000000_Synthonics_ChyloCureBook_Rev031919

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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