EQUIPMENT LEASING SOLUTIONS FOR CANNABIS AND HEMPcompanies and capital markets experience DAVID...

EQUIPMENT LEASING SOLUTIONS FOR CANNABIS AND HEMP

COMPANY PRESENTATION Q1 2020

CSE: XS OTCQB: XSHLF

2CSE: XS, OTCQB: XSHLF

The information contained within this presentation has been prepared by Xtraction Services Holding Corp. (“Xtraction Services”, “XS”, “Xtraction” or the“Company”) and contains information pertaining to the business, operations and assets of the Company. The information and opinions contained in thisPresentation (a) is provided as of the date hereof and is subject to change without notice, (b) does not purport to contain all of the information that aprospective party may desire or that may be necessary to fully and accurately evaluate an investment in the Company and (c) is not intended to berelied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of anyinvestor. In all cases, interested parties should conduct their own investigation and analysis of the investment merits and risks of Xtraction Services andsatisfy themselves as to the accuracy, reliability and completeness of any information and data provided. An investment in the securities describedherein is speculative and involves a number of risks that should be considered by a prospective investor. Prospective investors should carefullyconsider the risk factors described under “Risk Factors” attached here to as Appendix B to this Presentation before investing in the Company andpurchasing the securities described herein. No sales of the securities of the Company shall be made until the Company and the potential investor enterinto a subscription agreement for such securities.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION:Certain statements made within this Presentation constitute forward-looking statements and forward looking informationwithin the meaning of applicableCanadian and United States securities legislation (collectively herein referred to as “forward-looking information”), which can often be identified bywords such as “will”, “may”, “estimate”, “expect”, “plan”, “project”, “intend”, “anticipate” and other words indicating that the statements are forward-looking. Such forward-looking statements are expectations only and are subject to known and unknown risks, uncertainties and other important factors,including, but not limited to, risk factors included in this presentation, that could cause the actual results, performance or achievements of the Companyor industry results to differ materially from any future results, performance or achievements implied by such forward-looking statements. Such risks anduncertainties include, among others, dependence on obtaining and maintaining regulatory approvals, including acquiring and renewing state, local orother licenses; the uncertainty of existing protection from United States federal or other prosecution; regulatory or political change such as changes inapplicable laws and regulations, including United States state-law legalization, due to inconsistent public opinion, perception of the medical-use andadult-use cannabis industry, bureaucratic delays or inefficiencies or any other reasons; any other factors or developments which may hinder marketgrowth; reliance on management; the effect of capital market conditions and other factors on capital availability; competition, including from moreestablished or better financed competitors; and the need to secure and maintain corporate alliances and partnerships, including with customers andsuppliers. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements.

These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Inaddition, even if the outcome and financial effects of the plans and events described herein are consistent with the forward-looking statementscontained in this Presentation, those results or developments may not be indicative of results or developments in subsequent periods. Although theCompany has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from thosedescribed in forward-looking statements, there may be other factors and risks that cause actions, events or results not to be as anticipated, estimated orintended. Forward-looking information contained in this presentation is based on the Company’s current estimates, expectations and projections, whichthe Company believes are reasonable as of the current date. The Company can give no assurance that these estimates, expectations and projectionswill prove to have been correct.

Prospective investors should not place undue reliance on forward-looking statements, which are based on the information available as of the date ofthis Presentation. Forward-looking statements contained in this document are made of the date of this Presentation and, except as required byapplicable law, the Company assumes no obligation to update or revise them to reflect new events or circumstances. Historical statements contained inthis document regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. In thisregard, certain financial information contained herein has been extracted from, or based upon, information available in the public domain and/orprovided by the Company. In particular historical results should not be taken as a representation that such trends will be replicated in the future. Nostatement in this document is intended to be nor may be construed as a profit forecast.

An investment in the Company is speculative and involves substantial risk and is only suitable for investors that understand the potential consequencesand are able to bear the risk of losing their entire investment. Investors should consider the following risks, in addition to many others, and consult withtheir own legal, tax and financial advisors with respect to all such risks before making an investment.

CAUTIONARY NOTE REGARDING FUTURE-ORIENTED FINANCIAL INFORMATION:To the extent any forward-looking information in this presentation constitutes “future-oriented financial information” or “financial outlooks” within themeaning of applicable Canadian securities laws, such information is being provided to demonstrate the anticipated market penetration and the reader iscautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such future-orientedfinancial information and financial outlooks. Future-oriented financial information and financial outlooks, as with forward-looking statements generally, are,without limitation, based on the assumptions and subject to the risks set out above under the heading “Cautionary Note Regarding Forward-LookingInformation and Forward-Looking Statements”. The Company’s actual financial position and results of operations may differ materially from management’scurrent expectations and, as a result, the Company’s revenue and expenses may differ materially from the revenue and expenses profiles provided in thisPresentation. Such information is presented for illustrative purposes only and may not be an indication of the Company’s actual financial position or resultsof operations.

USE OF NON-IFRS MEASURES: This Presentation refers to EBITDA and EBITDA margin because certain investors may use this information to assess the Company’ performance and also determine the Company’s ability to generate cash flow. Xtraction Services believes EBITDA, which it defines as earnings before interest, taxes, depreciation and amortization, is one indicator of Xtraction Services’ financial performance and uses it as a proxy for the earning potential of the business. EBITDA is an economic measure that reflects the reduction for the cost of debt capital and the tax effects by adding back interest and taxes to earnings. EBITDA margin is EBITDA as a percentage of revenue. This data is furnished to provide additional information and is a non-IFRS measure and does not have any standardized meaning prescribed by IFRS. It should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS and is not necessarily indicative of operating costs presented under IFRS.

THIRD PARTY INFORMATION:This Presentation includes market and industry data which was obtained from various publicly available sources and other sources believed by theCompany to be true. Although the Company believes it to be reliable, the Company has not independently verified any of the data from third-party sourcesreferred to in this Presentation, or analyzed or verified the underlying reports relied upon or referred to by such sources, or ascertained the underlyingassumptions relied upon by such sources. The Company does not make any representation as to the accuracy of such information.

U.S. INVESTOR NOTICE:This Presentation does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities of the Company in anyjurisdiction in which an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Thesecurities have not been approved or disapproved by the U.S. Securities and Exchange Commission (the “SEC”) or by any state securities commission orregulatory authority, nor have any of the foregoing authorities or any Canadian provincial securities regulator passed on the accuracy or adequacy of thedisclosures contained herein and any representation to the contrary is a criminal offense. Any representation to the contrary is a criminal offense. Thesecurities offered hereby have not been registered under the 1933 Act, or the securities laws of any state and are being offered in reliance upon certainexemptions from registration under such laws. Any securities acquired by a “U.S. Person” (as defined in Rule 902(a) of Regulation S under the 1933 Act) isavailable. Prospective investors will be required to represent, among other things, that they meet the requirements of an available exemption from theregistration requirements of the 1933 Act and are familiar with and understand the terms of this offering and have all requisite authority to make suchinvestment. In making an investment decision, investors must rely on their own examination of the Company and the terms of this offering, including themerits and risks involved.

ALL INFORMATION IS PRESENTED IN US DOLLARS UNLESS OTHERWISE NOTED.

DISCLAIMER


XS OVERVIEWProven business model that anticipates high IRR1 and outsized returns for XS shareholders

Established Client Base• Currently four leasing contracts, and one sale-

leaseback• New partnership with KushCo2 gives Xtraction first

right of refusal to provide leasing services to any and all of their current and future customers

• Over 70 Original Equipment Manufacturers (OEM) within the Preferred Vendor Program

• White label solutions for OEM’s allows them to offer XS solutions seamlessly to their customers

• Supportive shareholder base – 43.3% Archytas & KushCo ownership (assuming conversion)

Revenue Generating Contracts Already In Place

Vendor Partnerships With Reliable and Well-Known OEM’s

1. IRR - Internal rate of return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments2. Refer to Strategic Partnership and Cooperation Agreement with KushCo Holdings Inc. as announced on Jan/30/2020


RECENT EVENTS

Archytas Share Purchase & Khrysos

TradeSale-leasback

Completed With Halo OTC Listing California Lenders License

XS continues to support shareholder ownership

interests

Allowed Halo to tap funds quickly by leveraging existing equipment

To provide improved accessibility and liquidity for

U.S. investors

California license allows XS to complete additional CA transactions and provide a wider variety of financial

products

• Archytas Ventures LLC purchased a total of 274,500 Common Shares at an average price of CAD$0.2068.

• Trade of non-essential equipment and spare parts inventory for 13.4% equity ownership position

• XS and Halo Labs Inc (NEO:HALO). entered into a sale-leaseback agreement for $600,000 payable over a 3-year term.

• Began trading on the OTCQB Venture Market under the symbol “XSHLF” on January 15, 2020.

• Entered into leasing agreement with Lehua Group USA, LLC (a multi-state, licensed cannabis processor specializing in THC-infused beverages). Equipment lease for up to $575,000.

See press releases dated Oct/23/19 and Jan/06/2020

See press release dated Nov/27/19 See press release dated Jan/15/20 See press releases dated Jan/27/20


XS + KushCo Holdings

• Sales and marketing support including cross promotion and branding

• Access to customer list with over 5,000 cannabis brands• Kush trading platform – help facilitate the sale of oil from

XS customers

• Investor Relations support

KushCo is the industry's largest ancillary service provider. Serving over 4,000+ cannabis and hemp customers nationwide, XS will have access to KushCo’s sales and marketing team to promote our products to new and existing customers.

KushCo (OTC: KSHB) Partnership & 19.9% Ownership PositionAllows both companies to continue respective growth initiatives while utilizing each other’s strengths

Strategic Partnership To Develop Business Opportunities


XS HIGHLIGHTSTaking a well understood and lucrative business model and applying it to the cannabis and hemp industry

1. Ackerell Capital 2018 Cannabis Report2. For informational purposes only and does not constitute tax advice

PROVEN BUSINESS MODEL

• Equipment leasing solutions exist in almost every other industry

• XS currently has an established client base with equipment deployed, and revenue generating contracts already in place

EXPERIENCED AND DEDICATED TEAM

• Our team has extensive experience in specialty finance, cannabis/hemp oil processing and underwriting

• Strong understanding of US finance having dealt with many lenders through previous endeavors

HIGH MARGINS WITH SIGNIFICANT GROWTH POTENTIAL• The cannabis market is

anticipated to grow to $127B by 20301

• Numerous cannabis and hemp companies looking to XS in today’s capital constrained environment

SOLUTIONS FOR A CAPITAL CONSTRAINED INDUSTRY

• An alternative way for companies to acquire new equipment without full payment

• Companies can also unlock capital from equipment they already own through our sale-leaseback program

• Lease payments are tax deductible2 for 280E companies


MANAGEMENT TEAMWe have assembled a high-quality team with expertise in building specialty finance companies and capital markets experience

DAVID KIVITZ ANTONY RADBOD JOE FAZZINI ALEX KAROL MATT SUOZZI CEO, Director SVP of Sales &

Marketing, Director CFO VP of Technology Senior Underwriter

• Previously Managing Partner and Co-Founder of Alta Verde Group, growing annual sales in excess of $50 million. Awarded #3 Fastest Growing Private Company in Los Angeles in 2015

• Prior investment roles at Hamilton Lane Advisors and CapitalSource

• Bachelor of Business Administration from The George Washington University

• Co-founder and lead investor of Nobody Media, a leader in digital content, strategy and behavioral targeting, whose clients included AARP, Boeing, and Ducati

• Founder of Pollen Partners, a B2B SaaS venture capital firm

• Responsible for launching a series of successful startups since 2010 and growing aggregate revenue from $0 to over $260 million

• Chief Financial Officer and VP of Corporate Development for Eastmain Resources Inc. (ER: TSX), prior Vice President, Analyst, and Senior Equity Research Associate roles at Dundee Capital Markets

• Prior Senior Associate, Audit & Assurance Group at PricewaterhouseCoopers LLP

• Bachelor of Commerce from University of Toronto

• Former Laboratory and Processing Director of the first cannabis license holder in the State of Florida, Knox Medical

• Navigated unique regulatory guidelines to establish state-of-the-art processing and analytical laboratories capable of manufacturing ambitious product forms

• Bachelor of Science in Biomedical Engineering and Biopsychology from Tuffs University

• Former Underwriter and Portfolio Manager for Capital One Bank (NYSE: COF)

• Prior Senior Credit Analyst with a $2 billion portfolio in the generalist middle market department

• Bachelor of Arts in Mathematics from the University of Virginia


DIRECTORS

GARY HERMAN STEPHEN CHRISTOFFERSEN Independent Director Independent Director

• Fund manager, Strategic Turnaround Equity Partners and affiliates. Previously, Abacoa Capital Master Fund, Ltd. Registered with Arcadia Securities, LLC. Previously investment banker with Burnham Securities, Inc.

• Experienced investor and board member in developing and growth-stage companies.

• Executive Vice President of Corporate Development for KushCo Holdings (OTC:KSHB), evaluates strategic acquisitions and fundraising initiatives

• Managed a $500MM equity portfolio for Comerica Bank and advised on M&A and fundraising initiatives for seed and growth stage companies. Prior Regional Director for Fixed Income at Intercontinental Exchange

Our Board of Directors provides industry, governance and finance support to our high-quality management team

DAVID KIVITZCEO, Director

ANTONY RADBODSVP of Sales & Marketing, Director


“We see the potential for future opportunities in the sector, caused by liquidity shortfalls driven by a lack of traditional bank financing and working capital constraints.” PWC Canada’s Cannabis Series

9

CAPITAL CHALLENGES FOR THE INDUSTRY

• Equity markets for cannabis and hemp have tightened

• More companies competing for less available capital

• Limited investor pool

• Companies need to access alternative sources of capital


XS PROVIDES THE SOLUTION TO A CHALLENGED INDUSTRY

With limited access to traditional funding sources, companies need an alternative solution

• XS provides equipment leasing solutions which reduces the need for excessive capital expenditures and start-up costs

• XS provides sale-leaseback services which enablescustomers to unlock capital from existing equipment without interrupting business operations

• Mitigates the need for companies to raise equity in today’s environment, which dilutes shareholders

THE XS SOLUTION


PREFERRED VENDOR PROGRAM +70 OEM’s

Reduced technology risk through “Preferred Vendor” program with a growing list of qualified and well-known equipment providers

Just a few of our Preferred Vendors…


XS UNDERWRITING CRITERIAXS has structured products to satisfy a wide spectrum of customers

PURCHASING OPTIONS DESCRIPTION LENGTH PORTFOLIO RETURNS (Gross)

Leasing • Flexible terms• Affordable down payment• Ability to upgrade equipment

12-36 Months > 50% IRR1

Sale-leaseback • Unlock invested capital• No disruption to operations• Attractive financing options

12-36 Months > 50% IRR

1. IRR - Internal rate of return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments

PORTFOLIO UNDERWRITING GUIDELINES THRESHOLD

Lease to value (Estimated market value at close) < 60%

Projected cost exposure at month 12 (Lease) < 40%

Projected cost exposure at month 12 (Sale-leaseback) < 50%

Months to cost recovery < 30 Months


CURRENT TRACTIONOur existing customers and pipeline continue to grow

Completed sale CBD ManufacturerPost-proccessing equipment

Pipeline

36-month leaseTHC ManufacturerFull production line

36-month sale-leasebackTHC ManufacturerFull production line

Completed sale THC ManufacturerPost-proccessing equipment

Completed sale THC ManufacturerTesting equipment

(1) 12-month lease(2) 14-month leaseHemp ManufacturerExtraction Equipment

Completed sale THC ManufacturerPost-proccessing equipment

48-month leaseHemp ManufacturerFull production line

33-month leaseHemp ManufacturerPost-processing equipment

36-month leaseTHC BrandExtraction and Cultivation Pods

Current Customers


LEASE CASE STUDY

XS is focused on financing options that provide short payback periods and high IRR

1. Total revenue includes customer deposit, origination fee, and end of term buyout.2. Period is the length of time required for XS to recover its equipment cost3. Internal rate of return (IRR) is a non-IFRS financial performance measures with no

standard definition under IFRS (see Disclaimer for more information on the use of non-IFRS measures).

• Flexible leasing structures • XS owns the equipment

through the term of the lease

• Flexible leasing options enable customers to upgrade or turn in their equipment at the end of the lease term

LEASE UNIT ECONOMICS ($ Millions)

Lease Term 36 months

Total Revenue1 $1,500,000

Equipment Cost $1,200,000

Payback Period2 19 Months

Advance Rate (At closing) 47%

Amount Financed (Cost exposure) $550,000

Gross IRR3 42%

Gross IRR w/End of Term Buyout 47%

End of Term Buyout $62,500


Q3 2019 Financial Results

1. See press release dated November 28, 2019

Increased revenues, reduced costs and operating expenses

Cash on hand as of September 30, 2019 was $4.93 million

As of September 30, 2019 – Q3, 20191

Q3, 2019 Q3, 2018

REVENUE $0.96 million $63.9 thousand

GROSS PROFIT $0.12 million ($0.18 million)

OPERATING EXPENSES $0.62 million $1.71 million

NET PROFIT ($0.41 million) ($2.30 million)


SALES FUNNELXS has developed a strong sales funnel to support a robust revenue growth profile

10

33

+2,200

ACTIVE NEGOTIATIONSXS is in the process of finalizing multiple transactions, pending the completion of all capital and legal obligations. Management anticipates closing many of these transactions.

CURRENTLY IN SALES PIPELINEDemand for XS’s services have been proven. Currently, the company has more customers than it can provide its services to and is moving forward with the most qualified candidates.

ACTIVE LEADSCurrently there is a large, un-tapped market of potential clients which is being assessed. These companies can directly benefit from the the leasing and consulting services offered by XS today.


MARKET CAPITILZATION & SHARE STRUCTURE

XS has been mindful of maintaining a strong capitalization structure while not diluting shareholders

XS Capital Structure (As at January 31, 2020)1

Common Shares Outstanding (Subordinate Voting Shares) 30,460,162

XS Founders (Proportionate Voting Shares - 3 Year Lock-Up Period) 12,207,298

KushCo (Proportionate Voting Shares - 1 Year Lock-Up Period) 10,600,300

Common Shares Outstanding 53,267,760

10% Unsecured Convertible Debentures (If Converted @ C$1.10)2 5,178,182

Options Outstanding (Weighted Avg. Exercise Price – C$0.80) 3,010,129

Warrants Outstanding (Weighted Avg. Exercise Price – C$1.34)3 8,489,636

Fully Diluted Shares Outstanding 69,945,707

1. Assumes conversion of Proportionate Voting Shares into Common Shares2. Sub receipt financing. Principal balance of C$5,696,000 convertible into units comprised of one common share and one

warrant at C$1.10.3. Includes warrants issuable from units upon conversion of convertible debentures.

Share Price (Feb/10/2020) C$0.39 (52 week High: $0.80 Low: $0.165)

Market Capitalization C$20.8 Million

23.4%

19.9%56.7%

Ownership Structure

Founders (incl. Archytas) KushCo Public Float


INVESTMENT HIGHLIGHTS

HIGH MARGINS

Significant operating leverage, 40%+ EBITDA margins

RECURRING REVENUE STREAM

Quick payback with high IRR

ANCILLARY CANNABIS BUSINESS

Not subject to 280E tax or restrictive regulations

NATIONAL OPPORTUNITY

Leasing services can be provided freely across state lines to service the U.S. cannabis and hemp industry

EXPERIENCED TEAM

Extensive experience in specialty finance, cannabis/hemp oil processing, and underwriting


APPENDIX


SIGNIFICANT GROWTH POTENTIAL DRIVEN BY MARKET DEMAND

Source: Ackerell Capital 2018 Cannabis ReportNote: USD/CAD ratio of 1.261. Operating under the assumption that cannabis is legalized in 2027 2. Based on Q3 2019 US data

2016A 2017A 2018A 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

US Cannabis Market is expected to reach $127B by 2030(2)$140

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The growth in the industry will be

driven by demand from

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and Food & Beverage segments.


MEDIA COVERAGE


CONTACT INFO

[email protected]

For more information please visitxtractnow.com

SALES & SERVICES

Florida930 Carter Road, Suite 216Winter Garden, Florida 34787

California1901 Avenue of the Stars, Suite 120Los Angeles, CA 90067

EQUIPMENT LEASING SOLUTIONS FOR CANNABIS AND HEMPcompanies and capital markets experience DAVID...

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