The TINLEY BEVERAGE COMPANY CSE:TNY OTC:QRSRF Q1 2016
Tinley is producing some of North America’s first premium hemp extract drinks “The enthusiasm is incredible. I’ve never seen anything like this before.” -Mark Blumenthal, founder of the American Botanical Council regarding hemp extract Hemp Extract – made from the stalk • Contains ingredients common to other Cannabaceae family plants including cannabis and hops • Increasingly believed to have a wide variety of health benefits, though no FDA-approved claims yet • CV Sciences, a prominent raw ingredient supplier, has grown to $15 million annually at the wholesale level – implies $50+ million at the retail level from this one supplier • One of the most requested supplements at several health food chains in LA; seen as the next “hot” supplement ingredient Hemp Seed • Virtually all hemp food and beverage products available today are made from hemp seeds, not from the plant material • Often sold as “hemp hearts”, “hemp nuts”, “hemp protein”, “hemp oil” or just “hemp” • Hemp seed products have seen a resurgence in demand, and beverages like Hemp2O and Rocky Mountain High are popular • Consumers are beginning to switch to hemp extract products Page 2 Confidential
Introducing “ Hemplify ” • Refreshing, drinkable vitality • Manufactured with patented supplement containing hemp extract formulation technology and found in popular sports and • The technology infuses oil-based functional drinks ingredients into water-based drinks in a • Tropical and apple cinnamon flavors manner that masks the oil’s taste , • Fortified with Omega 3, vitamins elevates bioavailability and ensures shelf and electrolytes stability • Sugar-free, vegan, non-GMO and • Works by creating micelles that preserve gluten-free the structure of the oil as it progresses through the digestive system, and then • In addition to the benefits of hemp “tricks” the gut into absorbing more oil extract, the supplemental ingredients into the bloodstream and brain are great for countless activities • The consumer therefore enjoys superior • Pre-workout & recovery taste and more of the benefits of the • Work/study nutrients than other consumption • Yoga methods • Hangover Now Available throughout the USA • Pre-smoke • Cognitive health Additional products in development include energy and sleep smoothies • Daily vitamins • General vitality Health claims in this presentation are based on anecdotal or initial scientific findings and/or common beliefs in the hemp and marijuana communities; not FDA-approved claims. Page 3 Confidential
Why is Tinley focusing on hemp extract drinks? “The drop in soda consumption represents the single largest change • in the American diet in the last decade.” – The New York Times: The Decline of ‘Big Soda’ – October 2, 2015 Bottled water has replaced much of the lost soda consumption, in • large part because it is the only option on shelves that contains no sugar Functional beverages have become the fastest-growing sub-sector of • the non-alcoholic beverage industry Functional drinks are a better solution for the big soda • companies than bottled water because they are more differentiated and higher-priced Hemp stalk drinks are positioned to benefit from this growth as • they are increasingly believed to provide substantial functional health benefits The major beverage companies are seeking to enter new functional • beverage categories via acquisition rather than internal development Advantages of the hemp stalk market vs. cannabis market • The functional drink market is 10x the size of the marijuana industry Source: New York Times, October 2, 2015 • Hemp extract is being sold in all 50 states; recreational marijuana in just 5 states • Tinley has more competitive advantages in mainstream • Ability to outsource production rather than build own facility • No need to share economics with local licensees • Ability to use established beverage distribution services • Tinley to review cannabis opportunities as regulations permit Page 4 Confidential
Tinley’s leadership team has experience creating and distributing mainstream products and have a history of entrepreneurial success Adam Szweras, Corporate Secretary and Director Jeffrey Maser, CEO and Director • Partner at Fogler, Rubinoff LLP, a leading Canadian law firm; • Previously at the Watt Design Group, the wholly-owned expertise in medical and recreational marijuana law in the USA and beverage strategy and design agency of Cott Corporation; at Canada the time, Watt was the largest food and beverage branding firm • 20 years securities law experience in North America and Cott was the largest cola company in the • Co-founder and Chairman of Foundation Markets Inc., a Toronto- world after Coke and Pepsi based investment bank and Exempt Market Dealer • 10 years in venture capital, merchant and investment banking • Successfully obtained 3 marijuana licenses in the USA with a focus on emerging industries including marijuana, health foods and technology Roger Dent, Director • CEO of Quinsam Capital; previously VP at Matrix Fund Management Jeff Pencer, Head of Product Development and Distribution and Managing Director of Research at CIBC World Markets • MBA, Harvard University and B. Comm, Queens University • 3rd generation beverage executive • Prominent Canadian small-cap investor • 30 years beverage industry experience; roles have included brand management and sales at Cott Corporation and COO of Bravo Brands’ Canadian operations David Ellison, Director • Principal at Acuity Corporate Securities Lawyers in Toronto • Specialist in oil-infused health beverages • Has provided capital markets, legal and operational services to US- based cannabis cultivators, processors and extractors over the past David Posner, Director two years • CEO of Nutritional High, which is building one of the largest • Clifford Chance LLP (UK) - International Structured Finance Group licensed marijuana edibles manufacturing facilities in Colorado • Solicitor of the Supreme Court of England and Wales • Brought “Hempen Gold”, the first hemp -infused beer to Canada Tony Roodenburg, Director • Imported and created marketing and branding initiatives for various other alcoholic products in Canada • CEO of Greencastle Resources, a Toronto-based venture capital firm specializing in technology and resources Page 5 Confidential
Tinley has distribution in the head/smoke shop channel in several states; in advanced discussions in the health, online and festival channels Health & natural foods stores • In application process at several large, mid-size and independent chains • Strong consumer awareness and demand; high prices and limited selection • Meetings at trade shows • Local California marketing associates in place to market via social media, media articles , in-store sampling and some sponsorship Head/smoke shops and convenience stores • 2 distribution groups in place in California • Received several orders; to ship in early April for 420 • Met with 30 distributors at a buyers marketplace and negotiating additional agreements • Very strong consumer awareness; high prices and limited selection • Marketing via social media, infused-products contests and in-store tastings Online • E-commerce via drinkhemplify.com launching for 420 • Large affiliate network – commission-based • Blogger and social media network • Working to list on Amazon, Google Shop, etc. Festivals • Countless music, hemp/marijuana and health/yoga festivals take place each month – high drink prices • Music promotion group to sell at events on behalf of Tinley Page 6 Confidential
Tinley’s valuation is attractive relative to other early -stage hemp and functional beverage companies Cap Table Valuation Comparables Shares outstanding 45,643,813 Name Symbol Market Cap Revenue Product Notes (trailing) Type Warrants Rocky OTC: US$20MM ~US$1.0MM Hemp seed “Rocky Mountain High” Mountain RMHB (est.) soda hemp seed energy soda; High Brands retails is $3/can $0.75, Jun-16 453,738 FBEC OTC: US$4.6MM <US$100k Hemp seed “WolfShot” is a hemp $0.50, Jun-17 163,633 Worldwide FBEC and extract energy shot that recently $0.20, Sep-17 591,339 shot launched $0.20, Nov-17 5,852,500 Earth Science OTC: US$13.5MM <US$100k CBD vape oil Recently announced $0.20, Dec-17 1,697,500 Technologies ETST upcoming launch of 3,000 $0.10, Aug-17 3,800,000 bottles through an e-cig distributor CannaVest OTC: US$15+ MM US$16.6MM CBD oil Prominent CBD supplier; 2- Options CANV 3 oil types $0.11, Oct-20-Jan-21 3,756,000 Dixie Elixir Private n/a US$10MM+ Cannabis Largest drinkables and $0.08, Mar-21 250,000 (est.) drinks and edibles company in edibles Colorado Fully Diluted Shares Outstanding 62,208,523 Naturally CSE:NSP US$14.4MM US$615k Coconut Hemp seeds food and pet Splendid OTC: hemp foods NSPDF omega drink Debt Nil Suja Juice Private US$390MM US$45MM Cold-pressed Founded 2012; Coca-Cola (est.) juices invested $90MM; various Mkt Cap at C$0.05 (basic) C$ 2,282,191 flavors of single product Mkt Cap at C$0.05 (fd) C$ 3,110,426 Tinley CSE: US$2.4MM <US$100k Hemp “ Hemplify ” launched in Funds from warrants/option exercises C$ 3,073,797 Beverage Co. TNY extract March 2016 OTC: drinks QRSRF Mkt Cap at C$0.05 (basic) US$ 1,734,465 As at March 21, 2016 Mkt Cap at C$0.05 (fd) US$ 2,363,924 Funds into treasury if warrants exercised US$ 2,336,086 Page 7 Confidential
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