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Bruush Oral Care Inc. – IPO: ‘424B3’ on 8/26/22

On:  Friday, 8/26/22, at 5:23pm ET   ·   Accession #:  1493152-22-24200   ·   File #:  333-265969

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/26/22  Bruush Oral Care Inc.             424B3                  1:2.1M                                   M2 Compliance LLC/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 424B3       Prospectus - New Facts or Events                    HTML   2.13M 

Filed pursuant to Rule 424(b)(3)

Registration Statement on Form F-1, File No. 333-265969

1,117,788 Shares of Common Stock

Representing

757,212 Shares of Common Stock and

360,576 Shares of Common Stock Underlying Warrants

The selling security holders named in this prospectus, referred to as the “Security Holders” in this prospectus, may offer and sell, from time to time, in one or more offerings, up to 1,117,788 shares of common stock of the Company, no par value (the “Common Stock”), consisting of 757,212 Shares of Common Stock and 360,576 shares of Common Stock underlying the warrants. The Common Stock may be sold by the Security Holders at prevailing market prices at the times of sale, prices related to the prevailing market prices or negotiated prices. The Common Stock may be offered by the Security Holders to or through underwriters, dealers or other agents, directly to investors or through any other manner permitted by law, on a continued or delayed basis. See “Plan of Distribution” beginning on page 52 of this prospectus. The Security Holders have agreed to a 90-day lock-up for sales into the public market with respect to all of these Common Stock.

We are not selling any securities in this offering, and we will not receive any proceeds from the sale of any securities by the Security Holders. The registration of the securities covered by this prospectus does not necessarily mean that any of these securities will be offered or sold by the Security Holders. The timing and amount of any sale is within the respective Security Holder’s sole discretion, subject to certain restrictions. To the extent that any Security Holder sells any securities, such holder may be required to provide you with this prospectus identifying and containing specific information about the selling Security Holder and the terms of the securities being offered.

The Common Stock will be quoted on The Nasdaq Stock Market. Usual and customary or specifically negotiated brokerage fees or commissions may be paid by the Security Holders upon the sale of the Common Stock being registered. No sales of Common Stock covered by this prospectus shall occur until the Common Stock sold in our initial public offering begins trading on The Nasdaq Stock Market.

The Security Holders and intermediaries through whom the securities are sold may be deemed “underwriters” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the securities offered hereby, and any profits realized or commissions received may be deemed underwriting compensation.

On July 29, 2022, a registration statement under the Securities Act with respect to our initial public offering of $15,510,764 of the Common Stock and warrants to purchase common stock was declared effective by the Securities and Exchange Commission. We received approximately $13.4 million in net proceeds from the offering of Common Stock after payment of underwriting discounts and commissions and estimated expenses of the offering.

We are a “foreign private issuer,” and an “emerging growth company” each as defined under the federal securities laws, and, as such, we will be subject to reduced public company reporting requirements. See the section entitled “Prospectus Summary—Implications of Being an Emerging Growth Company and a Foreign Private Issuer” for additional information.

Investing in the Common Stock involves a high degree of risk. Before buying any securities, you should carefully read the discussion of material risks of investing in the Common Stock and the company. See “Risk Factors” beginning on page 3 for a discussion of information that should be considered in connection with an investment in our securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is August 25, 2022

TABLE OF CONTENTS

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with additional or different information. The information contained in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock.

No dealer, salesperson or any other person is authorized in connection with this offering to give any information or make any representations about us, the securities offered hereby or any matter discussed in this prospectus, other than those contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or a solicitation of an offer to buy any securities by anyone in any circumstance in which the offer or solicitation is not authorized or is unlawful.

Enforcement of Civil Liabilities

We are a company incorporated under the law of British Columbia, Canada. Some of our directors and officers, and some of the experts named in this prospectus, are residents of Canada or otherwise reside outside of the United States, and all or a substantial portion of their assets, and all or a substantial portion of our assets, are located outside of the United States. We have appointed an agent for service of process in the United States, but it may be difficult for shareholders who reside in the United States to effect service within the United States upon those directors, officers and experts who are not residents of the United States. It may also be difficult for shareholders who reside in the United States to realize in the United States upon judgments of courts of the United States predicated upon our civil liability and the civil liability of our directors, officers and experts under the United States federal securities laws. There can be no assurance that U.S. investors will be able to enforce against us, directors, officers or certain experts named herein who are residents of Canada or other countries outside the United States, any judgments in civil and commercial matters, including judgments under the federal securities laws.

Cautionary Note Regarding Forward-Looking Statements

We discuss in this prospectus our business strategy, market opportunity, capital requirements, product introductions and development plans and the adequacy of our funding. Other statements contained in this prospectus, which are not historical facts, are also forward-looking statements. We have tried, wherever possible, to identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and other comparable terminology.

We caution investors that any forward-looking statements presented in this prospectus, or that we may make orally or in writing from time to time, are based on the beliefs of, assumptions made by, and information currently available to, us. These statements are based on assumptions, and the actual outcome will be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control or ability to predict. Although we believe that our assumptions are reasonable, they are not a guarantee of future performance, and some will inevitably prove to be incorrect. As a result, our actual future results can be expected to differ from our expectations, and those differences may be material. Accordingly, investors should use caution in relying on forward-looking statements, which are based only on known results and trends at the time they are made, to anticipate future results or trends. Certain risks are discussed in this prospectus and also from time to time in our other filings with the U.S. Securities and Exchange Commission (“SEC”). For additional information regarding risk factors that could affect the Company’s projections, see “Risk Factors” beginning on page 3 of this prospectus, and as may be included from time-to-time in our reports filed with the SEC.

This prospectus and all subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. The forward-looking statements speak only as of the time of such statements and we do not undertake or plan to update or revise such forward-looking statements as more information becomes available or to reflect changes in expectations, assumptions or results, except as and to the extent required by applicable securities laws. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this prospectus, could materially and adversely affect our results of operations, financial condition, liquidity, and our future performance.

Industry Data and Forecasts

This prospectus contains data related to the oral healthcare products industry in Canada and the United States. This industry data includes projections that are based on a number of assumptions which have been derived from industry and government sources which we believe to be reasonable. The oral healthcare products industry may not grow at the rate projected by industry data, or at all. The failure of the industry to grow as anticipated is likely to have a material adverse effect on our business and the market price of shares of our Common Stock. In addition, the rapidly changing nature of the oral healthcare products industry and consumer preferences subjects any projections or estimates relating to the growth prospects or future condition of our industries to significant uncertainties. Furthermore, if any one or more of the assumptions underlying the industry data turns out to be incorrect, actual results may, and are likely to, differ from the projections based on these assumptions.

Risk Factors

Investing in our securities involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information in this prospectus, including our financial statements and related notes included elsewhere in this prospectus, before making an investment decision. If any of the following risks are realized, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the trading price of our securities could decline, and you could lose part or all of your investment.

Risks Related to the Company’s Business

We face competition from companies with longer operating histories, greater brand recognition and significantly greater financial, marketing and other resources.

Our business is rapidly evolving and intensely competitive and we have many competitors across the oral care space. Our competition with respect to these offerings includes toothbrush and brush head manufacturers as well as ancillary product manufacturers. Our core toothbrush product competes with new and established manufacturers, direct-to-consumer companies and white label in-house brands offered by some large retail chains and department stores, some of which are sold at a lower price point than ours. We believe that our ability to compete successfully depends upon many factors both within and beyond our control, including:

Some of our current competitors have, and potential competitors may have, longer operating histories, greater brand recognition, larger fulfilment infrastructures, faster and less costly shipping, greater resources and technical capabilities, significantly greater financial, marketing and other resources and larger customer bases than we do. These factors may allow our competitors to derive greater revenues and profits from their existing customer base, capture market share from us, acquire customers at lower costs or respond more quickly than we can to new or emerging technologies and changes in consumer preferences or habits. These competitors may engage in more extensive research and development efforts, undertake larger and more impactful marketing campaigns and adopt more aggressive pricing strategies, which may allow them to build larger customer bases or generate revenues from their customer bases more effectively than we do.

We must maintain and enhance our brand or we may not achieve our growth objectives.

Our brand name and image are integral to the growth of our business and to the implementation of our strategies for expanding our business. We believe that our brand image has significantly contributed to the success of our business and is critical to maintaining and expanding our customer base. Maintaining and enhancing our brand may require us to make substantial investments in research and development, marketing and building awareness, and these investments may not be successful.

We anticipate that, as our business expands into new markets and new product categories, and as the industries in which we operate become increasingly competitive, maintaining and enhancing our brand may become difficult and expensive. For example, consumers in any new international markets into which we expand may not know our brand and/or may not accept our brand resulting in increased costs to market and attract customers to our brand. Further, as we develop retail partnerships, it may be difficult for us to maintain control of our brand with our retail partners, which may result in negative perceptions of our brand. Our brand may also be adversely affected if our public image or reputation is tarnished by negative publicity, including negative social media campaigns or poor reviews of our products or customer experiences. In addition, ineffective marketing, product diversion to unauthorized distribution channels, product defects, unfair labor practices and failure to protect our intellectual property rights are some of the potential threats to the strength of our brand, and those and other factors could rapidly and severely diminish consumer confidence in us. Failure to maintain the strength of our brand could have a material adverse effect on our business, financial condition and results of operations.

Our inability to successfully launch new products may adversely affect our business.

Launching new products can involve a significant investment in advertising and public relations campaigns. There are also certain risks involved in launching new products, including increased costs in the near term associated with the introduction of new product lines, development delays, failure of new products to achieve anticipated levels of market acceptance, the possibility of increased competition with our current products and unrecovered costs associated with failed product introductions.

Our ability to design, develop and commercially launch new products depends on a number of factors, including, but not limited to, our ability to design and implement solutions at an acceptable cost and quality, the availability of critical components from third parties and our ability to successfully complete the development of products in a timely manner. There is no guarantee that we will be able to respond to market demands. If we are unable to respond effectively to technological changes, or we fail to develop products in a timely and cost-effective manner, our products may become obsolete, and we may be unable to recover our research and development expenses which could negatively impact sales, profitability and the continued viability of our business.

Launching new products or updating existing products may also leave us with inventory that we may not be able to sell, or we may be required to sell at significantly discounted prices. Further, as we expand into new markets, we may not accurately predict consumer preferences in that market, which could result in lower-than-expected sales. Additionally, launching new products requires substantial investments in research and development. Investments in research and development are inherently speculative and require substantial capital and other expenditures. Unforeseen obstacles and challenges that we encounter in the research and development process could result in delays or the abandonment of plans to launch new products and may substantially increase development costs. If we are unable to maintain the high product-quality standards expected by our customers when we launch new products, or if our competitors are able to produce higher quality or more accessible products, our sales may be harmed. Should this occur, we may need to increase our investments in research and development and manufacturing processes, lower our prices or take other measures to address any loss of sales, which could increase our expenses, reduce our margins and/or negatively impact our brand and our ability to execute our overall pricing and promotion strategy. We may not be successful in executing our growth strategy related to launching new products, and failure to successfully launch new products could have a material adverse effect on our business, financial condition and results of operations.

We are dependent on the effectiveness of our marketing programs.

We are dependent on the effectiveness of our marketing programs and the efficiency of our related expenditures in generating consumer awareness and sales of our products. We rely on a combination of paid and unpaid advertising and public relations efforts to market our products.

Our paid marketing efforts include digital advertising, podcast and streaming media campaigns, influencer collaborations, public relations initiatives, affiliate partnerships and special discount offers. These efforts are expensive and may not result in the cost-effective acquisition of customers. We cannot ensure that the net profit from new customers we acquire will ultimately exceed the cost of acquiring those customers. Moreover, we rely in part upon third parties, such as marketing agencies, social media influencers and product reviewers, for both paid and unpaid services, and we are unable to fully control their efforts. We obtain a significant amount of traffic via search engines and, therefore, rely on search engines such as Google. Search engines frequently update and change the logic that determines the placement and display of results of a user’s search, such that the purchased or algorithmic placement of links to our site can be negatively affected. Moreover, a search engine could, for competitive or other purposes, alter its algorithms or results in a manner that negatively affects our paid or unpaid search ranking, and competitive dynamics could impact the effectiveness of search engine marketing or search engine optimization. We also obtain a significant amount of traffic via social networking websites or other channels used by current and prospective customers. As e-commerce and social networking continue to evolve rapidly, we must continue to establish relationships with these channels and may be unable to develop or maintain these relationships on acceptable terms. If we are unable to cost-effectively drive traffic to our sites, our ability to acquire new customers and our financial condition would suffer. In addition, the number of third-party providers of consumer product reviews, consumer recommendations and referrals is growing across industries and may influence consumers.

Moreover, if any of the third parties on which we rely were to cease operations, temporarily or permanently, face financial distress or other business disruption, we could suffer increased costs and delays in their ability to provide similar services until an equivalent service provider could be found, or until we could develop replacement technology or operations, any of which could also have an adverse impact on our business and financial performance. We continue to evolve our marketing strategies by adjusting our messages, the amount we spend on advertising and where we spend it with no assurance that we will be successful in developing future effective messages or in achieving efficiency in our marketing and advertising expenditures. Our marketing activities and the marketing activities of any third parties on which we rely are subject to various types of regulations, including laws relating to the protection of personal information, consumer protection and competition.

Product liability claims could hurt our business.

We may be required to pay for losses or injuries purportedly caused by our products or be subject to various product liability claims in the future. Claims could be based on allegations that, among other things, our products contain contaminants, include inadequate instructions or provide inadequate warnings concerning side effects or interactions with other products or substances. In addition, product liability claims may result in negative publicity that may materially adversely affect our sales. Also, if one of our products is found to be defective, we may be required to recall it, which may result in substantial expense and adverse publicity and materially adversely affect our sales. Potential product liability claims may exceed the amount of our insurance coverage or potential product liability claims may be excluded under the terms of our policy, which could adversely affect our financial condition. In addition, we may be required to pay higher premiums and accept higher deductibles in order to secure adequate insurance coverage in the future.

Changing consumer preferences may negatively impact our business.

The market for electric toothbrushes as a retail category is still emerging and if it does not continue to grow, if it grows more slowly than expected or if it does not achieve the growth potential we expect, our brand, business, financial condition or results of operations could be adversely affected. The Company’s success depends on the ongoing need for and appeal of an electric toothbrush with subscription-based brush head replacement program. Consumer preferences with respect to such personal items are continuously changing and are difficult to predict. As a result of changing consumer preferences, many specialized toothbrushes are successfully marketed for a short period of time, but then interest or demand or consumer requirements change. We cannot ensure that our electric toothbrush will achieve customer acceptance or that it will continue to be popular with consumers for any significant period of time. We also cannot ensure that new products will achieve an acceptable degree of market acceptance, or that if such acceptance is achieved, it will be maintained for any significant period of time. Our success is dependent upon our ability to develop, introduce and gain customer acceptance and their willingness to continue on a long-term basis to adapt their normal hygiene routine to using the Company’s electric toothbrush and to keep enticing new customers to transition from a manual toothbrush to an electric toothbrush. The failure of our product to achieve and sustain market acceptance could have a material adverse effect on our financial condition and results of operations.

We have a limited operating history.

We have a limited operating history with the current scale of our business, which makes it difficult to forecast our future results, particularly with respect to our own and third-party retail channels, which we have only recently developed. You should not rely on our past annual or quarterly results of operations as indicators of future performance. You should consider and evaluate our prospects in light of the risks and uncertainty frequently encountered by companies like ours. We may experience fluctuations in our quarterly results of operations due to seasonality and other factors, which could make sequential quarter to quarter comparison an unreliable indication of our performance.

Failure to attract new customers and subscribers, or retain existing customers and subscribers, or failure to do either in a cost-effective manner will harm our business.

Our success depends, in part, on our ability to attract new customers and retain existing subscribers in a cost-effective manner. Although we have historically experienced a high percentage of customers enroll in our brush head refill plan, where they are automatically charged and shipped a three-pack of replacement brush heads every six months, our customers may choose not to do so in the future or we may encounter difficulties during the technical processing of the renewal of credit card processing due to, for instance, the expiration or blocking of the applicable credit card. We have made, and we expect that we will continue to make, significant investments in attracting and retaining customers and subscribers through paid marketing efforts including digital advertising, podcast and streaming media campaigns, influencer collaborations, public relations initiatives, affiliate partnerships and special discount offers. Marketing campaigns can be expensive and may not result in the cost-effective acquisition or retention of customers and subscribers. Further, as our brand becomes more widely known, future marketing campaigns may not attract new or retain customers and subscribers at the same rate as past campaigns. If we are unable to attract new customers and subscribers, or retain existing customers and subscribers, our business will be harmed.

We rely on social media and influencers.

We use third-party social media platforms as marketing tools, among other things. For example, we deliver brand and direct response creative throughout Facebook, Instagram, Google, YouTube, Tik Tok and Snapchat, as well as maintain our own Facebook, Instagram and Tik Tok accounts. We also maintain relationships with social media influencers and engage in sponsorship initiatives. As existing e-commerce and social media platforms continue to rapidly evolve and new platforms develop, we must continue to maintain a presence on these platforms and establish presences on new or emerging popular social media platforms. If we are unable to cost-effectively use social media platforms as marketing tools or if the social media platforms we use do not evolve quickly enough for us to fully optimize such platforms, our ability to acquire new consumers and our financial condition may suffer. Furthermore, as laws and regulations rapidly evolve to govern the use of these platforms and devices, the failure by us, our employees, our network of social media influencers, our sponsors or third parties acting at our direction to abide by applicable laws and regulations in the use of these platforms and devices or otherwise could subject us to regulatory investigations, class action lawsuits, liability, fines or other penalties and have a material adverse effect on our business, financial condition and operating results.

Our reliance on third-party contract manufacturers and inability to fully control them may harm our business.

Our products are produced by third-party contract manufacturers. We face the risk that these third-party contract manufacturers may not produce and deliver our products on a timely basis, or at all. These difficulties may include reductions in the availability of production capacity, errors in complying with product specifications and customer requirements, insufficient quality control, sharing competitively sensitive information with our competitors, failure to meet production deadlines, failure to achieve our product or packaging quality standards, inability to access new or quality materials, shipping mistakes, increases in costs of materials and manufacturing or other business interruptions. The ability of our manufacturers to effectively satisfy our production requirements could also be impacted by manufacturer financial difficulty or damage to their operations caused by fire, terrorist attack, natural disaster or other events. The failure of any manufacturer to perform to our expectations could result in supply shortages or delays for certain products and harm our business. If we experience significantly increased demand, or if we need to replace an existing manufacturer due to lack of performance, we may be unable to supplement or replace our manufacturing capacity on a timely basis or on terms that are acceptable to us, which may increase our costs, reduce our margins or harm our ability to deliver our products on time. For certain of our products, it may take a significant amount of time to identify and qualify a manufacturer that has the capability and resources to produce our products to our specifications in sufficient volume and satisfy our service and quality control standards.

The capacity of our manufacturers to produce our products is also dependent upon the availability of raw materials. Our manufacturers may not be able to obtain sufficient supply of raw materials, which could result in delays in deliveries of our products by our manufacturers or increased costs. Any shortage of raw materials or inability of a manufacturer to produce or ship our products in a timely manner, or at all, could impair our ability to ship orders of our products in a cost-efficient, timely manner and could cause us to miss the delivery requirements of our customers. As a result, we could experience cancellations of orders, refusals to accept deliveries or reductions in our prices and margins, any of which could harm our financial performance, reputation and results of operations. Moreover, third-party manufacturers of our products and components must comply with applicable regulatory requirements, which may require significant resources and subject our manufacturers to potential regulatory inspections, stoppages or enforcement actions. It is difficult for us to accurately and consistently monitor and control third-party manufacturer compliance with all application laws, rules and regulations. Additionally, we currently have third-party manufacturing partners located in Canada and China, where it is even more difficult for us to ensure compliance with all applicable domestic and foreign laws, rules and regulations. Our reliance on third-party manufacturers and inability to fully control any operational difficulties with our third-party manufacturers could have a material adverse effect on our business, financial condition and results of operations.

We have contracts with our manufacturers who may breach these agreements, and we may not be able to enforce our rights under these agreements or may incur significant costs attempting to do so. As a result, we cannot predict with certainty our ability to obtain products in adequate quantities, of required quality and at acceptable prices from our suppliers and manufacturers in the future. Any one of these risks could harm our ability to deliver our products on time, or at all, damage our reputation and our relationships with our retail partners and customers or increase our product costs thereby reducing our margins.

Also, because most of our arrangements with our manufacturers are not exclusive, manufacturers could produce similar products for our competitors. Even when we have exclusivity arrangements, those manufacturers could choose to breach our agreements and work with our competitors and we may not become aware of such breaches or have remedies against the manufacturer for such breaches.

Manufacturing risks, including risks related to manufacturing in China, may adversely affect our ability to manufacture our products and could reduce our gross margin and our profitability.

We rely on third party manufacturers in China to manufacture our products. As a result, our business is subject to risks associated with doing business in China, including:

Economic regulation, trade restrictions and increasing manufacturing costs in China could adversely impact our business and results of operations.

We contract with manufacturing facilities in China. For many years, the Chinese economy has experienced periods of rapid growth. An increase in the cost of labor or taxes on wages in China may lead to an increase in the cost of goods manufactured in China. Significant increases in wages or wage taxes paid by contract manufacturing facilities may increase the cost of goods manufactured in China which could have a material adverse effect on the Company’s profit margins and profitability. Additionally, government trade policies, including the imposition of tariffs, export restrictions, sanctions or other retaliatory measures could limit our ability to source materials and products from China at acceptable prices or at all. We do not currently have arrangements with contract manufacturers in other countries that may be acceptable substitutes. We cannot predict what actions may ultimately be taken with respect to tariffs, export controls, countermeasures or other trade measures between the U.S. and China or other countries and what products may be subject to such actions. To the extent such actions inhibit our transactions with contract manufacturing facilities and suppliers in China, our business may be materially adversely affected.

The COVID-19 pandemic may negatively impact the manufacturing of our products by third-party manufacturers and the shipment of products to our fulfilment center in the United States.

The COVID-19 pandemic and the travel restrictions, quarantines and related public health measures and actions taken by governments and the private sector have adversely affected global economies and financial markets. The extent to which it may continue to impact our future results of operations and overall financial performance remains uncertain. The global macroeconomic effects of the pandemic may persist for an indefinite period of time, even though the initial waves of the pandemic have subsided.

We develop and manufacture products with third-party manufacturing partners located in China and Canada. The sourcing and purchase of raw materials is managed by the Company’s third-party manufacturing partners. Although to date we have not experienced any material interruptions or delays related to the manufacture of our products in China or Canada or moving our products from our manufacturers in China and Canada to our third-party fulfilment and logistics partner in Salt Lake City, Utah, there can be no assurance that we will not experience these impacts in the future. Such impacts if material and sustained would affect, among other things:

Our failure or the failure of third-party service providers to protect our sites, networks and systems against security breaches, or otherwise to protect our confidential information, could damage our reputation and brand and substantially harm our business and operating results.

We collect, maintain, transmit and store data about our customers, employees, contractors, suppliers, vendors and others, including credit card information and personally identifiable information, as well as other confidential and proprietary information. We also employ third-party service providers that store, process and transmit certain proprietary, personal and confidential information on our behalf. We rely on encryption and authentication technology licensed from third parties in an effort to securely transmit, encrypt, anonymize or pseudonymize certain confidential and sensitive information, including credit card numbers. Advances in computer capabilities, new technological discoveries or other developments may result in the whole or partial failure of this technology to protect transaction and personal data or other confidential and sensitive information from being breached or compromised.

Our security measures, and those of our third-party service providers, may not detect or prevent all attempts to hack our systems, denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, ransom-ware, social engineering, security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in or transmitted by our sites, networks and systems, or that we or our third-party service providers otherwise maintain, including payment card systems and human resources management platforms. We and our service providers may not anticipate, discover or prevent all types of attacks until after they have already been launched, and techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against us or our third-party service providers. In addition, security breaches can also occur as a result of non-technical issues, including intentional or inadvertent breaches by our employees or by persons with whom we have commercial relationships.

Breaches of our security measures or those of our third-party service providers or cyber security incidents could result in: (i) unauthorized access to our sites, networks and systems; (ii) unauthorized access to and misappropriation of personal information, including consumers’ and employees’ personally identifiable information, or other confidential or proprietary information of ourselves or third parties; (iii) limited or terminated access to certain payment methods or fines or higher transaction fees to use such methods; (iv) viruses, worms, spyware or other malware being served from our sites, networks or systems; (v) deletion or modification of content or the display of unauthorized content on our sites; (vi) interruption, disruption or malfunction of operations; (vii) costs relating to breach remediation, deployment or training of additional personnel and protection technologies, responses to governmental investigations and media inquiries and coverage; (vii) engagement of third-party experts and consultants; or (vii) litigation, regulatory action and other potential liabilities. If any of these breaches of security occur: (i) our reputation and brand could be damaged; (ii) our business may suffer; (iii) we could be required to expend significant capital and other resources to alleviate problems caused by such breaches; or (iv) we could be exposed to a risk of loss, litigation or regulatory action and possible liability. In addition, any party who is able to illicitly obtain a customer’s password could access that customer’s transaction data or personal information. Any compromise or breach of our security measures, or those of our third-party service providers, could violate applicable privacy, data security and other laws, and cause significant legal and financial exposure, adverse publicity and a loss of confidence in our security measures, which could have a material adverse effect on our business, financial condition and operating results. We may need to devote significant resources to protect against security breaches or to address problems caused by breaches, diverting resources from the growth and expansion of our business.

Global economy risk may negatively impact our business operations and our ability to raise capital.

The volatility of global capital markets over the past several years has generally made the raising of capital by equity or debt financing more difficult. We may be dependent upon capital markets to raise additional financing in the future. As such, the Company is subject to liquidity risks in meeting its operating expenditure requirements and future cost requirements in instances where adequate cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact our ability to raise equity or obtain loans and other credit facilities in the future and on favorable terms. If these levels of volatility persist or if there is a further economic slowdown, our operations, our ability to raise capital and the trading price of our Company’s securities could be adversely impacted.

Our success depends on management and key personnel.

Our success is currently largely dependent on the performance of our directors and officers, specifically our founder and CEO, Aneil Manhas. The loss of the services of any of these persons could have a materially adverse effect on our business and prospects. There is no assurance we can retain the services of our directors, officers or other qualified personnel required to operate our business. As our business activity grows, we will require additional key financial, operations, and marketing personnel as well as additional administrative staff. There can be no assurance that these efforts will be successful in attracting, training and retaining qualified personnel as competition for persons with these skill sets increase. If we are not successful in attracting, training and retaining qualified personnel, the efficiency of our operations could be impaired, which could have an adverse impact on our operations and financial condition.

Claims and legal proceedings may harm our business and divert the attention of management.

From time to time in the ordinary course of our business, or otherwise, the Company and/or its directors and officers may be subject to a variety of civil or other legal proceedings, with or without merit including commercial, employment and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources and cause the Company to incur significant expenses. Furthermore, because litigation is inherently unpredictable, the results of any such actions may have a material adverse effect on the Company’s business, operating results or financial condition.

We may be subject to intellectual property claims that create uncertainty about ownership or use of technology essential to our business and divert our managerial and other resources.

Our success depends, in part, on our ability to operate without infringing the intellectual property rights of others. Third parties may, in the future, claim our current or future products, trademarks, technologies, business methods or processes infringe their intellectual property rights or challenge the validity of our intellectual property rights. We may be subject to patent infringement claims or other intellectual property infringement claims that would be costly to defend and could limit our ability to use certain critical technologies or business methods. We may also become subject to interference proceedings conducted in the patent and trademark offices of various countries to determine the priority of inventions.

The defense and prosecution, if necessary, of intellectual property suits, interference proceedings and related legal and administrative proceedings can become very costly and may divert our technical and management personnel from their normal responsibilities. We may not prevail in any of these suits or proceedings. An adverse determination of any litigation or defense proceedings could require us to pay substantial compensatory and exemplary damages, could restrain us from using critical technologies, business methods or processes, and could result in us losing or not gaining valuable intellectual property rights.

Furthermore, due to the voluminous amount of discovery frequently conducted in connection with intellectual property litigation, some of our confidential information could be disclosed to competitors during this type of litigation. In addition, public announcements of the results of hearings, motions or other interim proceedings or developments in the litigation could be perceived negatively by investors and thus have an adverse effect on the trading price of our Common Stock.

Complying with requirements related to being a reporting company may be difficult, costly, divert the attention of management and harm our business.

Upon becoming a reporting issuer, the Company will be subject to reporting requirements under applicable securities law, the listing requirements of Nasdaq and other applicable securities rules and regulations. Compliance with these requirements will increase legal and financial compliance costs, make some activities more difficult, time consuming or costly and increase demand on existing systems and resources. Among other things, the Company will be required to file annual and current reports with respect to its business and results of operations and maintain effective disclosure controls and procedures and internal controls over financial reporting. In order to maintain and, if required, improve disclosure controls and procedures and internal controls over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could harm the Company’s business and results of operations. The Company may need to hire additional employees to comply with these requirements in the future, which would increase its costs and expenses.

Management of the Company expects that being a reporting issuer will make it more expensive to obtain and maintain directors’ and officers’ liability insurance, and the Company may in the future be required to accept reduced coverage or incur substantially higher costs to obtain or maintain adequate coverage. This factor could also make it more difficult for the Company to retain qualified directors and executive officers.

Compliance with new and changing corporate governance and public disclosure requirements adds uncertainty to our compliance policies and increases our costs of compliance.

Changing laws, regulations and standards relating to accounting, corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations, rules of the Nasdaq Stock Market, are creating uncertainty for companies like ours and adding complexity to our corporate compliance regime. These new or changed laws, regulations and standards may lack specificity and are subject to varying interpretations. Their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs of compliance as a result of ongoing revisions to such governance standards. We are committed to maintaining high standards of corporate governance and public disclosure, and our efforts to comply with evolving laws, regulations and standards in this regard have resulted in, and are likely to continue to result in, increased general and administrative expenses and significant management time and attention. In addition, the new laws, regulations and standards regarding corporate governance may make it more difficult for us to obtain or maintain directors’ and officers’ liability insurance. Further, our board members, chief executive officer and chief financial officer could face an increased risk of personal liability in connection with the performance of their duties. As a result, we may face difficulties attracting and retaining qualified board members and executive officers, which could harm our business. In certain instances, compliance requirements under certain rules of the Nasdaq Stock Market are more onerous than those under the Sarbanes-Oxley Act of 2002. For example, our board of directors is required to state that they have established internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

If we fail to or are unable to implement and maintain effective internal controls over financial reporting, the accuracy and timeliness of our financial reporting may be adversely affected.

We are subject to reporting obligations under U.S. securities laws. The SEC, as required under Section 404 of the Sarbanes-Oxley Act of 2002, has adopted rules requiring every public company to include a report of management on the effectiveness of such company’s internal control over financial reporting in its annual report. In addition, an independent registered public accounting firm must issue an attestation report on the effectiveness of the Company’s internal control over financial reporting.

We recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. If we fail to maintain effective internal control over financial reporting in the future, we and our independent registered public accounting firm may not be able to conclude that we have effective internal control over financial reporting at a reasonable assurance level. This could in turn result in the loss of investor confidence in the reliability of our financial statements. Furthermore, we have incurred and anticipate that we will continue to incur considerable costs and use significant management time and other resources in an effort to comply with Section 404 and other requirements of the Sarbanes-Oxley Act. If we are not able to continue to meet the requirements of Section 404 in a timely manner or with adequate compliance, we might be subject to sanctions or investigation by the SEC, the Nasdaq or other regulatory authorities. Any such action could adversely affect the accuracy and timeliness of our financial reporting.

We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor internal controls 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. In addition, an emerging growth company may take advantage of an extended transition period for complying with new or revised accounting standards applicable to public companies. We currently prepare our financial statements in accordance with IFRS as issued by the IASB, so we are unable to make use of the extended transition period. However, in the event that we convert to US GAAP (which we do not currently intend to do) while we remain an emerging growth company, we have irrevocably elected to opt out of such extended transition period.

As a result, our shareholders may not have access to certain information they may deem important. We may take advantage of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We will cease to be an emerging growth company upon the earliest of the following: (i) the last day of the first fiscal year in which our annual revenues were at least $1.07 billion; (ii) the last day of the fiscal year following the fifth anniversary of this offering; (iii) the date on which we have issued more than $1.0 billion of non-convertible debt securities over a three-year period; or (iv) the last day of the fiscal year during which we meet the following conditions: (i) the worldwide market value of our common equity securities held by non-affiliates as of our most recently completed second fiscal quarter is at least $700 million; (ii) we have been subject to U.S. public company reporting requirements for at least 12 months; or (iii) we have filed at least one annual report as a U.S. public company.

If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

Emerging growth companies are exempt from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. An emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of any fiscal year for so long as either: (i) the market value of our shares of Common Stock held by non-affiliates does not equal or exceed $250 million as of the prior June 30^th; or (ii) our annual revenues did not equal or exceed $100 million during such completed fiscal year. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

We are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. We would lose our foreign private issuer status if, for example, more than 50% of Common Stock is directly or indirectly held by residents of the United States on the date of determination, and we fail to meet additional requirements necessary to maintain our foreign private issuer status. If we lose our foreign private issuer status on such date, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms beginning at the end of the first fiscal year ending after such date, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to comply with U.S. federal proxy requirements and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements under the Nasdaq listing rules. As a U.S. listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting and other expenses that we do not incur as a foreign private issuer, and accounting, reporting and other expenses in order to maintain a listing on a U.S. securities exchange. These expenses will relate to, among other things, the obligation to reconcile our financial information that is reported according to IFRS to U.S. GAAP and to report future results according to U.S. GAAP.

Because we are a corporation incorporated in British Columbia and some of our directors and officers are resident in Canada, it may be difficult for investors in the United States to enforce civil liabilities against us based solely upon the federal securities laws of the United States.

We are a corporation incorporated under the laws of British Columbia with our principal place of business in Toronto, Canada. Some of our directors and officers and the auditors or other experts named herein are residents of Canada and all or a substantial portion of our assets and those of such persons are located outside the United States. Consequently, it may be difficult for U.S. investors to effect service of process within the United States upon us or our directors or officers or such auditors who are not residents of the United States, or to realize in the United States upon judgments of courts of the United States predicated upon civil liabilities under the Securities Act. Investors should not assume that Canadian courts: (i) would enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions of the U.S. federal securities laws or the securities or “blue sky” laws of any state within the United States; or (ii) would enforce, in original actions, liabilities against us or such persons predicated upon the U.S. federal securities laws or any such state securities or “blue sky” laws.

Risks Related to the Company’s Securities

Because of the speculative nature of investment risk, you may lose your entire investment.

An investment in the Company’s securities carries a high degree of risk and should be considered as a speculative investment. The Company has no history of earnings, limited cash reserves, a limited operating history, has not paid dividends and is highly unlikely to pay dividends in the immediate or near future. The likelihood of success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business. An investment in the Company’s securities may result in the loss of an investor’s entire investment. Only potential investors who are experienced in high-risk investments and who can afford to lose their entire investment should consider an investment in the Company.

Our auditor has expressed substantial doubt about our ability to continue as a going concern. We may be unable to obtain additional capital on favorable terms.

As a result of recurring net losses and limited cash reserves, our independent auditor has included a going concern paragraph to its report on our financial statements for the fiscal years ended October 31, 2021, and January 31, 2021 due to the substantial doubt that exists in our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to raise additional capital and to achieve sustainable revenues and profitable operations. Since inception, we have raised funds primarily through the sale of equity securities and the issuance of debt. We will need and are currently seeking additional funds to operate our business and the recent volatility of global capital markets has made the raising of capital by equity and debt financing more difficult. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations or cause substantial dilution for our stockholders. If we are unable to obtain additional funds, our ability to carry out and implement our planned business objectives and strategies will be significantly delayed, limited or may not occur. We cannot guarantee that we will become profitable. Even if we achieve profitability, given the competitive and evolving nature of the industry in which we operate, we may not be able to sustain or increase profitability and our failure to do so would adversely affect our business, including our ability to raise additional funds.

There is no existing market for our securities and we do not know if one will develop to provide you with adequate liquidity.

Prior to this offering, there has not been a public market for our securities. We cannot assure you that an active trading market for shares of our Common Stock will develop following this offering, or if it does develop, it may not be maintained. You may not be able to sell your shares of our Common Stock or the Warrants quickly or at the market price if trading in our securities is not active. The initial public offering price for the Units offered hereby will be determined by negotiations between us and the underwriter and may not be indicative of prices that will prevail in the trading market.

The price per Unit offered under this prospectus may not accurately reflect the value of your investment.

The offering price for shares of Common Stock and Warrants offered under this prospectus has been determined by negotiation among us and the underwriter. We cannot predict the price at which our shares of Common Stock or the Warrants will trade upon the closing of the offering.

Securities or industry analysts may not regularly publish reports on us which could cause the price of our securities or trading volumes to decline.

The trading market for our securities could be influenced by research and reports that industry and/or securities analysts may publish us, our business, the market or our competitors. We do not have any control over these analysts and cannot assure that such analysts will cover us or provide favorable coverage. If any of the analysts who may cover our business change their recommendation regarding our securities adversely, or provide more favorable relative recommendations about our competitors, the price of our securities would likely decline. If any analysts who may cover our business were to cease coverage or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our securities or trading volumes to decline.

Our publicly traded securities may experience price volatility.

The Company’s securities do not currently trade on any exchange or stock market and the Company has applied to list the Company’s securities on Nasdaq. Health and wellness 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.

Other factors unrelated to our performance that may affect the price of the Company’s securities include the following: (i) the extent of analytical coverage available to investors concerning our business may be limited if investment banks with research capabilities do not follow the Company; (ii) lessening in trading volume and general market interest in the Company’s securities may affect an investor’s ability to trade significant numbers of the Company’s securities; (iii) the size of our public float may limit the ability of some institutions to invest in the Company’s securities; and (iv) a substantial decline in the price of the Company’s securities that persists for a significant period of time could cause the Company’s securities, if listed on an exchange, to be delisted from such exchange further reducing market liquidity. As a result of any of these factors, the market price of the Company’s securities at any given point in time may not accurately reflect our long-term value. 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 fact that no market currently exists for the Company’s securities may affect the pricing of the Company’s securities in the secondary market, the transparency and availability of trading prices and the liquidity of the Company’s securities. The market price of the Company’s securities is affected by many other variables which are not directly related to our success and are therefore not within our control. These include other developments that affect the market for all health and wellness sector securities, the breadth of the public market for our Company’s securities and the attractiveness of alternative investments. The effect of these and other factors on the market price of the Company’s securities is expected to make the price of the Company’s securities volatile in the future, which may result in losses to investors.

Our investors may experience dilution upon investment in our securities.

Sales or issuances of equity securities could decrease the value of the Company’s securities, dilute shareholders’ voting power and reduce future potential earnings per share. We may sell additional equity securities in subsequent offerings (including through the sale of securities convertible into Common Stock) and may issue additional equity securities to finance our operations, acquisitions or other business projects. We cannot predict the size of future sales and issuances of equity securities or the effect, if any, that future sales and issuances of equity securities will have on the market price of the Common Stock. Sales or issuances of a substantial number of equity securities, or the perception that such sales could occur, may adversely affect prevailing market prices for the Company’s securities. With any additional sale or issuance of equity securities, including sales or issuances of equity securities in connection with this offering, investors will suffer dilution of their voting power and may experience dilution in our earnings per share. Moreover, to the extent outstanding options, Warrants or Additional Warrants are exercised, you will incur further dilution.

We have not and do not intend to declare or pay any dividends with respect to our Common Stock.

To date, the Company has not paid any dividends on its outstanding shares of Common Stock. Any decision to pay dividends on the shares of common stock of the Company will be made by the board of directors on the basis of the Company’s earnings, financial requirements and other conditions. See “Dividend Policy”.

Our management will have broad discretion over the use of the proceeds we receive in this offering and might not apply the proceeds in ways that increase the value of your investment.

Our management will have broad discretion over the use of our net proceeds from this offering and you will be relying on the judgment of our management regarding the application of these proceeds. Our management might not apply our net proceeds in ways that ultimately increase the value of your investment. We expect to use the net proceeds from this offering for execute our growth strategy, fund working capital and repay outstanding bridge loans. Our management might not be able to yield a significant return, if any, on any investment or use of these net proceeds. You will not have the opportunity to influence the decision on how to use the net proceeds from this offering.

There is no public market for our securities and there is no assurance that one to develop.

Prior to this offering, there has been no public market for shares of Common Stock or for the Warrants and there is no assurance such a market will develop. Without an active market, the liquidity of our shares of Common Stock and Warrants will be limited.

There is no assurance that the price of the shares of Common Stock will exceed the exercise price of the Warrants and the Warrants may therefore become worthless upon expiration.

The Warrants are exercisable for shares of Common Stock. The Warrants issued in this offering will be immediately exercisable and expire five years from issuance. The Warrants will have an initial exercise price equal to $4.16. If our Common Stock price does not exceed the exercise price of the Warrants during the period when the Warrants are exercisable, the Warrants may become worthless on expiration.

Since the Warrants are executory contracts, they may have no value in a bankruptcy or reorganization proceeding.

In the event a bankruptcy or reorganization proceeding is commenced by or against us, a bankruptcy court may hold that any unexercised Warrants are executory contracts that are subject to rejection by us with the approval of the bankruptcy court. As a result, holders of the Warrants may, even if we have sufficient funds, not be entitled to receive any consideration for their Warrants or may receive an amount less than they would be entitled to if they had exercised their Warrants prior to the commencement of any such bankruptcy or reorganization proceeding.

Holders of our Warrants will have no rights as a shareholder until they acquire shares of our Common Stock.

Until investors acquire shares of our Common Stock upon exercise of the Warrants offered in this offering, they will have no rights with respect to our Common Stock such as voting rights or the right to receive dividends. Upon exercise of such Warrants, holders will be entitled to exercise the rights of a shareholder only as to matters for which the record date occurs after the exercise date.

We may amend the terms of the Warrants in a way that may be adverse to holders with the approval by the holders of a majority of the then-outstanding Warrants.

The Warrant Agreement provides that the terms of the Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision. All other modifications or amendments, including any amendment to increase the exercise price of the Warrants or shorten the exercise period of the warrants, shall require the written consent of the registered holders of a majority of the then-outstanding Warrants.

The Additional Warrants will not be listed on any securities exchange or other nationally recognized trading system.

We have not applied and we do not intend to apply to have the Additional Warrants issuable to Qualified Holders upon the occurrence of certain dilutive events listed on any securities exchange or other nationally recognized trading system. Therefore, there can be no assurance that there will be any active trading market for the Additional Warrants.

Capitalization

The following table sets forth our cash and capitalization, as of October 31, 2021:

You should read the following table in conjunction with “Use of Proceeds”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes included elsewhere in this prospectus.

The Warrants issued as part of this offering to Qualified and non-Qualified holders are classified as financial liabilities in the chart above and will be included in the warrant derivative line on the Company’s financial statements. The Warrants were valued at $782,995 using valuation techniques with the inputs determined as follows: (i) expected remaining life is determined using the information in the warrant terms: (ii) fair value of the underlying stock is determined based on the mid-point of this Unit offering and a calculated allocation of the selling price to Common Stock; (iii) volatility is estimated based on market data and industry assessment; (iv) risk-free interest rate is determined based on central bank rates for a similar period to the expected remaining life; and (v) dividend yield is estimated using the Company’s past performance and future expectations.

The number of shares of our Common Stock outstanding after this offering reflects (i) the conversion of all outstanding shares of our Class A shares and Class B shares at a conversion ratio of 1:1 into shares of Common Stock, (ii) a subsequent reverse stock split of 3.86:1, effective July 27, 2022 and (iii) the number of shares of Common Stock offered hereby as part of the Units, and excludes:

Dividend Policy

Since inception, we have not declared or paid any dividends on our Common Stock. We do not have any current plans to pay any such dividends in the foreseeable future. We intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business. Because we do not anticipate paying any cash dividends on shares of Common Stock in the foreseeable future, capital appreciation, if any, will be your sole source of gains and you may never receive a return on your investment.

The determination to pay dividends will be made at the discretion of our board of directors and may be based on a number of factors, including our future operations and earnings, capital requirements and surplus, general financial condition, contractual and legal restrictions and other factors that the board of directors may deem relevant.

USE OF PROCEEDS

There will not be any proceeds from the distribution of the Common Stock by the Security Holders. All proceeds from the sale of the Common Stock will be paid directly to the selling security holders.

MANAGEMENT’s DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of financial condition and results of operations together with our financial statements and the notes accompanying those statements included elsewhere in this prospectus.

We present our financial statements in United States dollars (U.S. dollars) and in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, which may differ in material respects from generally accepted accounting principles in other jurisdictions, including generally accepted accounting principles in the United States, or U.S. GAAP.

The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including the risks and uncertainties described in the section titled “Risk Factors.” Our actual results may differ materially from those contained in the following discussion and analysis, as well as the section titled “Cautionary Note Regarding Forward-Looking Statements”.

Basis of Presentation

Our audited financial statements for the fiscal years ended October 31, 2021 (covering the nine-month period then ended) and January 31, 2021 have been prepared in accordance with IFRS and are presented in U.S. dollars. We manage our business based on one operating and reportable segment. Our presentation and functional currency is the U.S. dollar and all the amounts in this management’s discussion and analysis of financial condition and results of operations are in U.S. dollars unless otherwise indicated. Amounts shown as of and for the nine months ended October 31, 2020 have been included for comparison purposes, are unaudited. See “Results of Operations – October 31, 2021 compared to October 31, 2020”.

Non-IFRS Financial Measures

This discussion may refer to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our financial information reported under IFRS.

Going Concern

As of and for the nine-month period ended October 31, 2021, the Company has recurring losses, a working capital deficit of $3,962,096 (January 31, 2021 – working capital of $159,943), an accumulated deficit totaling $17,621,043 (January 31, 2021 – accumulated deficit of $13,409,772) and negative cash flows used in operating activities of $671,169 (January 31, 2021 – negative cash flows used in operating activities of $4,052,350). The ability of the Company to carry out its business objectives is dependent on its ability to secure continued financial support from related parties, to obtain equity financing or to ultimately attain profitable operations in the future. The Company will need to raise additional capital during the next twelve months and beyond to support current operations and planned development. Whether and when the Company can attain profitability and positive cash flows is uncertain. While the Company has been successful in securing financing in the past, there is no assurance that we will be able to obtain financing in the future on terms acceptable to us.

Change in Fiscal Year

On March 16, 2022, the board of directors of the Company approved a change to the Company’s fiscal year end from January 31 to October 31, effective immediately so that the fiscal year following the fiscal year ended January 31, 2021 would be the fiscal year ending on October 31, 2021. Accordingly, the financial statements of the Company included elsewhere in this prospectus include audited financial statements as at and for the fiscal years ended October 31, 2021 (comprising the nine months from February 1, 2021 to October 31, 2021) and January 31, 2021 (comprising a full 12-month period).

To enable meaningful comparisons in the Company’s financial position, results of operations and cash flows, unaudited financial information as at and for the nine-months ended October 31, 2020 and for the 12 months ended January 31, 2020 are presented in this section.

Company Overview

The Company is on a mission to inspire confidence through brighter smiles and better oral health. Founded in 2018 by Chief Executive Officer Aneil Manhas, a former investment banker and private equity investor turned entrepreneur, we are an oral care company that is disrupting the space by reducing the barriers between consumers and access to premium oral care products because it is our belief that high-quality oral care products should be more accessible. We are an e-commerce business with a product portfolio that currently consists of a sonic-powered electric toothbrush kit and brush head refills. Through our website, consumers can purchase a Brüush starter kit (the “Brüush Kit”), which includes: (i) the Brüush electric toothbrush (the “Brüush Toothbrush”); (ii) three brush heads; (iii) a magnetic charging stand and USB power adapter; and (iv) a travel case. We also sell the brush heads separately which come in a three-pack (the “Brüush Refill”) and can be purchased on a subscription basis, where the customer will automatically receive a Brüush Refill every six months (the “Subscription”). We consider a Subscription to be active (an “Active Subscription”) until it is either cancelled by the customer or terminated due to payment failure (for example, a lost or expired credit card). Later this calendar year, we plan to expand our portfolio with the launch of several new subscription-based consumable oral care products, including toothpaste, mouthwash, dental floss, a whitening pen, as well as an electric toothbrush designed for kids.

Company Highlights

Financial Operations Overview

Revenues

Revenues are comprised of sales of Brüush Kits and of Brüush Refills net of changes in the provision for payment discounts and product return allowances.

Cost of goods sold

Cost of goods sold consists of: (i) the costs of finished goods sold; and (ii) the freight expense of transporting the finished goods from the manufacturer to our third-party distribution facility in Salt Lake City, Utah.

Operating expenses

Operating expenses consist primarily of advertising and marketing expenses, salaries and wages, consulting services, professional fees, general office and administrative expenses, and shipping and delivery expense. We offer free regular shipping on all of our website orders. All of these expenses have increased year-over-year and are expected to keep rising as we continue to scale our brand building and customer acquisition efforts, as well as expand our operations to facilitate higher revenues.

Results of Operations – October 31, 2021 compared to October 31, 2020

The table below sets forth a summary of our results of operations for the fiscal year (nine months) ended October 31, 2021 and for the nine months ended October 31, 2020. The nine months ended October 31, 2021 constitutes our most recent fiscal year after the change in our fiscal year end from January 31 to October 31.

Revenues

Our revenues increased 523% for the fiscal year (nine months) ended October 31, 2021 to $1,965,441 from $315,541 for the nine months ended October 31, 2020. The primary reason for the increase in revenues was an increase in sales of Brüush Kits from $271,815 to $1,367,778, which is attributed to expanded marketing and customer acquisition efforts, as well as an increase in sales of Brüush Refills from $43,726 to $597,663 as our Active Subscription base continued to grow. During the fiscal year (nine months) ended October 31, 2021, the Company participated in multiple flash sales and influencer collaborations that featured product discounts, which resulted in the average selling price per Brüush Kit decreasing by approximately 10% when compared to the nine months ended October 31, 2020.

Cost of goods sold

Our cost of goods sold increased 709% to $978,243 for the fiscal year (nine months) ended October 31, 2021 from $120,958 for the nine months ended October 31, 2020. This increase was mainly due to a higher number of Brüush Kit sales.

Gross profit

We recorded gross profit of $987,198 and $194,583 for the nine months ended October 31, 2021 and October 31, 2020, respectively. Our gross margin declined to 50% for the nine months ended October 31, 2021 from 62% for the nine months ended October 31, 2020, reflecting our cost of goods sold increasing more than our revenues as described above. This was partly due to our participation in multiple flash sales and influencer collaborations that featured product discounts on Brüush Kits during the fiscal year (nine months) ended October 31, 2021 and caused a lower selling price per unit, resulting in an approximate 5% decrease in gross profit margin. The decline in gross profit is also due to the change in product mix, as a larger portion of revenue came from Brüush Refill units sold, which have a lower gross margin compared to Brüush Kits. The split between Brüush Kit and Brüush Refill sales was 70% and 30%, respectively during the fiscal year (nine months) ended October 31, 2021 compared to 86% and 14%, respectively during the nine months ended October 31, 2020, resulting in an approximate 7% decrease in gross profit margin.

Operating expenses

The following table sets forth our operating expenses for the nine months ended October 31, 2021 and October 31, 2020:

Outside of share-based compensation, our expenses have seen a substantial increase for the nine months ended October 31, 2021, as compared to the nine months ended October 31, 2020. Expenses such as shipping and delivery, advertising and marketing, consulting, professional fees and salaries and wages, which are the result of an increased spending on marketing and brand awareness initiatives, a more aggressive customer acquisition strategy and an expansion in operations due to the increase in revenues.

Operating loss before other items

Our operating loss before other items was $4,169,264 for the nine months ended October 31, 2021 as compared to an operating loss before other items of $6,971,693 for the nine months ended October 31, 2020. Excluding share-based compensation our operating loss before other items would have been $4,076,988 and $2,022,252 for the nine months ended October 31, 2021 and October 31, 2020, respectively. The increase in operating loss before other items excluding share-based compensation is due to a reduction in the gross margins realized by the Company during the nine months ended October 31, 2021 in addition to an increase in overall operating expenses as the Company increased advertising and marketing efforts, engaged in a more aggressive customer acquisition strategy and increased operations to support higher sales volumes.

Other items

The following table sets forth our other income (loss) for the nine months ended October 31, 2021 and October 31, 2020:

Our loss from other items was $42,007 for the nine months ended October 31, 2021 as compared to $581,417 for the nine months ended October 31, 2020. The improvement in other loss is due to the change in valuation of warrant derivatives, with the main driver of the increase in the fair value of the warrants from the time of issuance being the increase in the estimated stock price for the underlying shares. At the time of the issuance of the July/August 2020 warrants, the private placement of units was priced at CAD$0.60 per unit and the fair value allocated to the shares in the unit was CAD$0.48. At the time of issuance of the August/September 2020 warrants, the private placement of units was priced at CAD$1.80 per unit and the fair value allocated to the shares in the unit was CAD$1.46. We believe the increase in share price over a short period of time was caused by: i) a continuing improvement in general market sentiment as the S&P 500 was up almost 6 perfect month over month: (ii) increasing month-over-month revenues of 271% from $19,854 to $53,892; and (iii) investor perception of lower risk due to the Company being in a stronger capital position, as cash on hand increased by over $3 million.

The fair market value of the warrants was estimated using the Black-Scholes Option Pricing Model using the following assumptions:

The following table shows the evolution of the Company’s derivative warrant liability:

The change in the fair value of these derivative instruments of $92,918 is shown as a loss for the fiscal year ended October 31, 2021.

Liquidity and Capital Resources

The following table sets forth a summary of our cash flows from (used in) operating activities, investing activities and financing activities for the nine months ended October 31, 2021 and October 31, 2020:

Net cash from (used in) operating activities

Cash flows from (used in) operations, which is generally the net income or loss adjusted for non-cash items, such as amortization and depreciation and changes in non-cash working capital items, was an outflow of $(671,169) for the nine months ended October 31, 2021, as compared to an outflow of $(2,557,570) for the nine months ended October 31, 2020.

The main factors that contributed to the decrease in cash outflow from operations were: (i) the reduction of inventory on hand of $402,130 during the nine months ended October 31, 2021 compared to an increase of $200,145 during the nine months ended October 31, 2020, which both reflect changes in the ordinary course of business; (ii) an increase in accounts payable and accrued liabilities of $3,057,343 during the nine months ended October 31, 2021 versus a decrease of $2,235 during the nine months ended October 31, 2020; and (iii) a decrease in prepaid expenses and deposits of $36,795 during the nine months ended October 31, 2021 compared to an increase of $271,174 during the nine months ended October 31, 2020.

The Company closely monitors its inventory levels and develops forecasts by analyzing historical results and taking into consideration planned and upcoming marketing initiatives, as well as the overall marketing budget. Since the Subscription automatically sends the customer a Brüush Refill every six months and the churn rate on Active Subscriptions is less than 1% monthly, the Company believes it can forecast its sales of Brüush Refills for the following six-month period with a high degree of confidence. The production lead time for Brüush Refills is six weeks and for Brüush Kits is twelve weeks. Transit time of approximately four weeks is needed to ship the finished goods from our third-party manufacturing partner to our fulfillment center in Salt Lake City, Utah. To minimize freight costs, the Company generally tries to configure a purchase order to fit a 40-foot high-cube container. As such, the Company has historically had a very high level of inventory on hand relative to sales, but this ratio is expected to improve as revenues scale and inventory turns faster.

Net cash from (used in) investing activities

Cash from (used in) investing activities was $(21,201) for the nine months ended October 31, 2021 as compared to $(1,801) for the nine months ended October 31, 2020. During the fiscal year ended October 31, 2021, the outflow of cash was for the purchase of equipment and intangible assets, namely customer lists.

Net cash from (used in) financing activities

Cash provided by financing activities was $14,253 for the nine months ended October 31, 2021 as compared to $4,567,542 for the nine months ended October 31, 2020. The reduction in cash provided from financing activities is due to the Company completing equity financing rounds during the nine months ended October 31, 2020, whereas no financing rounds were completed in the nine months ended October 31, 2021.

As of October 31, 2021, the Company had a working capital deficit of $3,962,096, compared to a positive working capital of $1,498,660 as of October 31, 2020.

Funding requirements

As of and for the nine-month period ended October 31, 2021, the Company has recurring losses, a working capital deficit of $3,962,096 (January 31, 2021 – working capital of $159,943), an accumulated deficit totaling $17,621,043 (January 31, 2021 – accumulated deficit of $13,409,772) and negative cash flows used in operating activities of $671,169 (January 31, 2021 – negative cash flows of $4,052,350). The ability of the Company to carry out its business objectives is dependent on its ability to raise additional capital during the next twelve months and beyond to support current operations and planned development. Whether and when the Company can attain profitability and positive cash flows is uncertain. While the Company has been successful in securing financing in the past, there is no assurance that financing will be available in the future on terms acceptable to the Company.

Off-balance asset arrangements

During the periods presented, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Results of Operations – January 31, 2021 compared to January 31, 2020

The table below sets forth a summary of our results of operations for the fiscal years ended January 31, 2021 and 2020:

Revenues

Our revenues increased 334% for the fiscal year ended January 31, 2021 to $901,162 from $207,404 for the fiscal year ended January 31, 2020. The primary reason for the increase in revenues was an increase in sales of Brüush Kits from $197,813 to $817,778, which is attributed to expanded marketing and customer acquisition efforts, as well as an increase in sales of Brüush Refills from $9,591 to $83,384 as our Active Subscription base continued to grow. During the fiscal year ended January 31, 2021, pricing remained relatively unchanged with only a slight increase in the average selling price per Brüush Kit when compared to fiscal year ended January 31, 2020.

Cost of goods sold

Our cost of goods sold increased 337% to $291,195 for the fiscal year ended January 31, 2021 from $66,596 for the fiscal year ended January 31, 2020. This increase was mainly due to a higher volume of Brüush Kit sales.

Gross profit

We recorded gross profit of $609,967 and $140,808 for the fiscal years ended January 31, 2021 and 2020, respectively. Our gross margin remained consistent at 68% for the fiscal years ended January 31, 2021 and January 31, 2020, reflecting our cost of goods sold increasing at the same rate as revenues. The product mix remained comparable year over year, as the split between Brüush Kit and Brüush Refill sales was 91% and 9%, respectively during the fiscal year ended January 31, 2021 compared to 95% and 5%, respectively during the fiscal year ended January 31, 2020.

Operating Expenses

The following table sets forth our operating expenses for the fiscal years ended January 31, 2021 and 2020:

Our operating expenses have seen a substantial increase for the fiscal year ended January 31, 2021, as compared to the fiscal year ended January 31, 2020. There has been an increase in every category of expenses, except for travel and entertainment, with this reduction reflecting the impact of the COVID-19 pandemic. The increase in shipping and delivery, advertising and marketing, consulting, professional fees, and salaries and wages are the result of a more aggressive customer acquisition strategy and an expansion in operations due to the increase in revenues.

Share-based compensation of $4,949,441 for the fiscal year ended January 31, 2021 included a total of $2,524,597 as the aggregate estimated fair value of 417,780 Class A shares issued on February 12, 2020 and of 1,963,566 Class A shares of the Company issued on June 24, 2020 to our Chief Executive Officer as nominal consideration for services rendered. Also included is a total of $1,997,611 as the estimated fair value of 1,870,232 Class B shares of the company issued on July 17, 2020 as nominal consideration to directors of the Company for services rendered. Share-based compensation also included $145,933 for the vesting of 157,781 stock options (out of a total of 309,498 options granted during the fiscal year ended January 31, 2021) on November 23, 2020.

Operating loss before other items

Our operating loss before other items was $8,360,642 for the fiscal year ended January 31, 2021 as compared to an operating loss before other items of $1,377,379 for the fiscal year ended January 31, 2020, excluding share-based compensation our operating loss before other items would have been $3,411,201 and $1,324,970 for the year ended January 31, 2021 and January 31, 2020, respectively. The increase in operating loss before other items excluding share-based compensation is due to a reduction in the gross margins realized by the Company during the fiscal year ended January 31, 2021, as well as an increase in overall operating expenses as the Company increased advertising and marketing efforts, invested in brand building initiatives and expanded operations to support a higher sales volume.

Other items

On May 5, 2020, we received a loan in the amount of CAD$40,000 (approximately $28,506) under the Canada Emergency Business Account program. The loan is non-interest bearing and eligible for forgiveness of CAD$10,000 (approximately $7,127) of the principal amount if it is repaid on or before December 31, 2022. If the loan is not repaid by such date, the loan will bear interest at 5% per year and will be due on December 31, 2025. Government grant income of $14,139 reflects the difference between the face value of the loans and the fair value of the loan (as the loan was issued at below market rates) of $7,012 and $7,127, as we expect to repay the loan on or prior to December 31, 2022 and be eligible for the forgiveness of such amount of the principal of the loan. At January 31, 2021, the value of the loan was $17,580.

Foreign exchange loss represents losses resulting from the settlement of transactions denominated in currencies other than in U.S. dollars, the functional currency of the Company, and from the remeasurement of monetary items denominated in currencies other than U.S. dollars at year end exchange rates.

In July and August 2020, in connection with a private placement, we issued 1,033,495 warrants with an exercise price of CAD$0.90 exercisable 24 months from the from the time the Company completes a public offering of shares of its common stock in Canada or the United States (the “Liquidity Event”) Because the warrants have an exercise price denominated in a currency other than the Company’s functional currency, they are derivative financial instruments and measured at fair value at the end of each reporting period. The fair value of the warrants upon issuance was determined to be $178,956 at issue.

Additionally, in August and September 2020 in connection with a private placement, we issued 1,557,920 warrants with an exercise price of CAD$2.70 exercisable 24 months from the Liquidity Event. As the warrants have an exercise price denominated in a currency other than the Company’s functional currency, they are derivative financial instruments measured at fair value at the end of each reporting period. The fair value of the warrants upon issuance was determined to be $774,894.

The fair market value of the warrants was estimated using the Black-Scholes Option Pricing Model using the following assumptions:

The following table shows the evolution of the Company’s derivative warrant liability:

The change in the fair value of these derivative instruments of $536,209 is shown as an expense for the fiscal year ended January 31, 2021.

Liquidity and Capital Resources

The following table sets forth a summary of our cash flows from (used in) operating activities, investing activities and financing activities for the fiscal years ended January 31, 2021 and 2020:

Net cash from (used in) operating activities

Net cash used in operating activities, which is generally the net income or loss adjusted for non-cash items, such as depreciation and changes in non-cash working capital items, was an outflow of $(4,052,350) for the fiscal year ended January 31, 2021, compared to an outflow of $(1,459,556) for the fiscal year ended January 31, 2020. The main factors which contributed to decrease in cash outflow from operations were the net loss of $8,890,431 the fiscal year ended January 31, 2021, compared to a net loss of $1,378,860 for the fiscal year ended January 31, 2020, and changes in working capital, primarily in inventory and prepaid expenses and deposits.

Net cash used in investing activities

Net cash from (used in) investing activities was $(3,196) for the fiscal year ended January 31, 2021 and no cash from or used in investing activities for the fiscal year ended January 31, 2020. For the fiscal year ended January 31, 2021, the outflow of cash was for capital expenditures.

Net cash from financing activities

Net cash from financing activities was $4,567,542 for the fiscal year ended January 31, 2021, compared to $1,578,236 for the fiscal year ended January 31, 2020. This increase was due primarily to proceeds from the issuance of shares of $4,973,023 for the fiscal year ended January 31, 2021, compared to $1,354,158 of such proceeds in the fiscal year ended January 31, 2020, partially offset in fiscal year 2021 by repayment of loans of $433,987.

At January 31, 2021, the Company had working capital (current assets less current liabilities) of $159,943 compared to working capital of $84,956 at January 31, 2020.

Off-balance asset arrangements

During the periods presented, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Financial Instruments and Risk Management

Risk Management

In the normal course of our business, we are exposed to a number of financial risks that can affect our operating performance and financial condition. These risks, and the actions taken to manage them, are as noted below.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to any material interest rate risk.

Credit risk

Credit risk is the risk of loss associated with the counterparty’s inability to fulfill its payment obligations. For financial assets, this is typically the gross carrying amount, net of any amounts offset and any impairment losses.

The Company’s principal financial assets are cash and trade accounts receivable. The Company’s credit risk is primarily concentrated in its cash which is held with institutions with a high credit worthiness. Credit risk is not concentrated with any particular customer. The Company’s accounts receivable consists primarily of GST receivable. Trade receivables are generally insignificant.

At October 31, 2021, the Company’s maximum credit risk exposure is $175,577.

Foreign exchange risk

Foreign currency risk arises from fluctuations in foreign currencies versus the U.S. dollar that could adversely affect reported balances and transactions denominated in those currencies. As at October 31, 2021, a portion of the Company’s financial assets are held in Canadian dollars. The Company’s objective in managing its foreign currency risk is to minimize its net exposure to foreign currency cash flows by transacting, to the greatest extent possible, with third parties in U.S. dollars. The Company does not currently use foreign exchange contracts to hedge its exposure of its foreign currency cash flows as management has determined that this risk is not significant at this point in time. The Company is not exposed to any material foreign currency risk.

At October 31, 2021, the Company held the following assets denominated in Canadian dollars: Cash of CAD$388 and accounts and other receivables of CAD$127,432.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis.

Historically, the Company’s primary source of funding has been the issuance of equity securities for cash, primarily through the issuance of common shares. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding.

The following is an analysis of the contractual maturities of the Company’s financial liabilities as at October 31, 2021:

As of October 31, 2021, the Company had cash of $14,530 and current liabilities of $4,993,364, compared to $692,647 and $1,908,479, respectively, as of January 31, 2021. Appropriate going concern disclosures have been made in Notes to the financial statements. To address the negative working capital balance and any short-term cash shortfalls as of October 31, 2021, the Company closed a bridge loan on December 3, 2021 for $3,000,000 and a second bridge loan on April 28, 2022 for $1,650,000 to provide short term financing while the Company addresses longer term solutions to capital management. In connection with the December 2021 financing, the Company issued investors warrants containing a provision that allows the warrants to benefit from any more favorable terms in subsequent financings.

Capital Management

In the management of capital, the Company includes components of shareholders’ equity. The Company aims to manage its capital resources to ensure financial strength and to maximize its financial flexibility by maintaining strong liquidity and by utilizing alternative sources of capital including equity, debt and bank loans or lines of credit to fund continued growth. The Company sets the amount of capital in proportion to risk and based on the availability of funding sources. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. Issuance of equity has been the primary source of capital to date. Additional debt and/or equity financing may be pursued in future as deemed appropriate to balance debt and equity. To maintain or adjust the capital structure, the Company may issue new shares, take on additional debt or sell assets to reduce debt.

Contractual Obligations

All of our contractual maturities for liabilities as at October 31, 2021 and January 31, 2021 are within one year, consisting of accounts payable and accrued expenses and loans payable.

Related Party Transactions

Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company’s executive officers and Board of Director members.

All related party transactions are in the normal course of operations. All amounts either due from or due to related parties other than specifically disclosed are non-interest bearing, unsecured and have no fixed terms of repayments.

Critical Accounting Estimates and Judgments

The preparation of the Company’s Financial Statements in conformity with IFRS requires management to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if revision affects current and future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are prepared in accordance with the same accounting policies, critical estimates and methods described in the Company’s Financial Statements. The Company based its assumptions and estimates on parameters available when the Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur. See Note 3 of the Financial Statements for additional information.

Recent Accounting Pronouncements

None that specifically apply to the Company as evaluated by management.

Business

Overview

The Company, incorporated under the Business Corporations Act of British Columbia on October 10, 2017 under the name “Bruush Oral Care Inc.”, is on a mission to inspire confidence through brighter smiles and better oral health. Founded in 2018 by Chief Executive Officer Aneil Manhas, a former investment banker and private equity investor turned entrepreneur, we are an oral care company that is disrupting the space by reducing the barriers between consumers and access to premium oral care products because it is our belief that high-quality oral care products should be more accessible. We are an e-commerce business with a product portfolio that currently consists of a sonic-powered electric toothbrush kit and brush head refills. Through our website, consumers can purchase a Brüush starter kit (the “Brüush Kit”), which includes: (i) the Brüush electric toothbrush (the “Brüush Toothbrush”); (ii) three brush heads; (iii) a magnetic charging stand and USB power adapter; and (iv) a travel case. We also sell the brush heads separately, which come in a three-pack (the “Brüush Refill”) and can be purchased on a subscription basis, where the customer will automatically receive a Brüush Refill every six months (the “Subscription”). We consider a Subscription to be active (an “Active Subscription”) until it is either cancelled by the customer or terminated due to payment failure (for example, a lost or expired credit card). Later this calendar year, we plan to expand our portfolio with the launch of several new subscription-based consumable oral care products, including toothpaste, mouthwash, dental floss, a whitening pen, as well as an electric toothbrush designed for kids.

The Opportunity

According to a study conducted by the Oral Health Foundation in 2019, people who use an electric toothbrush have healthier gums, less tooth decay and keep their teeth for longer compared with those who use a manual toothbrush. Electric toothbrushes can generate upwards of 30,000 brush strokes per minute (versus around 300 with a manual toothbrush) and create better oral care habits with features like a smart timer and multiple brush modes. However, despite the oral health benefits, most people still use a traditional manual toothbrush. According to an independent report by consumer marketing analysis firm Mintel, only 36 percent of adults say they use an electric/powered toothbrush. They are more popular among older age groups and people with higher incomes, as Mintel reports that half of people 55 years and older with an annual income of $75,000 or more prefer using an electric brush over a manual one.

The low adoption rate despite the clear oral care benefits shows that consumers, especially the younger generations, do not find the current electric toothbrush value propositions compelling enough to upgrade from a manual toothbrush for a number of reasons. First and foremost, electric toothbrushes are traditionally expensive, with the high-end models retailing for over $200. Furthermore, the buying experience for an electric toothbrush and replacement heads is annoying from the consumer perspective, as they are often locked up in cases within the aisle, which requires finding a store attendant to gain access and then figuring out what brush head is compatible with the consumer’s device. Historically, electric toothbrushes have not been aesthetically pleasing and consumers do not want the devices or charging stands cluttering their countertops.

Our Value Proposition

With such a glaring opportunity in the market, we have developed an electric toothbrush that makes upgrading to an electric brush appealing. The key tenets of our value proposition include:

Production and Distribution

The Company develops and manufactures products with third-party manufacturing partners located in Canada and China. The sourcing and purchase of raw materials is managed by the Company’s third-party manufacturing partners. Although the COVID-19 pandemic has caused global manufacturing challenges and supply chain disruption, particularly in Asia, to date we have not experienced any material interruptions or delays related to the manufacture of our products in China or Canada or moving our products from our manufacturers in China and Canada to our third-party fulfilment and logistics partner in Salt Lake City, Utah. Additionally, to management’s knowledge, there have been no recent significant availability problems or supply shortages for raw materials or supplies that could have a material adverse effect on our ability to meet the business objectives as set out in this prospectus.

We distribute our products through a third-party fulfilment and logistics partner based in Salt Lake City, Utah. We offer free regular shipping to our customers, which takes 2-5 business days depending on the geographical location, as well as express 2-day shipping for a $10 charge.

Sales Channels

We currently sell products in the United States and Canada. The size of the oral care market in North American is an estimated $12 billion, of which electric toothbrushes account for over $1 billion. Our market share is currently infinitesimal. As an e-commerce business, our website – www.bruush.com – accounts for the majority of our sales. We also sell through Amazon and have commercial agreements with some third-party retailers including Indigo, Harry Rosen, Macy’s and Urban Outfitters, who all sell our products on their websites under a drop-ship arrangement. We are not dependent on any one of these third-party commercial agreements.

The Company’s breakdown of sales between the United States and Canada is as follows:

Seasonality

Since the Brüush Kit makes a great gift, the holiday season (November and December) is a peak period for sales. Other than a spike during the holiday shopping period, the business does not face any seasonal fluctuations in terms of revenues throughout the year.

Customers

We focus our marketing efforts on recruiting consumers that are between 18 and 45 years of age and currently using a manual toothbrush and convincing them that there has never been a more compelling opportunity to upgrade to an electric brush. Currently, this age range is underpenetrated relative to baby boomers when it comes to using an electric toothbrush, but this is expected to shift due to an increased understanding around the importance of oral hygiene among younger people. This group also consists of the first digital generations when it comes to shopping, as recent research has indicated that 67 percent of millennials prefer purchasing online, with self-care driving their spending habits. Studies have also found that the millennial and Generation Z groups have further shifted their preference away from in-store shopping during the COVID-19 pandemic and that even as life returns to normal, issues such as long lines and crowds will remain deterrents, with both groups citing convenience and price comparison among the top benefits of online shopping.

Currently, we have over 28,000 Active Subscriptions in our program, with an estimated 70 percent of our customer base between 18 and 45 years old. So far, our value proposition is resonating strongly, as the consumer feedback has been incredibly positive. We have received over 3,000 organic reviews, with a remarkable 90 percent five-star rating. Furthermore, despite offering a 90-day no questions asked return policy, our return rate is less than one percent, which is extremely low for an e-commerce company in the consumer goods space. Our low churn rate on Active Subscriptions of only one percent cancelled monthly, is further proof that our subscribers are enjoying the product. As such, we see a big opportunity to leverage our loyal customers to generate incremental sales. As we prepare to launch new products, we will give exclusive offers to our existing subscriber base to encourage them to expand their Subscriptions to include Consumables.

Competition

The electric toothbrush industry has traditionally been dominated by two major brands: (i) Philips Sonicare (owned by Dutch conglomerate Koninklijke Philips N.V.); and (ii) Oral-B (owned by American multinational consumer goods corporation Proctor & Gamble). In our view, these companies make high-quality products, but they can be expensive with their high-end models retailing for over $200. In North America, it is our belief that both Philips Sonicare and Oral-B primarily sell their products to the baby boomer generation through their brick-and-mortar retail networks, where the buying experience can be poor and there is a limited ability to lower prices. From a marketing standpoint, it seems that both companies rely on traditional initiatives, such as television ads and print media, with messaging that is targeted to an older demographic and may not resonate as well with the younger millennial and Generation Z groups.

In recent years, a number of competing brands have emerged, such as Burst, Goby, Moon and Quip. These companies usually offer electric toothbrushes at a lower price point than Philips Sonicare and Oral-B, but we feel that the product quality is inferior. Our value proposition is centered around offering an electric toothbrush that we believe is comparable to the high-end models of Philips Sonicare and Oral-B in terms of quality, but at the lower price point, which is more in-line with the emerging competition. Additionally, we are focused on: (i) distributing our products online versus through a brick-and-mortar retail network; (ii) offering our consumers the option to conveniently have their replacement brush heads shipped automatically to their door through our Subscription; and (iii) marketing to a younger demographic that is between 18 and 45 years of age through relevant channels such as social media.

Brand Strategy

Our brand strategy is focused on becoming the go-to oral care brand for the 18 to 45-year-old age group. The Company has helped differentiate itself from the competition by building a unique and human brand identity that resonates with the millennial and Generation Z cohorts. We have helped accomplish this by creating supercharged content that features bright colors and bold expressions and fits with our objective of shaking up the traditionally dull oral care category. We utilize this content across our website, paid media programs and social media channels. In addition to our campaign assets, we generate omni-channel content through customer excitement that has driven a steady stream of user-generated content and brand mentions.

The millennial and Generation Z demographic groups have a propensity to naturally and purposefully engage in social media to endorse the brands and products that they use and love. As such, we are very active on social media, where we aim to connect deeper with our target customer by building a community to drive brand engagement. We have primarily focused our social media efforts on Instagram, where we currently have over 28,000 followers. As part of our social media strategy, we have collaborated with over 200 on-brand influencers, mostly in an unpaid capacity. To facilitate these collaborations, we work both directly (outreach from the Company to the influencer) and with best-in-class influencer seeding tools to gift the Brüush Kit to influencers in exchange for a product review or authentic content (both static and video) that showcases our product in a genuine manner. We embed this content across our owned and operated social channels and in our customer outreach initiatives, repurposing it to our audience so they get direct product feedback from their peers. We also receive many inbound requests from micro-influencers, who want to collaborate with us to promote the Brüush Toothbrush. We continue to engage with our top performing influencers to turn them into a team of loyal brand ambassadors that we can leverage as we introduce new products to market.

Media exposure has also proven to be successful in terms of building the brand by way of creative pitching and tactical product seeding, often to existing relationships with commerce editors. In 2021, the Company received over 200 brand-elevating press placements, the majority of which were earned (unpaid), including coverage in Allure Magazine, New York Times, Vogue, Refinery29, The Wall Street Journal, Essence and Rolling Stone Magazine. Having these notable publications backlink our website not only improved search engine optimization, but also generated a rise in key performance indicators on our site for up to 48 hours after new placements. When we engage in paid placements, it is mainly focused in the affiliate channel, where we typically provide a small commission on sales that are generated by a publication covering our product. Even in this capacity, an editor typically chooses among several different electric toothbrushes, whereby the Brüush Toothbrush would need to be deemed the strongest before they would cover or advocate for our brand.

Partnership with Kevin Hart

On November 23, 2020, the Company announced that award-winning comedian and actor, Kevin Hart, had joined as a partner and celebrity endorser. With Kevin Hart’s authentic love for the product, wide demographic appeal and natural alignment with our brand, the partnership is aimed at shaking up the all-too-often humorless, ignorable oral care category by utilizing Mr. Hart’s talents in campaigns, content and social media.

Pursuant to the endorsement agreement between the Company and K. Hart Enterprises, Inc., the Company agreed to compensate K. Hart Enterprises through a combination of (i) cash payable in two installments of $750,000 for a total amount of $1,500,000; (ii) royalty payments of three percent based on gross revenues received by the Company during the term of the agreement from the sales of any Brüush products or subscriptions; and (iii) stock options to purchase 309,498 Class B common shares of the Company. Kevin Hart’s deliverables consist of a range of promotional activities including a production day to create comedic videos, appearances, media interviews and social ambassadorship of the Company to his 143 million Instagram followers. The initial two-year term of the endorsement agreement commenced on November 23, 2020 and ends on November 23, 2022, and may be extended for up to two additional years, if mutually agreed upon. This summary does not purport to be complete and is qualified in its entirety by the full text of the endorsement agreement.

Growth Strategy

Our mission is to disrupt the oral care industry by reducing the barriers between consumers and access to premium oral care products. We currently have over 28,000 Active Subscriptions in our program and plan to grow by continuing to pursue the following key growth strategies:

Scale e-commerce sales

To ensure a steady build of awareness and conversion, the Company employs an active digital advertising strategy with a focus on delivering brand and direct response creative throughout Facebook, Instagram and Google, among other digital channels. With a focus on driving qualified traffic to the website and increasing conversion, this approach allows us to learn, optimize and evolve. We see significant opportunity to continue increasing overall demand and improving conversion at every touchpoint across our subscriber acquisition funnel and plan to test new paid social channels that we have already seen success in from an organic perspective, in addition to scaling other paid media channels such as radio and podcast. Additionally, we will continue to drive brand awareness through top-of-funnel social media campaigns, influencer collaborations, public relations initiatives and affiliate partnerships. We will keep differentiating from the competition and build a strong foundation that binds all brand activations.

Expand distribution channels

Although our focus is scaling our e-commerce business, we will also look to increase awareness by expanding into new distribution channels through partnerships with other millennial-focused brands, brick-and-mortar retailers (both in-store and online) and dental practices. The focus of any new partnership will be to reach new consumers without compromising our brand identity and maintaining the premium nature of our brand. Additionally, we currently sell our products in the United States and Canada, which are very competitive markets for oral care. We will evaluate expanding our sales to other less competitive countries in the future.

Introduce new products

Later this calendar year, the Company plans to launch a set of auxiliary oral care products including four consumable products (the “Consumables”): toothpaste, mouthwash, dental floss and a whitening pen, in addition to an electric toothbrush designed for kids. We have already finalized the formulas for each of the Consumables, as well as the form, type and artwork for the packaging. The last step before production of the Consumables is to await the results of stability and compatibility testing with the packaging and formula, which is expected to be completed this summer. Of the Consumables, only the toothpaste is subject to registration with the United States Food and Drug Administration (“FDA”). Mouthwash, dental floss and whitening pen are categorized as cosmetic products, which do not require FDA approval.

The introduction of the new oral care products provides an opportunity for us to continue to increase touch points through our retention funnel, deepen our relationship with our existing subscribers, increase our average order value and grow our monthly recurring revenue. We are currently evaluating additional products that we intend to launch in 2023 and beyond, as our long-term goal is to “own the bathroom”. All new products will be high quality and deliver a similar premium experience to the Brüush Toothbrush.

Grow the team

With team members in Toronto, Ontario and Vancouver, British Columbia, the Company has seven employees under contract, which does not include consultants or board members. We have a strong management team in place and will focus on growing the team as we scale the business.

Regulatory Environment

In the United States, powered toothbrushes, such as the Brüush Toothbrush and the new electric brush designed for kids that we will be releasing, are regulated as a Class I device by the FDA, Federal Trade Commission (“FTC”) and other regulatory authorities (regulation number: 872.6865 and product code: JEQ). The FDA has exempted almost all Class I devices (with the exception of reserved devices) from the premarket notification requirement. The Brüush Toothbrush falls under the exemption and therefore the Company is not required to submit a premarket notification application or obtain FDA clearance before marketing the product in the U.S., however, the Company is required to register its establishment with the FDA. The Company’s annual renewal for the medical device establishment has been successfully completed for 2022 (registration number: 3014925406 and owner operator number: 10058820).

Of the Consumables that we will be launching later this year, only the toothpaste is subject to registration with the FDA. Mouthwash, dental floss and the whitening pen are all categorized as cosmetic products, which do not require FDA authorization. Our toothpaste will be classified as an over-the-counter (“OTC”) drug product, which is subject to the FDA OTC drug regulatory requirements due to the inclusion of sodium fluoride as an active ingredient. Third-party manufacturing facilities for OTC drug products must comply with the FDA’s drug Good Manufacturing Practices (GMPs) that require them to maintain, among other things, good manufacturing processes, including stringent vendor qualifications, ingredient identification, manufacturing controls and record keeping. The third-party manufacturer of our toothpaste located in Canada is registered with the FDA and in full compliance with the FDA’s GMPs, as they already produce a range of OTC toothpastes that are currently selling in the United States.

As an OTC drug product, our toothpaste will be permitted to be produced and marketed without prior approval from FDA, but it must comply with the monograph for OTC anticaries drug products, which regulate its formulation, packaging and indications by establishing acceptable active ingredients, labelling requirements and product claims that are generally recognized as safe and effective. If our toothpaste is not in compliance with the applicable FDA monograph for OTC anticaries drug products, we may be required to stop making claims or stop selling the product until we are able to obtain the requisite FDA approvals. Based on separate assessments conducted by our team, manufacturing partner in Canada and third-party regulatory advisors, we are confident that our toothpaste will comply with FDA OTC drug regulatory requirements.

In Canada, electronic toothbrushes are a Class II device and require ISO 13485:2016 with Medical Device Single Audit Program (MDSAP) certification through a recognized registrar, in addition to a Medical Device License application. To facilitate the possibility of Canadian-based warehousing and fulfilment, we are currently working towards ISO 13485:2016 certification and expect to obtain it, as well as receive the Medical Device License, this year. For Canada, our toothpaste will require a Natural Product Number (“NPN”) and bilingual packaging. Getting an NPN requires pre-market approval from Health Canada, which can take at least 60 days from the submission date. We do not anticipate any issues receiving Health Canada approval, since the formula and the OTC ingredients are in the prescribed levels in the monograph and all packaging will follow Canadian labelling, requirements. Additionally, the third-party manufacturer of our toothpaste is located in Canada, registered with Health Canada, and already produces a range of OTC toothpastes that are currently selling in the Canadian market.

Intellectual Property

The Company has a registered United States design patent for the ornamental and industrial design for the manufacture of The Brüush Toothbrush, which expires on November 19, 2034. We also have a similar industrial design registration for The Brüush Toothbrush in Canada that expires on December 13, 2028. We do not intend to file any new patents as it relates to the new products that we will be launching later this year. Additionally, the Company retains trademarks in the United States, Canada, Australia, United Kingdom and the European Union for our name and symbol “BRÜUSH”.

Legal Proceedings

We may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

There are no material proceedings to which any director or officer is a party that is adverse to the Company or has a material interest adverse to the Company. We do not believe that any lawsuit filed to date is material or would have a material adverse impact on our Company. No director or executive officer has been a director or executive officer of any business which has filed a bankruptcy petition or had a bankruptcy petition filed against it during the past ten years. No current director or executive officer has been convicted of a criminal offense or is the subject of a pending criminal proceeding during the past ten years. No current director or executive officer has been the subject of any order, judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities during the past ten years. No current director or officer has been found by a court to have violated a federal or state securities or commodities law during the past ten years.

Corporate Information

The Company’s principal office is located at 128 West Hastings Street, Unit 210, Vancouver, BC V6B 1G8. Our telephone number is (844) 427-8774 and website address is www.bruush.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus. Investors should not rely on any such information in deciding whether to purchase our securities.

Management

The following table sets forth certain information regarding our directors and executive officers as of the date of this prospectus:

Executive Officers

Aneil Manhas, Chief Executive Officer and Chairman

Aneil Manhas, the founder of the Company, has served as Chief Executive Officer since inception in 2018. Mr. Manhas has a career spanning over 15 years working in the financial services industry and in CEO positions of his previous companies.

Recently, he was CEO of Surface 604 from 2015 until 2019, an electric bike company that he founded and grew to be one of North America’s leading e-bike brands. During the same period, he was also President and CEO of GVA Brands / Rosso Sports from 2014 until 2019, a company he purchased and transformed into Canada’s leader in entry-level powersports.

Mr. Manhas previously worked at Credit Suisse in Los Angeles, California for two years as an Investment Banking Analyst before joining Onex Corporation in Toronto, Ontario as a member of the investment team for five years, evaluating and executing large private equity transactions across multiple industries.

Aneil holds an Honors Business Administration (HBA) from the Richard Ivey School of Business at the University of Western Ontario.

Matthew Kavanagh, Chief Financial Officer

Matthew Kavanagh joined the Company in February 2022 as Chief Financial Officer to direct and oversee the Company’s finance department. Mr. Kavanagh has over 15 years of experience in a variety of leadership, managerial, financial, accounting, regulatory compliance, assurance, tax and advisory areas.

From 2017 to 2021, prior to joining the Company, Mr. Kavanagh was Vice President of Finance for Zenabis Global Inc., where he established the finance department from the ground up to manage all accounting, inventory costing, finance, reporting, budgeting, tax and payroll functions. Mr. Kavanagh led the finance department though the reverse take-over of Bevo Agro Inc. (TSX-V: BEVO) and subsequent up listing from the TSX Venture Exchange to the Toronto Stock Exchange (TSX: ZENA).

Prior to Zenabis, Mr. Kavanagh was an Assurance and Advisory Manager at Deloitte LLP in Vancouver, British Columbia and BDO USA, LLP in Madison, Wisconsin from 2014 to 2017, and previously, was a Senior Accountant in Madison, Wisconsin from 2011 to 2014.

Mr. Kavanagh holds both a Bachelor of Accounting and Financial Management, as well as a Master of Accounting from the University of Waterloo.

Alan MacNevin, Chief Operating Officer

Alan MacNevin joined the Company in June 2022 as Chief Operating Officer and leads the Company across all aspects of operations, driving strategic growth by directing and overseeing the scale of digital commerce, execution of strategic partnerships, launch of new products and expansion into new geographical markets. Mr. MacNevin has over 20 years of experience in executive-level positions managing large teams globally, while leading the growth at start-up e-commerce and subscription-based businesses and building them into category leaders.

Mr. MacNevin joins the Company from Rakuten Kobo, where over the past ten years he has held various executive positions including Chief Revenue Officer (2014-2015), Chief Marketing Officer (2015-2019), and most recently, Chief Operating Officer (2019-2022), where he managed the day-to-day global operations of the company. Driving growth, profitability and international expansion, Mr. MacNevin played a key role in Kobo’s emergence as a dominant player in the eReading industry.

Prior to joining Rakuten Kobo, Mr. MacNevin was a member of the executive team at Sirius Satellite Radio for six years from 2005 to 2011. At Sirius, Mr. MacNevin led the subscriber management team as the company grew from inception to over two million subscribers before it merged with XM Canada in 2011. Mr. MacNevin has also held senior marketing and operational roles at the Canadian Broadcasting Company, Chapters-Indigo Online and Bell Mobility.

Non-Executive Directors

Kia Besharat, Director

Kia Besharat has over 15 years of extensive founder, private equity, investment banking and directorship experience. As Senior Managing Director and Head of Capital Markets Origination at Gravitas Securities Inc., Mr. Besharat leads the advisory, restructuring, corporate finance and mergers and acquisitions mandates across the firm’s platform with a recent focus on the following industry groups: consumer/retail, natural resources, internet/new media, technology and healthcare.

Since joining the firm in 2016, he has played a pivotal role in establishing Gravitas Securities Inc. as one of the top independent investment banks in Canada. At Gravitas Securities Inc., his transactions have totaled more than $1 billion and in aggregate of more than $4 billion over the span of his career. Since 2020, Mr. Besharat has been a founder and Director of EMERGE Commerce Ltd. (TSXV: ECOM), a disciplined, diversified, rapidly growing acquirer and operator of direct-to-consumer e-commerce brands across North America. He has also been a founder and Director of Mednow Inc. (TSXV: MNOW) since 2020, a healthcare technology company offering virtual access with exceptional care. as well as a Director of Gravitas II Capital Corp. (TSXV: GII.P).

Mr. Besharat holds a Bachelor of Arts in Economics from McGill University, as well as a Master of Science degree (specializing in Finance and Investment) from the University of Edinburgh.

Dr. Robert Ward, Director

Dr. Robert Ward is a Certified Specialist in Orthodontics licensed in the provinces of Manitoba and Alberta, where he maintains a private practice. He is also the CEO of XerosGuard, a company that he founded in 2018 and offers dentists a revolutionary product that maintains intra-oral isolation and moisture control while a patient occludes their teeth.

Previously, from 2016-2019, Dr. Ward’s ownership group successfully acquired and green-fielded 11 dental and orthodontic offices in Central Canada and proceeded to have a successful exit in the summer of 2019. This sale is widely believed to be one of the largest transactions in the space in Canadian history. Dr. Ward is passionate about innovative, cutting-edge techniques and technologies to provide the highest level of care to patients. This keen interest has led to his involvement in several intellectual property-focused dental start-up businesses and he currently holds three dental-related patents in the United States.

Dr. Ward attended the University of Manitoba and holds a Bachelor of Science (Biology), Bachelor of Science (Dentistry), Doctor of Medicine in Dentistry and Master of Science in Orthodontics. Dr. Ward is involved with several continuing education and professional organizations, including the Canadian Association of Orthodontists and American Association of Orthodontists. He also maintains a part-time professor position in the College of Dentistry at University of Manitoba in Orthodontics.

Brett Yormark, Director

In June 2022, Brett Yormark was named the Big 12 Conference’s fifth Commissioner. Previously, since 2019, Mr. Yormark served as the COO of Roc Nation and Co-CEO of Roc Nation Unified. Roc Nation, founded in 2008 by JAY-Z, is a full-service entertainment company supporting a diverse roster of talent through artist management, music publishing, touring, production, strategic brand development and more. The client list includes some of the world’s most recognizable names in the entertainment and sports worlds.

Prior to Roc Nation, Mr. Yormark spent 14 years as President and CEO of Brooklyn Sports & Entertainment (BSE) Global, which manages and controls Barclays Center, the Brooklyn Nets and the Nets’ NBA G League team, the Long Island Nets. During his tenure, he also expanded BSE’s venue footprint by leading the renovation, reopening and subsequent operation of NYCB LIVE, home of the Nassau Veterans Memorial Coliseum on Long Island and Manhattan’s iconic Webster Hall. While at BSE Global, Mr. Yormark had oversight for all facets of Barclays Center and NYCB LIVE, including operations, event programming, sales and marketing.

Prior to BSE Global, Mr. Yormark worked for NASCAR for six years, where he helped build the stock-car racing company into a major sports property. Mr. Yormark was named the maximum three times to the “Forty Under 40” list by Sports Business Journal and was selected twice to the “40 Under 40” list by Crain’s New York Business. He is also on the board of the City Parks Foundation, the TJ Martell Foundation and NYC & Company.

Corporate Governance

Director Independence

The board of directors has reviewed the independence of directors based on Nasdaq listing standards. Based on this review, the board of directors has determined that Kia Besharat, Dr. Robert Ward and Brett Yormark are independent within the meaning of the Nasdaq rules. In making this determination, our board of directors considered the relationships that each of these non-employee directors has with us and all other facts and circumstances our board of directors deemed relevant in determining their independence. As required under applicable Nasdaq rules, we anticipate that our independent directors will meet in regularly scheduled executive sessions at which only independent directors are present.

Committees of the Board of Directors

The board of directors has established an Audit Committee, a Nominating and Corporate Governance Committee and a Compensation Committee. The members of the Audit Committee will be Kia Besharat (Chairman), Dr. Robert Ward and Brett Yormark. The Nominating and Corporate Governance Committee will be Kia Besharat (Chairman) and Dr. Robert Ward. The Compensation Committee will be Kia Besharat (Chairman) and Dr. Robert Ward. Each of the directors on the Audit Committee has been determined by our board of directors to be independent.

Audit Committee

The Audit Committee is governed by a written charter, which is approved and annually adopted by the board of directors. The board of directors has determined that the members of the Audit Committee meet the applicable independence requirements of the SEC and the Nasdaq Stock Market, that all members of the Audit Committee fulfill the requirement of being financially literate and that Kia Besharat is an Audit Committee financial expert as defined under current SEC regulations.

The Audit Committee is appointed by the board of directors and is responsible for, among other matters, overseeing the:

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee is appointed by the board of directors and is responsible for, among other matters:

Compensation Committee

The Compensation Committee is appointed by the board of directors and is responsible for, among other matters:

Risk Oversight

Our board of directors oversees a company-wide approach to risk management. Our board of directors determines the appropriate risk level for us generally, assess the specific risks faced by us and review the steps taken by management to manage those risks. While our board of directors will have ultimate oversight responsibility for the risk management process, its committees will oversee risk in certain specified areas.

Specifically, our compensation committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements, and the incentives created by the compensation awards it administers. Our audit committee oversees management of enterprise risks and financial risks, as well as potential conflicts of interests. Our board of directors is responsible for overseeing the management of risks associated with the independence of our board of directors.

Code of Business Conduct and Ethics

Our board of directors adopted a Code of Business Conduct and Ethics that applies to our directors, officers and employees. A copy of this code is available on our website. We intend to disclose on our website any amendments to the Code of Business Conduct and Ethics and any waivers of the Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer, controller or persons performing similar functions.

Family Relationships

There are no family relationships among our directors and/or executive officers.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past 10 years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K that are material to an evaluation of the ability or integrity of any director or executive officer of the Company.

Equity Compensation Plan

On June 30, 2022, our board of directors approved an Omnibus Securities and Incentive Plan effective June 29, 2022, replacing the Stock Option Plan previously approved on August 6, 2021. We plan to grant awards under this new plan, See “Executive and Director Compensation – Stock Option and Other Incentive Plans” for a description of the 2022 plan.

Board Diversity

While we do not have a formal policy on diversity, our board of directors considers diversity to include the skill set, background, reputation, type and length of business experience of our board members as well as a particular nominee’s contributions to that mix. Our board of directors believes that diversity promotes a variety of ideas, judgments and considerations to the benefit of our Company and shareholders.

On August 6, 2021, the Securities and Exchange Commission approved a proposed rule from Nasdaq on diversity of boards of directors of companies listed on Nasdaq. Under the rule as approved, “foreign private issuers” can meet the diversity requirement with either two female directors or one female director and one director who is an underrepresented individual based on national, racial, ethnic, indigenous, cultural, religious or linguistic identity in its home country or LGBTQ+. Companies with five or fewer directors can meet the requirement by having at least one director who meets the definition of “diverse” under the new rule. The requirements will become effective from August 7, 2023.

Executive and Director Compensation

The following information is related to the compensation paid, distributed or accrued by us for the fiscal years ended October 31, 2021 and January 31, 2021 for our Chief Executive Officer (principal executive officer) serving during the year ended October 31, 2021 and the other most highly compensated executive officer serving at January 31, 2021 whose total compensation exceeded $100,000 (the “Named Executive Officers”).

Summary Compensation Table

Compensation

The following table sets out the compensation paid to the individuals in U.S. dollars who were Named Executive Officers during the years ended October 31, 2021 and January 31, 2021.

(1) Mr. Manhas has served as Chief Executive Officer of the Company since inception in 2018. Pursuant to his employment agreement with the Company dated July 28, 2022, his compensation includes: (i) an annual salary of $400,000; and (ii) an annual cash bonus equal to the higher of an amount determined by the board of directors or 1.5% of the Company’s total gross revenues for the Company’s fiscal year ending October 31^st of each year. If Mr. Manhas is terminated without cause, the Company must pay him a severance, in a lump sum upon termination or as and when normal payroll payments are made, in the amount of equal to two years of his then annual salary and the prior year’s cash bonus and retain the benefits as set forth in the Mr. Manhas’ employment agreement for the balance of the term and all outstanding compensation owing as of the termination date.

(2) Mr. Kavanagh became the Chief Financial Officer of the Company starting on February 22, 2022. His compensation includes an annual salary of CAD$200,000 and stock options to acquire 150,000 Class B common shares at a strike price of CAD$1.80 per share. The stock options will vest annually in equal increments of 37,500 Class B common shares per year over a four-year term. The Company may at any time terminate Mr. Kavanagh without just cause. If Mr. Kavanagh is terminated without cause, the Company must pay him a lump sum amount equal to one month of his then annual salary. Mr. Kavanagh’s employment agreement also includes a Change of Control provision, whereby a change of control means: (i) the occurrence of or combination of, a sale of shares, amalgamation, merger or other consolidation of the Company to which the beneficial shareholders of the Company prior thereto do not retain more than 50% of the beneficial ownership; (ii) a sale, lease or disposition of all or substantially all of the assets of the company; and (iii) for greater certainty an initial public offering on a stock exchange shall not be deemed to constitute a change of control. If Mr. Kavanagh is terminated without cause 60 days preceding or 90 days following a change in control, Mr. Kavanagh will be entitled to an amount equal to 25% of his then annual salary. If within 90 days following a change in control, good reason exists (good reason shall mean, unless consented to in writing by Mr. Kavanagh, a material reduction in title, position or responsibilities, or any material reduction in salary), Mr. Kavanagh shall be entitled to terminate employment by giving the Company one month written notice and will be entitled to an amount equal to 25% of his then annual salary.

(3) Mr. MacNevin became the Chief Operating Officer of the Company starting on June 6, 2022. His compensation includes an annual salary of CAD$250,000 and stock options to acquire 300,000 Class B common shares at a strike price of CAD$1.80 per share. The stock options will vest annually in equal increments of 75,000 Class B common shares per year over a four-year term. The Company may at any time terminate Mr. MacNevin without just cause. If Mr. MacNevin is terminated without cause in the first year of employment, the Company must pay him a lump sum amount equal to two months of his then annual salary. One month of Mr. MacNevin’s annual salary will be added for each full calendar year he has been working at Company up to a maximum lump sum payment of 12 months of then annual salary.

The compensation set out above is based on current conditions in the Company’s industry and on the associated approximate allocation of time for the Named Executive Officers listed above and is subject in future to adjustments based on changing market conditions and corresponding changes to required time commitments. Following the Listing, the Company will review its compensation policies and may adjust them if warranted by factors such as market conditions.

Stock Options and Other Incentive Plans

On June 30, 2022, our board of directors approved the 2022 Omnibus Securities and Incentive Plan (the “2022 Incentive Plan”) effective June 29, 2022, replacing the Stock Option Plan previously approved on August 6, 2021.

The 2022 Incentive Plan was implemented for the purpose granting incentive share options, non-qualified share options, restricted share awards, restricted share unit awards, share appreciation rights, unrestricted share awards (collectively, “Awards”) to incentivize our directors, employees and consultants and the directors, employees and consultants of our subsidiary companies.

The board of directors may grant Awards from time to time under the 2022 Incentive Plan to one or more employees, directors or consultants that the Company determines to be eligible for participation in the 2022 Incentive Plan, as the board may determine at its discretion, subject to an aggregate number of shares of Common Stock that may be issued under the 2022 Incentive Plan limited to 20% of the overall outstanding shares of the Company.

Class of Share: An Award granted under the 2022 Incentive Plan entitles the option holder, subject to the satisfaction, waiver or acceleration of specific exercise conditions, to subscribe for shares of Common Stock.

Adjustment of Award: In the event there is any variation in our share capital that affects the value of the options, adjustments to the number and purchase price of shares subject to each Award in accordance with the plan. Any adjustment to an incentive share option shall comply with the requirements of Section 424(a) of the Code and any adjustment to a non-qualified share option shall comply with the requirements of Section 409A of the Code.

Transferability: No Award under the 2022 Incentive Plan may be assigned, transferred, sold, exchanged, encumbered, pledged or otherwise hypothecated or disposed of by the holder (other than in the case of an assignment to personal representatives upon death or the by gift to any family member (as defined in the 2022 Incentive Plan).