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Inside the controversies and feuds of beauty influencer James Charles

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James Charles attends the 2018 People’s Choice Awards. Jon Kopaloff / Stringer / Getty Images
  • James Charles is a beloved beauty influencer with nearly 24 million YouTube subscribers.
  • The 21-year-old has also faced a string of scandals throughout his internet career — starting with a joke he made about contracting the Ebola virus while visiting South Africa in 2017.
  • His most famous controversy, however, began in 2019 when he feuded with YouTuber Tati Westbrook and their former mutual friend Jeffree Star.
  • He’s also been criticized on various occasions for strongly editing his photos and criticizing other celebrities, among other things.
  • Visit Insider’s homepage for more stories.

James Charles is widely known as one of the biggest beauty creators online. He’s also faced a plethora of scandals and feuds throughout his internet career.

Many people might recognize the 21-year-old makeup artist from his previous feud with Tati Westbrook and Jeffree Star — dubbed “Dramageddon 2.0.” He’s also faced backlash for making inappropriate jokes, allegedly manipulating people, and describing influencers as a marginalized group, among other instances.

From his first controversy in 2017 to his most recent feud, here’s a look back at the beauty mogul’s controversial past.

James Charles faced his first major backlash after joking about Ebola in February 2017.

james charles covergirl
James Charles attends a Dior event in February 2017. Donato Sardella/Getty Images

On February 16, 2017, James Charles posted a now-deleted tweet in which he joked about contracting the Ebola virus while visiting South Africa. He shared the tweet shortly after being named CoverGirl’s first CoverBoy.

“‘I can’t believe we’re going to Africa today omg what if we get Ebola.’ ‘James we’re fine we could’ve gotten it at chipotle last year’….” Charles said on Twitter, according to The Cut.

Twitter users were quick to criticize the then 17-year-old, and called his message “stereotypical and degrading.”

According to Seventeen, Charles also began to block users who called him out, and shared a tweet in which he seemingly told himself to “block and move on james block and move on.”

The makeup mogul later said on Twitter that he was “extremely sorry” for his tweet, and was “aware” that his message was “extremely offensive and degrading.” He also referred to the continent of Africa as a country.

In September 2017, Charles found himself in the middle of a feud with cast members from the horror film “It.”

Finn Wolfhard Stranger Things 2 premiere
James Charles (not pictured) once fought with “Stranger Things” actor Finn Wolfhard. Frazer Harrison/Getty Images

Seven months later on September 7, 2017, Charles wrote in a tweet that he was “excited” to see the film “It.” But, according to BuzzFeed, the makeup artist quickly changed his mind about the film, and called it “awful” and “predictable” in a series of now-deleted tweets.

Fans of the movie weren’t the only ones to disagree with his tweets. Finn Wolfhard, an actor who starred in “It,” also sent Charles a message over Twitter.

“Why are you on your phone in the movie theater? Rule 1.” Wolfhard said on Twitter.

Charles first responded by saying he was “kinda honored” to be “dragged by a legendary child actor,” and then shared a two-minute-long video in which he apologized to Wolfhard and fans.

Charles also asked people on Twitter to “please shut up about using your phone during a movie,” as he felt that there were “more important things to worry about like, idk, the world ending.”

One month later, Charles was widely criticized for creating an “It”-inspired makeup tutorial on YouTube.

James Charles Pennywise tutorial
Charles uploaded an “It”-inspired makeup tutorial to YouTube in October 2017. James Charles/YouTube

On October 8 2017, Charles uploaded a makeup tutorial titled “It Pennywise Glam Halloween Makeup Tutorial.” He opened the video saying, “I know everybody’s gonna say that this is the most hypocritical, ironic video of 2017 so far, and you’re probably right.”

“It would be way too good of an opportunity to pass up,” Charles continued. “Even though I personally did not enjoy the movie, Pennywise was the best.”

The following day, “It” actor Wyatt Oleff took to Twitter with a message that was seemingly about Charles, according to BuzzFeed.

“When you decide to exploit a movie that you hate for money & attention cause why not,” Oleff wrote on Twitter.

Charles faced backlash for calling Ariana Grande the “rudest celebrity” he’s ever met in March 2018.

ariana grande
James Charles said Ariana Grande unfollowed him on Twitter in 2017. Evan Agostini/Invision/AP

On March 30, 2018, Charles uploaded a YouTube video in which vloggers Shane Dawson and Ryland Adams apply his makeup. Approximately 11 minutes into the video, Dawson asks Charles to name the rudest celebrity he’s ever met. He quickly replies, “Ariana Grande.”

“I haven’t really talked about it because I really like Ariana, I guess I just had a really crappy experience with her,” Charles said in his video.

According to Charles, the star followed him on Twitter, and exchanged direct messages with him following one of her concerts. But once fans called out Grande for following Charles in the midst of his “Ebola scandal,” the popstar unfollowed him so as to “not disappoint” her fans.

Grande’s fans immediately defended the star, according to Billboard, and said she did the right thing by unfollowing Charles.

Six months later, Charles found himself in another feud, this time with makeup mogul Marlena Stell.

james charles
James Charles feuded with Marlena Stell in 2018. Jon Kopaloff / Stringer / Getty Images

YouTube’s beauty community saw tons of drama in August 2018, most notably between vloggers Jeffree Star, Manny MUA, Gabriel Zamora, Laura Lee, and Nikita Dragun.

Shortly after their feud subsided, Marlena Stell, the founder of the beauty brand Makeup Geek, took to Twitter on September 27, 2018. In a now-deleted tweet, she announced that she was working on a Netflix documentary about the beauty industry.

Charles responded to her tweet, saying, “Wait what?” He continued to tweet Netflix, saying he wanted to make an unbiased documentary “on the behind the scenes of the beauty industry and why the community is plummeting.”

He continued to say that he felt “livid” and “defeated” because “everything that [he puts his] heart and love and a ton of work into is always stolen by someone.” He then sent two tweets to Stell.

Stell first responded to Charles by saying she was approached by Netflix, and that “it would be great” to hear from an influencer for her documentary. Charles, however, did not accept her response, and the feud continued for hours, according to Dazed Digital.

Leading up to the release of his first-ever makeup product, Charles was accused by fans of creating fake eye-shadow swatches.

morphe palette
The James Charles x Morphe palette retails for $39. Morphe

James Charles announced his first-ever beauty product, the $39 James Charles x Morphe eye-shadow palette, in a YouTube video on November 2, 2018.

While swatching a black shade named “Spooky,” Charles is seen swiping the shadow across his arm, and appears to do so over another layer that he applied previously. Fans noticed the second layer, and began questioning Charles on Twitter.

Charles admitted to “pre-swatching” some of his eye-shadow shades on Twitter, and then conducted a live Instagram video in an attempt to prove that he created a high-quality product.

That same month, some fans said that pink shadows from the James Charles palette stained their eyelids and gave them hives.

Kodee Rants
Kodeerants describes her experience using the James Charles eye-shadow palette. KodeeRants/Twitter

Twitter user @kodeerants uploaded a video on November 19, 2018, in which she accuses Charles of failing to advertise that some shades in his palette are not meant to be used on the eyes.

According to the Twitter user, her eyelids were stained pink and broke out in hives after she applied the shade “Skip.”

“You should never, ever, ever try to promote a product that does this to another human being,” she yelled in her video.

Charles defended himself in a tweet, saying “most pinks, purples, & reds all stain certain skin types.”

“You accusing me of lying to fans & not caring about people is a ridiculous cry for attention,” Charles continued. “If you have hives, consult your dermatologist, not me for likes on Twitter.”

Kodeerants did not accept his response, writing on Twitter: “Your lack of sympathy for someone who was harmed by a product with your name on it is truly shocking.”

Some called the makeup artist a hypocrite after he destroyed a James Charles x Morphe palette — something he criticized another YouTuber for doing.

james charles burning palette
James Charles burns his namesake Morphe palette for a YouTube video. Jeffree Star/YouTube

At the end of December 2018, a YouTube star named Lauren Godwin shared a video of her destroying a James Charles x Morphe eye-shadow palette to TikTok.

“There are people who can’t afford the palette, can’t get it because it’s sold out, or who have been scammed by knock offs,” Charles replied in a now-deleted tweet, according to We the Unicorns. “And she’s gonna buy one just to destroy for likes… on tiktok? this ain’t it sis.”

Read more: People are destroying their James Charles makeup following his feud with fellow beauty YouTuber Tati Westbrook

Godwin followed up with a YouTube video, in which she said she had no harsh feelings towards Charles, and even bought an extra palette to use. Charles then replied in a tweet where he apologized to Godwin, saying it wasn’t that deep,” and that she shouldn’t receive hate.

A few days later, however, Charles appeared in a Jeffree Star YouTube video where the two makeup moguls are seen destroying makeup, including their own palettes. Many felt the video was hypocritical, and questioned Charles about it on Twitter.

In March 2019, Charles was accused by Reddit users of editing his Instagram photos.

james charles photoshop
The image on the left is from YouTube, and the one on the right is from Instagram. James Charles/YouTube and Instagram

According to Revelist, people on Reddit began to accuse Charles of “faking his skill level” in March, as many of his makeup looks are extremely refined and proportional.

While the makeup artist has frequently admitted to using the photo-editing app Facetune on his photos, people on Reddit claimed that Charles was taking his editing too far.

“Photoshop absolutely can be art,” Reddit user jimmyjrdanceparty wrote. “But when you’re selling yourself specifically as a makeup artist and you’re editing your makeup to the point where it’s clearly not your skills in the final product, that’s incredibly disingenuous.”

Charles was called out by people on social media for his use of the phrase “the house” in YouTube video.

james charles the house
James Charles does his makeup in alphabetical order in March 2019. James Charles/YouTube

On March 22, 2019, Charles uploaded a YouTube video in which he is seen applying his makeup in alphabetical order. He also uses the video to teach his followers the basics of “Sister Speech,” or the slang language he frequently uses.

When he gets to the letter “T,” Charles says it stands for a phrase called “the house.” Charles then says he learned the phrase from YouTuber Rich Lux, and defines “the house” as the “best way to put emphasis on anything.”

According to BuzzFeed, people on Twitter were quick to correct Charles, informing him that the phrase was meant to be “the house down,” rather than “the house,” and that it actually stems from drag culture, coming from the late drag performer Erica Andrews who created the phrase “the haus down boots.”

Charles was widely criticized for saying he’s not “full gay” because he’s been attracted to women and transgender men.

James Charles Kinsey Scale
Jeff Witteck does James Charles’ makeup for a YouTube video. James Charles/YouTube

On April 12, 2019, Charles uploaded a YouTube video in which vlogger Jeff Witteck does his makeup. The two discuss dating and sexuality, among other topics, and at one point talk about the Kinsey Scale.

“So the Kinsey Scale is from like, zero to six,” Charles says to Witteck in his video. “Zero being like, completely straight, and six being like, completely gay. I truly believe the amount of people that are a flat-out zero, or flat-out six, is very, very small.”

When Charles says he would put himself on the scale at 5.5, Witteck replies, “So you’re not even full gay?”

Charles then says, “I mean, no. There have been girls in the past that I’ve thought have been really, really beautiful. There’s also been like, trans guys in the past too that I was really, really into for a moment in time.”

According to Nylon, the response from Charles upset many fans, who felt his answer was offensive, and discredited transgender men as “actual” men. Charles later apologized on Twitter.

After attending Coachella with Charles, YouTuber Gage Gomez accused the makeup artist of “manipulating” him.

gage gomez james charles
Gage Gomez speaks about his experience with James Charles. Gage Gomez/YouTube

Gage Gomez posted a YouTube video on April 29, 2019, in which he claims he was manipulated by Charles from January up until Coachella. Throughout his video, Gomez claims that Charles “pressured” him to hang out, and tried to “manipulate” him.

“James saw this as an opportunity to manipulate me as a person who may or may not have been trying to figure things out about their sexuality, after the fact that I told him I was straight multiple times,” Gomez says in his video.

Charles took to Twitter with a statement, in which he said Gomez “never” told him he was straight. Charles also claimed that Gomez was looking for “an opportunity” to spend time with influencers.

While attending the 2019 Met Gala, Charles was accused by fans of copying a red-carpet look worn by Zoë Kravitz — which he previously mocked.

james charles zoe kravitz
Zoë Kravitz at the 2019 Vanity Fair Oscar Party, and James Charles at the 2019 Met Gala. Evan Agostini/Invision/AP and Kevin Mazur/MG19/Getty Images

On March 11, 2019, Charles was featured in one of Tana Mongeau’s YouTube videos in which the two “brutally roast celebrity fashion.”

When discussing the gold-and-black mesh ensemble Zoë Kravitz wore to the 2019 Vanity Fair Oscar Party, both Charles and Mongeau say they don’t know who she is, and rate her outfit a zero out of 10. Charles also says Kravitz looks like “she didn’t finish getting dressed.”

But while attending the 2019 Met Gala in May, Charles arrived wearing a similar outfit, which included a mesh top and black pants.

According to Revelist, many Twitter users pointed out similarities between the two outfits and were upset with Charles for wearing a style that was similar to one he previously mocked.

After the Met Gala, Charles was criticized yet again for talking about social-media influencers as if they were a marginalized group.

morphe james charles
James Charles attends the 2019 Met Gala. Charles Sykes/Invision/AP

After attending his first Met Gala, Charles took to Instagram to share a photo from the event. In the caption of his photo, he thanked YouTube and Alexander Wang for inviting him to the ball.

“Being invited to such an important event like the ball is such an honor and a step forward in the right direction for influencer representation in the media and I am so excited to be a catalyst,” Charles wrote on Instagram.

According to Revelist, people on social media criticized Charles for seemingly describing influencers as a marginalized group, and felt that his caption was ignorant.

Arguably his biggest scandal to date occurred in May 2017, when YouTuber Tati Westbrook publicly ended their friendship in a YouTube video.

Tati Westbrook James Charles
Tati Westbrook discusses the end of her friendship with James Charles. Tati Westbrook/YouTube

On May 10, 2019, Westbrook uploaded a 43-minute long video called “Bye Sister” to her YouTube channel. She said in the video that she’d be ending her longtime friendship with Charles because she was “completely blindsided” when he endorsed Sugar Bear Hair — a direct competitor of her Halo Beauty vitamin brand.

Westbrook criticized the YouTuber for being influenced by “fame, power, and a fat bank account,” and called him a “bad role model” for creating “over-sexualized” content.

She also made serious claims about Charles, alleging that he leveraged his fame to sexually manipulate boys. Charles denied the unsubstantiated claims and Westbrook went on to delete the video, though it’s since been reposted by fans.

Charles’ reputation ultimately took a hit as a result of the feud. He lost 3 million YouTube subscribers at the time, and some people even destroyed his merchandise.

Star later involved himself in the falling out by calling Charles “a danger to society.”

James Charles, Tati Westbrook, Jeffree Star
Jeffree Star and James Charles were friends prior to their 2019 feud. James Charles / YouTube

Hours after Westbrook released “Bye Sister,” Charles apologized in a video of his own called “Tati.” However, Star then ignited the feud once again by saying in a tweet that Charles was banned from his home and “is a danger to society.”

Star never produced substantive evidence to back up his claims, and later said during an appearance on the “Mom’s Basement” podcast that he didn’t know if a recording he claimed to have from an alleged victim of Charles’ was real.

Some influencers, like Gabriel Zamora and Nikita Dragun, came to the defense of Charles, who defended himself in a video titled “No More Lies” on May 18. In the video, he said: “I have never and would never and will never use my fame, money, or power to manipulate or get any sexual actions from a guy. That is disgusting, it is not me, and the fact that Tati brought this up blows my mind because she knows the real story.”

He also directly addressed Star in the video, saying the beauty influencer’s tweets and private messages to him were “hurtful, defamatory, extremely excessive,” and “based on lies.”

Charles said that he stands by his previous apology to Westbrook, and thanked both her and Star for taking some responsibility for their feud. Still, Charles shared screenshots showing that Tati and her husband did not respond when he tried to address their argument privately, and said one of the “most hurtful” things Westbrook did was publicly criticize his mother’s parenting.

All three YouTubers seemingly came to an agreement by March 19, when Westbrook and Star shared separate statements about how they’d no longer discuss their feud.

#JamesCharlesIsOverParty began trending on Twitter in January when some people thought he sang the N-word in a video posted to his Instagram story.

James Charles Instagram story
A screenshot of the video James Charles posted to his Instagram story on New Year’s Eve. James Charles/Instagram

At the start of the new year, Charles posted a video of himself singing “My Type” by Saweetie on New Year’s Eve. As Insider’s Rebecca Harrington reported at the time, some people thought it sounded like Charles sang the N-word to the lyrics: “Rich n—-, eight-figure, that’s my type / That’s my type, n—- that’s my type.”

When asked about the clip on Twitter, Charles replied: “no? turn up the volume & listen, I skip over it. how stupid would I have to be to confidently record a video of me singing the n word and still have it up the next morning.”

He participated in the controversial “mugshot” trend in April.

James Charles' original tweet
James Charles originally posted this tweet without a caption explaining the mugshot trend. Screenshot Twitter/@jamescharles

At the time, it was trendy for TikTok users to post videos of themselves with “smudged mascara and costume makeup techniques to artificially roughen their facial features – some have even added fake bruises, black eyes, and bloody noses,” to create “attractive, staged mugshots,” as Insider’s Kat Tenbarge previously reported.

But many took issue with the trend as they felt it glorified abuse and harmed domestic violence survivors.

After Charles shared his take on the trend, he wrote in a now-deleted tweet: “only I could lazily smudge on some purple eyeshadow and fake blood to recreate a dumb tik tok trend and have it twisted into an actual scandal lol.”

In the middle of the COVID-19 pandemic, Charles attended a party alongside dozens of other influencers.

larray party
From left to right, there’s Nikita Dragun, Larri “Larray” Merritt, and James Charles. Phil Shaw, @ p.hil/Instagram

On July 21, a birthday party for internet star Larri “Larray” Merritt was attended by dozens of influencers — despite record COVID-19 cases in California at the time. As Insider previously reported, guests included James Charles, Tana Mongeau, Nikita Dragun, Charli and Dixie D’Amelio, Emma Chamberlain, and more.

Charles and other attendees were not seen wearing masks or social distancing throughout the party, leading YouTuber Tyler Oakley to publicly call them “bad influences” on Twitter.

“hi @jamescharles @NikitaDragun @tanamongeau @larrayxo @charlidamelio @dixiedamelio & any others who have been partying in large groups,” he wrote. “please consider social distancing, mask wearing, & using your huge platforms to encourage responsibility during a worldwide pandemic.”

Charles later apologized by saying in a YouTube video that he wouldn’t share clips from the party to help set a better example.

“Even though I have been wearing a mask in public and have tested negative multiple times, going to a party during a pandemic was a selfish and stupid decision,” he said. “People’s safety and keeping COVID-19 contained is FAR more important than celebrating a friend’s birthday and unsafe partying is not something I want to promote to my audience.”

Charles criticized Alicia Keys for creating a beauty brand, and later apologized on Twitter.

alicia keys
Alicia Keys did not publicly respond to any of James Charles’ tweets about her. Emma McIntyre/Getty Images

In a now-deleted tweet from August, Charles voiced his GFN that “people who do not wear makeup should not be coming out with makeup brands.” He was seemingly referencing Keys, who will be launching a “lifestyle beauty brand” with e.l.f. Cosmetics in 2021, according to a press release from the brand.

The following day, he shared a lengthy apology on Twitter, and said he deleted the tweet because he feels it’s “childish” to indirectly tweet someone, and that he is “not the gatekeeper of makeup.”

“Yesterday I posted a subtweet about how I thought some celebrities shouldn’t launch makeup lines,” Charles wrote. “It was about Alicia Keys. A few years ago, she announced that she no longer would wear makeup, so I was bothered because many celebrities come into the beauty space as a cash grab without any actual passion and then leave.”

“I deleted the tweet after a few mins because it’s childish to indirect tweet someone & I am not the gatekeeper of makeup,” he continued. “Anyone should be able to secure their bag and it’s not up to me which brands people should or shouldn’t support. I’m now glad that I DID delete it because after reading further, I learned that the beauty line is SKIN CARE.”

Charles added that he felt he made a mistake, and that he “should’ve read more before tweeting.”

“Regardless of my intention with my tweet, it ended up being a microaggression against someone I respect, so to Alicia Keys I owe a direct apology — I’m sorry,” he said. “It wasn’t my place to gatekeep this industry. I can’t wait to support and try out the products and I know the brand will be worth a billion in a few years.”

He faced a similar feud with Lauren Conrad after she accidentally sent him empty products from her namesake makeup line.

"The Hills" star Lauren Conrad explained that she accidentally sent James Charles the empty packaging for her new makeup products.
Lauren Conrad said she accidentally sent the empty packaging from her makeup line. Instagram/@jamescharles, Rachel Murray/GettyImages

Back in August, Charles filmed himself ranting about receiving a press package full of empty beauty products from someone who he said had “no business” creating a makeup line. Though Charles didn’t name Conrad in the video, he did hold up easily-identifiable products from her brand.

Conrad then confirmed in an Instagram comment that Charles was talking about her brand, and said she was the person who accidentally filled his package with sample bottles in place of real products. Charles then apologized in an Instagram story after her comment, and the two seemingly reconciled a few days later.

The duo also reunited for a video with YouTuber NikkieTutorials in November.

He was later accused of stealing clothing designs from internet stars Ethan and Hila Klein.

Merch James Charles
James Charles’ hoodie is on the left, and the Klein’s design is on the right. James Charles/YouTube/HilaKleinH3/Twitter

Charles announced in September that he’d be selling pastel color-blocked variations of his Sisters apparel.

But shortly after sharing pictures of the clothing, YouTuber and podcaster Ethan Klein — of the H3H3 productions channel — suggested that Charles had copied the color palette used in hoodies from the Teddy Fresh apparel brand he runs with his wife Hila.

“I know we didn’t invent colorblocking but I’m having a hard time w the new james charles merch, it’s the same exact design as Hila’s,” Klein wrote in a tweet. “Combined with the fact that his audience is so huge, many people will assume he designed it and start accusing us of plagarism. What do you think?”

In response, Charles wrote on Twitter: “When you DM’d me yesterday, I sent you the original photo that inspired my collection, explained I’ve never seen your brand, but also asked what you wanted me to do… You didn’t reply. After last year, I vowed to keep conversations private and create solutions, not drama.”

“If you’d like to continue our conversation and find a solution, my DMs are still open!” Charles added.

Klein continued to speak about the similarities on Twitter, share text messages sent to him by Charles, and compare the situation to Charles accusing makeup brand Wet n Wild of copying his namesake eye-shadow palette. Charles did not publicly respond further, and he later released his color-blocked clothing line.

Charles defended TikTok star Charlie D’Amelio after she was widely criticized online — leading to a minor feud with internet celebrity Trisha Paytas.

James Charles defended 16-year-old Charli D'Amelio in the middle of a massive wave of backlash against her.
21-year-old James Charles defended 16-year-old Charli D’Amelio. Thomas Petrou/UTA, Dia Dipasupil/FilmMagic/Getty Images

In late November, Charli and her family released a YouTube video in which they ate dinner together and talked with Charles, their close friend and fellow internet star.

People have since taken issue with various clips from the video, in which Charli and her sister Dixie complain about gourmet food made for them by a private chef. Some were also upset by Charli saying she wishes she could reach 100 million followers instead of 95 million followers on TikTok in the coming weeks.

In response to the backlash, Charles wrote on Twitter: “this charli situation is NOT sitting right with me… 100M followers in one year & y’all expect her to know how to be a perfect role model? death threats because she’s a picky eater & made a joke about a milestone? 30+ year olds dragging someone half their age? feels familiar.”

When fellow internet star Trisha Paytas joined in on the criticism, and claimed Charles’ relationship with Charli is “predatory,” Charles replied in a now-deleted video: “I didn’t want to respond to this because I didn’t want to give Trisha the attention that she’s clearly craving, however, I have now been accused of being a child groomer and this is not an accusation that I’m going to take lightly.”

“To insinuate that the relationship between Charli and I is anything other than just a friendship is absolutely disgusting,” he said. “I don’t need Charli and Charli does not need me. I became friends with the D’Amelio family as a whole very, very early on because this was all very, very new to them and I wanted to be a friend and a mentor in any way that I possibly could. And Charli and I, despite not being the same age, had one thing in common, which is coming into the spotlight at a very, very young age.”

He continued: “This is something that Trisha has never experienced because the only reason she is in the spotlight is because she has said racist things, she has said the N-word, she’s done blackface, she offended the trans community, she offended the DID community, she said Hitler wasn’t that bad of a guy, voted for Trump, and has started a fight with about every single other creator on this platform.”

“You are in no position to be talking about me and my career so I highly recommend that you stop starting fights with people that are half your age, pack it up, and work on holding yourself and your best friends around you, because they and you are the problem,” Charles said.

Read the original article on Insider

Business

LPL Financial to Acquire Waddell & Reed’s Wealth Management Business and Enter Into Long-Term Partnership With Macquarie

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Macquarie to acquire Waddell & Reed Financial, Inc. and upon closing sell
Waddell & Reed’s wealth management business to LPL Financial for $300 million

Long-term partnership between LPL Financial and Macquarie will provide existing
Waddell & Reed advisors and clients with continuity, as well as longer-term opportunities through partnership with a leading international asset manager

SAN DIEGO, Dec. 02, 2020 (GLOBE NEWSWIRE) — LPL Financial Holdings Inc. (Nasdaq: LPLA) (“LPL Financial” or “LPL”), a leading U.S. retail investment advisory firm, independent broker-dealer, and registered investment advisor (RIA) custodian, today announced it has entered into an agreement with Macquarie Asset Management (“Macquarie”), the asset management division of Macquarie Group (ASX: MQG; ADR: MQBKY), to acquire the wealth management business of Waddell & Reed Financial, Inc. (NYSE: WDR) (“Waddell & Reed”), upon completion of Macquarie’s acquisition of all of the issued and outstanding common shares of Waddell & Reed. Additionally, LPL and Macquarie have agreed to enter into a long-term partnership, with Macquarie becoming one of LPL’s top tier strategic asset management partners.

Through its subsidiaries, Waddell & Reed has provided investment management and wealth management services to clients throughout the U.S. since 1937. Today, investment products are distributed under the Ivy Investments ® brand, as well as through independent financial advisors associated with Waddell & Reed, Inc. As of September 30, 2020, Waddell & Reed’s wealth management business had assets under administration of approximately $63 billion, up 10% year-over-year.

Dan Arnold, President and Chief Executive Officer of LPL Financial said: “Waddell & Reed advisors are highly experienced and well-respected throughout the industry. They are a terrific fit both culturally and strategically, and we welcome them to the LPL family. Looking ahead, we expect our capabilities and resources will benefit their practices and help them unlock additional value and growth. Additionally, we look forward to deepening our long-term partnership with Macquarie, which will help us preserve unique aspects of the Waddell & Reed advisor experience while also positioning us to explore additional long-term opportunities together.”

Philip J. Sanders, Chief Executive Officer of Waddell & Reed, said: “Over the past few years, we have been focused on leveraging our strong heritage as the foundation for transforming our firm into a more diversified and growth-oriented financial services enterprise. The long-term partnership between LPL and Macquarie as part of this transaction accelerates that transformation and ultimately will benefit our clients and independent financial advisors while delivering significant value to our stockholders.”

Martin Stanley, Head of Macquarie Asset Management, said: “The addition of Waddell & Reed Financial and our enhanced partnership with LPL will significantly increase our ability to grow and invest in our combined business for the benefit of our clients. Ivy Investments’ complementary investment capabilities will provide diversification to Macquarie Asset Management’s capabilities and client base. The consideration offered reflects the quality of Waddell & Reed’s business and the future benefits of our partnership with LPL.”

Shawn Lytle, President of Delaware Funds by Macquarie and Head of Macquarie Group in the Americas, added: “This transaction is an important step forward in our growth strategy for Delaware Funds by Macquarie. The acquisition of Waddell & Reed’s asset management business and our partnership with LPL significantly strengthens our position as a top 25(1) US actively managed, long-term, open-ended mutual fund manager across equities, fixed income and multi asset solutions.”

The transaction has been approved by the Boards of Directors of LPL Financial, Macquarie Group, and Waddell & Reed and is expected to close in the middle of 2021, subject to regulatory approvals, Waddell & Reed stockholder approval, and other customary closing conditions.

LPL Financial posted an investor presentation with an overview of the transaction on its Investor Relations page at investor.lpl.com.

Centerview Partners LLC served as exclusive financial advisor and Ropes & Gray LLP served as exclusive legal advisor to LPL in connection with the transaction.

About LPL Financial
LPL Financial (https://www.lpl.com) is a leader in the retail financial advice market, the nation’s largest independent broker/dealer(+) and a leading custodian (or provider of custodial services) to RIAs. We serve independent financial advisors and financial institutions, providing them with the technology, research, clearing and compliance services, and practice management programs they need to create and grow thriving practices. LPL enables them to provide objective guidance to millions of American families seeking wealth management, retirement planning, financial planning and asset management solutions.

(+)Based on total revenues, Financial Planning magazine June 1996-2020.

Securities and Advisory Services offered through LPL Financial LLC, a Registered Investment Advisor. Member FINRA/SIPC. We routinely disclose information that may be important to shareholders in the “Investor Relations” or “Press Releases” section of our website.

About Waddell & Reed Financial
Through its subsidiaries, Waddell & Reed Financial, Inc. has provided investment management and wealth management services to clients throughout the United States since 1937. Today, Waddell & Reed Financial distributes its investment products through the unaffiliated channel under the Ivy Investments® brand (encompassing broker/dealer, retirement, and registered investment advisors), its wealth management channel (through independent financial advisors associated with Waddell & Reed, Inc.), and its institutional channel (including defined benefit plans, pension plans, endowments and subadvisory relationships). For more information, visit ir.waddell.com.

About Macquarie Asset Management
Macquarie Asset Management (MAM) is Macquarie’s asset management business. MAM is a full-service asset manager, providing investment solutions to clients across a range of capabilities including infrastructure & renewables, real estate, agriculture, transportation finance, private credit, equities, fixed income, and multi-asset solutions. As of September 30, 2020, MAM had $A554.9 billion of assets under management. MAM has over 1,900 staff operating across 20 markets in Australia, the Americas, Europe and Asia. MAM has been managing assets for institutional and retail investors since 1980 in Australia and 1929 in the US, through a predecessor firm, formerly known as Delaware Investments.

(1) Source: Assets under management as of Sept. 30 – Based on data represented in Strategic Insight and Morningstar. Data includes ICI Method of Sales: Salesforce, Institutional and Retirement. Data excludes Variable Insurance Products, Closed End Funds, ETFs, passive mutual funds, Money Market Funds, Delaware Pooled Trusts, and Optimum Funds.

Forward-Looking Statements
Statements in this press release regarding LPL Financial Holdings Inc. (together with its subsidiaries, including LPL Financial LLC, the “Company” or “LPL Financial”) and its potential growth, business strategy and plans, including the expected benefits of Macquarie Group’s acquisition of Waddell & Reed Financial, Inc. (together with its subsidiaries, “Waddell & Reed”) and LPL Financial’s acquisition of Waddell & Reed’s wealth management business and partnership with Macquarie Group, as well as any other statements that are not related to present facts or current conditions or that are not purely historical, constitute forward-looking statements. These forward-looking statements are based on the historical performance of the Company and Waddell & Reed and the Company’s plans, estimates and expectations as of December 2, 2020. Forward-looking statements are not guarantees that the future results, plans, intentions or expectations expressed or implied by the Company will be achieved. Matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, legislative, regulatory, competitive and other factors, which may cause levels of assets serviced, actual financial or operating results, levels of activity or the timing of events to be materially different than those expressed or implied by forward-looking statements. In particular, the Company can provide no assurance that the assets reported as serviced by financial advisors affiliated with Waddell & Reed (“Waddell & Reed Advisors”) will translate into assets serviced by LPL Financial, that Waddell & Reed Advisors will join LPL Financial, or that the benefits that are expected to accrue to LPL Financial, Waddell & Reed, Macquarie Group and their respective advisors and stockholders as a result of the transactions described herein will materialize. Important factors that could cause or contribute to such differences include: failure of the parties to satisfy the closing conditions applicable to the acquisitions described herein in a timely manner or at all, including the completion of the acquisition of Waddell & Reed by Macquarie Group, obtaining the required stockholder and regulatory approvals, and the retention by Waddell & Reed of minimum assets prior to closing; disruptions to the parties’ businesses as a result of the announcement and pendency of the transactions, difficulties and delays in recruiting Waddell & Reed Advisors or onboarding the clients or businesses of Waddell & Reed Advisors; the inability by the Company to sustain revenue and earnings growth or to fully realize revenue or expense synergies or the other expected benefits of the transactions, which depend in part on the Company’s success in onboarding assets currently served by Waddell & Reed Advisors; disruptions of the Company’s or Waddell & Reed’s business due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with its financial advisors and their clients, employees, other business partners or governmental entities; the inability to implement onboarding plans and other consequences associated with acquisitions; the choice by clients of Waddell & Reed Advisors not to open brokerage and/or advisory accounts at LPL Financial or move their assets from Waddell & Reed to LPL Financial; unforeseen liabilities arising from the acquisition of Waddell & Reed’s wealth management subsidiaries; changes in general economic and financial market conditions, including retail investor sentiment; fluctuations in the value of assets under custody; effects of competition in the financial services industry, including competitors’ success in recruiting Waddell & Reed Advisors; and the other factors set forth in Part I, “Item 1A. Risk Factors” in the Company’s 2019 Annual Report on Form 10-K and any subsequent SEC filing. Except as required by law, the Company specifically disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this press release, even if its estimates change, and you should not rely on those statements as representing the Company’s views as of any date subsequent to the date of December 2, 2020.

Investor Relations:
Chris Koegel
617-897-4574
Chris.Koegel@lpl.com

Media Relations:
Jeffrey Mochal
704-733-3589
Jeff.Mochal@lpl.com

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First Responder Announces Proposed Transaction with Airbeam Wireless Technologies

Mish Boyka

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/Not for distribution to U.S. news wire services or dissemination in the United States/

Homegrown Canadian Disruptor Enters 5G-Edge Technology Race
Proposed Entity to Build Innovative Technology Stack for Smart Cities

VANCOUVER, BC, Nov. 30, 2020 /CNW/ – First Responder Technologies Inc. (“First Responder” or the “Company”) (CSE: WPN) (OTCQB: WPNNF) (FWB: 3WK), a leading developer of public safety and security technologies, is pleased to announce that it has entered into a letter of intent dated November 27, 2020 (the “LOI“), which sets out the basic terms and conditions for the acquisition (the “Acquisition“) by the Company of all of the issued and outstanding common shares in the capital of Airbeam Wireless Technologies Inc. (“Airbeam“) in exchange for common shares in the capital of the Company (the “First Responder Shares“). The Acquisition is expected to be structured as a reverse takeover and will constitute a “fundamental change” for the Company pursuant to the rules and policies of the Canadian Securities Exchange (the “Exchange“). The Acquisition is an arm’s length transaction. Upon successful completion of the Acquisition, it is anticipated that the resulting entity (the “Resulting Issuer“) will continue the combined businesses of Airbeam and First Responder under a name to be determined by the parties.

Creating a Canadian National Leader in Emerging 5G-Edge Enabled Smart City Technologies

Over the past decade, governments, privacy commissioners and industry have been working together to develop a roadmap to realize the potential of 5G for the development of Smart Cities in North America, and around the world. The Acquisition proposes to create a Canada-based leader in this important sector, with privacy at the core of the Resulting Issuer’s approach to product development.

As a result of the Acquisition, the Resulting Issuer is expected to develop and sell a complete Canadian-owned technology solution – chip, hardware, software and services – that could reduce Canadian dependence on foreign-owned 5G networking hardware and software.

The combination of Airbeam’s 60GHz millimeter wave (“MMW“) chipset, and Smart City networking hardware and services, together with First Responder’s innovative AI-enabled weapons detection camera and Wi-Fi-based concealed weapons technology, may create a new capability in the public safety and security segment, an important and fast emerging segment of the Smart City vertical. This new public safety infrastructure developed by First Responder, and powered in the future by Airbeam’s 60GHz chipset, may then be utilized as “edge networking nodes” as 5G networks densify, which can offer wireless backhaul, edge computing and networking capabilities to overcome anticipated bottlenecks in the current infrastructure.

“Airbeam remains one of the few independent 60GHz MMW chipset and system solutions available in the market. Combining Airbeam’s technology and highly experienced leadership team with First Responder’s executive team, advisory council and capital markets vehicle, creates a unique opportunity to develop a full stack technology offering that may enable an industry leader to emerge in North America in the 5G-Edge networking and public safety segment of the Smart City vertical,” said Dr. Karim Arabi, Chairman of Airbeam.

In the future, the Resulting Issuer anticipates developing unique hybrid appliances, which may combine some or all of 5G small cell, edge compute, wireless backhaul, computer vision and AI capabilities, which may enable new and unique Smart City applications to be developed for transportation, municipal infrastructure and public safety that have the potential to directly impact daily life in North American cities and beyond. Given the privacy concerns that attend to such capabilities, the Resulting Issuer is expected to continue a process started by First Responder that will integrate privacy considerations from the earliest stages of product inception, and work with third-party privacy advocacy groups and privacy commissioners to ensure that the benefits of this new capability also preserve the privacy and liberty of North American and international customers.

“In the GFN of First Responder’s management, this is an exciting opportunity for Canada and Canadians to potentially replace dependence on foreign 5G networking hardware and software at the edge, with a homegrown solution to develop 5G hardware, software and integrated solutions, which may be the foundational technology for Smart Cities of the 21st century, in North America, and around the world” said Robert F. Delamar, CEO of First Responder and proposed CEO of the Resulting Issuer.

About Airbeam

Airbeam is a private company existing under the laws of British Columbia and is based in Richmond, British Columbia. There are currently 64,551,545 common shares in the capital of Airbeam (the “Airbeam Shares“), 3,500,000 restricted shares, 1,000,000 restricted share units and 669,999 common share purchase warrants outstanding.

Airbeam is a developer of 5G-enabled Smart City technologies, which sells a proprietary 60 GHz millimeter wave (“MMW“) chipset, hardware and software, which cost in excess of $110 million USD to develop by a leading semiconductor company from which it was acquired.

As of the date hereof, no meaningful financial information has been prepared by Airbeam. Airbeam will prepare audited financial statements in the near future and the Company will provide a summary of significant financial information in due course.

Proposed Acquisition

The Company and Airbeam have entered into the LOI, which sets out certain terms and conditions pursuant to which the proposed Acquisition will be completed. The transaction terms outlined in the LOI are subject to the parties successfully entering into a definitive agreement (the “Definitive Agreement“) in respect of the Acquisition on or before February 12, 2021 or such other date as the Company and Airbeam may mutually agree.

The LOI also contemplates other material conditions precedent to the closing of the Acquisition (the “Closing“), including the completion of a bridge financing to raise minimum aggregate gross proceeds equal to such amount required to fund First Responder until the completion of the Acquisition (the “Bridge Financing“), the completion of a concurrent financing to raise minimum aggregate proceeds equal to such amount required to provide the Resulting Issuer with sufficient working capital for a minimum of 12 months following the completion of the Acquisition (or such other amount as may be agreed upon by the parties) (the “Concurrent Financing“), customary due diligence, compliance with all applicable regulatory requirements and receipt of all necessary regulatory, corporate, third-party, board and shareholder approvals being obtained, including the approval of the Exchange. There can be no assurance that the Acquisition will be completed as proposed, or at all.

It is anticipated that the Closing will involve, among other things, the following steps, which may be amended if the parties mutually agree that such form would better satisfy their objective (including but not limited to, tax efficiency to the parties):

  • prior to the closing of the proposed Acquisition, the Company will consolidate its share capital on a basis to be determined by the parties (the “Consolidation“);
  • the shareholders of Airbeam will receive post-Consolidation First Responder Shares in exchange for their Airbeam Shares pursuant to an exchange ratio to be determined by the parties;
  • completion of the Bridge Financing of First Responder securities to be priced in the context of the market;
  • completion of the Concurrent Financing of Airbeam securities or First Responder securities, as may be agreed upon by the parties, to be priced the context of the market but in no event less than the offering price of the Bridge Financing;
  • receipt of all director, shareholder and regulatory approvals relating to the Acquisition and the Concurrent Financing, including, without limitation, the approval of the Exchange; and
  • each of the parties shall have executed, delivered and performed their respective covenants as outlined in the Definitive Agreement, and all representations and warranties of each party contained in the Definitive Agreement shall be true and correct at the time of Closing.

Certain of the First Responder Shares issuable pursuant to the Acquisition may be subject to the escrow requirements of the Exchange and to hold periods as required by applicable securities laws.

The Company and Airbeam, as applicable, may pay finder’s fees in connection with the Bridge Financing, the Concurrent Financing and the Acquisition up to the maximum permitted under the policies of the Exchange.

The Resulting Issuer – Summary of Proposed Directors

It is currently anticipated that certain of the current officers and directors of the Company will resign from their respective positions with the Company.

Following the Closing, the board of directors of the Resulting Issuer is expected to consist of seven (7) directors, four (4) of which will be nominees of Airbeam and three (3) of which will be nominees of the Company.

Dr. Karim Arabi, current Chairman of Airbeam, and Mr. Wayne Lloyd, current President of Airbeam are expected to become directors of the Resulting Issuer.  Robert Delamar is expected to be Chief Executive Officer and a director the Resulting Issuer.  Naresh Singhal is expected to be Chief Technology Officer, but not a director of the Resulting Issuer, with other officers to be determined in due course by the board of directors of the Resulting Issuer.

The following is a brief description of the known directors and officers of the Resulting Issuer who have been identified as of the date hereof:

Dr. Karim Arabi – Chairman

Dr. Arabi is a seasoned executive with extensive leadership experience in the semiconductor and telecommunications industry. Previously, VP of R&D at Qualcomm, Dr. Arabi also held a diverse portfolio of other roles there, such as head of the ASIC research department responsible for Advanced Wireless and Computing Technologies, and VP of Engineering, Mobile SoC Design. He also served as VP, Engineering at Dialog Semiconductor, working on semiconductor products for mobile devices. Dr. Arabi has had several successful technology exits in the semiconductor sector most recently commercializing an innovative power supply chipset for mobile devices enabling higher efficiency and more compact products.

Wayne Lloyd – Director

Mr. Lloyd is an entrepreneur and technology executive with extensive capital markets experience. Mr. Lloyd currently serves as the Chief Executive Officer of Tracesafe Inc., is founder of Consensus Core, and has extensive experience scaling start-ups, special situation investing, and completing complex M&A transactions in the technology sector.  Mr. Lloyd has helped raise millions in capital to grow businesses and has a proven track record of attracting world class talent to start-up ventures. Mr. Lloyd earned a CFA charterholder designation in 2015.

Robert Delamar – Chief Executive Officer

Mr. Delamar is a lawyer and high technology CEO with almost 20 years of experience developing and leading technology companies in Silicon Valley and around the world. After starting his career in Silicon Valley, Robert returned to Vancouver to complete law school at UBC and articled at Blake, Cassels & Graydon in Vancouver. He was called to the bar of British Columbia in 2004.  Immediately after his call to the bar, Mr. Delamar left Vancouver to work in the high-tech corridor situated outside of Washington, DC, where he worked at a mobile satellite networking company in a business development role, and co-founded a social media start-up.  Following a brief return to Canada to practise law as a civil litigator, in 2011 he was recruited to serve as founder and CEO of a video streaming technology start-up company, owned by a major Latin American media and telecommunications conglomerate, which through a series of transactions became UUX, Inc., which was later acquired by Spain’s Agile Content, SA. While at UUX, Inc., Mr. Delamar led a sales effort focused on major international mobile telecoms companies. Between 2014 and 2016 Robert split his time between Vancouver and Silicon Valley, where he co-founded and served as CEO of a green refinery development company, and served as Co-CEO of a peer-to-peer networking company.  In July of 2019 Mr. Delamar accepted the appointment as CEO and member of the board of directors for First Responder Technologies Inc.

Naresh Singhal – Chief Technology Officer

Mr. Singhal has more than 30 years of experience in the technology industry in a variety of domains and industry verticals. He completed a B.S. (Honors) in Electronics and Communications Engineering from National Institute of Technology, India, and professional development coursework from Stanford University. He holds one technology patent, with several others pending. Mr. Singhal started his career as a Scientist with India’s Defense Research & Development Organization (“DRDO“), where he led some prestigious defense projects. After the DRDO, Mr. Singhal moved to the United States and worked at a number of different startups. At Entrisphere Inc. (“Entrishphere“), he built Network Management Systems for next generation optical networking products. Entrisphere was acquired by Ericsson and helped Ericsson get a foothold in the wireline business, selling these products to the major Regional Bell operating companies AT&T, Verizon and BellSouth, in response to a multi-billion dollar request-for-proposal. Subsequently Mr. Singhal led engineering at streaming media startup Sezmi, which went through several acquisitions and mergers before becoming UUX Inc.. As VP of Engineering at UUX, he helped create the world’s first truly converged internet TV as-a-service platform, that combined linear (live) television and Over-the-Top television in an intuitive multi-device user experience. Most recently, Mr. Singhal was Chief Technology Officer at Trunomi, a fintech startup building technology for privacy and data rights management, in response to regulations like the EU General Data Protection Regulation, amid increasing concerns about how corporations misuse personally identifiable information.

Further details concerning the management and directors of the Company will be provided in a comprehensive press release when the parties enter into the Definitive Agreement and in the disclosure document to be prepared and filed in respect of the Acquisition.

Trading in First Responder Shares

Trading in the Company’s shares has been halted in compliance with the policies of the Exchange. Trading in the Company’s shares will remain halted pending the review of the proposed Acquisition by the Exchange and satisfaction of the conditions of the Exchange for resumption of trading. It is likely that trading in the shares of the Company will not resume prior to Closing.

Disclosure and Caution

Further details about the proposed Acquisition, the Bridge Financing, the Concurrent Financing and the Resulting Issuer will be provided in a comprehensive press release when the parties enter into the Definitive Agreement and in the disclosure document to be prepared and filed in respect of the Acquisition. Investors are cautioned that, except as disclosed in the disclosure document, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon.

All information provided in this press release relating to Airbeam has been provided by management of Airbeam and has not been independently verified by management of the Company.

As the date of this press release, the Company has not completed a Definitive Agreement with Airbeam and readers are cautioned that there can be no assurances that a Definitive Agreement will be executed, or that the Acquisition will be completed.

No securities regulatory authority has either approved or disapproved of the contents of this news release. The securities of the Company have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States, or to or for the account or benefit of any person in the United States, absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any common shares in the United States, or in any other jurisdiction in which such offer, solicitation or sale would be unlawful.

On behalf of the Board of Directors,

Robert F. Delamar

Robert F. Delamar, CEO

First Responder Technologies Inc.
915 – 700 West Pender Street
Vancouver, BC. V6C 1G8
[email protected]
+1-604-227-9821

About First Responder Technologies Inc.

First Responder Technologies Inc. (the “Company“) is a technology development company that commercializes academic and internally developed intellectual property for use in the public safety market. The Company is developing a WiFi-based technology, based in part, on academic research licensed from Rutgers, the State University of New Jersey (“Rutgers“) that can be used to detect concealed weapons. The Company’s threat detection technology line of business was created to capture a significant portion of the global weapons detection systems market, and in particular, the global perimeter security detection market. In the Company’s view, WiFi–based threat detection technology may be utilized by a wide range of facilities, including schools, places of worship, shopping centres and theatres, to not only make their premises secure, but also reduce their cost of security, from the interior of a facility to the perimeter.

For more information visit: www.firstrespondertech.com or follow us on Twitter, LinkedIn and Facebook.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

Certain statements contained in this news release may constitute forward–looking information, including statements relating to the completion of the Acquisition, the proposed business of the Resulting Issuer, the completion of the Bridge Financing, the completion of the Concurrent Financing, the proposed directors and officers of the Resulting Issuer, the completion of the Consolidation, shareholder, director and regulatory approvals, and future press releases and disclosure. Forward–looking information is often, but not always, identified by the use of words such as “anticipate”, “plan”, “estimate”, “expect”, “may”, “will”, “intend”, “should”, and similar expressions. Forward–looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward–looking information. The actual results of the Company, Airbeam or the Resulting Issuer could differ materially from those anticipated in this forward–looking information as a result of regulatory decisions, competitive factors in the industries in which the Company and Airbeam operate, prevailing economic conditions, changes to the Company or Airbeam’s strategic growth plans, and other factors, many of which are beyond the control of the Company and Airbeam. Each of the Company and Aiream believe that the expectations reflected in the forward–looking information are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward–looking information should not be unduly relied upon. Any forward–looking information contained in this news release represents the Company and Airbeam’s expectations as of the date hereof, and is subject to change after such date. Each of the Company and Airbeam disclaim any intention or obligation to update or revise any forward–looking information whether as a result of new information, future events or otherwise, except as required by applicable securities legislation.

Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE First Responder Technologies Inc.

For further information: Please Contact: General Inquiries: [email protected]; Investor Relations: Lyle McLennan, [email protected]; Media Contacts: Jeff Rutledge, [email protected]

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Here’s how technology has evolved over the past two decades

Mish Boyka

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<p> The humble fungus turned out to be quite a sage and agreed to share a few pieces of invaluable advice with the <em>Homo sapiens</em> species.</p><p>
In the summer, I went camping with my friends. On the first day after our arrival, I woke up early to take a walk and pick some chanterelles for breakfast. As bad luck would have it, however, I left my glasses in the tent, and without them, I struggle to tell mushrooms apart. Still, I resolved to carry on, and having collected a handful of becapped specimens I returned to our camp.
</p><p>
My friends, still fast asleep, did not take me up on my breakfast offer, so I ate my tofu and mushroom scramble alone. And seeing the effect it had on me, I quickly realized I had accidentally collected some mushrooms from the <em>Psilocybe</em> genus. This little mishap was a surprise, but I didn’t let it throw me off balance – I let the psilocybinous song carry me away. And now, I shall report on the places I visited and the things I saw. If I find the right words, that is.</p><p>The ground began to rumble, or maybe rather stir and writhe, as if there was a gargantuan snakelike creature breathing underneath its surface. A low murmur and chemiluminescent glow seeped from between patches of moss and foliage. Greenish tentacles glimmered in the murky ground, twisting and turning, and showed me the way towards the heart of the forest. I recognized those viridescent threads to be mycelium, made of the hyphae that are the basis of fungi’s organization system, whereas the glow seemed to be caused by luciferins – a protein capable of emitting light as the result of an enzymatic reaction. Once this mycological phenomenon dawned on me, I was no longer anxious and walked ahead.</p><p>As I was forcing my way through the thicket, in my mind I tried to systematize all the information about fungi I have learned. They are a kingdom that belongs to the group of eukaryotes, which encompasses all cellular organisms that pack their genetic material into chromosomes kept in their cells’ nuclei. This makes them quite similar to humans, which convinced me even more that I could trust the call that beckoned me forward, especially since those organisms boast ancient evolutionary history. The oldest fossils that have been identified as remnants of fungi are estimated to be around one billion years old, which indisputably proves the primaeval nature of the wisdom that summoned me.</p><p>With every step that brought me closer to the heart of the land, I could hear the commotion of heated dispute grow louder around me. Then I remembered a certain theory linking the consumption of hallucinogenic mushrooms by the ancestors of contemporary humans with the development of our consciousness. If not for the phenomenon of synaesthesia, the meaning of the conversations I heard would surely have been lost on me. After all, fungal communication happens noiselessly, with the aid of chemical substances that flow through the mycelium. Luckily, I could feel the vibrations of the ground and electromagnetic impulses, catching even the tiniest of signal molecules so that I understood everything that was being said.</p>

<p>I finally arrived at an arena shaped like an ascocarp, the fruiting body of the sac fungi. In the stalls sat tens of thousands of various species of fungi, with the elders occupying the seats at the top of the assembly hall, chaired by the Hatter who looked strikingly similar to the well-known and liked Jersey cow mushroom.</p><p>Silencing the crowd, he announced:</p><p>”Welcome, human, son of mycelium.”</p><p>”Greetings to you, my brothers,” I answered kindly, filled with a feeling of unity with all the organisms that surrounded me.</p><p>”Your current state is no accident. You have been chosen from all the <em>Homo sapiens</em> to help us solve the most pressing problems of the modern world. Are you ready to serve our cause?”</p><p>”If you’re talking about the same problems that gnaw at my mind every day, I will be happy to help,” I said to him, but felt that I had addressed each and every fungus individually, as they were an inseparable entity.</p><p>”We know your thoughts, but it might be more anthropomorphic-friendly to allow you to express your worries about the state of the world verbally. As a kingdom of sage species, we have decided to try and save our shared motherland. The only one we all have.”</p><p>”It would be very helpful if I did a quick recap of what we know about you. Please, don’t get me wrong. In my current state, nothing is certain, and such a historic exchange deserves to be fully comprehended by both sides.”</p><p>”We know what you mean. And we would very much like to know what you, humans, think of us exactly.”</p><p>”As far as I’m aware, you were classified as plants for a long time. Your ability to move is far from impressive, and you seem to be well-rooted in the soil. Even mycelium is deceptively similar to plant roots. What is it that makes you different from other kingdoms of the living world?”</p><p>”Actually, some of us can move at a rather speedy pace, and several characteristics differentiate us from plants. First, we have no tissue. Our bodies are made entirely of thickly weaved mycelium. Also, we are heterotrophs, meaning that we absorb nutrition from other organisms, namely decomposing organic matter. Of course, we help it decompose through releasing our digestive enzymes into the environment. This ability makes us the main cleaners of the natural world. We can also feed parasitically, hunt, and cooperate with autotrophic organisms.”</p><p>”But you are not only what you eat?”</p><p>”We are also different from other organisms on a biochemical level. We have our cell walls just like plants do, and they serve the same purpose – to protect the inside of the cell. Interestingly, however, the main ingredient of our walls is not cellulose, as it happens for plants, but chitin, a polysaccharide also found in the exoskeletons of various insects. It’s easy to tell us apart from animals because we use ergosterol instead of cholesterol to build our cellular membrane. But actually, on a genetic level, we are more closely related to animals than we are to plants.”</p><p>”And I imagine this genetic similarity must be the reason for the brotherly feeling that overwhelms me so. I have heard some rumours about the largest organism on our planet. They say it’s a fungus that weighs 440 tonnes! I must say, I find it quite hard to comprehend. If that were true, its cap would be visible from space.”</p><p>”You are taking it a little too far. Cap-and-stem fungi are called mushrooms. They are the fruiting bodies of a fungus. Its essence that is mycelium remains hidden underground and only grows above it to reproduce. It is the mycelium of our stumpy brother that you believe to be the largest living organism. Unfortunately, he could not make it to our meeting. He is a little listless due to his impressive age and bulk. Nobody can remember it very well, but he claims to be more than 2500 years old.”</p><p>”Please, do send him my regards. There is another question I must ask you, though. I have heard a lot about some pioneer species, capable of preparing a low-grade environment for being populated with more demanding species, including herbaceous plants. That makes it just one step away from a fully-developed ecosystem.”</p><p>”Thanks to the wide range of enzymes we produce, we can decompose next to everything! We are not intimidated by rocky areas and conflagration sites. Mycelium and spores can be found even by receding glaciers and in the desert. By processing unwelcoming environments, we create a layer of fertile ground on which life can thrive. It was thanks to us that the first plants could populate dry land. But enough about us. Now it’s time to discuss the problems you have caused for the Earth, and which we can solve. Ask ahead.”</p><p>”You have been around for a long time, so you must be familiar with the history of fossil fuels. We use them as our energy source. We do it by burning them, and while doing so, we release greenhouse gases into the atmosphere. Recently, this has become a burdensome issue for our civilization. What should we do?”</p><p>”Forests sponge up more than one-third of all CO2 emitted by the plunderous consumption culture of the current era, aptly named the Anthropocene. Plants absorb CO2 and transform it into biomass in the process of photosynthesis. And while we fungi do not photosynthesize, our role in the accumulation of CO2 could hardly be overstated. By establishing symbiotic relationships with plants, we increase the speed of their growth and improve their quality of life. When your scientists compare the efficiency of CO2 ‘cleaning’ in a forest with a low level of mycorrhiza – that is the coexistence of plants and fungi – and a forest with a high level of such interaction, it becomes clear that fungi-rich ecosystems manage this task much better. We must, however, bring another issue to your attention. CO2 is not the only by-product of your activity. Pollution caused by nitrogen compounds is also very impactful, and we aren’t very fond of them. Take care of us, and we will take care of you.”</p><p>”I shall do whatever I can to convince my people. And speaking of fossil fuels, another issue comes to mind. When we extract and transport petroleum, we sometimes cause spills that pollute the environment. Do you have any advice in this department?”</p><p>”It is but a simple matter. We have several families in our ranks who can digest the hydrocarbons that make up this black gore. Other living organisms can use the products of its decomposition. Not only do we purify contaminated soil, but we can also cooperate with plants that grow there, and help them survive. In the right conditions, petroleum waste could become incubators of earth.”</p><p>”It seems that some of our most pressing ecological issues could be tackled with fungal power. But we also have other problems at hand. Human life is becoming longer than ever, and as we age, our health begins to deteriorate. We suffer from all sorts of ailments, from cancers to metabolic diseases, such as diabetes. Could fungi heal us?”</p><p>”Oh, dear human, you surely know that many medicines are produced with the use of fungi. Baker’s yeast, which you have been using for years to make bread, wine and beer, is also used in micro-factories.”</p><p>”That is true. We discovered the genome <em>Saccharomyces cerevisiae</em>, which allowed us to understand many biological processes. The similarities between human and fungal cells are staggering. This species of yeast is a model organism, commonly used in scientific research. We can even use yeast to produce insulin, a hormone that is indispensable in treating diabetes, one of our civilization’s diseases.”</p><p>”I am proud of you humans. But remember that you have brought upon yourselves so many of those problems that you are so proud of fixing.”</p><p>”You’re right, and many of them remain unsolved.”</p><p>”I won’t tell you not to worry, but do not abandon hope. We fungi are very fond of Russian literature. One of us, the chaga mushroom that grows on birches, is the protagonist of Aleksandr Solzhenitsyn’s novel<em> Cancer Ward</em>. An infusion made of this arboreal growth has incredibly potent healing abilities: it regulates blood pressure, relieves stomach ulcers, and it can even stop the development of some neoplastic cells. It is also used to treat HIV-positive patients.”</p><p>”I have read this book, and I’d hardly consider the chaga its main character.”</p><p>”Do you want our help or not?”</p><p>”I’m sorry.”</p><p>”It doesn’t matter. Our time is almost up. I can feel the serotonin receptors in your body are almost depleted. In a few moments from now, we will no longer be able to communicate. But do take these leaflets with you, they contain some useful information and interesting facts. Whether you choose to use them and save our shared home or not, is your decision. Goodbye, human, and remember: we are always with you, inside you, and around you. Farewell!”</p><p>*</p>

<p>When I came to, I was lying in a beautiful forest clearing, a handful of leaflets in my fist. The mycelium’s hyphae, which seemed to have coiled around my body, were now receding back into the depths of the fungal world. The clearing looked like an endlessly pulsating mandala, in which the fate of our planet was written. It is up to us whether and how we read them. Fungi are a vast, diverse kingdom, and scientists will need many more years to explore them. They have the potential to solve a number of issues that haunt our civilization. Will we accept the helping stem that they are offering?</p><p>For a few more minutes, I daydreamed. I pondered the challenges that loom over humanity. The thoughtless destruction of our environment. Of the natural magic that seems to be the key to the door of perception and survival. Then I heard the voices of my friends and of the fungi that live within them calling me. They didn’t want to believe my story, but I very much hope that at least some of the fungal wisdom can seep through and into the thallus of <em>Homo sapiens</em>. After all, they gave me leaflets!</p><h3><em>LEAFLETS</em></h3><h3>Decontamination of flat surfaces</h3><p>Another nuclear reactor failure? Are the usual cleaning methods not good enough? Is your kitchen covered in radioactive ash? Or perhaps only cockroaches have survived, and you don’t know whom you should call for help? Try the slimy spike-cap!</p><p>This inconspicuous clammy mushroom is capable of absorbing huge amounts of the radioactive isotope caesium-137, thus immobilizing it. The mushrooms can then be picked and burned in a controlled environment, creating radioactive ash, which enables a much easier way of storing or further processing. The concentration of caesium-137 in the slimy spike-cap can be up to 10,000 times higher than in the environment around it. So put on your hazmat suit and go sporulate some mushrooms.</p><h3>Psylololo</h3><p>Psst! Looking for some mystical experiences? Fancy feeling at one with nature and the shamans that surround you? Or maybe you’re after vivid, colourful hallucinations? Come and join the <em>Psilocybe</em> circle, where colours have flavours, and all existential dread fades away!</p><p>Psilocybin, produced by our clever little brothers, has been known to humanity since the dawn of time. It is suspected to have contributed to the development of human consciousness and to have helped shape our spirituality, leading to the creation of religion. Today, it is used mostly for recreational purposes and in <a href=”https://przekroj.pl/en/society/leaving-your-ego-behind-tomasz-stawiszynski” target=”_blank”>therapy.</a> They say that once the door of perception is open and we see things as they really are, everything else will fall into place. We don’t promise that we can save the world, but it’s worth giving us a chance. Under specialist supervision, of course!</p>

<h3>Mushroom meat</h3><p>Are animal-borne diseases giving your civilization grief again? Has factory farming finally been recognized as animal violence? Perhaps you disagree with the concept of using animals as a source of protein in your diet, but you cannot imagine life without a tasty burger? The answer is already here: Quorn, the meat substitute made of <em>Fusarium venenatum</em>!</p><p>This spelling nightmare is, in fact, a delicious mushroom that grows in a sterile bioreactor, where it needs glucose and nitrogen to grow, and is later enriched with vitamins and mineral compounds. The final product is rich in proteins and fibre, has very little saturated fats, and has an exceptionally low track record of allergic reactions. On top of it, Quorn’s carbon footprint is 80% lower than beef’s. So far, the mushroom is known mainly in the West, but its popularity is growing fast – we can expect to see it on our plates sooner rather than later.</p><h3>Will work for food</h3><p>Reliable and hardworking fungus is looking for employment as polyethene waste utilizer. The issue of excessive amounts of plastic waste in the environment is prevalent, and humans are still looking for new ways to utilize them. My brother <em>Aspergillus terreus</em><em> </em>and I, <em>A. sydowii</em>, will happily take it upon ourselves to solve this pressing issue. Can work under challenging conditions with no special equipment required – we produce all of our enzymatic instruments ourselves, and they are perfect for softening and decomposing polymers. We would also like to use this opportunity to recommend the services of our good friend the oyster mushroom, who specializes in the production of environmentally-friendly biodegradable materials that could soon replace the outdated plastics. Feel free to get in touch.</p><h3>Yeast looking for eukaryote</h3><p>I am one of the best-known organisms on the planet, so how come we haven’t met yet? Tired of sexless germination, I am looking for the possibility of genetic recalibration to enrich my genome and establish a stable romantic relationship.</p><p>My full name is <em>Saccharomyces cerevisiae</em>, although I prefer to be called yeast. My career in the baking industry took off back in the times of the pharaohs. I’m still in touch with my friends and acquaintances in that part of the world, so if we get to know each other better, we can go for an exotic trip with a local guide. The baking business turned out to be very lucrative, but I didn’t see it as much of a challenge, which pushed me to keep expanding my horizons. Maintaining my signature freshly-baked bread scent, I tried my hand at alcohol fermentation. But don’t think me some shady moonshiner! I am a master of biochemical transformations, which I can prove with my vast portfolio of carbohydrates that I change into energy and ethanol. I’m comfortable with oxygen, but oxygen-free environments are also perfectly fine.</p><p>Being a fungus of success, I could never sit back for too long. I decided to try my hand at science next. I was hired as a model organism – not that I had to try very hard, considering my impressive skill set. A single-cell organism capable of growing in all kinds of conditions, a master of mitosis, who easily adapts to molecular modifications, has a lot in common – genetically at least – with more complex eukaryotes, including humans. In short, I am your perfect candidate. My academic interests include synthesizing medicines and hormones, ageing research, unveiling the secrets of cellular divisions and their accompanying DNA repairs, and intensification of mitochondrial mysteries. Lately I have become an avid fan of astrobiology, having visited the circumterrestrial orbit, and am planning a flight to the heliocentric orbit next. And while my genetic information isn’t exactly a scientific enigma, I still have a delicious secret or two to share. If you think you might be interested, swipe right. We’ll have a pastry, brew some wine, and if there’s a spark, we can try some conjugation.</p><p><em>Translated from <a href=”https://przekroj.pl/nauka/mysli-maslaka-tomasz-sitarz” target=”_blank” rel=”noopener noreferrer”>the Polish</a> by Aga Zano</em></p><p>Reprinted with permission of <a target=”_blank” href=”https://przekroj.pl/en/” rel=”noopener noreferrer”>Przekrój</a>. Read the <a href=”https://przekroj.pl/en/science/the-magic-of-mushrooms-tomasz-sitarz” target=”_blank”>original article.</a></p>

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