commissions and other estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of June 30, 2023, would have been $8,905,825, or $0.88 per Common Share. This amount represents an immediate increase in pro forma as adjusted net tangible book value per Common Share of $1.28 to our existing shareholders and immediate dilution of $3.62 in pro forma as adjusted net tangible book value per Common Share to new investors purchasing Common Shares in this offering.

Dilution per Common Share to new investors is determined by subtracting pro forma as adjusted net tangible book value per Common Share after this offering from the Primary Offering price per Common Share paid by new investors. The following table illustrates this dilution on a per Common Share basis (without giving effect to any exercise by the underwriter of its option to purchase additional shares):

A $0.50 increase (decrease) in the assumed Primary Offering price of $4.50 per Common Share, would increase (decrease) the pro forma as adjusted net tangible book value per Common Share by $0.13, and increase (decrease) dilution to new investors by $0.37 per Common Share, in each case assuming that the number of Common Shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

The foregoing discussion and table do not take into account further dilution to new investors that could occur upon the exercise of outstanding warrants or convertible promissory notes having a per Common Share exercise or conversion price less than the per Common Share offering price to the public in this offering.

If the underwriter exercises in full the over-allotment option to purchase additional Common Shares in this offering, the as adjusted net tangible book value after the offering would be $1.01 per Common Share, the increase in net tangible book value to existing shareholders would be $1.41 per Common Share, and the dilution to new investors would be $3.49 per Common Share, in each case assuming a Primary Offering price of $4.50 per Common Share.

The following table presents, as of June 30, 2023, on an as adjusted basis, the number of Common Shares purchased from us, the total consideration paid to us, and the average price paid per Common Share by existing shareholders and by new investors purchasing Common Shares in this offering at an assumed Primary Offering price of $4.50 per Common Share (the midpoint of the estimated price range set forth on the cover of this prospectus), before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us:

Except as otherwise indicated, the above discussion and table assume no exercise of the underwriter’s over-allotment option to purchase additional Common Share from us. If the underwriter’s over-allotment option to purchase additional Common Share were exercised in full, our existing shareholders would own 68.50 percent and our new investors would own 31.50 percent of the total number of Common Shares outstanding upon completion of this offering.

The number of Common Shares that will be outstanding after this offering is based on 7,252,033 Common Shares outstanding as of June 30, 2023, assuming all outstanding Series 1 Shares are converted into 900,679 Common Shares immediately prior to the closing of the Primary Offering, and excludes the following:

Any holder of Series 1 Shares may, at any time, elect to convert all or any portion of the outstanding Series 1 Shares held by such holder into Common Shares. The Series 1 Shares will automatically convert into Common Shares on the date that is 12 months after the closing of the Primary Offering. The number of Common Shares issuable upon conversion of the Series 1 Shares is calculated as of the date of this prospectus as follows: (i) with respect to the 3,098,971 Series 1 Shares issued on January 3, 2023, January 9, 2023, February 6, 2023, and March 31, 2023, (a) the aggregate number of Series 1 Shares outstanding, divided by (b) $3.60, which is 80 percent of the midpoint of the price range set forth on the cover of this prospectus; and (ii) with respect to the 239,129 Series 1 Shares issued on September 7, 2023, (a) the aggregate number of Series 1 Shares outstanding, multiplied by (b) 0.6, divided by (c) $3.60, which is 80 percent of the midpoint of the price range set forth on the cover of this prospectus. The actual number of Common Shares issuable upon conversion of the outstanding Series 1 Shares may increase or decrease on a future date based on when the closing of the Primary Offering occurs and the actual offering price per Common Share. See “Description of Share Capital – Preferred Shares” on page 93 of this prospectus for more information regarding the conversion of the Series 1 Shares.

SELECTED CONSOLIDATED FINANCIAL DATA

The summary consolidated statements of operations data for the year ended December 31, 2022, have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary consolidated statements of operations data for the three months ended June 30, 2022 and 2023, have been derived from the unaudited consolidated financial statements included elsewhere in this prospectus. The unaudited consolidated financial statements have been prepared on a basis consistent with our audited financial statements and, in our opinion, contain all adjustments, consisting of only normal recurring adjustments, necessary for fair presentation of such financial data. Our historical results are not necessarily indicative of the results that should be expected for any future period.

You should read the consolidated financial data set forth below in conjunction with our consolidated financial statements and the accompanying notes and the information in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 48 of this prospectus. Our historical results are not necessarily indicative of the results to be expected for any period in the future.

First Person Ltd.

Consolidated Statement of Operations and Comprehensive Loss