Discover Wellness Solutions Corp. - Investing Insider Magazine

Discover Wellness Solutions Corp.

(CSE: WLNS)

Corporate Presentation

January 2021

Blending Science with Nature

Disclaimer This Presentation contains forward-looking statements that relate to the Company’s current expectations and views of future events and should be read together with the moredetailed information and financial data and statements available in the Company’s amended and restated prospectus dated September 2018 and on SEDAR.com. ThisPresentation does not contain all the information you should consider before purchasing securities of the Company.

In some cases, these forward-looking statements can be identified by words or phrases such as “may”, “might”, “will”, “expect”, “anticipate”, “estimate”, “intend”, “plan”,“indicate”, “seek”, “believe”, “predict” or “likely”, or the negative of these terms, or other similar expressions intended to identify forward-looking statements. The Company hasbased these forward-looking statements on its current expectations and projections about future events and financial trends that it believes might affect its financial condition,results of operations, business strategy and financial needs. These forward-looking statements include, among other things, statements relating to: the Company’s expectationsregarding its revenue, expenses and operations; The Company’s expectations regarding timing of the completion of the construction and related construction costs; theCompany’s anticipated cash needs and its needs for additional financing; the Company’s intention and ability to grow the business and its operations; including its ability tocomplete business acquisitions and integrate acquired businesses; the Company’s expectations regarding harvesting of initial product and product sales prices; expectations withrespect to future production costs and capacity; expectations regarding our growth rates and growth plans and strategies; expectations with respect to the future growth of itsmedical and recreational cannabis products; any commentary related to the legalization of adult-use, recreational cannabis and the timing related to such legalization; and theCompany’s expected business objectives for the next twelve months.

Forward-looking statements are based on certain assumptions and analyses made by the Company in light of the experience and perception of historical trends, currentconditions and expected future developments and other factors it believes are appropriate and are subject to risks and uncertainties. In making the forward looking statementsincluded in this Presentation, the Company has made various material assumptions, including but not limited to (i) obtaining the necessary regulatory approvals; (ii) thatregulatory requirements will be maintained; (iii) general business and economic conditions; (iv) the Company’s ability to successfully execute its plans and intentions; (v) theavailability of financing on reasonable terms; (vi) the Company’s ability to attract and retain skilled staff; (vii) market competition; (viii) the products and technology offered bythe Company’s competitors; and (ix) that our current good relationships with our suppliers, service providers and other third parties will be maintained. Although we believe thatthe assumptions underlying these statements are reasonable, they may prove to be incorrect, and we cannot assure that actual results will be consistent with these forward-looking statements. Given these risks, uncertainties and assumptions, prospective purchasers of the Company’s securities should not place undue reliance on these forward-looking statements. Whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to a number of known andunknown risks, uncertainties, assumptions and other factors.

The Company’s forward-looking statements are based on the reasonable beliefs, expectations and opinions of management. Although the Company has attempted to identifyimportant factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to beas anticipated, estimated or intended. There is no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from thoseanticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. We do not undertake to update or revise any forward-looking statements, except as, and to the extent required by, applicable securities laws in Canada.

Discover Wellness Solutions | 2

Discover Wellness Solutions Inc. (CSE: WLNS)


Focused on a cost leadership strategy in CBD concentrates derived from industrial hemp

23,400 sq. ft. Wellness Canada licensed extraction and processing facility in Alberta – Scalable 4x

Strategic partnership with SynerGenetics BioScience Inc. (“SynerGenetics” or “SG”), a leading plant genetics technology company

SG has contributed to date 550,000 lbs of premium high-CBD hemp flower and biomass and; Discover Wellness Solutions assumes SG’s global CBD hemp business and sales pipeline.

SG’s proprietary technology produces hemp cultivars with upto 15%+ CBD content without testing ‘hot’ for THC(<0.3%) -1,325 acres cultivated in Canada for 2020.

Exclusivity on SG’s CBD genetics for cultivation and sale for Canada in perpetuity

Investment Highlights – Vertically Integrated Cost Leader

Discover Wellness Solutions | 4(1) Piper Jaffrey, market at maturity(2) InnoTech Alberta, 2023 estimate (3) Based on current blended average market price of $5,500 per kg

▪ Hemp products represent a $50-100(1) bln global market opportunity and a near-term market of $1 billion by 2023(2)

▪ Lack of psychoactive properties and reduced regulatory hurdles have established a large & growing global CBD market

▪ CBD concentrates present an attractive niche in Canada due to limited crops of >8% CBD driving demand in Canada

▪ Management expects significant expansion of Canadian retail distribution points for CBD which would increase the size of the market demand in Canada

▪ 23,400 sq. ft. facility for large-scale extraction & processing, with annual capacity of up to 500,000 kilograms of hemp biomass

▪ Wellness Canada licensed for extraction, processing, cultivation and sale (flower only) of hemp and cannabis products

▪ Strategic relationship with leading hemp CBD genetics player, SynerGenetics Bioscience

▪ Transaction with SG creates vertically integrated seed-to-concentrate platform focused on becoming the lowest cost producer of CBD concentrates and CBD flower products

▪ SG contributed to date 550,000 lbs of 2020 high-CBD hemp which could yield 19,250lbs of CBD concentrates with an implied value between ~$34.7M(3)

▪ Contributed by SG on favourable economics, satisfied in Discover Wellness Solutions shares and a deferred cash payment tied to sales

▪ Exclusivity on SG high CBD hemp genetics in Canada

▪ Discover Wellness Solutions granted perpetual exclusive license to SG current and future pipeline of proven high-CBD hemp genetics in Canada which enables additional revenue stream via seed sales in Canada

▪ Expected to be cash flow positive in CY2021 as extraction operations to begin Q1 2021

▪ Attractive expected gross margin of approx. 70% for CBD isolate product

CBD: $50 to $100 Bln Global Market Opportunity

Discover Wellness Solutions | 5(1) InnoTech Alberta, 2023 estimate (2) Cowen, US estimates by 2025(3) Piper Jaffrey, market at maturity

Canadian CBD Market

$1.0Billion(1)

$16Billion(2)

$50-$100Billion(3)

International CBD Market

Topicals, $4.0

Nutraceuticals, $6.4

Vapor, $1.0

Beauty, $1.1

Beverages, $2.4

Food, $4.0

Discover Wellness Solutions to address significant domestic market against backdrop of massive global CBD trade

FDA ApprovedPending FDA Approval

Recently Completed SynerGenetics Transaction


Discover Wellness Solutions builds competitive advantage

with exclusivity on SG proprietary genetics

Delivering stabilized hemp cultivars with up to 15% CBD

and <0.3% THC

_______

Proprietary Genetics Advantage

Leverage Discover Wellness Solutions Assets

Ability to leverage Discover Wellness Solutions processing

facility with 550,000 lbs of premium high-CBD hemp

biomass from SG

Expected to yield between 19,250 lbs of CBD concentrates

_______

Significant alignment with SG as SG will be receiving up to 65% of consideration in shares of Discover Wellness Solutions

becoming largest shareholder

Any cash consideration tied to the sale of products

_______

Highly Aligned Partnership

SG Transaction creates platform focused on becoming the

lowest cost producer of CBD concentrates and flower for a

rapidly expanding global market

Diversified revenue streams for Discover Wellness Solutions not

previously available

_______

Low-Cost Vertically Integrated Platform

Focus on becoming cash flow positive CY 2021

SynerGenetics Bioscience Overview


About SynerGenetics Bioscience

SynerGenetics leading hemp genetics company focused on high-CBD hemp

▪ Canadian plant genetics research and development company focusedon high-CBD hemp strains.

▪ Utilizes genomic research and technology to produce hemp strainswith up to 15% CBD content and <0.3% THC.

▪ Founded by principals with extensive experience in the cannabis andgenomic research industries.

▪ Pipeline of 20+ new hemp and cannabis strains under development.

▪ Cultivation was de-risked by distributing across Canada, with contractfarms in B.C., Manitoba, and Ontario for 2020 harvest.

▪ Controls 4 acres of new-build greenhouse facility in British Columbia,with option to acquire additional facility space (“BC Facility”).

▪ BC Facility contains a nursery capable of growing 100 million seeds,enough for harvesting on 14,000 acres, yielding 14 million kilogramsannually.

▪ BC Facility equipped with state-of-the-art technology, includingprecise environmental controls (light, temp, humidity, CO2, andautomated irrigation and nutrient system.

Capabilities

Biomass

Contract farms on 1,325 acres

Ability to cultivate up to 1million kg of high CBD hemp biomass

annually

Genetics

Proprietary portfolio of high-CBD hemp strains

Developing 20+ new strains to add to portfolio

Successful 2020 SG Harvest

Discover Wellness Solutions | 8Source: SG Management

Premium CBD Crop Agri-scale Dry & CureAgri-scale Harvesting Industrial Biomass Processing

Agri-Scale hemp cultivation, harvesting and biomass processing

SynerGenetics Hemp Contributed to Date


Location Lbs Contributed

Ontario Farms (partner) Elgin County, Ontario 550,000 lbs

BC Farms (partner) Delta, British Columbia Pending

Total - 550,000 lbs

1

2

1Source: SG Management

2

Discover Wellness Solutions Licensed Facility


23,400 sq. ft.

Footprint of existing licensed building on-site

330,000 sq. ft.

Expansion room available

500,000 kg

Expected annual biomass

extraction capacity

▪ Located on a 7.4-acre property in the County of Newell, Alberta

▪ Located directly on the Trans-Canada Highway and ~2 hours from Calgary International Airport

▪ Holds licenses for the cultivation, extraction, processing, and medical sales (flower only) of cannabis products

▪ New regulations will allow for extraction in the entire facility

▪ Current footprint of 23,400 square feet

▪ Expansion potential up to 330,000 square feet equivalent

▪ Minimal expense & time to retrofit

2Hours outside of Calgary

CBD Distillate

CBD Isolate

Consumer Wellness Products

Hemp Cigarettes

High-CBD Flower

Biomassfor Processing

Discover Wellness Solutions Markets


Biomass Markets Concentrates Markets

Discover Wellness Solutions has a number of markets to monetize its up to 550,000 lbs of premium CBD hemp flower and biomass

Illustrative Pro Forma Value Creation

Biomass Concentrates Total

Total Biomass Inventory 550,000 lbs 550,000 lbs

Allocation 50% 50%

Biomass allocation 275,000 lbs 275,000 lbs 550,000 lbs

Mass yield 100% 7%

Output 275,000 lbs 19,250 lbs

Price per lbs of output $25 $1,800

Potential Revenue $6,875,000 $34,650,000 $41,525,000


SG hemp purchase provides enough inventory for illustrative revenue opportunities of up to $41.5m

(1) Price of $4,00 per kg converted to per lbs. at 2.2FOR ILLUSTRATIVE PURPOSES ONLY

Discover Wellness Solutions to generate revenue through bulk sales of CBD crude, distillate and isolates to a number of potential customers

Distillate

Crude

Discover Wellness Solutions Refocused CBD Business Model


Ethanol Crude Extractor

Hempbiomass

Isolates

SynerGenetics

Genetics & Biomass Extraction(1) Target Customers

4 Column Distillation

Isolate Reactor

Mid-Sized LPs

Large LPs

Wholesale Agents

White Label Manufacturer(topicals, edibles, & beverages)

(1) Pending purchase of extraction equipment

CBD Flower

CBD Isolate Margin Analysis


Vertical integration increases pro-forma margins from 26% to 81%

$2,180 / kg 26%

$5,000 / kg 59%

$220 / kg 3%HEMP CULTIVATION

EXTRACTION COSTS

GROSS MARGIN

REVENUE $8,500 / kg 100%

$1,100 / kg 13%HEMP WHOLESALE

MARGIN

Third Party Extraction

$6,830 / kg81%

$350 / kg4%

$220 / kg3% HEMP CULTIVATION

EXTRACTION COSTS

REVENUE$8,500 / kg100%

$1,100 / kg13%HEMP WHOLESALE

MARGIN

Discover Wellness Solutions Internal Extraction

GROSS MARGIN

(Q4 2019)Completed Phase I Facility Renovation

Near-Term Milestones


Receipt of Medical Cultivation & Sales

License from Wellness Canada

(Oct 2019)

Complete First Commercial Sale

(Q1 2021)

Contribution of 1 million kg

Hemp Biomass(Q4 2020)

(Q4 2020)Complete Non-Brokered

Private Placement

(Q4 2018)Completed IPO and

commences trading on CSE

Purchased Newell, AB Facility

(Q1 2018)

Extraction Equipment

Purchases & Additional Facility

Modifications(Q1 2021)

(Q1 2021)Commence Commercial

Operations

Business transformation to be complete by Q1 2021

(CY 2021)Cash Flow Positive for

CY2021

Management Team & Board


Peter Cheung – Interim CEO, CFO

▪ 20+ Years of diverse experience as a VP Finance, CFO, & capitalmarkets professional

▪ Has led over $40 billion of financial advisory, M&A, debt, andequity offerings

Dr Surinder Singh – Chief Scientist

▪ Dedicated plant scientist and researcher with 10+ years ofexperience

▪ Received his Ph.D. from McGill University

Sunny Dabas – QA Manager

▪ 8+ years in quality assurance in the international pharmaceuticalproducts industry

▪ Received his master of pharmacy in 2008

Eugene Chen – Board Member

▪ Partner at McLeod Law LLP▪ Over 20 years experience as a securities, corporate finance, and

mergers & acquisitions lawyer

Dave Guebert – Board Member

▪ Senior financial executive with over 35 years of experience▪ Served as CFO of a number of public and private enterprises▪ Director of Legend Power Systems (CSE: LPS)

Tony Fairfield – Board Member

▪ Senior insurance executive with 25 years experience▪ Founder and President of Fairfield, Watson, & Lewis Inc., one of

the largest independent employee benefit accounting firms inWestern Canada

Manish Grigo, MBA, CFA – Chief Strategy Officer

▪ Over 12 years’ experience in the capital markets as a ResearchAnalyst

▪ Since 2017 advising companies on their capital markets strategies;across a wide range of industries Mining, Gaming and FinTech

Eason Chen, CPA – Board Member▪ Over 15 years of experience in corporate governance, corporate

finance, financial reporting, Canadian and cross-border listings▪ Previously held senior managerial position at Ernst & Young LLP,

MNP LLP and currently holds senior managerial positions atvarious publicly listed companies

Capital Structure


Source: SEDAR, Company Filings(1) As at December 30th, 2020(2) Weighted Average Strike Price of $0.43(3) Weighted Average Strike Price of $0.66

Discover Wellness Solutions Capitalization Table

Cap Table Shares % F.D.

Basic Shares Outstanding (1) 52,942,036 89%

Total Basic Shares Outstanding 52,942,036 89%

Current Options(1,2) 2,100,000 4%

Current Warrants(1,3) 4,554,560 8%

Fully Diluted Shares Outstanding 59,596,596 100%

Price per Share $0.36

Fully Diluted Market Capitalization $21,454,775

For more Information, please contact:

Peter Cheung CPA, CAInterim Chief Executive Officer & CFO

[email protected]

Manish GrigoChief Strategy Officer

[email protected]

https://discoverwellness.solutions/

Discover Wellness Solutions Corp. - Investing Insider Magazine

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