To the frontier of the global medical cannabis markets€¦ · Prospective investors are encouraged...
Transcript of To the frontier of the global medical cannabis markets€¦ · Prospective investors are encouraged...
Aura Health Inc. (CSE:BUZZ)
Q3 2018
INVESTOR DECK
AURA HEALTH INC. (CSE:BUZZ)
To the frontier of the global medical cannabis markets
Aura Health Inc. (CSE:BUZZ)
Forward Looking Statements
The information contained in this presentation does not purport to be all-inclusive or to contain all information that prospective
investors may require. Prospective investors are encouraged to conduct their own analysis and reviews of the Aura Health Inc. (the
"Company“) and of the information contained in this presentation. Prospective investors should consult their own professional
advisors to assess their potential investment in the Company. The remarks contained in this presentation (“Presentation”) may
contain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) relating to the
Company’s operations or to its business environment. These statements are identified by the use of forward-looking terminology such
as “believes,” “plans,” “intend,” ”scheduled,” “potential,” “continue,” “estimates,” “hopes,” “goal,” “objective,” “expects,” “may,” “will,”
“should” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy
that involve risks and uncertainties. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended,
and Section 27A of the Securities Act of 1933, as amended, apply to forward-looking statements made by the Company. The reader is
cautioned that no statements contained in Presentation should be construed as a guarantee or assurance of future performance or
results. These forward-looking statements involve risks and uncertainties, including those identified within this Presentation. The
actual results that the Company achieves may differ materially from any forward-looking statements due to such risks and
uncertainties. These forward-looking statements are based on current expectations, and the Company assumes no obligation to
update this information. Readers are urged to carefully review and consider the various disclosures made by the Company in it’s
reports filed on SEDAR that attempt to advise interested parties of the risks and factors that may affect the Company’s business. The
information in this current report shall not be incorporated by reference into any registration statement pursuant to the Securities Act
of 1933, as amended. The furnishing of the information in this Presentation is not intended to, and does not, constitute a
representation that such furnishing is required by Regulation FD or that the information this current report contains is material
investor information that is not otherwise publicly available. This summary has been provided to the recipient for information
purposes only and no representation or warranty, express or implied, is made as to the completeness or accuracy of the information
contained herein. The contents are not to be reproduced or distributed to the public or press. The information contained herein is not
guaranteed as to its accuracy or completeness. Throughout this presentation various logos and trademarks will be used. These
trademarks and logos are the property of their respective owners. An investment in the Company's securities should be considered
highly speculative. There is no guarantee that an investment in the Company will earn any positive return in the short or long term.
An investment in the Company is appropriate only for investors who have the capacity to absorb a loss of some or all of their
investment. There are certain risk factors associated with an investment in the Company’s securities.
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Aura Health Inc. (CSE:BUZZ)
Mission
Aura Health’s mission is to build an international
network of vertically integrated businesses in the
medical cannabis industry.
Our mid term goal is to grow high quality and low
cost flower in Israel to process into extracts and
other end products in Europe for the purpose of
distributing to medical cannabis jurisdictions in
Europe.
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Aura Health Inc. (CSE:BUZZ)
David Posner
Chairman
• Mr. Posner acted as Chief Executive Officer of NHII. (CSE:EAT)
from May 2014 to July 2016 and remains the Chairman of
the Board of NHII.
• Prior to joining NHII, he had a 20-year career running
privately held real estate funds both commercial and
residential based in Toronto, where he was involved both in
negotiating acquisitions and long-term leases.
• Mr. Posner holds a Bachelor of Arts degree from York
University.
Daniel Cohen
Chief Executive Officer
• Mr. Cohen has nearly 20 years of experience in the capital
markets and most previously served as a partner and head of
institutional equity sales at Beacon Securities.
• Prior to that, he held roles in institutional equity sales,
investment banking and equity research at Wellington West
Capital Markets, RBC Capital Markets and HSBC Securities.
• Mr. Cohen holds an MBA in Finance from McGill University
and is a CFA Charterholder.
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Keith Li
Chief Financial Officer
• Mr. Li has over 10 years of experiences in both the public
accounting and private sector, specializing in audit and
assurance, corporate accounting, financial reporting and
regulatory compliance services to companies in a number
of industries.
• Mr. Li holds a Bachelor of Commerce Degree in Finance
from McGill University, and has been a CPA, CA since 2012.
Vernon (Jim) Frazier Director• Mr. Frazier acted as Chief Operating Officer of NHII since
April 2016 and currently serves as NHII’s CEO.
• Mr. Frazier has over 23 years of experience in the food and is also the President of Grimaldi Candy.
• Mr. Frazier owns and operates a successful Florida-based candy and chocolate business which has been a well-known manufacturer of confectioneries for over 40 years.
• He holds an MBA from the Dale Carnegie School of Business at University of Cincinnati.
Leadership Team
Aura Health Inc. (CSE:BUZZ)
Company Snapshot
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Market Info as of August 28, 2018 CSE: BUZZ
SHARES OUT
Basic Common Shares Outstanding 24,309,784
Options & Warrants 11,294,883
*NHII Converts 3,116,640
Investor Converts 1,632,653
Total Shares FD 40,353,960
CONVERTS
NHII Converts
Notional USD120,000
Conversion Price 0.05
Investor Converts
Notional CAD600,000
Conversion Price 0.365
INSIDE OWNERSHIP
Management & Board 14%
NHII 12%
*NHII - Nutritional High International Inc. (CSE: EAT)
Aura Health Inc. (CSE:BUZZ)
Our Strategy
• Signed an LOI with Holycanna, an Israel cultivation license holder with the plan to
build a 50K square foot facility by 2Q 2019.
• Signed a LOI with CannabiSendak to build a high profile dispensary in Tel Aviv that will
be exclusively supplied by HolyCanna.
• In active discussions with several Eurozone parties who have either built or are
looking to build a Euro GMP extraction facility.
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Focus on Delivering High Quality Medicinal Cannabis Products
Aura Health Inc. (CSE:BUZZ)
Extraction Expertise
Aura’s partnership with Nutritional High allows it to
leverage NHII’s proprietary product development
approach:
• Proprietary techniques of infusing products with THC and CBD
extracts on a semi-automatic basis
• Utilizing both the short-path distillation techniques and VTA
scale machinery to ensure a potent, clean, consistent product
• Mix of manufacturing techniques to ensure consistency in the
product
• International network of experts, specialized in every aspect of
the seed-to-sale industry, able to assist with rolling-out the
company’s operations
• NHII oil has been tested as high as 98% THC
Current Product Capabilities:
• Extracts
• Tablets
• Vape Cartridges
• Edible Products
7 Source: Prohibition Partners Report
NHII Cannabis-Infused Products
Aura Health Inc. (CSE:BUZZ)
HolyCannaHOLYCANNA is an Israeli based cannabis cultivator and nursery
license holder. It strives to bring the best Israeli medicinal
cannabis and related products to the global market.
• The license was issued by the Israeli Medical
Cannabis Agency of the Ministry of Health.
• Initial 50,000 sq. ft. site.
• 26% Partner in Moshav located in Central Israel –
ideal climate for outdoor cultivation.
• Additional 325,000 sq. ft. available for expansion.
• Leveraging its own 7,500 square foot facility,
Holycanna can can develop its own nursery and
engage in tissue culture and R&D.
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50K sq. ft. of canopy
42.5K sq. ft. outdoor
7.5K sq. ft. indoor
Room to expand on the
moshav, with 325K of
additional sq. footage
Aura Health Inc. (CSE:BUZZ)
HolyCanna
Deal Structure
• Aura Health Inc. entered into binding LOI to
acquire 54% interest in HolyCanna.
• Convertible Note will convert into equity of
HolyCanna upon receiving regulatory approval.
• Should regulatory approval be rejected, note will
convert to royalty agreement entitling Aura to a
15% gross revenue royalty.
• Aura funds the 10M NIS (~$3.6M CAD) in
required capex, with dilution penalty to
HolyCanna in the event of cost overruns.
• Earn-out in place, with HolyCanna receiving $1M
CAD in Aura shares for every incremental $1M in
EBITDA generated, to max of $5M CAD.
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Aura Health Inc. (CSE:BUZZ)
HolyCanna Economics
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Estimated Annual Capacity
Annual grams per sq. ft. 70g
Total square footage 50,000 sq. ft.
Growing cycles per year 5
Revenue per gram $2.70
Costs per gram $1.62
Projected Facility Economics
Monthly Annual
Capacity 291,667g 3,500,000g
Revenue $787,500 $9,450,000
Direct Costs $472,500 $5,670,000
Gross Profit $315,000 $3,780,000
Gross Margin 40% 40%
All figures in $CAD
Aura Health Inc. (CSE:BUZZ)
CannabiSendak
Opportunity
• Entered into binding LOI to acquire 57% of the medical
cannabis dispensary in Israel being established by Shlomi
Sendak. The dispensary will be the 1st licensed
dispensary in Israel to feature a café, patient consultation
areas, and a doctor on site.
• CannabiSendak manages two Facebook groups that are
filled with 10,000 Cannabis patients and holds a database
of more than 12,000 medical cannabis patients;
• CannabiSendak holds statements from more than a
thousand medical cannabis patients who undertake to
buy its first merchandise;
• Terms of the Deal:
• Advance an initial US$500,000 to acquire 57% interest in the
medical cannabis clinics that are being established
• Pay an additional $250,000 for every 500 patients that
become clients of CannabiSendak Clinics
• CannabiSendak will use Holycanna as exclusive grower for
its branded product offerings
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A prominent Israeli cannabis
activist, active in the medical
cannabis industry in Israel for
more than 24 years and
considered to be a 'guru' among
cannabis patients, who follow his
advice and guidance;
Shlomi Sendak
Cannabis Activist
Shlomi
Sendak
Cannabis
Activist
Aura Health Inc. (CSE:BUZZ)
CannabiSendak Economics
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Estimated Per Gram Economics (CAD):
Sale price per g $5.40
Cost per g $2.60
Gross margin per g 52%
*Average Israeli Patient Consumption per month
Monthly Annual
Grams 35g* 420g
Sale price $189 $2,268
Cost $91 $1,092
Gross margin 52% 52%
Estimated Patient Economics (CAD):
5000 Patients 10,000 Patients
Monthly Annual Monthly Annual
Revenue 945,000 11,340,000 1,890,000 22,680,000
Direct Costs 455,000 5,460,000 910,000 10,920,000
Gross Profit 490,000 5,880,000 980,000 11,760,000
Gross Margin 52% 52% 52% 52%
Financial Projections (CAD):
Projected ramp up:• 1,000 patients in the first month
• 500-1,000 new patients per month
• 10,000 patients in Tel Aviv
Aura Health Inc. (CSE:BUZZ)
Israel - A natural global hub
for medical cannabis
• Global leader in IT
• Global leader in Ag Tech
• A powerful force in pharma and biotech
• Dots already connected - Israel is the birthplace of modern medical cannabis R&D• 1964 - Prof. Raphael Meshoulam and his team discover and
isolate THC
• 1977 - Prof. Ruth Gallily and her team discover anti-anti-inflamatory aspects and medical uses of CBD
• Medreleaf’s award winning products, including globally recognized Avidekel, were developed in Israel
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Aura Health Inc. (CSE:BUZZ)
Target Market - Israel
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Old Domestic Medical Regime
• 35,000 registered patients and growing
monthly
• 80 doctors licensed to prescribe
prescriptions need regulator’s approval
• Number of qualifying indications increasing
New Domestic Medical Regime
• New reforms have been written and published
• Pilot for new pharmacies and dispensaries began
in April
• Doctor training program has been established and
first round has already taken place
• Large demand from Israeli MDs
• New regime will not require prescriptions to have
regulator’s approval
• Full start date expected in Q4
Export Law
• Support already received from departments of Finance and Agriculture
• Hold out is department of homeland security
• Israeli trade magazine published an article indicating the full export
announcement will come from Prime Minister Netanyahu’s office in the next
month
Aura Health Inc. (CSE:BUZZ)15
Strategic Expansion Plan
European Market
Source: Prohibition Partners Report
Medical Only
Decriminalized
Illegal
Fully Legal
Ukraine
Russia
Finland
Spain
France
Germany
United Kingdom
Ireland
Italy
Switzerland
Portugal
Greece
AustriaHungary
Slovakia
Serbia
Romania
Albania
Kosovo
Macedonia
Montenegro
Bosnia and Herzegovina
Bulgaria
Moldova
Poland
Czech Republic
Slovakia
Croatia
Belgium
Netherlands
Denmark
Norway
Sweden
Belarus
Estonia
Lithuania
Latvia
Aura Health Inc. (CSE:BUZZ)
Germany boasts the largest economy in
Europe - a global leader across multiple
industries and the forerunner of the
European cannabis industry.
Germany, Europe’s largest potential
market opened up in March 2017 with the
introduction of new medical cannabis
legislation and the creation of eleven
production licenses.
As of January 2017, public health insurers,
which provide cover to 90% of the
population, were required to cover
cannabis medication (up to 5 oz. per
month), making Germany one of the most
valuable markets in Europe.
Mid term strategy will be to grow high
quality / low cost product in Israel, extract
onshore Europe (GMP calibre) for
distribution into Eurozone.
Target Market - Germany
16 Source: Prohibition Partners Report
Aura Health Inc. (CSE:BUZZ)
Existing Clinics Business Sun Valley Clinics in US
Sep 2016
Las Vegas, NV
Clinic Opened
Aug 2017
Ft. Lauderdale, FL
Clinic Opened
May 2017
Tucson, AZ
Clinic Opened
April 2017
Mesa, AZ
Clinic Opened
Aura Health Inc. (CSE:BUZZ)
Existing Clinics Business
Sun Valley Clinics in US
2550 S Rainbow Blvd, Las Vegas, NV 89146
2011 E University Dr., Mesa, AZ 85213 7074 E Speedway Blvd, Tucson, AZ 85710
3267 Davie Blvd, Fort Lauderdale, FL 33312
CONTACT
US
Daniel Cohen
Chief Executive Officer
647-202-1824
Address:
77 King Street West, Suite
2905, Toronto, ON M5K 1H1
www.aurahealthinc.com
Aura Health Inc. (CSE:BUZZ)
Risk Disclosure
The Company is seeking to establish new business lines, which inherently contains a high degree of risk. Potential Investors are cautioned toreview the following risk factors in addition to those contained in public disclosure record of the Company (available on www.sedar.com), relatingto the Company: (1) The Company has a very limited operating history in an emerging area of business and had negative cash flows fromoperations in its most recently completed financial year. (2) Non-compliance with federal, provincial or state laws and regulations, or theexpansion of current, or the enactment of new laws or regulations, could adversely affect the Company's business. (3) The Company may becomesubject to additional government regulation and legal uncertainties that could restrict the demand for its services or increase its cost of doingbusiness, thereby adversely affecting its financial results. (4) The Company may be required to obtain and maintain certain permits, licenses andapprovals in the jurisdictions where their products are licensed, although the Company does not anticipate such approvals will be necessary. (5)As a manufacturer and distributor of products designed to be ingested by humans, the Company faces an inherent risk of exposure to productliability claims, regulatory action and litigation, if its products are alleged to have caused significant loss or injury. (6) Manufacturers anddistributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such ascontamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labelingdisclosure. (7) The Company may not be able to accurately predict its future capital needs and it may not be able to secure additional financing.(8) The market price of the Common Shares could be subject to significant fluctuations in response to various factors, many of which are beyondthe Company's control. (9) The Company is currently in the early development stage. There is a risk that the additional resources will be neededand milestones will not be achieved on time, on budget, or at all, as they can be adversely affected by a variety of factors. (10) The Company mayface intense competition and expects competition to increase in the future, which could prohibit its development of customer base andgenerating revenue. (11) The Company's operations are subject to environmental and safety laws and regulations concerning, among otherthings, emissions and discharges to water, air and land, the handling and disposal of hazardous and non-hazardous materials and wastes, andemployee health and safety. (12) The Company must rely largely on its own market research to forecast sales as detailed forecasts are notgenerally obtainable from other sources at this early stage of the industry in the U.S. (13) The Company may be subject to growth-related risksincluding capacity constraints and pressure on its internal systems and controls. (14) The Company has no earnings or dividend record, and doesnot anticipate paying any dividends on the Common Shares in the foreseeable future. Dividends paid by the Company would be subject to taxand, potentially, withholdings. (15) Exchange rate fluctuations may adversely affect the Company's financial position and results. (16) In the eventof a dispute arising from the Company's foreign operations, the Company may be subject to the exclusive jurisdiction of foreign courts or maynot be successful in subjecting foreign persons to the jurisdictions of courts in Canada. (17) Officers and directors of the Company own significantshares and can exercise significant influence. (18) Sales of a large number of Common Shares in the public markets, or the potential for suchsales, could decrease the trading price of the Common Shares and could impair the Company's ability to raise capital through future sales ofCommon Shares. (19) Volatile global financial and economic conditions may negatively affect the Company's operations.