December 2019 Private and confidential 1 Presentation Disclaimer - - PowerPoint PPT Presentation

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December 2019 Private and confidential 1 Presentation Disclaimer - - PowerPoint PPT Presentation

December 2019 Private and confidential 1 Presentation Disclaimer The information contained in this document (the Presentation) has been prepared by SV Pharma Limited (SVP). SVP is a private limited company. This Presentation has not


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Private and confidential

December 2019

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The information contained in this document (the “Presentation”) has been prepared by SV Pharma Limited (“SVP”). SVP is a private limited company. This Presentation has not been verified and is subject to material updating, revision and verification and amendment without notice. This Presentation has not been approved by an authorised person in accordance with Section 21 of the Financial Services and Markets Act 2000 (as amended) (“FSMA”) and therefore it is being provided for information purposes only. Reliance on this Presentation for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested. While the information contained herein has been prepared in good faith, neither SVP nor any of its current or proposed directors, officers, agents, employees or advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof,

  • r of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as “Information”) and liability therefore is

expressly disclaimed. Accordingly, neither SVP nor any of its current or proposed directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct

  • r Indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained herein or for any

errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation. The views of the SVP’s management/directors and/or its partners/representatives set out in this Presentation could ultimately prove to be incorrect. No warranty, express or implied, is given by the presentation of these figures here and investors should place no reliance on SVP’s estimates cited in this Presentation. This Presentation may contain “forward-looking statements” that involve substantial risks and uncertainties, and actual outcome and developments may differ materially from those expressed or implied by these statements or a variety of factors. These forward-looking statements are statements regarding SVP’s intentions, beliefs or current expectations concerning, among other things, SVP’s performance, financial condition, prospects, growth, strategies and the industry in which SVP operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as of the date of this Presentation and SVP does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Presentation. This Presentation should not be considered as the giving of investment advice by the SVP or any of its directors, officers, agents, employees or advisers. In particular, this Presentation does not constitute or form part of any offer or invitation to subscribe for or purchase any securities and neither this Presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. No reliance may be placed for any purpose whatsoever on the information or opinions contained in these slides or the Presentation or on the completeness, accuracy or fairness thereof. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relation to such matters. Neither this Presentation nor any copy of it may be (a) taken or transmitted into Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or the United States of America (each a “Restricted Territory”), their territories or possessions; (b) distributed to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933 (as amended)) or (c) distributed to any individual outside a Restricted Territory who is a resident thereof in any such case for the purpose of offer for sale or solicitation or invitation to buy or subscribe any securities or in the context where its distribution may be construed as such offer, solicitation or invitation, in any such case except in compliance with any applicable exemption. The distribution of this document in or to persons subject to other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction. This Presentation is being made available on the basis that recipients keep confidential any information contained herein, whether orally or in writing, in connection with SVP. This Presentation is confidential and must not be copied, reproduced, published, distributed, disclosed or passed to any other person at any time without the prior written consent of SVP. Prospective investors should not construe the contents of this Presentation as legal, tax, investment or other advice. All prospective investors should make their own enquiries and consult their own advisers as to legal, tax, investment, and related matters concerning an investment in SVP. By accepting a copy of this Presentation you agree to be bound by the foregoing provisions.

Presentation Disclaimer

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SV Pharma’s Vision

Our goal is to build Europe’s most innovative cannabis extraction business and become the leading pharma grade cannabis company in Europe, setting the gold- standard in cultivation and extraction

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Extraction and Refining

Short term cash generative business SV Pharma has acquired ethanol extraction and refining equipment from a leading US manufacturer to install in German facility. Will produce high grade CBD distillate/isolate for wholesale. Generating fast cash flow. Extraction scheduled to commence in Q1 2020.

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Company Overview

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German THC Trading Licence

Providing a foothold in the largest medical cannabis market in Europe SV Pharma holds a trading licence for THC in Germany which includes import / export and distribution. Licence currently allows for trading of 160kg of flower per year. Work underway to expand licence, increasing capacity, for full commercialisation.

Large Scale Pharma Operation

Unlimited THC cultivation and processing licence via JV with leading pharma company JV with Zada Pharmaceuticals Bosnia, GMP certified THC cultivation, extraction and processing facility SV Pharma holds 62% of JV with Zada to contribute an initial €6 mill towards land and buildings. Construction scheduled to commence in Q2 2020.

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European Hemp / CBD- A large undeveloped emerging market

  • Traditionally used for food & fibre, hemp is now being used to produce a variety of medicinal

and healthcare products – largely hemp derived cannabidiol

  • In Europe, hemp is defined as cannabis containing less than 0.2% THC
  • The hemp flower can be used to

create crude oil, distillate and an isolate depending on the intended use

  • Estimated current product demand
  • utstrips supply 5 to 1
  • Significant demand in Europe for

consistent high quality CBD

  • Germany cultivated 2,147 hectares
  • f hemp in 2017, 43% more than

2016 and increasing year on year

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The Opportunity

  • Europe is estimated to produce close to 1/4 of the world’s hemp crop
  • European CBD market expected to boom - the market was estimated at $318 million in 2018

and is expected to grow over 400 percent through 2023 (1)

  • But while hemp production and demand have rapidly grown, high quality extraction and

processing has lagged

  • SV Pharma is poised to become a leading provider of CBD distillate and isolate in Europe
  • With speed to market a priority we will capture this opportunity and become a top player in

the European extraction industry generating high returns on capital

(1) Brightfield Group - 26 March 2019

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SV Pharma Extraction Overview

SV Pharma is expecting delivery of its first 500 Gallon Industrial Performance Integrated Extraction and Recovery Solution on site in Germany in Q1 2020.

  • Fully licensed operation to be located in Berlin, Germany with a focus on

scalability

  • Ethanol extraction and recovery system represents the newest and most

innovative extraction technology in the marketplace

  • First production planned for Q1 2020 – 3 month ramp up
  • Scalable operations:
  • 2nd extraction unit planned to come online in Q4 2020
  • Working with equipment suppliers to manufacture new solutions for

specific products

  • Rigid Quality Assurance
  • Third-party testing at each stage (independent lab on site)
  • GMP certification to commence in 2020
  • Key Stats
  • 360kg daily processing volume based on single shift
  • Producing 23 liters of CBD distillate per shift
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Strong, scalable, cash generating business from the first year of operations

Extraction - Financials

2020 2021 Total Production – Distillate (litres) 5,250 10,041 Total Revenue €12.3 mill €23.5 mill EBITDA (€) €7 mill €15 mill

  • Production commencing Q1 2020, ramp up phase of 3 months
  • Production based on a conservative 8 runs per day (8 hour shift), 20 days per month
  • MoU signed with hemp producers ensuring continuity of supply of high quality biomass, developing strong

relationships with farmers

  • Offtake MoU signed with a major distributor in Europe for CBD distillate, crude oil and/or isolate
  • Cashflow positive by Q2 2020
  • Highly scalable – potential for 2nd Extraction unit – Q4 2020 doubling processing capacity
  • Ability to produce full spectrum, crude, isolate and THC products with existing equipment to take advantages of

changing opportunities in the market

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German Licencing and Distribution

SV Pharma’s German subsidiary holds a trading licence from BfArM (German medical agency) to supply medical THC flower

  • Germany is currently dependent on the import of medical

cannabis from abroad; 4,400 kg imported in 2018 with demand expected to increase significantly

  • Currently hold a limited licence to import, export and distribute

160kg pa of THC in Germany

  • Extending this licence to allow for larger quantities to allow for

full commercialisation

  • Building a distribution network outside of Germany to be well

positioned as the European medical cannabis market matures and further develops

  • Existing laboratory and R&D facilities located in Rostock
  • Lease for certified GDP and GMP lab in negotiation
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Pharmaceutical Applications

Joint Venture to construct a GMP certified, pharmaceutical grade facility, including cultivation, extraction and processing. Construction to commence in Q2 2020

  • JV with Zada Pharmaceuticals, one of the largest pharmaceutical

companies in the Balkan region, with SV Pharma having a controlling 62% interest

  • Engrained ability to cultivate, process and export medical cannabis

(including unlimited THC) into Europe.

  • Zada will invest circa €6m by way of land, facilities and

construction, SV Pharma will be responsible for equipment and fit-

  • ut at an estimated cost of circa €6-8m
  • Initial 50,000 sq. ft facility to be constructed, increasing to 100,000
  • sq. ft
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Zada Pharmaceuticals / SV Pharma Joint Venture

JV will utilise Zada’s pharma expertise to:

  • Grow, conduct R&D, extract, process, import/export and distribute THC and CBD
  • Opportunity to manufacture drugs via a sub-licence of GMP product licence (SPV Bosnia will apply

for its own licence once lab constructed and approved)

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Burim Thaci – Chairman

Burim is an experienced executive whose prior accomplishments include leading and expanding

  • perations and international trade for two large global

pharmaceutical production companies over the past ten years. Three and a half years of this was focused on investment and management in the medical cannabis

  • industry. As an executive manager with over 16 years’

experience, he is well-versed in project financing, management and financial restructuring and change management

Greg Kuenzel – CEO

Greg holds a Bachelor of Business Degree and is a Fellow of the Institute of Chartered Accountants in England & Wales. He has many years of experience in providing accounting and corporate advice to public companies in a diverse range of industry sectors. For the past 15 years he has worked with predominantly UK listed companies holding senior financial and management positions. Greg is a partner of Heytesbury Corporate LLP. More recently he has advised a number

  • f medical cannabis companies operating in the UK and

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Team

In-country professionals experienced in pharmaceutical, cannabis and corporate management

Colby Riggle – Operations Director

Colby, as a native of California, has in excess of 15 years of experience in the cannabis space as both Master Grower for Calaveras Wellness Farms, Calaveras CA and The Cannabis Cooperative; and Head

  • f Operations at Incredible Extracts Oakland, CA. He

has experience managing teams of growers (for both indoor and outdoor operations) and has overseen processing and extraction on an industrial scale including for the pharmaceutical sector

Nicola Baldwin – Corporate Counsel

Nicola has, for the last 10 years, worked with London- based City & Westminster Corporate Finance LLP as its in-house legal adviser. Prior to that she was employed by a city law firm, now DMH Stallard. Her experience includes corporate finance transactions, M&A and multi-jurisdictional IPOs. As well as being a practising solicitor, Nicola regularly sits as a Magistrate in Central London

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Adrian Beeston – Executive Director

Adrian is a private investor who specialises in the financing and structuring of small to medium size businesses and the flotation of these companies on the US, English and Canadian Exchanges. Prior to this he was a Director of Thorpe-Beeston Investments Ltd, from 2002 until 2017. He moved to the UK from Canada in 2000, where he worked with Altium Capital, a major pan-European corporate finance house, where he focused primarily on the raising of private equity

  • MD. Ranjit S. Bhardwaj – R&D Director

Dr Bhardwaj has been working in phytomedicine for well over a decade, with a focus on cannabis and its medicinal properties for the past 10 years. Dr Bhardwaj and his team are currently undertaking R&D studies on numerous conditions, including nausea, loss

  • f appetite, spasticity, Tourette's syndrome, pain,

itching, glaucoma, epilepsy, asthma, psychiatric symptoms, hyperactivity disorder / ADHD, Alzheimer's disease, autoimmune and inflammatory diseases and

  • ther syndromes. He is currently in the development

stage of several products created with the SV Pharma team scientists in Germany and Bosnia 13

Team

In-country professionals experienced in pharmaceutical, cannabis and corporate management

Herman Groenewoudt – Commercial Director

Prior to joining SV Pharma, Herman was the CEO of C3 International B.V. Holding, which holds the Vitaponix branded patent in agriculture and organic nutrition. Herman has previous experience in the cannabis industry with a focus on nutrition. This includes agriculture and glass house operation experience on a 4-hectare facility in the Netherlands. Herman was also a director for international sales at ATCO Europe B.V. for more than 6 years. Herman achieved the rank of Lieutenant during his service in the Royal Netherlands Navy

  • Dr. Ziga Bolta– Technological & Product

Development Director

Dr Bolta has extensive experience in business development, product portfolio management, project management, intellectual property protection and

  • licensing. He has organised specialised Patient Focused

Certification training for the use of cannabis in patients, cultivation and processing. Dr Bolta is a chemical process engineer and a doctor

  • f

biotechnology (plant biotechnology).

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Item £ Germany – capex, fit out, overheads 2,250,000 Bosnia 250,000 Corporate costs, legal and overheads 500,000 TOTAL 3,000,000

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Use of Proceeds

Highlights

  • Establish extraction facility utilising cutting edge ethanol extraction

and refining system to produce high grade CBD products

  • Generate fast short term cash flow
  • Expand existing German licences to create commercial THC
  • pportunities
  • Commence work on JV with Zada Pharmaceuticals in Bosnia holding

an unlimited THC production licence

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Funding Vehicle SV Pharma Limited Total Investment Amount £3,000,000 Pre-Money Valuation £20,000,000 Timing December 2019/January 2020

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Financing Structure