[PPT] - Accurately diagnosing disease in People, Pets and Production PowerPoint Presentation

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Accurately diagnosing disease in People, Pets and Production Animals BEFORE symptoms appear

February 2018 David Gordon, CEO

Dr. Christoph Sensen, CSO

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This Presentation is based upon information supplied by CNA Diagnostics Inc. (“CNAD” or the "Company") solely for use by prospective strategic partners and/or investors in the company. This Presentation does not purport to be all- inclusive or to contain all of the information that a prospective strategic partner and/or investor may desire. No representation or warranty is made as to the accuracy or completeness of any of the information contained herein. Each recipient of this memorandum agrees that all of the information contained herein is of a confidential nature, that he will treat it in a confidential manner, and that he will not directly or indirectly, disclose, or permit his agents or affiliates to disclose, any of such information without the prior written consent of the Company. Neither this Presentation, nor its delivery to any prospective strategic partner and/or investor, shall constitute an offer to sell or the solicitation of an offer to buy any securities of the Company, nor shall this Presentation be construed to indicate that there has been no change in the affairs

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the Company. This Presentation contains "forward-looking information", which is disclosure regarding possible events, conditions or financial performance that is based on assumptions about future economic conditions and courses of action. In particular, the forward-looking information in this presentation includes: statements regarding timing and outcomes of research, development, and commercialization activities, financing activities, protection of intellectual property, market share and growth. Actual results may vary from the forward-looking information in this presentation. Material risk factors that could cause actual results to differ materially from the forward- looking information include: (i) CNAD’s ability to develop commercially viable products; (ii) CNAD’s ability to achieve profitability; (iii) CNAD’s ability to produce and market its products; (iv) CNAD’s ability to obtain regulatory approval of its products; (v) CNAD’s ability to protect its intellectual property; (vi) competitive and alternative technologies; and (vii) CNAD’s ability to obtain financing to support its operations. The material factors or assumptions that were used to develop the forward-looking information in this presentation include: our ability to achieve research and development objectives, timing of proposed commercialization plans, ability to protect intellectual property, ability to secure needed financing or our ability to develop sufficient margins in the business through development of proposed technology or other means. CNAD's views regarding possible events, conditions or financial performance may change. However, CNAD does not intend to update the forward-looking information in this presentation, except as required by applicable securities legislation.

Disclaimer

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Molecular diagnostic company with a proprietary technology platform + significant in house expertise that

accurately identifies diseases in People, Pets and Production Animals BEFORE symptoms appear.

Third party validation: Canadian military collaboration on human sepsis. Kills 5.1M annually worldwide. $24B

annual health care costs in USA. Once symptoms appear chance of death increase 8% per hour. Phase 1a study – identified all 22 patients 2-3 days BEFORE the symptoms appeared.

Developing and monetizing an IP portfolio of diagnostic tests.
Process is standardized, repeatable, and scalable.
T
date 100% success rate in the identification of motifs for four diseases in humans (sepsis ~3 days), cattle

(BSE – 10 months), elk (CWD – 10 months) and rats (radiation – 1 hour).

Business model is to stay within our niche and employ channel partners for distribution.
Low SG&A costs. Burning only $50k CAD per month plus R&D. Full wet lab benefits and large research team

through intelligent partnerships.

Third party validation: license agreement for the distribution of production animal diseases with major European

pharma for 67 countries.

Industry is attracting capital. Everyone is focused on human cancer.
Test pipeline is ready to expand aggressively.

At a Glance

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Mammal Challenge Identification Value Commercial Use Rats Radiation Identify impact within 1 hour Proof of concept None yet Elk Chronic wasting 10 months before symptoms Proof of concept None Beef Cattle Bovine Spongiform Encephalopathy 10 months before symptoms Prevents transfer to humans and other animals Beef Importing Nations Human Bacterial Sepsis Up to 3 days before symptoms Saves lives ~20% death rate 1 million infections in USA each year Wide spread, plans for screening diagnostic being developed with MedUni Graz

Proof of Concept

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Body responds to challenges as it fights to return to normal. Cells die as part of normal life (Apoptosis). DNA information regarding cell activity is released into the blood and contain the genomic regions that were transcribed just before the cell died. CNAD identify long chain DNA biomarkers specific to the host’s response to the challenge. Markers are usually present before the clinical signs appear. Biomarkers are patented. α<0.0001

Circulating Nucleic Acids (CNA)

Tests easily run using standard PCR equipment. Limited specific expertise required to administer.

+8 years to develop proprietary technology

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Workflow

Blood Collection Isolation and Amplification

f DNA

High- throughput Sequencing

f DNA

Bio-informatical Analysis Identification of Marker Sequences by PCR

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Highest burden of death and medical expenses in hospitals

worldwide.

– Most expensive in-patient cost in U.S. hospitals - $24B annually. – Once signs of the disease appear ~20-30% chance of death.

1.6M cases annually in U.S. with 500,000 deaths.
Expensive and unpredictable to health insurers.
Over 300 different forms of Sepsis. i.e. bacterial, fungal, etc.
Competitors have developed solutions to diagnose specific forms
f sepsis a patient has contracted.

– These tests are not commonly run until clinical signs appear.

IP Portfolio - Sepsis Opportunity

CNAD is working with Canadian Department of National
Defense. Mar. 2015 – Completed initial trial utilizing 22

test Sepsis patients and a control group of 51 people.

CNAD is working with Medical University of Graz
66 Candidiasis samples
Results:

– 100% identification of sepsis in patients. – Diagnosed infection up to 3 days before any clinical signs appeared.

Next steps – Phase 1b bacterial – 33 E. Coli, 27 S.Aureus. Phase 1 Fungal. 66 Candidiasis.
Goal – Biomarkers identified and provisional patents filed by end of 2018.

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Human Sepsis PCR Status: Infected Individuals vs. Controls

The cycle at which fluorescence from amplification exceeds the background fluorescence The lower the CQ value is the higher is the amount of target CQ difference of 3.3 means 10 fold higher or lower amount of target! Still under evaluation (normalization needed)

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Corporate Strategy - Positioning

Deploy funds to animal diseases

Quick to market
Quick to cash flow
Lower risk to investors
Only diseases/conditions with high economic

impact

Selectively investigate high impact human diagnostics

Massive upside potential
Use non-dilutive funds as much as

possible to reduce risked capital

Barbell Strategy

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Corporate Strategy – Business Offering

Identification of biomarkers related to diseases or conditions CRO Pure Distribution Collaborative

Margin

earned on studies

IP assigned
Royalty tail
CNAD keeps IP
Royalty share
f Net Sales
CNAD bears

costs

CNAD keeps IP
Samples,

distribution, costs sharing, disease ID are unique to deal Appropriate for large enterprises Unique deal terms Appropriate for low risk appetite

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Corporate Strategy - Partnering

Product Distribution:

Use of channel partners.
67 country distribution agreement with

Laboratorios Maymo for bovine tests

Limited sales costs.
Multiple partners (never just one).
Access to new distribution partners via Director

networks, contracted sell side networks, and

ther existing contacts.
Accessing large scale manufacturing (sepsis).
In discussion with mid-sized pharma and vet
perations.
Opening doors to government at high levels.

Samples for New Diagnostic Tests:

Securing human sepsis samples through

Medical University of Graz, Canadian Military.

Agreement with Vetmed Vienna.
Access to one of largest European biobanks.
Scientific Advisory Committee.
Collaborative partnerships.

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Corporate Strategy - Structuring for Exit

Working with Board and Advisors to structure company for maximum sale

value.

Considering ways to earn multiple high value exits for investors via

corporate structure.

Contracts with partners include exit options (for ease of future transactions).
Continue to act as pubco for investor transparency and confidence.
Audited financial statements
Good governance practices in place
Considering methods to create liquidity windows for those that want out

early.

Share buybacks on future rounds?
Exploring Dual Process
Strategic Sale(s)
Go Public (carefully)
Consider timing.
Expect >$1,000,000 in additional costs to be borne by shareholders

IF this is the preferred route.

Capital to dictate direction.

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Financing

Small Bridge Round Open:

Raise $2M CAD @ $0.50 CAD/ Common Avoting

share

$9.1M pre-money
22% of company post money [f.d.]
AB shareholders get tax credit

Activity Estimated Cost [$CAD] Johne’s Regulatory Approvals $100,000 Sepsis [Bacterial and Candidiasis] Biomarker Identification $600,000 Companion Animal Test Development (Start) $600,000 High-Throughput Machine Development $250,000 [~$800,000 in Grants] Exploratory Research / New Targets $50,000 Necessary Overheads $225,000 Raise Fees $140,000 Total Estimated Costs to Dec 2018 $1,965,000

Existing shareholders and insiders picked up all expiring warrants.
Expansion is a function of available capital. Identifying many diseases of relevance. Managing

Growth.

Financial statements are audited.

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16.4M Common Shares 1.4M Options 1.3M Warrants 19.1M Fully Diluted

Corporate Structure

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Insider Ownership – 40% Paid in Capital – $2.6M Debt – $0 Cash – $400k $9.5M pre-money valuation (f.d)

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Proposed Exits and DCF

Terminal Value Method: Free Cash Flow Multiple Used: 4.0x (~23X average for trading comps. Abaxis, Idexx 27x) Terminal Value: $725M Discount Rate to show $0.50 stock: 185% ROI on $0.50 round: 80X (Terminal Sale Value Only)

Projected Annual Forecast 2018 2019 2020 2021 2022 Total Revenues 2,019,125 12,072,048 40,637,904 139,289,600 276,771,995 EBIT (506,140) (1,402,829) 22,558,581 116,930,866 250,516,113 Capital expenditures (net of asset sales)

(5,000,000)
Unlevered free cash flows

(818,903) (7,537,067) 18,703,553 82,712,439 181,423,526 Discount factor 0.960 0.738 0.568 0.437 0.336 Present value of free cash flows (786,029) (5,565,000) 10,622,910 36,136,566 60,971,419 Sum of present values of FCFs 101,379,866

Disclaimer: Early Modelling given what we know today. Please refer to Slide 2 Disclaimer Disclaimer: Early Modelling. This is an estimate. Please refer to Slide 2 Disclaimer

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David L. Gordon CEO

David is a business and financial professional with +15 years experience optimizing business performance and effectively deploying capital to maximize an organization’s potential. David has co-managed a $3.0 billion North American equity fund; conducted the turnaround of a municipal water utility including direct oversight and responsibility of $1.4 billion capex over 4 years, $330 million annual OPEX, and a team of 20 FTEs. David has managed an $85 million land development portfolio, raised over $125 million (in collaboration with partners) for SMEs and small pubcos, and conducted complex private equity transactions for middle market companies in the range of $10-$60 million while investment banking with CIBC. David has participated in the success of Resverlogix ($2.80 to >$28) and Neptune Biotech ($1.11 to >$6.00) as well as many other micro-cap public companies. He holds a Chartered Financial Analyst (CFA) designation and is a Project Management Professional (PMP) and well as the Top Graduate within his Bcomm program. David is a published author on strategy execution. David is experienced in the unique challenges facing small and quickly growing entities and loves bringing disruptive technologies to market.

Dr. Christoph W. Sensen CSO

A founding member of CNA Diagnostics Inc., Dr. Sensen is a University Professor for Computational Biotechnology at the Graz University of Technology in Austria and an Adjunct Professor at the University of Calgary’s Faculty of Medicine, Department of Biochemistry and Molecular Biology. He participated in several large-scale Genome Research programs, including two for the development of markers for CWD and BSE, and co-Author on more than 100 peer-reviewed articles and has edited or published six books in the field of Genome Research and Bioinformatics. Dr. Sensen is a reviewer for granting agencies and Journals; and Chief Editor at Journal of Biotechnology (Elsevier). Previously he worked for seven years as a Research Officer at the National Research Council of Canada’s Institute for Marine Biosciences (NRC-IMB) and as a visiting scientist at the European Molecular Biology Laboratory (EMBL) in Heidelberg (13 months). He studied Biology in Mainz, Düsseldorf and Cologne and obtained a Dr. rer. nat. degree from the University of Cologne in 1994.

Management

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Dennis L. Nerland, QC Director

Dr. Greg Andrews

Chairman, Director

Dr. David Chalack

Scientific Advisor

Dr. G. Kee Jim

Director Alec Milne Director

Dr. Robert B. Church