What on Earth CONFIDENTIAL - Profound Ventures, LLC Happened to - PowerPoint PPT Presentation

1 10X Medical Device Conference - May 14, 2019  “What on Earth CONFIDENTIAL - Profound Ventures, LLC Happened to Proove Biosciences?”

2  What We’ll Discuss Tonight  A Little About Me  About Profound Ventures  About Proove Biosciences CONFIDENTIAL - Profound Ventures, LLC  After 7 Years of Success: Where was Proove in December 2016  What Happened Next? 7 Months of Destruction  Where Do You Go From There?

3  A Little About Me  Husband: Married over 19 years to my  Award-Winning Executive & Social Best Friend, Catherine, a Lawyer & Law Entrepreneur: Professor at Chapman University  Earthly Angel, Baltimore Sun;  Emerging Technology Company CEO of the  Dad: Parents of 3 great kids and Year, OCTANe; devout members of The Church of  Excellence in Entrepreneurship Award, OCBJ; Jesus Christ of Latter-day Saints CONFIDENTIAL - Profound Ventures, LLC  Two-Time Finalist, EY Entrepreneur of the  Idealist: Activist, Volunteer, Youth Year Award (OC); Sports Coach, PTA President, Former  Worked at Eli Lilly, Johnson & Johnson, Publicly-Elected School Board Member Prometheus, & founded Proove Biosciences

4 Who We Are Profound Ventures, LLC (“Profound”) is a social entrepreneurship seed fund and new venture accelerator dedicated to using new business models and technologies to solve profound societal problems based in Orange County, California. Leadership • Brian Meshkin • Laura Hunter, Esq. CONFIDENTIAL - Profound Ventures, LLC Managing Par tner Partner • Award-Winning Health • Fmr General Counsel of Obagi Technology Entrepreneur (Inc Medical Products, CLO of 500, Deloitte Fast 500), founder Proove Biosciences & Head of of Proove, fmr with Lilly, J&J, & Life Science Practice at Prometheus Labs international law firm, Brobeck Entrepreneurship to solve profound societal problems by • Felix Frueh, Ph.D. • Khanh Nguyen creating, seed funding, and Partner Partner growing new business ventures • Fmr head of Genomics at • Fmr CTO of Proove Biosciences, and non-profit organizations FDA/CDER; fmr CSO at Human Freedom Communications, the Longevity; fmr President of Medco Milken Institute, & DoctorDrew.com Research Institute

5  Our Current Portfolio Next-Gen Brain Revolutionizing Providing improved Computer Interfaces advancing Diagnostics to Deliver outcomes at the Providing at-home Value through intersection of rehab & data analysis neuromodulation with Hospitals Beyond the behavioral healthcare for stroke recovery - advances in big data Duopoly of LabCorp & advanced telehealth 5th leading cause of analytics to & Quest Diagnostics data technology death in the US personalize therapy CONFIDENTIAL - Profound Ventures, LLC ? Rapidly Aging The Largest and Most Exploding Growth of Population Which Will Expensive Health Neurological Disease Account for 25% of Condition & the Cost the U.S. more the US Population in Leading Cause of than $1.5 trillion per 15 Years Preventable Death year—8.8% of GDP

6  What on Earth Happened to Proove Biosciences? CONFIDENTIAL - Profound Ventures, LLC

7  About Proove Biosciences CONFIDENTIAL - Profound Ventures, LLC

8  Proove Biosciences: December 2016  278 FT Employees  Research collaborations with leading centers: USC, UNC, McGill, Univ. of Utah, Cedars Sinai & others  60,000 sq. ft. campus in Irvine Spectrum  Research awards from medical societies (ASIPP,  CLIA-credentialed, CAP-accredited clinical laboratory ASRA, AAN) CONFIDENTIAL - Profound Ventures, LLC  Over 100 scientific abstracts presented at meetings  354K precision medicine panels in 2016 alone  Over 10 peer-reviewed publications  $28.1M in cash collected revenue for 2016, $1M in cash EBITDA  CMS and NIH Pain Consortium leadership support of technology 2 nd yr in a row Inc. 500, Deloitte Technology Fast 500   Strong Board of Directors  World’s Largest & Highest Quality DNA Biobank &  2-years of externally audited financials Big Data Clinical-Genetic Database in Chronic Pain – >153,000 patients  Preparing to file S-1, raising mezzanine cross-over round to position the company for a strong IPO  15 precision medicine profiles on the market

9  And then we were victimized by Fake News & Corporate Espionage  Warren Buffett once said, “It takes 20 years Reporter Charles Piller intentionally to build a reputation and ignored primary sources provided five minutes to ruin it.”  Quite a Fall from Grace to Go from “Earthly Angel” in the Baltimore Sun to a “Corrupt CEO” Reporter Charles Piller in STAT News used sources fabricated by taking Proove’s logo 3 disgruntled employees conspired to off the Internet and invent accusations for a “Whistleblower” putting it on fraudulent lawsuit to protect themselves while they documents were competing with Proove. Then after being fired, they went to Charles Piller…

10  The Dangers of a One-Sided Story: How Charles Piller & STAT News Reported the “Facts”: Prince William Gives Onlookers Rude Gesture CONFIDENTIAL - Profound Ventures, LLC

11  The Dangers of a One-Sided Story: How a Professional Journalist Would Report the “Facts”: Prince William Holds Up the Number 3 CONFIDENTIAL - Profound Ventures, LLC

12  The Dangers of a One-Sided Story: Whether You Like Prince William or the Royal Family Determines Your Agenda or “Confirmation Bias” CONFIDENTIAL - Profound Ventures, LLC

13  How One Discredited Reporter Fired from the Los Angeles Times Created His Lies Quote Their Voila: a Credible Share Reaction to “Quote” about Misinformation False the Company or with Experts to Information as Person to Create Get Their an opinion of the Plausible Reaction to the Person or Deniability about Falsehood CONFIDENTIAL - Profound Ventures, LLC Company Fake News Examples: OIG Former Pure Genetic Billing Research Investigation of KOL Reaction Employee Test Practices Practices an Ordering Opinions Doctor

14  Some of Piller’s Lies Reported by STAT News Bias Piller’s Lies Truth – The Antithesis of the Accusations Laboratory-Developed No scientific • Extensive published scientific evidence (>100 scientific posters, dozens of 3 rd party publications, 10 peer-reviewed publications) Tests (LDTs) Are Not evidence Credible Because • On just one of its profiles, Proove had 3 clinical validity papers of supporting They Are Not over 5K patients showing up to 97% accuracy and 3 clinical utility testing Approved by the FDA papers of over 15K patients showing 90% effectiveness Laboratories involved Paid docs to • Piller used a fraudulent source document where someone pulled in pain and addiction down our logo from the Internet and created a false document order tests are involved in • Proove engaged in IRB-approved studies, listed on CONFIDENTIAL - Profound Ventures, LLC “kickback” schemes ClinicalTrials.gov, approved by leading institutions • No doctor was ever paid or financially-induced to order testing Laboratories are Research is • Award-winning research from leading medical societies, corrupt and any • Collaborations with leading researchers and research centers, a sham successful lab must • Research methods reviewed and approved by leading centers to be like Theranos surpass highest standards (even beyond NIH-awardees) Laboratory billing Engaged in • Coding approved by CMS in writing on four occasions, practices are corrupt • Proove underbilled and was paid at a price equal to 10% of what Medicare and abuse the system other labs were getting paid for PGx tests by CMS, fraud • Technology supported by the CMO & CDO of CMS

15  What did we do about it?  Legal Counsel’s Recommendation: “Don’t respond. It makes you look defensive. We reached out to the government and they told us that there is no investigation of Proove. As a limited-use public figure, defamation laws do not protect you, so you will not win a defamation lawsuit.”  Board of Director’s Recommendation: “As Mark Twain said, “Never Pick CONFIDENTIAL - Profound Ventures, LLC a Fight with People Who Buy Ink by the Barrel.” We’ve been around a long- time. We are doing all the right things. Just take the high road.” Unfortunately I was scared and inexperienced, and so I listened to the advice of legal counsel and my All-Star Board of Directors. I was wrong do to so.

16  The Situation Went from Bad to Worse…  May 2017  U.S. Attorney’s office accidentally leaks a whistleblower lawsuit from a disgruntled ex-employee  Proove lawyers inform U.S. Attorney’s office of administrative mistake of leaking “sealed” documents on PACER  U.S. Attorney’s office re-seals accidentally unsealed documents  Proove offers to meet with government to answer any questions  June 7, 2017  FBI delivers subpoenas to Proove’s office with the TV Cameras from the local Los Angeles CBS, NBC, and ABC television stations present  Media reports “FBI Raid” which suggests charges, arrests, etc.  FBI delivers subpoena for documents and buys employees pizza while collecting documents  No charges, indictments, arrests, or any formal allegations of wrongdoing