000000_Synthonics_ChyloCureBook_Rev031919

Revised 3/12/19

What is

ChyloCure is a nutritional supplement company focused on the commercialization of Chylobinoids. Chylobinoids are a proprietary mineral-infused, full-spectrum cannabinoid complex that is rich in CBDa. Chylobinoids provide more consistent dos- ing and greater potency than most products derived from cannabis. They can be easily formu- lated into a variety of products, including creams, lotions, capsules, and edibles. Unlike most hemp-based products, which con- sist primarily of CBD, Chylobinoids consist primarily of cannabidiolic acid (CBDa), the acid form of CBD. Although much research in the space is prelimi- nary, CBDa is reportedly more effective than CBD in the treatment of inflammation, epilepsy, nau- sea, pain, and some neurodegenerative diseases. Moreover, Chylobinoids are designed to bypass the body’s hepatic metabolism—leading to greater absorption of the cannabinoid payload into the bloodstream. We believe that their CBDa-rich na- ture and improved absorption will distinguish Chylobinoids from other hemp-based products. Where did Chylobinoids come from? Chylobinoids, and the process used to produce them, were developed by Synthonics—a company founded to discover and develop metal- coordinated pharmaceuticals. Because Synthonics focuses on the improvement and licensing of FDA- approved products, it is establishing ChyloCure as a separate company that will have the exclusive right to Synthonics’ intellectual property for the produc- tion and sale of cannabis-containing nutraceuticals. Is there a market for Chylobinoids? The market for CBD/CBDa products is large and growing rapidly. It is projected to grow from just under $600 million in 2018 to $22 billion in 2022. We believe that ChyloCure’s unique formulation and technology positions it to benefit from this explosive growth.

How can I get Chylobinoids? We are currently producing Chylobinoid powder, solution, capsules, and creams on a small scale. We have received enthusiastic responses from the us- ers of our solution, capsules, and creams, and we have testimonials endorsing the effectiveness of our Chylobinoid products. Based on these prelimi- nary results, we intend to substantially expand the scope of our Chylobinoid business. We initially intend to sell bulk powder to dis- tributors and retailers, and to white label capsules, creams, lotions, and edibles for wholesalers or re- tail outlets. As our market presence expands, we will explore the establishment of our own brand of products. I’m interested. Now what? To support the launch of ChyloCure and the ex- pansion of its operations, we are offering convertible notes in ChyloCure. The notes will con- vert into equity at the lesser of $10 per share or 80% of the price paid by investors in the next round. This structure allows investors to benefit from an early investment (through the $10.00/share cap) while protecting them against a subsequent down round (through the 20% dis- count). We believe that the note proceeds will allow us to significantly increase our production capacity and to market our product aggressively. The pro- ceeds will go towards acquiring a royalty-free li- cense from Synthonics, securing a manufacturing facility, purchasing larger manufacturing equip- ment, operating expenses, and marketing. Our anticipated exit, which we hope will occur by 2021, is to either offer sale of ChyloCure stock publicly or be purchased.

BUSINESS PLAN Appendix A: Presentation Appendix B: Testimonials

CHYLOCURE OFFERING EXECUTIVE SUMMARY Synthonics, Inc., is establishing ChyloCure, a new company that will bring the benefits of Synthonics’ metal coordination chemistry to the medical cannabinoid market. ChyloCure will use metal coordination chemistry to produce Chylobinoids™, proprietary extraction fractions from the hemp product stream. Chylobinoids consist primarily of non-psychoactive cannabinoids and plant waxes/lipids and have structural and pharmacokinetic properties similar to those of chylomicrons (the lipoprotein particles that transport dietary lipids through the lymphatic system). We believe metal-coordinated Chylobinoids will offer several significant advantages over other cannabinoid extracts. Chylobinoids are i) Relatively inexpensive to produce, ii) Easily measured for accurate dosage and delivery, iii) Highly lipophilic, which may reduce first-pass hepatic metabolism and more than double bioavailability, iv) Designed to contain other cannabinoid materials, which may enhance clinical efficacy through the “entourage effect,” v) Less likely to be regulated as a drug substance than CBD or CBDa isolates would, and vi) Patentable as new compositions of matter. BUSINESS CONCEPT ChyloCure will have exclusive rights to develop, make and sell Chylobinoid-containing nutraceuticals. Demand for hemp-derived cannabinoids is significant and rapidly growing. Hemp Business Journal forecasts the market for hemp-based cannabinoid products to grow from approximately $130 million in 2016 to almost $700 million in 2020. This market should continue to grow as products such as Epidiolex (CBD oil), a marijuana-derived drug recently approved for treatment of two refractory seizure disorders, enter the pharmaceutical market. We believe that due to their unique structure and superior absorption, Chylobinoids will represent a significant advance over other cannabinoids. In addition, because we can produce them so efficiently, Chylobinoids should be profitable even when priced similarly to other CBD and CBDa rich powders. Accordingly, we intend initially to sell product at prevailing market prices to wholesalers and retailers while we develop data and market presence to support premium pricing. We believe that this combination of low cost manufacturing and superior performance will allow ChyloCure to pursue development of a unique, premium-priced product in a rapidly growing market with relatively low capital requirements and risk. PURIFICATION AND MANUFACTURING Production of crude marijuana and hemp extracts typically uses supercritical carbon dioxide, butane or ethanol in a resource and work-intensive process. These methods generate extracts that are often contaminated with waxes, lipids, and other unknown plant material. Further refinement of the crude extracts leading to purer forms of cannabinoid products typically involve multiple extractions, filtrations and evaporation steps using ethanol, which is known as "winterization," or the use of hydrophobic solvents like hexane.

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In contrast to the typical extraction methods, our purification process is extremely efficient and green. The extraction process uses only water, acetone and GRAS (generally regarded as safe) salts and takes about four hours, as opposed to the four to six days typically needed to produce “winterized” cannabinoid oil. No trace of acetone is left in the finished product. The process requires little capital investment and is scalable to approximately one kilogram per week with approximately $150,000 of equipment. In addition, the purification process is relatively efficient, producing yields from plant material and oils (measured as the estimated mass of Chylobinoids contained in the finished product as a percentage of the estimated mass of CBDa contained in the starting material) of more than 80%. We produce chylobinoids as a free-flowing powder. Because powders are easier to manipulate and allow for more accurate and consistent dosing and delivery, they sell for a substantial premium over similarly pure oils. We believe that given the efficiency of our process and the price differential between oil or plant material and powder, we can profitably produce and sell our chylobinoids without first demonstrating their superiority to other CBD or CBDa rich powders. In addition, chylobinoids offer the increased flexibility of incorporating other active agents, such as vitamins, into the complex to further expand the applications of chylobinoid. PRODUCT BENEFITS In addition to providing a convenient means of delivering consistent therapeutic dosing, our chylobinoid products may offer significant clinical advantages over conventional medicinal cannabinoids. Poor absorption reduces the efficacy and increases the variability of response to many hemp-based cannabinoids. Synthonics has demonstrated, through animal and other pre-clinical testing, that magnesium coordination can significantly improve the bioavailability of poorly absorbed drugs by increasing their lipophilicity (ability to pass through a fat-based environment) while maintaining their solubility (ability to pass through a water-based environment). Our purification process produces cannabis-containing complexes that appear very similar to chylomicrons. We expect that, when combined with coconut, sesame and other oils , chylobinoids will behave as chylomicrons do when absorbed into the bloodstream and avoid the first-pass hepatic metabolism, which contributes to the known low oral bioavailability of CBD (around 8%). We believe that avoiding the liver’s metabolic filter may greatly boost the bioavailability (from 8% to 60-80%), improve tissue delivery and targeting, and increase the safety of our orally ingested cannabinoid products. We believe that our chylobinoids contain substantially more CBDa than other hemp derived products since the application of heat and drying during conventional purification processes typically converts most of the CBDa contained within the raw material to CBD. Recent research indicates that CBDa may have distinctive pharmacodynamic effects and be more effective than CBD in treating certain conditions, such as epilepsy, anticipatory nausea, anxiety/pain, and inflammation. Specifically, CBDa appears to inhibit COX-2 (an enzyme that promotes inflammation), block GPR55 (G protein-coupled receptor 55), stimulate PPARG receptors (involved in neurodegenerative disorders), and stimulate 5-HT1A receptors (involved with controlling anxiety, addiction, appetite, sleep, pain perception, nausea and vomiting).

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Consistent with this early research, preliminary clinical observation from three patients with refractory seizures currently dosed with chylobinoid capsules indicate that chylobinoids are many times more effective, better tolerated, and have fewer side effects than currently used high dose CBD-based products derived from market sources such as Charlotte’s Web Hemp. Although one cannot draw any firm conclusion from such a small sample set, these results, the results of other users of our product, and our understanding of the science underlying our chemistry cause us to believe that our chylobinoids will offer superior relief to a significant subset of the addressable market. We intend to work with leading prescribers and government research entities to pursue studies intended to demonstrate the efficacy of chylobinoids against disease states such as epilepsy. REGULATORY ASPECTS Despite the continued growth in the medical cannabis industry, federal and state laws governing the production and sale of non-psychoactive cannabinoids have been muddled and often in conflict. Until recently, the DEA considered hemp derived products to be controlled substances. The Farm Bill of 2018 expressly removed hemp-derived products from the list of federally controlled substances, which should substantially reduce or eliminate the federal law risk surrounding the production, distribution and sale of hemp-derived products, such as Chylobinoids. The Farm Bill of 2018 does not, however, preempt state law, and companies, such as ChlyoCure, that participate in the hemp market will still need to comply with the laws of the various jurisdictions in which they do business. State laws vary substantially across the country and are currently in flux. We expect that the recently passed Farm Bill will encourage states to liberalize their rules regarding hemp. Hemp-derived products will be subject to regulation by the FDA. We believe that hemp extracts, such as Chylobinoids, should ultimately be regulated as dietary supplements under DSHEA (Dietary Supplement Health and Education Act of 1994), which allows for their continued sale without FDA approval. This may be a significant advantage over pure isolates of CBD or CBDa, which are more likely to be subject to the FDA’s drug approval processes. Synthonics has a patent application pending for metallo-cannabinoids and for use of its metal coordination chemistry to extract cannabinoids from cannabinoid-containing plants and oils and is filing a new composition of matter patent to cover chylobinoids. Although each patent prosecution is unique, and one cannot predict the outcome of any application with certainty, Synthonics has received composition of matter patents covering the metal coordinates of dozens of known compounds and expects to receive one or more patents covering its work with cannabinoids. Synthonics will grant ChyloCure an exclusive royalty-free license for the use of Synthonics’ patents and trade secrets in the cannabinoid containing nutraceutical field. This license will allow ChyloCure to produce a unique and protectable product. Further, these patents and patent applications do not appear to encroach on any known or existing method of use, process or composition of matter patents in this field.

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BUSINESS MODEL ChyloCure intends to manufacture CBDa-rich chylobinoids for sale to retailers and formulators. We seek to offer a premium product of consistent purity (approximately 70% CBDa and 5% CBD) and composition. Although we believe that chylobinoids will be better absorbed and therefore more effective than other compositions containing similar quantities of CBDa and that CBDa-rich compounds will prove more effective in certain applications than CBD-rich compounds, we assume for purposes of our financial modeling that our CBDa-rich chylobinoids will sell for about the same price as similarly pure CBD-rich products. We have secured local sources of hemp flower that contains an average of about 8% CBDa and sells for approximately $44.00 per pound. Extrapolating from our trial runs, we expect to produce approximately one kilogram of chylobinoid powder from every 34 pounds of hemp leaves and flower. Based on discussions with potential distributors, we believe that our chylobinoid powder will sell for more than $25,000 per kilogram of CBDa. Assuming costs of about $300 for adjuvants and testing and $750 for labor on each kilogram, our cost of goods should be about $3,500 per kilogram. After paying 15% commission on sales, our profit margin should be over 70%, or nearly $18,000 per kilogram. Even if our costs prove to be 25% higher than anticipated and our sale price is 25% lower than anticipated, our margins on powder produced from hemp leaf would still be about 63%, or about $12,000 per kilogram. We have assumed for modelling purposes that we will sell product in bulk to third parties that will repackage it for resale and that our product will be priced comparably to other similarly pure hemp- based powders. We intend, however, to conduct animal tests to demonstrate Chylobinoids’ superior absorption and efficacy against certain disease states or conditions, which should increase the bulk price for our product. In addition, we intend to produce capsules and cream for sale to consumers, which could substantially increase the revenue and profit derived from our chylobinoids. For example, one kilogram of chylobinoid powder could be packaged into approximately 66,000 capsules that could be sold for about $1.00 each. Our base case projection for bulk sales of chylobinoids through 2023 appear below. 2019 2020 2021 2022 2023 Net Sales 600,000 $ 2,039,400 $ 3,812,556 $ 7,127,383 $ 9,286,624 $ Cost of Goods 82,980 $ 290,510 $ 559,388 $ 1,077,120 $ 1,445,536 $

Gross Margins Cost of Sales

$ $ $ $

517,020 90,000 80,000 246,000

1,748,890 $ 305,910 $ 100,000 $ 270,000 $

3,253,168 $ 571,883 $ 100,000 $ 300,000 $

6,050,263 $ 1,069,107 $ 100,000 $ 450,000 $

7,841,088 $ 1,392,994 $ 120,000 $ 500,000 $

R&D

General and Admin

Operating Income Capital Expenditures

$ $

101,020 425,000

1,072,980 $

2,281,285 $ 120,000 $

4,431,156 $ 180,000 $

5,828,094 $

$

60,000

$

18,000

Net Pre-Tax Cash Flow

$

(323,980)

1,012,980 $

2,161,285 $

4,251,156 $

5,810,094 $

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These projections assume that annual market growth is 65% through 2021 and 15% thereafter, that ChlyloCure’s market share grows at 10% per year, and that the cost of plant material and sale price for powder increase 3% per year. MARKETING AND PRODUCT DEVELOPMENT ChyloCure will initially market its product as similar, but superior, to other CBD/CBDa rich powders. Over the past several months, we have produced product in small quantities for distribution at no charge to potential partners. These efforts have led to indications of interest from hemp-based cannabinoid retailers for purchase our product in kilogram quantities at prices equal to or in excess of those that we have used in our projections. We have also provided product for the past few months for three patients with severe epilepsy, both of whom have reported a dramatic decrease in the frequency and severity of their seizures. We intend to conduct a set of animal tests to demonstrate the superior absorption of our chylobinoids over CBD and CBDa. We believe that a demonstration of improved absorption will be sufficient to distinguish our product from others in the market place and intend to market the product based in substantial part on the results from those studies. We intend to rely on anecdotal evidence supplemented by later studies designed to support nutraceutical product claims to demonstrate effectiveness in the treatment of certain disease states. We believe that anecdotal evidence and absorption studies should allow us to price our product at a substantial premium to other CBD/CBDa rich powders. CAPITAL STRUCTURE Prior to the sale of the convertible notes, the Company will authorize 1,000,000 shares of common stock (300,000 shares of which will have been issued to Synthonics, Inc.) and 300,000 shares of preferred stock (none of which will have been issued). The common stock is valued at $10.00 per share giving the Company a pre-money valuation of $3.0 million. USE OF PROCEEDS We are seeking up to $1.0 million through this offer. Proceeds in that amount will be used to i) Pay initial licensing fee to Synthonics: $250,000 ii) Transaction costs $25,000 iii) Purchase rotovap and other equipment: $150,000 iv) Initial Build-Out $25,000 v) R&D expense (absorption and formulation studies): $100,000 vi) Operations $450,000 We reserve the right to close this offering with a smaller raise. In such case the payment of the initial licensing fee will be deferred in whole or in part to ensure that sufficient funds are on hand for initial operations.

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RELATIONSHIP WITH SYNTHONICS Prior to the closing of the offering, Synthonics will assign all its intellectual property rights with respect to cannabinoid-based nutraceuticals to ChyloCure. Those intellectual property rights will include all rights under any patents and patent applications as well as all know-how and any related intellectual property later developed by Synthonics. Synthonics will assign those intellectual property rights pursuant to an exclusive non-royalty bearing license. In exchange for the exclusive right to practice Synthonics’ intellectual property in the field of cannabinoid-based nutraceuticals, ChyloCure will, subject to availability of funds, make a one-time payment of $250,000 to Synthonics and issue 300,000 shares of its common stock to Synthonics. Prior to the offering, ChyloCure will be a wholly-owned subsidiary of Synthonics. Assuming that the offer is fully subscribed and all investors convert their notes into equity at the voluntary conversion rate, Synthonics would hold 75% of the equity in ChyloCure and the initial investors would hold 25%. To facilitate the transfer of know-how and insure a smooth launch of ChyloCure’s business, Tom Piccariello, president and chief science officer of Synthonics, will serve as ChyloCure’s initial chief executive officer. ChyloCure will reimburse Synthonics for Dr. Piccariello’s time at a rate not to exceed $20,000 per quarter. In addition, Synthonics and ChyloCure will enter into a shared services agreement for the provision of scientific expertise, analytical services and the like. EXIT STRATEGY ChyloCure’s likely exit is through a public offering or sale or license to another player in the cannabis industry. ChyloCure’s valuation will thus depend on the success of chylobinoids in the market place and the regulatory environment for cannabis-based products. We would expect valuations to increase as the federal regulations become friendlier to hemp-based products and the market for cannabis- containing nutraceuticals evolves from a local to a national one.

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OFFERED SECURITIES The Company is offering up to $1.0 million in convertible notes. The notes will bear interest at 8%, become due in two-years and convert into equity at 80% of the price per share paid in the Company’s next qualified offering subject to a valuation cap of $4.0 million. A more detailed summary of the terms appears below. Interest: Notes will bear interest at 8% per annum, simple interest, from the issuance date through maturity or conversion (“Interest”). Maturity Date: The outstanding principal amount and any accrued and unpaid Interest will become due and payable on demand at any time twenty-four (24) months following the issuance date. Mandatory Conversion: Upon completion by the Company of an equity financing from the sale of the Company's preferred or common stock, in which the gross proceeds payable to the Company equal or exceed $500,000 (excluding the Principal Amount and Interest due on all Notes that will convert in connection with such financing) in one closing or a series of related closings (a “Qualified Financing”), the unpaid Principal Amount and any accrued and unpaid Interest thereon (“Note Value”) of the Note will be automatically converted into the securities issued in the Qualified Financing (the “Qualified Securities”). Conversion Discount: Upon a Qualified Financing, the Note Value will be automatically converted into Qualified Securities at a price equal to the per share price paid by the purchasers of Qualified Securities in the Qualified Financing multiplied by the lesser of (i) eighty percent (80%) and (ii) $4.0 million divided by the pre-money valuation used for next Qualified Financing. Voluntary Conversion: At any time prior to completion by the Company of a Qualified Offering, the Investor may convert the Note Value into common stock at a price per share of $10.00. Change In Control: Upon the closing by the Company of a Change in Control (as defined below) after the issuance date of the Note and on or before the Maturity Date (and provided that the Note has not otherwise been converted into Qualified Securities), the Investor will receive a payment from the Company in an amount equal to 110% of the Note Value within ten (10) days of Investor’s surrender and the cancellation of the Note. The Company will notify the Investor at least fifteen (15) days prior to the close of any Change in Control.

Prepayment:

The Company may at any time prepay all, but not less than all, of the outstanding Principal Amount, plus accrued and unpaid Interest without the payment of any premium or penalty; provided, that (a) Company gives the Investor at least forty-five (45) days prior written notice of any prepayment; and (b) if the Company closes a Qualified Financing (as defined above) within one hundred and twenty (120) days after the date of such prepayment notice, the

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Company will give the Investor the opportunity to invest the Note Value (as defined above) in the Qualified Financing All investors receiving Qualified Securities or common stock will be required, as a condition to the issuance of the Qualified Securities or common stock, to execute and join the Company’s Stockholders’ Agreement. All purchases of Notes shall be made pursuant to the Company’s Note Purchase Agreement.

Agreements:

KEY EXECUTIVES AND ADVISORS • Tom Piccariello. CEO. Dr. Piccariello is a founder and the president and chief science officer of Synthonics. He was the lead inventor of the Carrierwave technology (attaching a peptide to an active agent to make that agent less subject to abuse) that ultimately led to the discovery, development and launch of Vyvanse (lisdexamfetamine dimesylate for treatment of ADHD) at New River Pharmaceuticals. Shortly after the commercial launch of Vyvanse, Shire acquired New River for approximately $2.4 billion. Dr. Piccariello has experience in the fields of synthetic chemistry, metallurgy, electrochemistry, plant enzymology, chemical manufacturing and pharmacology. In addition to serving as the lead scientist for two pharmaceutical start-up companies (both of which became public), Dr. Piccariello founded and ran contract research and contract manufacturing companies, which he later sold. Dr. Piccariello has 23 patents and patent applications to his credit, 18 of which deal with novel drug delivery technologies. He has a B.S. in biology and a Ph.D. in chemistry from Virginia Polytechnic Institute and State University (Virginia Tech). • Ken Slepicka. Director/President of Mid-West Operations and National Sales. Mr. Slepicka is a founder and former chief executive officer of Synthonics. He has been actively involved in the medical cannabis space since 2014 and has helped develop and refine our cannabinoid purification process. He has deep knowledge of the medical cannabis industry and has developed connections with many leading cannabis distributors and retailers. He is expert in in the formulation of cannabinoid containing products. • Scott Palmer. Dr. Scott Palmer, M.D., is a board-certified physician in Internal Medicine. He is a graduate of the University of Michigan and Rush Medical College. Dr. Palmer did his internship, residency and chief residency at Presbyterian St. Luke's Hospital in Chicago, Illinois. Dr. Palmer has been selected as one of the "Top Doctors: Chicago Metro Area" by Castle Connolly Medical Ltd. and Consumer's Checkbook, as well as being selected "America's Top Physicians" by Consumer's Research Council of America, Washington, D.C. Dr. Palmer is a member of the American Medical Association, American College of Physicians and the Chicago Society of Medical Medicine. Dr. Palmer is also the Medical Team Physician of the Chicago Bulls and the Chicago White Sox. In addition to chairing Synthonics Inc. Scientific Advisory Board, Dr. Palmer is a member of Synthonics Board of Directors. Dr. Palmer's interests are in pharmaceutical research, exploring the treatment of autism, cancer, neurodegenerative disorders and infectious diseases.

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• James (Jim) Politis. Director of Marketing and Sales, East Operations , has been a hemp advocate since 2006. He worked with state and federal officials to the first bills passed on legalizing hemp production in 2014 (federal) and 2015 (state). Jim also spoke with Virginia Tech, Virginia State University and James Madison University to start research programs growing and finding end use products for consumer goods. Mr. Politis served on the Montgomery County Board of Supervisors, District D for 16 years advocating for small businesses and farmers. He also owned businesses in farming, restaurant, wholesale distribution, sales, marketing, product branding and private labeling. • Dave Munsee. Founded Advanced Growers in West Virginia. Dave began in industry growing medical marijuana for the state of California. The non-psychotic nature of hemp combined with recent research regarding its effectiveness involved inspired Mr. Munsee to start Advanced Growers to engage in developing providing this new agricultural product to his fellow citizens. Much of the information contained herein is conveyed through forward-looking statements, including but not limited to, the (i) projected financial performance of the Company; (ii) completion of, and the use of proceeds from, the sale of the shares being offered hereunder; (iii) the expected development of the Company’s business; (iv) the regulatory treatment of the industry and the Company’s products (v) the patent protection, if any, that Chylobinoids may receive; (vi) benefits associated with the Company’s products and market acceptance of those products; (vii) cost and availability of hemp and other materials; (vi) pricing of and margins on Company’s products; and (viii) future liquidity, working capital, and capital requirements. Forward-looking statements are provided to allow potential investors the opportunity to understand management’s beliefs and opinions in respect of the future so that they may use such beliefs and opinions as one factor in evaluating an investment. These statements are not guaranties of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements. Although forward-looking statements contained in this presentation are based upon what management of the Company believes are reasonable assumptions, there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements. NOTE ON FORWARD LOOKING STATEMENTS

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Appendix A: Presentation

Mineral Infused Cannabinoids: An Advance in Nutraceutical Products

Photo credits: CPD events, Lafaza, CGStudio

• Hemp derived CBD and CBDa attractive and growing niche – Estimated at $580 million in 2018 * – Expected to exceed $2.0 billion in 2020 – Could exceed $20.0 billion in 2022 *

– Recent de-scheduling should accelerate growth of industry • As medical use evolves need for “pharmaceutical grade” product grows – Ease of predictable and precise dosing – Increased and consistent potency – Pure product that retains benefits of “entourage effect” – Improved absorption and performance – Increasing recognition of diverse biological effects * Brightfield Group (9/2018)

Opportunity

• Takes approximately 1 day to convert hemp flower to chylobinoid • Easily scalable to kilograms of product per batch • Produces powders for uniform dosing - ~80% pure “chylobinoid” powder - ~97% pure Mg-CBDa powder

- Novel route for post-process conversion to pure CBD or THC if preferred • Both process and resulting metal coordinated cannabinoids covered by pending patent applications

• Extraction process uses very cheap reagents and requires standard laboratory equipment

Synthonics’ Cannabis Purification Process

Process Diagram

1 kilogram powder/week

Material Costs $1,740

Labor & Analysis $1,290

Sales Costs $3,750

Total Direct Costs $6,780

Sales Price $25,000

Margin $18,220

34 lbs. hemp flower ($1,430)

Labor

1.0 Kilo Powder ($25,000)

Reagents ($310)

Economics of Conversion of Hemp Flower to Chylobinoid Powder

What are Chylobinoids?

• Complexes of cannabinoids (CBDa, CBD, THCa, etc.) and waxes extracted from hemp or marijuana plant • Similar to chylomicrons (naturally produced lipoprotein particles that transport fats and cholesterol into the bloodstream via lymphatic system) • Bypass liver-metabolism for increased tissue delivery • Can incorporate other active agents if desired • Patentable

Improved Bioavailability (BA) and Efficacy of Chylobinoids and Mg-CBDa • Chylobinoids – Lipophilic nature may reduce first-pass hepatic metabolism and thus increase bioavailability by 2-5 times – Contain primarily CBDa, with other cannabinoid materials to promote “entourage effect” • Mg-CBDa (magnesium CBDa complex)

– CBDa believed to be substantially more potent (1000-4000x) than CBD in regards to receptor affinity – Magnesium coordination improves bioavailability by increasing amphiphilicity of complex – Possible synergistic CNS activity through NMDAR antagonism by magnesium ion

Potential Applications of Chylobinoids • Anti-inflammatory (osteoarthritis) • Anti-epileptic (seizure disorders) • Anti-emetic (anticipatory nausea)

• Analgesic (oral use and topical application)

• Anti-proliferative in some tumor models (e.g. breast cancer, glioma) • Antibacterial/Antimicrobial effects

• Treatment of neurodegenerative and neuroinflammatory diseases Source: https://herb.co/marijuana/news/cbda

Price

Charlotte's Web CBD X X None X $33/gram

Chylobinoid CBDA √ √ New Molecule √ $50/gram

Ojai Energetics CBD √ √ Formulation X $300/gram

Highly potent receptor binding

Patent Type

Micellar

formulation

Improved BA

Major

cannabinoid

Competitive Products Product

2019 2020 2021 2022 2023 Net Sales $ 600,000 $ 2,039,400 $ 3,812,556 $ 7,127,383 $ 9,286,624 Cost of Goods $ 82,980 $ 290,510 $ 559,388 $ 1,077,120 $ 1,445,536

Gross Margins $ 517,020 $ 1,748,890 $ 3,253,168 $ 6,050,263 $ 7,841,088 Commissions $ 90,000 $ 305,910 $ 571,883 $ 1,069,107 $ 1,392,994 R&D $ 80,000 $ 100,000 $ 100,000 $ 100,000 $ 120,000 General and Admin $ 246,000 $ 270,000 $ 300,000 $ 450,000 $ 500,000

Operating Income $ 101,020 $ 1,072,980 $ 2,281,285 $ 4,431,156 $ 5,828,094 Capital Expenditures $ 425,000 $ 60,000 $ 120,000 $ 180,000 $ 18,000

Net Pre-Tax Cash Flow $ (323,980) $ 1,012,980 $ 2,161,285 $ 4,251,156 $ 5,810,094

Pro Forma Financials

• Up to $1,000,000 in Convertible Preferred Notes • 8% interest

• Convert at 20% discount to next equity raise • Valuation capped at $4.0 million

• C corporation to be established in Virginia

Offering Terms

Pay initial licensing fee to Synthonics*: $250,000 Transaction costs: $ 25,000 Purchase rotovap and other equipment: $150,000 Initial Build-Out: $ 25,000 R&D expense (absorption and formulation studies): $ 80,000 Operations: $470,000

Use of Proceeds

* All or some of fee may be deferred if proceeds are less than $750,000

A

• Chylomicrons arise from bile acid emulsified triglycerides

• They are naturally produced in the body from lipoproteins, fats, cholesterol, and triglycerides

• They bypass first pass metabolism thereby increasing absorption of lipids into the bloodstream

• They mature in the bloodstream by incorporating HDL and APOE

What is a Chylomicron?

Chylomicron Structure

Appendix B: Testimonials

Non-confidential Summary of Chylobinoid's Effect ChyloCure is a small biotechnology company which has recently developed a novel hemp derived product called chylobinoid that has shown to be very safe, well-tolerated, and have potent medicinal properties. Chylobinoid consists of 75-85% magnesium-cannabidiolic acid (Mg-CBDa), approximately 5% cannabidiol (CBD), 5% other cannabinoids, and naturally occurring plant lipids. Because of its hydrophilic (water loving) nature, the drug can be easily administered via capsules rather than as an oral solution as with many CBD products (e.g. Epidiolex). CBDa binds strongly to the 5-HT 1A receptor (for treatment of anxiety and depression), inhibits GPR-55 (the so called “third cannabinoid receptor” for treatment pain and cancer), and selectively inhibits the COX-2 receptor (for treatment of inflammation). It is for these reasons and its greater oral bioavailability that CBDa has shown to be far more potent than CBD for the management of epilepsy, nausea and other neurological disorders. In the case of CBDa (the biologically active plant precursor of CBD), coordination of CBDa with magnesium during the extraction process to form Mg-CBDa appears to further increase the complexes’ amphiphilicity (enhanced solubility and lipophilicity) and improve its total oral bioavailability from around 8% as seen with conventional CBD to up to around 75-80%. Introduction to Epilepsy Management using Mg-CBDa by Dr. Michael Smith: In addition to CBDa’s known ability to reduce neuroinflammation and traverse the blood-brain barrier, its coordination with magnesium may synergistically enhance antagonism of excitatory NMDA receptors in the brain and further augment the complex’s unique anti-seizure profile. Synthonics has created a powerful, innovative and patentable anti-epilepsy drug which may be significantly safer and more efficacious than Epidiolex, other AED’s currently on the market and even those under development. Given preliminary clinical results it is our strong belief that there is huge potential in using Mg-CBDa for those afflicted by refractory epilepsy as well as treating patients with other related neurological disorders such as autism and Fragile X Syndrome. We have had preliminary discussions with the Epilepsy Therapy Screening Program (ETSP), a section of NINDS/NIH, to study Mg-CBDa in their animal models, but this work had been delayed due to regulatory issues associated with the testing of cannabinoid products in federal facilities. FDA approval of Epidiolex last summer and recent passage of the Farm Bill, however, have significantly improved the regulatory climate and the view of CBD and similar cannabinoid drugs. Over the last twelve months we’ve been administering Mg-CBDa to several patients with refractory epilepsy and a patient with ALS with very positive results (see testimonials below). We’ve also been able to affirm that the drug remains safe, efficacious, and not interactive with other AEDs despite titrating up the dose in all cases. One patient who’s been taking the drug since May of last year has demonstrated a remarkable seizure reduction of 73% without adverse effects. Additionally, several patients have been able to reduce the dose of their other AEDs without increasing seizure frequency or severity.

Testimonials prepared by patients or their parents: 34-year-old woman's seizures drop by 73% for 163 days with chylobinoid

Noel is my 34-year old daughter who began having seizures at age eight. The seizures began out of the blue, she’d been a healthy child and I had a normal pregnancy and delivery. Her first seizure was on February 12, 1992, we didn’t know at the time that it was in fact a seizure because she’s never had a full-blown convulsion. In the fall of 1992 Noel had a brain biopsy and multiple subpial transection in an attempt to stop the seizures that were occurring hundreds of times per day. She was diagnosed with Rasmussen’s Encephalitis, a debilitating epilepsy syndrome with very poor prognosis and difficult to control seizures. Over those twenty-seven years, Noel has rarely had a day without at least three seizures. Her seizures have changed over the years, in the beginning they were focal with a lot of mouth and hand twitching. As the years progressed, they increased in severity and strength and she developed tonic seizures, her body stiffens and she falls, usually backwards and hits her head. She’s sustained many brain injuries and bleeds due to the severity of these drops and lost all independence as she must have somebody with her when she walks or use a wheelchair for safety. Noel continued to have seizures for 27 years, tried and failed many medications including Dilantin, Phenobarb, Aptiom, Felbatol, Keppra, Vimpat, Zonegran, Fycompa and Onfi. Noel has also endured plasmapheresis with IVIG infusion, vagal nerve stimulator implant, and a special high fat diet all to no avail. We’ve also tried CBD products that are available over the internet, including Charlotte’s Web, Palmetto Harmony and Haleigh’s Hope. She showed no improvement with these products so we discontinued their use. On May 15 Noel began taking the CBDa formulation under the supervision of her epilepsy specialist and improved Noel’s seizures almost immediately. By day three the seizure activity was notably lessened. I can report that as I write this today (October 28, 2018), Noel has been on the CBDa product for 163 days and 121 of those days have been seizure free. That’s a 73% reduction in seizures. It’s like a miracle to us. We started on a very low dose because we were unsure how the CBDa would react with her current medication regime. We’ve titrated slowly over the months and she now remains at a dose of 15mg BID. The really great thing about the CBDa product is that we have noticed absolutely no side effects. There seems to be no interaction with other anti-seizure medications and we’ve even been able to reduce some of the meds. Typically, her anti-seizure medications cause dizziness, somnolence and increase/decrease of appetite. None of these has occurred with the CBDa product. She also seems to be clearer in her thinking.

As a family, we have such an incredibly improved quality of life. It’s hard to put in to words how difficult the years have been, every minute waiting for the inevitable seizure to occur. We’ve been able to let our guard down a bit and it feels good. I have been employed at the Epilepsy Foundation of Greater Chicago for the past sixteen years and am engaged with many clients who have very refractory seizures. Statistically, 30% of people affected by epilepsy don’t gain adequate seizure control from the therapies available today. Since FDA approved medication for epilepsy never seems to come quickly enough for those suffering with seizures, it’s my belief that this unique CBDa formulation would be embraced by families coping with refractory epilepsy. An improved quality of life and respite from ongoing uncontrolled seizures is so very important because ongoing seizures can have such devastating consequences. This population of refractory patients is desperate to have better control. There are so many who could benefit from this amazing product and my wish is that each of those people would have the opportunity that Noel has had to try it. I’d be happy to answer any questions you might have about Noel’s journey. Retired pharmacist ALS symptoms improved with chylobinoid I’m a recently retired pharmacist of 48 years, the last 35 of which have been spent in a hospital/clinical setting. I’ve specialized in inpatient pain control for the last 20 years. I was diagnosed with bulbar-onset ALS (amyolateral sclerosis) roughly one year ago. I’ve been taking and continue to take FDA-approved ALS medications and have now exhausted all that traditional medicine can presently provide. There are very few agents that are classified as true neuroprotectives and CBD is one of them. A few months ago, I obtained a ‘green card’ and tried CBD oil bought in a registered cannabis dispensary. I subsequently noticed a slight improvement in my speech and swallowing since trying this, but nothing remarkable. My recent use of Synthonics’ “chylobinoid” drug (metallo-CBDa) has been a different story; when I take it, I’ve noticed an increased improvement in my speech, likely due to its increased bioavailability, or possibly its greater affinity and effect on certain receptors. The ultimate point here is not the exact mechanism of chylobinoid’s increased efficacy, but the fact that it simply seems to work better than ‘regular’ CBD oil and I greatly prefer it to the CBD products I’ve tried. I would recommend it wholeheartedly to other ALS patients in hopes that their experience will be as positive as mine. Teenage boy with rare genetic disorder has “breakthrough periods” with improved ability to stay on task is more socially engaged after taking chylobinoid. Our son, John, was 4 years old when he had his first seizure. Like many cases of epilepsy diagnosed during childhood, his was not a very typical presentation. He was simply found clinging to a piece of playground equipment, not letting go or responding to the adults who

were supervising him at preschool. Another 3 months passed before he had another episode, this time witnessed by myself and my wife, Carol. It was terribly frightening, he was unresponsive and we didn’t know what was wrong. Of course, we started seeing a number of physicians who initially diagnosed him with Pervasive Developmental Delay-a scary enough diagnosis to receive as a parent in its own right, but his pediatrician, who had known him since birth and observed him meeting all of his milestones and being a very social and engaged 4- year-old was still suspicious. His episodes started happening more frequently and typically were accompanied by incontinence and at this point seizures were suspected. A local neurologist was actually suspicious that John might have Fragile X syndrome and sent chromosomes. It was then that we received the devastating news that John was mosaic for Ring 20 syndrome, a rare genetic disorder with only 50 case described worldwide at the time of his diagnosis. Children affected by this syndrome had varying degrees of difficulties and presentations, but were linked by severe, intractable epileptic seizures. We started to see epilepsy specialists throughout Chicago and even traveled to New York to see a neurologist who had seen one patient with John’s diagnosis in the past. His seizures started to happen more frequently, several times a week, by the time he was 6, and several times daily by the time he was 10. All the while we have tried different combinations of medications-23 different anti-seizure meds and countless combinations of them. We began to see an epileptologist at Northwestern’s Children’s Hospital who had some experience with genetic epilepsy syndromes. Based on his recommendation, in addition to the multitude of meds, John spent 6 months on a strict ketogenic diet, no small feat for a 10-year- old boy. Still his epilepsy progressed. Despite unbelievable support by our school system, he began to fall behind his peers academically and socially. His seizures gradually increased to between 5 and 20 seizures a day-some generalized tonic-clonic during which we would helplessly watch his lips turn blue. We sought opportunities to participate in study medications none of which we qualified for due to his extensive prior treatment. We considered VNS surgery, but this was thought to be unlikely to help someone with John’s disease. For several years we sought an opportunity for Joh to be treated with a cannabinoid-based medication, but for various reasons were declined. Ultimately, John’s Northwestern based neurologist encouraged us to seek help elsewhere as he agreed this was the next logical direction in which to go, but he was bound by institutional constraints not permitting him to care for John while taking such a medication. It was at this time that we were fortuitously directed to Dr. Scott Palmer and Dr. Michael Smith at Rush University. Dr. Smith had some experience treating intractable epilepsy with CBD and Dr. Palmer was connected with Synthonics, a company developing hemp-based CBDa to treat various medical conditions. Dr. Smith agreed that proceeding to a trial of CBDa to treat John’s seizures was the best next step for us to take. We began treatment with CBDa in March of this year and steadily increased the dose. Since then John’s seizure frequency has progressively lessened and he’s begun to have “breakthrough periods” during which he’s demonstrated an improved ability to stay on task and during these times is more socially engaged. Another important aspect of this therapy to recognize is that, despite steadily increasing the dose of the CBDa over the past ten months, we have seen no untoward side effects-behavioral or medical. This has been a great

relief to us as some of the previous anti-seizure medications John had been on had potentially severe and permanent side effects. We have also been carefully monitoring his levels of his other medications and have not seen any significant drug-drug interactions. We continue to hope that this new medication is the missing key to John’s seizure control. Regardless of the outcome, we will remain deeply grateful to the efforts of these physicians and scientists who have so generously shared their expertise, time and resources. Fourteen-year-old with intractable epilepsy with nearly 100% reduction in seizure frequency on chylobinoid product My daughter first exhibited signs of epilepsy around her second birthday. Soon after she was diagnosed with Localization-related (focal) epilepsy and epileptic syndromes with complex partial seizures, with intractable epilepsy. She is now 14 years old. Over the last 12 years, she had has countless seizures, some days up to 36 a day. Since her diagnosis she has been on a multiple different cocktails of prescription drugs that have all failed to control her seizures long term. At the age of 9, she has had brain surgery, Craniotomy Stealth Neuro Navigation, with little to no improvement in her condition. This procedure actually removed a tiny portion of her brain. Afterwards, her partial seizures progressed to grand mal seizures. For the last 5 years she been on multiple medications such a Depakote, Lamictal, and Topamax and continued to have daily seizures. Nothing we tried helped, including a visit to Mayo clinic and attempting the ketogenic diet. Nothing has ever helped for longer than a few months. My daughter has missed countless days of school, months at a time. For the last two years she been homeschooled due to her non-stop seizures and various side effects of her drugs including the inability to focus, double vision, and drowsiness. Over the years I had heard about the benefits CBD oil from many people with epilepsy, but was unable to find anyone who would allow us to give it a try until I met Ken Slepicka who told me about chylobinoid drug program and introduced us to Dr. Smith and Dr. Palmer. Since starting on the chylobinoid drug program I’ve seen substantial improvement across the board with my daughter. Not only have her seizures substantially decreased, we have been able to wean her most harmful drug, Depakote, whose side effects include serious liver damage, by half over the last two months. Her quality of life as increased substantially. She has been able to attend full days of school. She is more alert. Her seizures have decreased from 26 a day to zero. I am beyond happy that the harmful drugs that have had little to no help and many side effects can be replaced by a natural and safe alternative. I could not be happier to be part of the research the chylobinoid drug.